B-125340, DEC. 8, 1955

B-125340, DEC. 8, 1955

TO MR. A. B. ALLEN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25, 1955, ACKNOWLEDGED SEPTEMBER 1, PROTESTING THE ACTION OF THE POST OFFICE DEPARTMENT IN NEGOTIATING CERTAIN CONTRACTS WITH THE SOUTHERN PACIFIC COMPANY FOR THE HAULING OF MAIL IN THE SACRAMENTO, REDDING, AND FRESNO AREA OF CALIFORNIA.

IN REPLY TO OUR REQUEST FOR A COMPLETE REPORT IN THE MATTER THE POSTMASTER GENERAL HAS REPORTED THAT, WHILE THE SOUTHERN PACIFIC COMPANY HAD BEEN PROVIDING RAILWAY MAIL SERVICE IN THAT AREA, HIGHWAY POST OFFICE SERVICE WAS NEEDED IN ORDER TO GIVE THE PATRONS OF THE AREA IMPROVED POSTAL SERVICE. IT IS REPORTED ALSO THAT THE CONTRACT IN QUESTION PROVIDES FOR THE PERFORMANCE OF APPROXIMATELY 431,250 ANNUAL MILES OF HIGHWAY POST OFFICE SERVICE AT A RATE OF $140,000 PER ANNUM, WHICH SERVICE INCLUDES THE FURNISHING OF VEHICLES WITH DRIVERS BY THE CONTRACTOR.

IT IS FURTHER EXPLAINED IN THE REPORT THAT---

"THERE ARE CERTAIN CIRCUMSTANCES IN THIS CASE WHICH DO NOT ORDINARILY EXIST IN THE ESTABLISHMENT OF HIGHWAY POST OFFICE SERVICE. SACRAMENTO, CALIFORNIA, AN IMPORTANT RAILROAD JUNCTION POINT, HAS INADEQUATE POST OFFICE FACILITIES FOR THE OPERATION OF HIGHWAY POST OFFICE VEHICLES. THE PROPOSED CONTRACT WITH THE RAILROAD COMPANY HAS ELIMINATED THIS DIFFICULTY BECAUSE THE VEHICLES WILL BE OPERATED FROM THE SACRAMENTO, CALIFORNIA, RAILROAD STATION (SOUTHERN PACIFIC COMPANY) WHERE ADEQUATE TAILBOARD SPACE IS AVAILABLE. THE DEPARTMENT WOULD INCUR ADDITIONAL SHUTTLE COSTS FOR THE MOVEMENT OF THE MAILS BETWEEN A LEASED FACILITY AND THE SACRAMENTO RAILROAD STATION IF THE HIGHWAY POST OFFICE SERVICE WAS NOT PERFORMED BY THE SOUTHERN PACIFIC COMPANY. THE CONTRACT RATE INCLUDES THE COST OF LOADING AND UNLOADING MAIL FROM HIGHWAY POST OFFICE VEHICLES AT THIS TERMINAL POINT.

"WHEN EMERGENCY CONDITIONS MAKE IT IMPOSSIBLE TO OPERATE MOTOR VEHICLES OVER THE HIGHWAYS, THE RAILROAD COMPANY WILL UTILIZE TRAIN SERVICE OPERATED TO PROVIDE FOR THE TRANSPORTATION OF MAIL BETWEEN ANY OF THE POINTS AND AT ANY OF THE DESIGNATED OFFICES.

"THE RATE PER MILE OF APPROXIMATELY 32 CENTS THEREFORE NOT ONLY INCLUDES THE NORMAL OPERATION OF HIGHWAY POST OFFICE SERVICE BUT ALSO THE FURNISHING OF ADEQUATE FACILITIES AND MANPOWER AT SACRAMENTO, CALIFORNIA, FOR THE OPERATION OF THE SERVICE TOGETHER WITH EMERGENCY RAILROAD SERVICE WHEN AND IF REQUIRED. THEREFORE, THE DEPARTMENT BELIEVES THAT THE EXECUTION OF A CONTRACT WITH THE SOUTHERN PACIFIC COMPANY FOR THE OPERATION OF THE SUBJECT SERVICE WILL FOLLOW THE POLICY AND PROCEDURE CONTEMPLATED BY 47 STAT. 809, 39 U.S.C. 541A, AND THAT THIS OPERATION IS FULLY JUSTIFIED IN THE INTEREST OF PROVIDING POSTAL PATRONS OF THE SACRAMENTO-REDDING-FRESNO AREA WITH THE REQUIRED POSTAL SERVICE AT THE MOST REASONABLE COST TO THE TAXPAYER.'

SECTION 541A OF TITLE 39 OF THE U.S.C. REFERRED TO BY THE POSTMASTER GENERAL, PROVIDES AS FOLLOWS:

"THE POSTMASTER GENERAL IS AUTHORIZED, IN HIS DISCRETION, TO PERMIT RAILROAD AND ELECTRIC-CAR COMPANIES TO PROVIDE MAIL TRANSPORTATION BY MOTOR VEHICLE OVER HIGHWAYS IN LIEU OF SERVICE BY TRAIN, THE COMPENSATION FOR SUCH SERVICE TO BE AT A RATE NOT IN EXCESS OF THE RATE THAT WOULD BE ALLOWED FOR SIMILAR SERVICE BY RAILROAD OR ELECTRIC CAR, PAYMENT THEREFOR TO BE MADE FROM THE APPROPRIATE APPROPRIATION FOR RAILROAD TRANSPORTATION AND MAIL MESSENGER SERVICE OR ELECTRIC AND CABLE-CAR SERVICE.'

REGARDING THE CONTRACT RATE AS COMPARED WITH THAT ALLOWABLE FOR RAILROAD SERVICE IT IS REPORTED THAT:

"THE SOUTHERN PACIFIC RAILROAD FORMERLY RECEIVED APPROXIMATELY $142,000 FOR SERVICE RENDERED BY RAIL TO THE POST OFFICE DEPARTMENT. THIS SAME COMPANY OPERATES THE HIGHWAY POST OFFICE SERVICE AT THE RATE OF $140,000 PER ANNUM BUT PROVIDES FOUR ROUND TRIPS OF THIS SERVICE AS CONTRASTED WITH THREE ROUND TRIPS OF SERVICE BY RAIL. THE PER MILE RATE OF $0.321 WHICH INCLUDES TERMINAL FACILITIES AT SACRAMENTO AND LOADING AND UNLOADING SERVICE AT THAT POINT, IS FOR THE USE OF A 35 FOOT HIGHWAY POST OFFICE VEHICLE AND OPERATOR, CONTRASTED WITH A RATE OF $0.528 FOR A 30-FOOT RPO CAR.'

IN VIEW OF THE ABOVE PROVISIONS OF LAW AND THE EXPLANATION NOW FURNISHED BY THE POSTMASTER GENERAL, IT APPEARS THAT THERE EXISTS NO LEGAL BASIS ON WHICH WE PROPERLY MIGHT OBJECT TO THE ACTION OF THE POST OFFICE DEPARTMENT IN THIS MATTER.