B-122841, AUG. 31, 1956

B-122841: Aug 31, 1956

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WHICH ARE GENERALLY REFERRED TO AS "CAMS" (COMMERCIAL AIR MOVEMENTS). OUR AUDIT IS A PART OF OUR STATUTORY RESPONSIBILITIES RELATIVE TO THE SETTLEMENT AND ADJUSTMENT OF ALL CLAIMS BY OR AGAINST THE UNITED STATES (31 U.S.C. 71) AND SECTION 322 OF THE TRANSPORTATION ACT OF 1940. SUCH ACTION IS DESIGNED TO RECOVER PUBLIC FUNDS UNLAWFULLY COLLECTED AND RETAINED AND IS NOT IN ANY WAY INCONSISTENT WITH THE "NATIONAL TRANSPORTATION POLICY" (AS YOU SUGGEST) WHICH. APART FROM THE FACT THAT SUCH POLICY IS NOT SPECIFICALLY APPLICABLE TO AIR CARRIAGE SUBJECT TO THE CIVIL AERONAUTICS ACT OF 1938. CLEARLY ENOUGH IS NOT INTENDED TO SANCTION PAYMENTS TO CARRIERS IN EXCESS OF THE AMOUNTS TO WHICH THEY ARE ENTITLED FOR THEIR SERVICES.

B-122841, AUG. 31, 1956

TO MR. JOHN J. KLAK:

CONSIDERATION HAS BEEN GIVEN TO YOUR REQUEST THAT OUR OFFICE REVIEW ITS AUDIT ACTION WITH RESPECT TO THE CHARGES OF AVIATION CORPORATION OF SEATTLE, DOING BUSINESS AS WESTAIR TRANSPORT, AN IRREGULAR AIR CARRIER, FOR TRANSPORTATION SERVICES PERFORMED FOR THE UNITED STATES BEGINNING IN 1951. THE SERVICES, FOR THE MOST PART, CONSISTED OF CHARTER MOVEMENTS BY AIR OF MILITARY PERSONNEL BETWEEN VARIOUS MILITARY ESTABLISHMENTS WITHIN THE UNITED STATES, WHICH ARE GENERALLY REFERRED TO AS "CAMS" (COMMERCIAL AIR MOVEMENTS).

OUR AUDIT IS A PART OF OUR STATUTORY RESPONSIBILITIES RELATIVE TO THE SETTLEMENT AND ADJUSTMENT OF ALL CLAIMS BY OR AGAINST THE UNITED STATES (31 U.S.C. 71) AND SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 49 U.S.C. 66, SPECIFICALLY RESERVES THE RIGHT IN THE GOVERNMENT IN INSTANCES SUCH AS HERE INVOLVED TO RECOVER OVERPAYMENTS BY SETOFF. SUCH ACTION IS DESIGNED TO RECOVER PUBLIC FUNDS UNLAWFULLY COLLECTED AND RETAINED AND IS NOT IN ANY WAY INCONSISTENT WITH THE "NATIONAL TRANSPORTATION POLICY" (AS YOU SUGGEST) WHICH, APART FROM THE FACT THAT SUCH POLICY IS NOT SPECIFICALLY APPLICABLE TO AIR CARRIAGE SUBJECT TO THE CIVIL AERONAUTICS ACT OF 1938, CLEARLY ENOUGH IS NOT INTENDED TO SANCTION PAYMENTS TO CARRIERS IN EXCESS OF THE AMOUNTS TO WHICH THEY ARE ENTITLED FOR THEIR SERVICES.

THE AUDIT HERE IS FOR THE PURPOSE OF DETERMINING THAT THE SERVICES CONTRACTED FOR HAVE BEEN PERFORMED IN A SATISFACTORY MANNER, AND THAT THE CONTRACT AND CHARGES CONFORM TO ALL APPLICABLE STATUTES, RULES, REGULATIONS, AND VALID AGREEMENTS BETWEEN THE CARRIER AND THE GOVERNMENT. THE RATES AND CHARGES OF WESTAIR TRANSPORT FOR CHARTER PASSENGER SERVICES WERE DETERMINED BY REFERENCE TO ITS TARIFFS FILED WITH THE CIVIL AERONAUTICS BOARD IN COMPLIANCE WITH SECTION 403 OF THE CIVIL AERONAUTICS ACT OF 1938, 49 U.S.C. 483, WHICH PROVIDED THE MAXIMUM THAT THE CARRIER COULD CHARGE THE GOVERNMENT. BY REFERRING TO THE CARRIER'S TARIFFS, TO SUCH ARRANGEMENTS BETWEEN THE CARRIER AND THE GOVERNMENT THAT DO NOT EXCEED TARIFF REQUIREMENTS AND RATES, AND THE DOCUMENTS SUBMITTED BY THE CARRIER TO SUPPORT ITS BILLS, THE CORRECTNESS OF THE CARRIER'S CHARGES ARE DETERMINED.

YOUR REQUEST FOR REVIEW OF OUR AUDIT ACTION WITH REGARD TO WESTAIR TRANSPORT DOES NOT IDENTIFY ANY SPECIFIC INSTANCES INVOLVING PARTICULAR VOUCHERS AND CONTRACTS AS TO WHICH OUR ACTION DID NOT CONFORM TO THE RECORD OR WAS CONTRARY TO ESTABLISHED LEGAL PRINCIPLES. SINCE YOUR COMPLAINT WAS GENERAL IN NATURE, OUR TRANSPORTATION DIVISION WAS REQUESTED TO FURNISH INFORMATION REGARDING THE AUDIT OF THE ACCOUNTS OF WESTAIR TRANSPORT. THE TRANSPORTATION DIVISION HAS ADVISED THAT A REVIEW HAS BEEN MADE OF ALL OVERPAYMENT NOTICES, G.A.O. FORMS NO. 1003, STATED AGAINST THAT CARRIER, AND THAT SUCH NOTICES INDICATED THAT THERE WERE SEVERAL DISTINCT CLASSES OR TYPES OF OVERPAYMENTS. IT SHOULD BE STATED, HOWEVER, THE TYPES OF OVERPAYMENTS ARE NOT PECULIAR TO TRANSACTIONS INVOLVING ONLY WESTAIR TRANSPORT, BUT ARE TYPICAL OF OVERPAYMENTS WHICH WE HAVE FOUND IN THE AUDIT OF VOUCHERS INVOLVING COMMERCIAL AIR MOVEMENTS (CAMS) BY REGULAR AND IRREGULAR AIR CARRIERS GENERALLY, IN ALL INSTANCES USING SIMILAR AUDIT PRINCIPLES.

THE FOLLOWING SPECIFIC INSTANCES OF OVERPAYMENT ARE PRESENTED AS BEING REPRESENTATIVE OF THE SEVERAL CLASSES OR TYPES OF OVERPAYMENTS INVOLVED IN THIS CASE AND WILL SERVE TO ILLUSTRATE THE AUDIT PROCEDURE USED.

1. FERRY MILEAGE BILLED AND PAID FOR EXCEEDED FERRY MILEAGE ACTUALLY FLOWN BY AIRCRAFT ASSIGNED TO A SPECIFIC CHARTER MOVEMENT.

T/R DA-1,113,479, ATTACHED TO BILL NO. WAT-20, PAID ON VOUCHER NO. 511982 IN THE AUGUST 1952 ACCOUNTS OF DISBURSING OFFICER J. L. WHIPPLE, WAS ISSUED AT CAMP STONEMAN, CALIFORNIA, ON JULY 14, 1952, FOR THE TRAVEL OF 38 PERSONS FROM OAKLAND AIRPORT, CALIFORNIA, TO COLUMBIA MUNICIPAL AIRPORT, SOUTH CAROLINA, AND REFERRED TO CAM 1177-J, FOR WHICH WESTAIR TRANSPORT BILLED AND WAS PAID $4,784.65.

THE AMOUNT PAID INCLUDED CHARGES FROM 1,850 PREFERRY MILES FROM CHICAGO, ILLINOIS, TO OAKLAND, CALIFORNIA, AND 523 POSTFERRY MILES FROM COLUMBIA, SOUTH CAROLINA, TO PHILADELPHIA, PENNSYLVANIA. WHILE THE TRANSPORTATION REQUEST AND THE ADMINISTRATIVE ACCEPTANCE OF THE CHARTER CERTIFICATE, WHICH IS SHOWN TO HAVE OCCURRED SEVERAL DAYS AFTER THE SCHEDULED DATE OF THE MOVEMENT, WERE CONSIDERED SATISFACTORY EVIDENCE OF PERFORMANCE OF THE LIVE MILEAGE SERVICE BETWEEN THE POINTS SPECIFIED IN THE CHARTER CERTIFICATE, THERE WAS NO EVIDENCE PRESENTED TO SUPPORT THE FERRY MILEAGE BETWEEN THE POINTS SPECIFIED THEREIN. ON MARCH 1, 1954, WE REQUESTED FACTUAL EVIDENCE OF THE FERRY MILEAGE ACTUALLY FLOWN IN CONNECTION WITH THIS MOVEMENT. IN OCTOBER 1954 WESTAIR TRANSPORT SUBMITTED, IN CONNECTION WITH CAM 1177-J, A PILOTS FLIGHT REPORT, WHICH INDICATES THAT PLANE NUMBER 1247-N (THE SAME PLANE NUMBER NOTED ON THE BOTTOM OF THE CAM CERTIFICATE) FLEW IN FERRY SERVICE FROM LOWRY AIR FORCE BASE, DENVER, COLORADO, TO OAKLAND, CALIFORNIA, ON JULY 15, 1952. THIS IS CONFIRMED BY WESTAIR TRANSPORT'S OPERATIONAL REPORT FOR THE QUARTER ENDING SEPTEMBER 30, 1952, WHICH WAS REQUIRED TO BE FILED WITH THE CIVIL AERONAUTICS BOARD PURSUANT TO APPLICABLE REGULATIONS. WESTAIR TRANSPORT'S TRIP REGISTER, PAGES 49 AND 50, ALSO INDICATES THE FERRY FLIGHT OF THIS PLANE FROM DENVER TO OAKLAND ON JULY 15, 1952. THE AIRCRAFT (1247-N) WAS POSITIONED AT DENVER AS A RESULT OF ANOTHER CHARTER PASSENGER MOVEMENT UNDER CAM 1201-J, FROM KELLY FIELD, SAN ANTONIO, TEXAS, TO LOWRY AIR FORCE BASE, DENVER, COLORADO. UPON COMPLETION OF THE CHARTER FLIGHT PURSUANT TO CAM 1177-J, THE OPERATIONAL REPORT FILED WITH THE CIVIL AERONAUTICS BOARD INDICATES AIRCRAFT 1247-N DID NOT MAKE A POSTFERRY FLIGHT FROM COLUMBIA, SOUTH CAROLINA, TO PHILADELPHIA, PENNSYLVANIA, BUT, INSTEAD, THE PLANE WAS RESCHEDULED IN ANOTHER CHARTER PASSENGER FLIGHT FROM COLUMBIA, SOUTH CAROLINA, TO VICHY, MISSOURI, UNDER CAM 1238-J.

FOR THE SERVICES ACTUALLY PERFORMED PURSUANT TO CAM 1177-J, WESTAIR TRANSPORT WAS ALLOWED 941 PREFERRY MILES FROM DENVER TO OAKLAND, COMPUTED FROM U.S. DEPARTMENT OF COMMERCE COAST AND GEODETIC SURVEY PUBLICATION NO. 238, 2,309 LIVE MILES FROM OAKLAND TO COLUMBIA AS BILLED, AND NO POSTFERRY MILEAGE SINCE NO POSTFERRY FLIGHT WAS NECESSARY. ON THE BASIS OF THE FOREGOING INFORMATION A NOTICE OF OVERPAYMENT FOR $1,145 WAS ISSUED IN CONNECTION WITH THIS TRIP.

THE RECORD SHOWED THAT WESTAIR TRANSPORT WAS FULLY COGNIZANT AT THE TIME IT BILLED AND WAS PAID CHARGES BASED ON THE TOTAL FERRY MILEAGE SHOWN ON THE CHARTER CERTIFICATE, THAT IT HAD ACTUALLY FLOWN A REDUCED AMOUNT OF FERRY MILEAGE. IN THIS SITUATION WESTAIR TRANSPORT GAVE NO EFFECT TO GENERAL PROVISION (3) OF THE CHARTER CERTIFICATE WHICH READS:

"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.'

THE ABOVE EXAMPLE OF THE FAILURE TO ELIMINATE OR REDUCE FERRY MILEAGE NOT FLOWN BECAUSE OF RESCHEDULING AIRCRAFT IS TYPICAL OF MANY CASES. OUR AUDIT ACTION GAVE EFFECT TO THIS PROVISION OF THE CHARTER CERTIFICATE, AND UNDER THE CIRCUMSTANCES WAS PROPER.

2. OFFSET OF PREFERRY MILEAGE SHOWN ON THE CHARTER CERTIFICATE, BUT NOT FLOWN, AGAINST POSTFERRY MILEAGE FLOWN IN EXCESS OF AMOUNT SHOWN ON CHARTER CERTIFICATE.

T/R DA-1,132,670, ATTACHED TO WESTAIR TRANSPORT'S BILL NO. T-124, PAID ON VOUCHER NO. 559187 IN THE FEBRUARY 1953 ACCOUNTS OF DISBURSING OFFICER J. L. WHIPPLE, WAS ISSUED ON JANUARY 1, 1953, FOR THE TRAVEL OF 38 PERSONS FROM BOEING FIELD, SEATTLE, WASHINGTON, TO FRIENDSHIP FIELD, BALTIMORE, MARYLAND, AND REFERRED TO CAM 4294-J. FOR THIS SERVICE WESTAIR TRANSPORT BILLED AND WAS PAID $3,815.10, WHICH INCLUDED CHARGES FOR 959 PREFERRY MILES FROM BURBANK, CALIFORNIA, TO SEATTLE, WASHINGTON, AND 163 POSTFERRY MILES FROM BALTIMORE, MARYLAND, TO NEWARK, NEW JERSEY.

EVIDENCE THAT THE PREFERRY MILEAGE WAS FLOWN WAS NOT FURNISHED BY WESTAIR TRANSPORT. AN AMENDED OPERATIONAL REPORT FOR THE QUARTER ENDED DECEMBER 31, 1952, FILED WITH THE CIVIL AERONAUTICS BOARD, INDICATES THAT AIRCRAFT 1246-N--- THE SAME AIRCRAFT SHOWN ONCAM 4294-J- - WAS POSITIONED AT SEATTLE, WASHINGTON, AS THE RESULT OF A COMMON CARRIAGE PASSENGER FLIGHT FROM WASHINGTON, D.C. ACCORDINGLY, IN CONFORMITY WITH GENERAL PROVISION (3) OF THE CHARTER CERTIFICATE THE PREFERRY MILEAGE WAS DISALLOWED. THE POSTFERRY MILEAGE FLOWN WAS SUPPORTED BY A COPY OF SLICK AIRWAYS, INC. AIRCRAFT AND ENGINE LOG FOR AIRCRAFT 1246-N. (SLICK AIRWAYS FORMS ARE REPORTEDLY USED AS A MATTER OF CONVENIENCE.) THIS LOG INDICATES THAT AIRCRAFT 1246-N FLEW IN FERRY STATUS FROM BALTIMORE, MARYLAND, TO LA GUARDIA FIELD, NEW YORK, A DISTANCE OF 172 MILES, OR NINE MILES IN EXCESS OF THE 163 POSTFERRY MILES SHOWN ON THE CHARTER CERTIFICATE. IN OUR AUDIT WESTAIR TRANSPORT WAS ALLOWED CREDIT FOR THE 172 (OR NINE MORE THAN CLAIMED) POSTFERRY MILES ACTUALLY FLOWN IN ORDER TO GIVE THE CARRIER MAXIMUM CREDIT FOR ALL FERRY MILES IDENTIFIABLE AS BEING APPLICABLE TO THE SPECIFIC MOVEMENT INVOLVED.

3. FERRY MILEAGE "SPLIT" BETWEEN TWO SUCCESSIVE CAM FLIGHTS.

T/R DA-1,110,691, ATTACHED TO WESTAIR TRANSPORT'S BILL NO. WAT-23, PAID ON VOUCHER NO. 518807 IN THE SEPTEMBER 1952 ACCOUNTS OF DISBURSING OFFICER J. L. WHIPPLE, WAS ISSUED AT FORT LAWTON, WASHINGTON, ON JULY 30, 1952, FOR THE TRAVEL OF 37 PERSONS FROM SEATTLE, WASHINGTON, TO STANDIFORD FIELD, LOUISVILLE, KENTUCKY, AND REFERRED TO CAM 1444-J. FOR THIS SERVICE THE CARRIER BILLED AND WAS PAID $3,739.15. THIS AMOUNT INCLUDED CHARGES FOR 1,369 PREFERRY MILES FROM OMAHA, NEBRASKA, TO SEATTLE, WASHINGTON, AND 269 POSTFERRY MILES FROM LOUISVILLE, KENTUCKY, TO CHICAGO, ILLINOIS.

TO SUPPORT THIS FERRY MILEAGE THE CARRIER SUBMITTED THREE PILOTS FLIGHT REPORTS ON FORMS OF THE FLYING TIGER LINE, INC. THE FIRST REPORT INDICATES THAT PLANE NUMBER 1246-N (PLANE 1246-N IS ALSO SHOWN ON CAM 1444-J) FLEW IN A FERRY STATUS FROM ELP (EL PASO, TEXAS) TO BUR (BURBANK, CALIFORNIA), AND THE SECOND REPORT INDICATES THAT THE PLANE FLEW IN FERRY STATUS FROM BUR (BURBANK) TO BFI (SEATTLE WASHINGTON). THESE TWO DOCUMENTS WERE SUBMITTED TO SUPPORT THE CARRIER'S CLAIM FOR 1,369 PREFERRY MILES FROM OMAHA TO SEATTLE. THE THIRD REPORT INDICATES THAT PLANE 1246-N FLEW FROM SDF (LOUISVILLE, KENTUCKY) TO GRI (GRAND ISLAND, NEBRASKA), AND IT WAS SUBMITTED TO SUPPORT THE POSTFERRY MILEAGE CLAIMED FROM LOUISVILLE, KENTUCKY, TO CHICAGO, ILLINOIS.

THE DISTANCE SHOWN IN PUBLICATION NO. 238 FROM EL PASO TO BURBANK (LOS ANGELES USED FOR BURBANK) IS 701 MILES, AND THE DISTANCE FROM BURBANK TO SEATTLE IS 959 MILES OR A TOTAL OF 1,660 MILES. ON THE BASIS OF SUCH RECORDS, WITHOUT MORE, IT WOULD APPEAR THAT WESTAIR TRANSPORT WAS ENTITLED TO THE 1,369 PREFERRY MILES STATED IN CAM 1444-J AS FLOWN FROM OMAHA TO SEATTLE. HOWEVER, THE CARRIER HAD ALSO DESIGNATED THE SAME FLIGHT REPORTS AS SUPPORTING THE 628 POSTFERRY MILES BID FROM EL PASO, TEXAS, TO SAN DIEGO, CALIFORNIA, IN CONNECTION WITH CAM 1354-J. THIS IS THE SO-CALLED "SPLIT-FERRY" SITUATION; THAT IS, THE FERRY MILEAGE FLOWN IS SPLIT BETWEEN TWO SUCCESSIVE CAM FLIGHTS WHERE THE SAME AIRCRAFT IS USED. IN THE INSTANT CASE, PLANE 1246-N WAS USED IN A CHARTER PASSENGER FLIGHT UNDER CAM 1354-J FROM SPRINGFIELD, MISSOURI, TO EL PASO, TEXAS, PRIOR TO THE FERRY FLIGHT FROM EL PASO TO SEATTLE VIA BURBANK DESCRIBED ABOVE. THE FERRY MILEAGE SITUATION, AS RELATED TO THE CARRIER'S CLAIM FOR PREFERRY MILEAGE ON CAM 1444-J AND THE POSTFERRY MILEAGE ON CAM 1354-J, APPEARS AS FOLLOWS:

CHART

CAM CERTIFICATE FERRY MILEAGE:

CAM 1354-J, POSTFERRY, EL PASO TO SAN DIEGO 628

CAM 1444-J, PREFERRY, OMAHA TO SEATTLE 1,369

TOTAL RELATED CAM CERTIFICATE FERRY MILEAGE 1,997

ACTUAL FLIGHT OF THE PLANE (MILEAGE COMPUTED FROM PUBLICATION NO. 238):

EL PASO TO BURBANK 701

BURBANK TO SEATTLE 959

TOTAL 1,660

THUS, IT CAN BE SEEN THAT THE DISTANCE OF 1,660 MILES ACTUALLY FLOWN AND CREDITED BY WESTAIR TRANSPORT AGAINST THESE TWO CAMS, IS LESS THAN THE AGGREGATE OF THE CERTIFICATE POSTFERRY MILEAGE ON CAM 1354-J AND THE PREFERRY MILEAGE ON CAM 1444-J. IN ORDER TO GIVE THE CARRIER MAXIMUM CREDIT FOR THE 1,660 MILES ACTUALLY FLOWN OUR TRANSPORTATION DIVISION ALLOWED THE 628 POSTFERRY MILES STATED IN CAM 1354-J, AND THE BALANCE, OR 1,032 MILES, WAS CREDITED AGAINST THE PREFERRY MILES STATED IN CAM 1444- J. AN AUDIT PRACTICE TO WHICH YOU OBJECT IS THE REQUIREMENT FOR REVIEWS AND RECOMPUTATION OF THE INDIVIDUAL CAM RECORDS. IT APPEARS THAT MORE THAN ONE REVIEW OF FERRY SUPPORT DATA IS OFTEN NECESSARY IN ORDER TO GIVE THE CARRIER MAXIMUM CREDIT FOR FERRY MILEAGE FLOWN IN CONNECTION WITH RELATED CAMS, WHICH WOULD NOT BE POSSIBLE IF THE CAMS ARE CONSIDERED INDIVIDUALLY. SITUATIONS SUCH AS THAT INVOLVED IN THE ABOVE EXAMPLE REQUIRED THE REVIEW OF FERRY SUPPORT DATA IN ORDER THAT APPROPRIATE DISTRIBUTION OF FERRY MILEAGE FLOWN COULD BE MADE. IT SHOULD BE NOTED THAT CONSIDERATION OF THE FERRY MILEAGE ATTRIBUTABLE TO SUCCESSIVE CAMS WAS UNDERTAKEN ONLY IN INSTANCES WHERE SUCCESSIVE CHARTER MOVEMENTS PERFORMED WITH THE SAME AIRCRAFT COULD BE READILY ASSOCIATED FROM THE AVAILABLE FLIGHT RECORDS. HOWEVER, WHERE THE EVIDENCE SUBMITTED BY WESTAIR TRANSPORT IN SUPPORT OF FERRY MILEAGE FLOWN INDICATED THAT THE AIRCRAFT ASSIGNED TO SUCCESSIVE CAMS HAD BEEN USED FOR OTHER COMMERCIAL PURPOSES IN THE INTERVENING PERIOD, THE ABOVE TREATMENT OF FERRY MILEAGE COULD NOT BE APPLIED DUE TO INABILITY ACCURATELY TO ASSOCIATE THE FERRY MILEAGE WITH PARTICULAR CAMS. IN SUCH CASES THE CAMS WERE TREATED AS RELATING TO SEPARATE AND DISTINCT CHARTERS. THIS PROCEDURE HAS BEEN CONSISTENTLY FOLLOWED IN OUR AUDIT OF PAYMENTS TO ALL AIR CARRIERS WHEN THE SO-CALLED "SPLIT" FERRY MILEAGE PROBLEM HAS ARISEN.

4. MILEAGE SOURCES

(A)PUBLICATION NO. 238

CHARTER CERTIFICATE NO. 1716-B, RELATED TO T/R DA-1,056,904, ISSUED ON FEBRUARY 2, 1952, WAS SUBMITTED IN PARTIAL SUPPORT OF WESTAIR TRANSPORT'S BILL NO. 217, PAID ON VOUCHER NO. 211386 IN THE FEBRUARY 1952 ACCOUNTS OF DISBURSING OFFICER S. E. BIGNELL. THE CERTIFICATE INDICATES THAT BOTH THE LIVE MILEAGE FROM OAKLAND, CALIFORNIA, TO OLMSTEAD AIR FORCE BASE, PENNSYLVANIA, AND THE POSTFERRY MILEAGE FROM HARRISBURG, PENNSYLVANIA, TO NEWARK, NEW JERSEY, WERE DETERMINED FROM SOURCE CODE B, AIRWAYS DISTANCE CHARTS. HOWEVER, GENERAL PROVISION (1) OF THE CHARTER CERTIFICATE READS:

"/1) THE FOLLOWING LETTER CODES SHALL BE USED TO INDICATE THE SOURCES OF MILEAGES BETWEEN POINTS LISTED IN THE ROUTINGS:

CHART

CODE SOURCE WHEN USED

A DEPARTMENT OF COMMERCE PUBLICATION 328 GENERALLY

B AIRWAYS DISTANCE CHARTS FIRST ALTERNATE

C CAB MILEAGE BOOK NO. 1 AND/OR 2 SECOND ALTERNATE

OR AS PUBLISHED

TARIFFS REQUIRE

D OTHER THIRD ALTERNATE"

THIS PROVISION SIGNIFIES THAT CODE B AIRWAYS DISTANCE CHARTS ARE TO BE USED AS THE "FIRST ALTERNATE" TO DEPARTMENT OF COMMERCE PUBLICATION 238, WHICH SHOWS AIRLINE DISTANCES BETWEEN CITIES IN THE UNITED STATES COMPUTED ON THE GREAT CIRCLE PROJECTION BASIS. THE WORD "ALTERNATE" IS UNDERSTOOD AS DENOTING THAT "SOURCE B" IS A SUBSTITUTE MILEAGE SOURCE TO BE USED IN LIEU OF ,SOURCE A," WHERE NECESSARY, AND NOT AT THE CARRIER'S OPTION.

AS PREVIOUSLY INDICATED, AIR CARRIERS SUBJECT TO REGULATION BY THE CIVIL AERONAUTICS BOARD ARE REQUIRED BY SECTION 403 OF THE CIVIL AERONAUTICS ACT TO CHARGE ONLY THOSE RATES SPECIFIED IN THEIR CURRENTLY EFFECTIVE TARIFFS. AT THE TIME OF THIS MOVEMENT FROM OAKLAND TO OLMSTEAD AIR FORCE BASE THE EFFECTIVE CHARTER TARIFF FOR WESTAIR TRANSPORT'S ACCOUNT WAS AGENT JOHN J. KLAK'S MILITARY TRAFFIC TARIFF NO. 1, C.A.B. NO. 3. THE RATES SHOWN ON 3RD REVISED PAGE 10, EFFECTIVE FROM NOVEMBER 7, 1951, TO MARCH 26, 1952, ARE PERTINENT HERE. THE PROVISION IN THIS TARIFF RELEVANT TO THE COMPUTATION OF MILEAGES, REMAINED UNCHANGED FROM MAY 26, 1951, THROUGH MARCH 26, 1952. SUCH PROVISION READS AS FOLLOWS:

"MILEAGE WILL BE COMPUTED BY REFERENCE TO CURRENT UNITED STATES COAST AND GEODETIC SURVEY CHARTS AND THE ROUTE USED WILL BE THE MOST DIRECT ALONG ESTABLISHED CIVIL AIRWAYS WHEN PRACTICAL.'

PUBLICATION NO. 238, CODE A IN THE CHARTER CERTIFICATE, IS MORE FULLY DESCRIBED AS "U.S. DEPARTMENT OF COMMERCE COAST AND GEODETIC SURVEY AIR- LINE DISTANCES BETWEEN CITIES IN THE UNITED STATES.' IT SHOULD BE CLEAR, FROM THE FACT THAT THE COAST AND GEODETIC SURVEY HAS ISSUED VARIOUS CHARTS OR PUBLICATIONS USEFUL IN DETERMINING AIRLINE DISTANCES BETWEEN CITIES, THAT THE PERTINENT PROVISION IN AGENT KLAK'S TARIFF NO. 1, 3RD REVISED PAGE 10, IS LACKING IN ESSENTIAL CLARITY TO SIGNIFY THAT THE MILEAGES FOR TARIFF PURPOSES ARE TO BE OBTAINED EXCLUSIVELY FROM "AIRWAYS DISTANCE CHARTS.' THE CONCLUSION THAT PUBLICATION NO. 238 MAY PROPERLY BE VIEWED AS WITHIN THE SOURCES INDEFINITELY DESCRIBED IN THE TARIFF IS STRENGTHENED BY REASON OF THE FULLER DESCRIPTION OF THE PUBLICATION SPECIFIED, AS CONTAINING THE MILEAGE INFORMATION, IN 4TH REVISED PAGE 10 OF THE TARIFF, EFFECTIVE MARCH 27, 1952, A FEW MONTHS AFTER THE EFFECTIVE DATE OF 3RD REVISED PAGE 10. THE 4TH REVISED PAGE 10 IDENTIFIES THE PUBLICATION AS THE "CURRENT (C) U.S. DEPARTMENT OF COMMERCE COAST AND GEODETIC SURVEY AIR LINE DISTANCES BETWEEN CITIES IN THE UNITED STATES.' THE SAME DESCRIPTION IS ALSO CONTAINED IN LATER REVISIONS OF PAGE 10. THAT DESCRIPTION CONFORMS CLOSELY TO THE TITLE OF THE PUBLICATION USED IN OUR AUDIT, LACKING ONLY THE WORDS "SPECIAL PUBLICATION NO. 238" IN ORDER TO MAKE IT IDENTICAL WITH SUCH TITLE. THE REFERENCE "/C)" IS EXPLAINED IN THE TARIFF AS DENOTING "CHANGES IN WORDING WHICH RESULT IN NEITHER INCREASES OR DECREASES.'

THUS, IT WOULD APPEAR THAT, ALTHOUGH AGENT KLAK'S TARIFF NO. 1 ESTABLISHES NO PARTICULAR PUBLICATION BY NUMBER AS BEING THE SOLE OR PRIMARY SOURCE OF MILEAGE INFORMATION, THE GENERAL LANGUAGE USED IN 3RD AND 4TH REVISED PAGE 10 IS PRACTICALLY THE SAME AS THE TITLE OF PUBLICATION NO. 238. IN ANY EVENT, SINCE THERE IS REASONABLE GROUND FOR THE ASSUMPTION THAT THE TARIFF LANGUAGE IS INDEFINITE, ANY DOUBT THAT THEREBY ARISES MUST BE RESOLVED IN FAVOR OF THE GOVERNMENT IN ACCORDANCE WITH A FIRMLY-ESTABLISHED PRINCIPLE OF TARIFF INTERPRETATION.

(B) USE OF AIRWAY DISTANCE CHARTS WHERE THE TARIFF RATE AVAILABLE TO THE GENERAL PUBLIC IS LOWER THAN THE RATE IN CARRIER'S MILITARY TRAFFIC TARIFF.

DURING THE PERIOD FROM MAY 26, 1951, TO OCTOBER 6, 1951, WESTAIR TRANSPORT HAD ON FILE WITH THE CIVIL AERONAUTICS BOARD TWO TARIFFS--- LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, AND MILITARY TRAFFIC TARIFF NO. 1, C.A.B. NO. 3. THE CHARTER RATES MADE AVAILABLE TO THE GENERAL PUBLIC ON 2ND REVISED PAGE 17-A OF LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, WERE SUBSTANTIALLY LOWER THAN THE CHARTER RATES SHOWN IN MILITARY TRAFFIC TARIFF NO. 1, C.A.B. NO. 3. IT IS WELL SETTLED THAT THE UNITED STATES, BEING A PART OF THE GENERAL PUBLIC, IS ENTITLED TO TRANSPORTATION SERVICES AT RATES NOT IN EXCESS OF THOSE AVAILABLE TO THE PUBLIC FOR LIKE SERVICES. 33 COMP. GEN. 483, 487; 20 ID. 870, 875; MISSOURI PACIFIC RAILROAD COMPANY V. THE UNITED STATES, 71 C.CLS. 650, 661. WESTAIR TRANSPORT'S BILLS COVERING SERVICES PERFORMED DURING THIS PERIOD WERE THEREFORE AUDITED ON THE BASIS OF THE RATES IN LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5. THIS TARIFF PROVIDED THAT RULE 26.0 WOULD GOVERN THE COMPUTATION OF MILEAGE. THE SAID RULE PROVIDES THAT---

"MILEAGE BETWEEN POINTS NOT SPECIFICALLY SHOWN IN TABLES, ON WHICH FARES ARE BASED, WILL BE COMPUTED BY REFERENCE TO CURRENT UNITED STATES COAST AND GEODETIC SURVEY SECTIONAL OR REGIONAL AERONAUTICAL CHARTS AND THE ROUTE USED WILL BE THE MOST DIRECT ALONG ESTABLISHED CIVIL AIRWAYS WHEN PRACTICAL.'

THERE APPARENTLY ARE VARIOUS SECTIONAL AERONAUTICS CHARTS COVERING THE UNITED STATES, AND NO AERONAUTICAL CHARTS SPECIFICALLY TITLED "REGIONAL.' THE SECTIONAL AERONAUTICAL CHARTS DO NOT INDICATE MILEAGES ALONG THE CIVIL AIRWAYS, AND TO DETERMINE MILEAGES IT IS NECESSARY TO SCALE THE MILEAGES BETWEEN POINTS ON THE VARIOUS CHARTS. IT WAS FOUND THAT THE COAST AND GEODETIC SURVEY PUBLISHED A "CIVIL AIRWAYS AND MILEAGE CHART, LOW FREQUENCY (COLORED) AIRWAYS SYSTEM," WHICH INDICATED MILEAGES BETWEEN POINTS ON THE CIVIL AIRWAYS. SINCE THE DISTANCES BETWEEN POINTS ON THE CIVIL AIRWAYS WERE SCALED FROM THE SECTIONAL AERONAUTICAL CHARTS, THE USE OF THIS "MILEAGE CHART" WOULD NOT APPEAR TO VIOLATE THE PROVISIONS OF RULE 26.0. THEREFORE, IN THOSE INSTANCES WHERE WESTAIR TRANSPORT'S (AVIATION CORPORATION OF SEATTLE) LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, WAS USED IN OUR AUDIT TO DETERMINE THE RATE, THE ABOVE-IDENTIFIED "MILEAGE CHART" AFFORDED THE INFORMATION NECESSARY TO DETERMINE THE AGGREGATE DISTANCES.

5. RATES

T/R DA-442,831, ISSUED ON JULY 17, 1952, FOR THE TRAVEL OF 40 PERSONS, REFERRING TO CAM NO. 1238-J, WAS ANNOTATED ON THE BACK "TRANSPORTATION PROVIDED FOR 31 PERSONS.' WHILE MILITARY TRAFFIC TARIFF NO. 1, C.A.B. NO. 3, NAMED A FERRY MILEAGE RATE OF 80 CENTS PER MILE, APPLICABLE IN EITHER CASE, IT NAMED A RATE OF $1.25 PER CHARTER MILE FOR LOADS OF MORE THAN 35 PASSENGERS AND A RATE OF $1.15 PER CHARTER MILE FOR LOADS OF 35 PASSENGERS OR LESS. WESTAIR TRANSPORT'S BILL NO. WAT-20, PAID ON VOUCHER NO. 511982 IN THE AUGUST 1952 ACCOUNTS OF DISBURSING OFFICER J. L. WHIPPLE, INDICATES THAT THE CHARGES FOR THIS TRANSPORTATION REQUEST WERE COMPUTED BY THE CARRIER ON THE BASIS OF A LOAD OF MORE THAN 35 PASSENGERS AT $1.25 PER CHARTER MILE. THERE DID NOT APPEAR TO BE ANY PROPER BASIS FOR THE CARRIER'S CHARGE AND WE APPLIED THE RATE OF $1.15 PER CHARTER (LIVE) MILE FOR THIS MOVEMENT.

T/R WQ 35,499,157, ATTACHED TO WESTAIR TRANSPORT'S BILL NO. 8, PAID ON VOUCHER NO. 89767 IN THE OCTOBER 1951 ACCOUNTS OF DISBURSING OFFICER S. E. BIGNELL, WAS ISSUED ON SEPTEMBER 28, 1951, FOR THE CHARTER TRANSPORTATION OF 44 PERSONS FROM SEATTLE, WASHINGTON, TO NEWARK, NEW JERSEY. THE TRANSPORTATION REQUEST REFERRED TO CAM 323-B. FOR THIS SERVICE WESTAIR TRANSPORT BILLED AND WAS PAID$6,065.20, BUT NO RATE BASIS FOR THE CHARGES WAS SHOWN IN THE BILL OR THE CHARTER CERTIFICATE. IN SUBSEQUENT CORRESPONDENCE WITH THE CARRIER IT WAS DEVELOPED THAT CHARGES HAD BEEN BASED ON A RATE OF FOUR CENTS PER PASSENGER MILE. WESTAIR TRANSPORT'S TARIFF PUBLISHING PER PASSENGER MILE RATES WAS LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, WHICH ON ORIGINAL PAGE 16 SHOWS "NON-CHARTER PASSENGER FARES IN DOLLARS PER PASSENGER AIR MILE.' THESE RATES WERE SPECIFICALLY IDENTIFIED AS NON CHARTER RATES. AS THE TRANSPORTATION REQUEST CALLED FOR "CHARTER" SERVICE, THE ONLY RATE APPLICABLE TO THIS MOVEMENT WAS THE CHARTER RATE PER MILE. WHEN THE SERVICE HERE INVOLVED WAS PERFORMED WESTAIR TRANSPORT HAD ON FILE WITH THE CIVIL AERONAUTICS BOARD TWO CHARTER TARIFFS, OF WHICH LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, DISCUSSED ABOVE, QUOTED THE LOWEST CHARTER RATE. THEREFORE, IN OUR AUDIT, THE CHARTER RATE OF "$0.75 PER AIR MILE USE OF ENTIRE AIRPLANE" SHOWN ON 2ND REVISED PAGE 17-A OF LOCAL PASSENGER TARIFF NO. 1, C.A.B. NO. 5, AND THE MILEAGES COMPUTED FROM THE "CIVIL AIRWAYS AND MILEAGE CHART," WERE USED TO DETERMINE THE ALLOWABLE CHARGES FOR THE LIVE AND FERRY MOVEMENTS.

YOU SUGGEST THAT WE FAILED TO RECOGNIZE C.A.A. FLIGHT AND OPERATIONAL AND OTHER RESTRICTIONS PLACED UPON THE CARRIER. OUR OFFICE HAS BEEN AWARE OF CERTAIN RESTRICTIONS PERTAINING TO THE OPERATIONS OF IRREGULAR AIR CARRIERS SET FORTH IN PART 42 OF THE CIVIL AIR REGULATIONS, 14 C.F.4. 42, SUCH AS THE GROSS MAXIMUM TAKE-OFF WEIGHT LIMIT OF 45,000 POUNDS FOR C-46 TYPE AIRCRAFT USED IN CARRYING PASSENGERS FOR HIRE, AND THE REQUIREMENT THAT NIGHT VFR (VISUAL FLIGHT RULES) PASSENGER OPERATIONS ENTAILING USE OF LARGE AIRCRAFT SHALL BE CONDUCTED ONLY OVER CIVIL AIRWAYS OR OVER OFF- AIRWAY ROUTES FOR WHICH THE ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HAS ESTABLISHED MINIMUM EN ROUTE INSTRUMENT ALTITUDES. OUR OFFICE IS WILLING TO GIVE EFFECT TO CIVIL AIR REGULATIONS REQUIRING OPERATIONS ONLY OVER THE CIVIL AIRWAYS WHEN CARRYING PASSENGERS FOR HIRE. HOWEVER, IT SHOULD BE NOTED THAT THE BURDEN OF ASSERTING AND PROVING CLAIMS ON THIS BASIS IS UPON THE CLAIMANT. 23 COMP. GEN. 907; 18 ID. 980; AND 17 ID. 831.

THE ABOVE ILLUSTRATIONS SHOULD SHOW THAT OUR OFFICE HAS TRIED TO GIVE MAXIMUM CONSIDERATION TO THE PROVISIONS OF THE CARRIER'S TARIFFS, THE AIR CARRIER ASSOCIATION AGREEMENTS WITH THE GOVERNMENT, AND THE INDIVIDUAL CHARTER CERTIFICATES. OUR AUDIT PRACTICES AND POLICIES WITH RESPECT TO PAYMENTS TO WESTAIR TRANSPORT HAVE BEEN REVIEWED AND HAVE BEEN FOUND CONSISTENT WITH THE GENERAL AUDIT PRINCIPLES WE APPLY. IF THERE ARE ANY SPECIFIC BILLS OF WESTAIR TRANSPORT ON WHICH WE HAVE STATED EXCEPTIONS WHICH YOU BELIEVE WERE INCORRECTLY STATED, WE WILL AGAIN REVIEW THE AUDIT ACTION TAKEN UPON YOUR REQUEST SUPPORTED BY APPROPRIATE RECORDS AND INFORMATION IN FAVOR OF YOUR POSITION.

SINCE THE OVERPAYMENTS INVOLVED IN THIS CASE ARE CONSIDERABLE IN AMOUNT, HAVING BEEN MADE SEVERAL YEARS AGO, AND SINCE THE CARRIER HAS BEEN FULLY AWARE OF THE MEANS OF PROOF REQUIRED IN OUR AUDIT TO SUBSTANTIATE ITS BILLINGS AND THE TYPES OF QUESTIONS THAT WERE BEING RAISED, IT IS NECESSARY THAT THE CARRIER TAKE APPROPRIATE STEPS TO LIQUIDATE ITS INDEBTEDNESS TO THE UNITED STATES INASMUCH AS WE WOULD NOT BE WARRANTED IN FURTHER DELAYING PROPER COLLECTION EFFORTS TO RECOVER THE OVERPAYMENTS.