B-120302, MAY 4, 1956

B-120302: May 4, 1956

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTERS REQUESTING REVIEW OF THE AUDIT ACTION TAKEN BY OUR TRANSPORTATION DIVISION ON YOUR BILL NO. 1 126. THE CHARGES FOR SUCH SERVICES WERE CLAIMED AND PAID ON BILL NO. 1 126. FACTUAL EVIDENCE THAT THE FERRY MILEAGE FOR WHICH CHARGES WERE CLAIMED AND PAID HAD IN FACT BEEN FLOWN. YOU WERE REQUESTED TO REFUND THE CHARGES PAID ADMINISTRATIVELY FOR THE UNSUPPORTED FERRY MILEAGE. STATING THAT THE SERVICES IN QUESTION "WERE CONTRACTED ON A BID BASIS. THE PLANES WERE OPERATED AS SECOND SECTIONS OF REGULARLY SCHEDULED FLIGHTS. POSSIBLY CARRYING A FEW PASSENGERS AND UNITED STATES MAIL WHICH HAD BEEN "DIVERTED FROM REGULAR SCHEDULES" BETWEEN YOUR HOME BASE AND THE "POINT AT WHICH THE MILITARY MOVEMENT WAS TO BEGIN OR END.'.

B-120302, MAY 4, 1956

TO BRANIFF AIRWAYS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS REQUESTING REVIEW OF THE AUDIT ACTION TAKEN BY OUR TRANSPORTATION DIVISION ON YOUR BILL NO. 1 126, IN CONNECTION WITH CERTAIN CHARTER AIR MOVEMENTS OF MILITARY PERSONNEL FROM SAN ANTONIO, TEXAS, TO CHEYENNE, WYOMING, AND DENVER, COLORADO, IN JANUARY 1950, COVERED BY CHARTER AIR MOVEMENT (CAM) CERTIFICATES NOS. 1 THROUGH 10, INCLUSIVE.

THE CHARGES FOR SUCH SERVICES WERE CLAIMED AND PAID ON BILL NO. 1 126, SUPPORTED ONLY BY THE GOVERNMENT TRANSPORTATION REQUESTS ISSUED TO COVER SUCH MOVEMENTS. OUR TRANSPORTATION DIVISION, THEREFORE, REQUESTED YOU TO FURNISH COPIES OF THE CHARTER (CAM) CERTIFICATES ISSUED FOR THOSE MOVEMENTS, AND FACTUAL EVIDENCE THAT THE FERRY MILEAGE FOR WHICH CHARGES WERE CLAIMED AND PAID HAD IN FACT BEEN FLOWN. WHEN YOU FAILED TO SUPPLY SATISFACTORY EVIDENCE WITH RESPECT TO THE FERRY MILEAGE, YOU WERE REQUESTED TO REFUND THE CHARGES PAID ADMINISTRATIVELY FOR THE UNSUPPORTED FERRY MILEAGE, AND DID SO.

YOU NOW PROTEST THIS AUDIT ACTION, STATING THAT THE SERVICES IN QUESTION "WERE CONTRACTED ON A BID BASIS," AND THAT PROOF OF THE CLAIMED FERRY MILEAGE COULD NOT BE SUPPLIED BECAUSE, IN SOME INSTANCES, THE PLANES WERE OPERATED AS SECOND SECTIONS OF REGULARLY SCHEDULED FLIGHTS, POSSIBLY CARRYING A FEW PASSENGERS AND UNITED STATES MAIL WHICH HAD BEEN "DIVERTED FROM REGULAR SCHEDULES" BETWEEN YOUR HOME BASE AND THE "POINT AT WHICH THE MILITARY MOVEMENT WAS TO BEGIN OR END.' YOU FURTHER STATE THAT THE REQUEST BY OUR OFFICE FOR THE COMPLETION OF THE CHARTER CERTIFICATES "MANY MONTHS SUBSEQUENT TO PERFORMANCE OF THE SERVICE PLACES THE CARRIER IN A CRITICAL POSITION, AND ONE WHICH COULD HAVE BEEN AVOIDED" IF YOU HAD KNOWN OF THE REQUIREMENTS IN JANUARY 1950. YOU URGE THAT YOU PERFORMED THE SERVICE IN GOOD FAITH AT THE LOWEST BID, "TAKING INTO CONSIDERATION FERRY MILEAGES AND THE OPERATION OF THE AIRCRAFT AS AN UNDESIRED SECOND SECTION OF A REGULAR FLIGHT TO KEEP THE BID AS LOW AS ECONOMICALLY POSSIBLE.'

WITH RESPECT TO THE COPIES OF CHARTER CERTIFICATES YOU FURNISHED, IT IS NOTED THAT JOINT REGULATIONS OF THE DEPARTMENTS OF THE ARMY, THE NAVY, AND THE AIR FORCE, WERE ISSUED ON NOVEMBER 18, 1949, DESIGNATED SR-55-105-5, N -MC-SR-1, AFR 75-38, PRESCRIBING REGULATIONS FOR THE TRANSPORTATION OF PASSENGER TRAFFIC UNDER AGREEMENTS OF PASSENGER TRAFFIC ENTERED INTO WITH COMMON CARRIERS OF PASSENGERS BY RAILROAD, SHIP, BUS, AND AIR. SECTION V OF THE CITED JOINT REGULATION DEALS WITH AIR TRANSPORTATION AND PARAGRAPH 23 SPECIFICALLY CONCERNS CHARTER AIR SERVICES. UNDER THE TERMS OF SUCH REGULATION WHEN CHARTER AIR SERVICE WAS AUTHORIZED THE LOCAL TRANSPORTATION OFFICER AT THE POINT OF ORIGIN OF THE PASSENGER MOVEMENT WAS REQUIRED TO EXECUTE A "MEMORANDUM ORDER" IN TRIPLICATE. SHOWING THEREON THE TRANSPORTATION REQUEST NUMBER AND THE ROUTING ORDER (CAM NUMBER) AND TO SUPPLY IN SUCH "MEMORANDUM ORDER" ALL OF THE INFORMATION RESPECTING THE MOVEMENT WHICH APPEARS ON THE CHARTER CERTIFICATES WHICH YOU FURNISHED UPON REQUEST. THE REGULATIONS PROVIDED THAT THE ORIGINAL OF THE "MEMORANDUM ORDER" TO BE EXECUTED BY SUCH LOCAL TRANSPORTATION OFFICER WAS TO BE DELIVERED TO THE SERVICE CARRIER.

HOWEVER, ASIDE FROM CONSIDERATION OF ANY REGULATIONS OF SPECIFIC AGREEMENTS, AS MENTIONED ABOVE, INDICATING THE EXISTENCE OF A PROCEDURE FOR ISSUANCE OF ESSENTIAL PAPERS AT THE TIME OF THE MOVEMENTS, YOU HAVE THE BURDEN OF PROVING (A) THE LEGAL LIABILITY OF THE UNITED STATES, AND (B) YOUR LEGAL RIGHTS TO THE PAYMENT OF YOUR CLAIM ON BILL NO. 1-126. COMP. GEN. 907; 18 ID. 980, AND 17 ID. 831. WHILE YOUR BILL NO. 1-126 MAY HAVE BEEN PAID ADMINISTRATIVELY UNDER THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 955, 49 U.S.C. 66, PRIOR TO AUDIT AND SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, SUCH PROMPT PAYMENT DID NOT OPERATE TO RELIEVE YOU, AS A CLAIMANT, FROM THE OBLIGATION OF PROVING YOUR CLAIM, WHEN REQUESTED TO DO SO BY OUR OFFICE, CONSISTENT WITH THE INTENT OF THE ABOVE SECTION 322 AND OUR STATUTORY DUTY TO SETTLE AND ADJUST ALL CLAIMS BY OR AGAINST THE UNITED STATES. 31 U.S.C. 71.

WITH RESPECT TO YOUR CONTENTION THAT YOU ARE ENTITLED TO PAYMENT OF THE BID PRICE, EVEN THOUGH ALL OF THE FERRY MILEAGE INCLUDED IN THAT COMPUTATION WAS NOT IN FACT FLOWN, IT SHOULD BE NOTED THAT YOUR "BID," AS REFLECTED IN THE CHARTER CERTIFICATE FORMS INVOLVED, WAS SUBJECT TO THE GENERAL PROVISIONS THEREOF. PARAGRAPH (3) OF THOSE PROVISIONS STATES THAT

"IF THE AGREED UPON FERRY MILEAGE CAN BE ELIMINATED OR REDUCED BY RESCHEDULING THE ASSIGNED EQUIPMENT IN REGULAR OR OTHER CHARTERED SERVICES, THE BENEFIT OF SUCH REDUCTION IN FERRY MILES FLOWN SHALL BE CREDITED BACK TO THE CONTRACTING AGENCY AT THE CONTRACT RATE PER MILE.'

YOUR LOCAL CHARTER TARIFF NO. 2 C.A.B. NO. 12, EFFECTIVE OCTOBER 6, 1949, PROVIDED FOR RATES OF $1.30 CENTS PER MILE (AS CHARGED BY YOU IN THE PRESENT INSTANCE) FOR BOTH PASSENGER AND FERRY MOVEMENTS IN C-54 PLANES. THE FERRY RATE WAS SUBJECT TO NOTE 1, PAGE 2 OF THE TARIFF, WHICH READ AS FOLLOWS:

"FERRY MILEAGES WILL BE COMPUTED TO AND/OR FROM, AS THE CASE MAY BE, THE NEAREST POINT AT WHICH THE TYPE AIRCRAFT BEING USED ON THE CHARTER IS HELD OUT TO BE AVAILABLE FOR CHARTER TO AND/OR FROM THE POINT THE CHARTER COMMENCES AND/OR TERMINATES.' THE TARIFF DOES NOT SHOW ANY SPECIFIC POINT OR POINTS WHERE C-54 OR ANY OTHER TYPE OF AIRCRAFT WAS "HELD OUT TO BE AVAILABLE FOR CHARTER," AND THAT INFORMATION DOES NOT SEEM TO BE AVAILABLE ELSEWHERE. SUCH A PROVISION IS INDEFINITE AND ITS APPLICATION IS UNCERTAIN; BUT IN ANY EVENT IT SEEMS CLEAR THAT THE ARRANGEMENTS YOUR COMPANY MADE WITH THE MILITARY AUTHORITIES ON THESE MOVEMENTS CONTEMPLATED PAYMENT FOR FERRY MILEAGE TO THE EXTENT THAT THE OPERATION OF MOVING AND POSITIONING AN AIRCRAFT PRELIMINARY OR SUBSEQUENT TO ITS USE FOR TRANSPORTING THE PASSENGERS HERE INVOLVED WOULD OTHERWISE BE OF A NON- REVENUE CHARACTER. THE USE OF SUCH AIRCRAFT IN OTHER REVENUE SERVICE HAVING NO DIRECT RELATION TO A PARTICULAR CHARTER MOVEMENT WAS APPARENTLY NOT AUTHORIZED UNDER THE TERMS OF THE ARRANGEMENTS CONCERNED, WITHOUT APPROPRIATE ADJUSTMENT OF THE ORIGINAL "BID" PRICE AND PRECLUDED COLLECTION OF SPECIFIED CHARGES FOR FERRY MILEAGE WHICH WAS NOT IN FACT SUCH MILEAGE.

ACCORDINGLY, IT IS CONCLUDED THAT UNDER THE CIRCUMSTANCES IN EFFECT WHEN THESE SERVICES WERE PERFORMED WE WOULD NOT BE JUSTIFIED IN ALLOWING ANY CHARGES FOR FERRY MILEAGE IN CONNECTION WITH THESE MOVEMENTS. SINCE THE AUDIT ACTION OF OUR TRANSPORTATION DIVISION IS CONSISTENT WITH THAT VIEW IT IS SUSTAINED.