B-126589, APR. 13, 1956

B-126589: Apr 13, 1956

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UNITED STATES AND MEXICO: REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 3 AND FEBRUARY 2. REQUESTING DECISION WHETHER IN THE CIRCUMSTANCES HEREAFTER RELATED YOUR AGENCY IS AUTHORIZED TO MAKE PAYMENT ON CERTAIN INVOICES OF THE INTERNATIONAL BUSINESS MACHINES CORPORATION. THE MACHINES WERE LEASED FROM THE INTERNATIONAL BUSINESS MACHINES CORPORATION. THE PURCHASE ORDER STATED THAT THE EQUIPMENT WAS TO BE SHIPPED ON COMMERCIAL BILL OF LADING BY THE BEST AND CHEAPEST WAY AND THAT THE COMMERCIAL BILL OF LADING WAS TO BE CONVERTED TO GOVERNMENT BILL OF LADING UPON ARRIVAL. THE CONTRACTOR PREPAID THE TRANSPORTATION CHARGES AND IT WAS THUS NOT POSSIBLE TO CONVERT THE COMMERCIAL BILLS OF LADING TO GOVERNMENT BILLS OF LADING.

B-126589, APR. 13, 1956

TO HONORABLE LELAND H. HEWITT, COMMISSIONER, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 3 AND FEBRUARY 2,1956, REQUESTING DECISION WHETHER IN THE CIRCUMSTANCES HEREAFTER RELATED YOUR AGENCY IS AUTHORIZED TO MAKE PAYMENT ON CERTAIN INVOICES OF THE INTERNATIONAL BUSINESS MACHINES CORPORATION, WASHINGTON, D.C. THE INVOICES REPRESENT TRANSPORTATION CHARGES PAID BY THE CORPORATION ON ACCOUNTING MACHINES SHIPPED TO EL PASO, TEXAS, FROM POUGHKEEPSIE, NEW YORK, AND FROM GREENCASTLE, INDIANA.

THE MACHINES WERE LEASED FROM THE INTERNATIONAL BUSINESS MACHINES CORPORATION. THE PURCHASE ORDER STATED THAT THE EQUIPMENT WAS TO BE SHIPPED ON COMMERCIAL BILL OF LADING BY THE BEST AND CHEAPEST WAY AND THAT THE COMMERCIAL BILL OF LADING WAS TO BE CONVERTED TO GOVERNMENT BILL OF LADING UPON ARRIVAL. HOWEVER, THE CONTRACTOR PREPAID THE TRANSPORTATION CHARGES AND IT WAS THUS NOT POSSIBLE TO CONVERT THE COMMERCIAL BILLS OF LADING TO GOVERNMENT BILLS OF LADING. THE SHIPMENTS HAVE BEEN RECEIVED AND THE COMMISSION HAS NOT MADE PAYMENT TO THE CARRIERS FOR TRANSPORTING THE EQUIPMENT. INCLUDED IN TWO OF THE INVOICES IS THE FEDERAL TRANSPORTATION TAX PAID BY THE CONTRACTOR.

YOUR DOUBT IN THE MATTER ARISES BECAUSE THE TRANSPORTATION WAS NOT HANDLED IN ACCORDANCE WITH THE PROCEDURES PRESCRIBED BY THE GENERAL ACCOUNTING OFFICE (GENERAL REGULATION NO. 97). YOU RECOMMEND THAT YOU BE AUTHORIZED TO PAY THE INVOICES ON THE BASIS OF THE TRANSPORTATION COSTS THAT WOULD HAVE BEEN INCURRED HAD GOVERNMENT BILLS OF LADING BEEN USED.

IN VIEW OF THE CONTEMPLATED USE OF GOVERNMENT BILLS OF LADING, IT APPEARS TO HAVE BEEN THE UNDERSTANDING OF THE PARTIES THAT THE GOVERNMENT WOULD PAY THE COST OF TRANSPORTING THE MACHINES TO EL PASO. UNDER SUCH CIRCUMSTANCES, THE CONTRACTOR MAY BE REIMBURSED FOR THE TRANSPORTATION CHARGES PAID BY IT NOT IN EXCESS OF THE COSTS WHICH WOULD HAVE BEEN INCURRED IF GOVERNMENT BILLS OF LADING HAD BEEN USED. SEE 6 COMP. GEN. 454. CONSEQUENTLY, THE CONTRACTOR MAY NOT BE REIMBURSED FOR THE FEDERAL TRANSPORTATION TAX IMPOSED UNDER 26 U.S.C. 4271, SINCE, IF GOVERNMENT BILLS OF LADING HAD BEEN USED, SUCH TAX WOULD NOT HAVE BEEN IMPOSED. SEE 26 C.F.R. 143.20, NOTE (3).

SHIPMENT BY FREIGHT FORWARDER WOULD HAVE BEEN THE BEST AND CHEAPEST WAY TO MAKE THE SHIPMENTS AS REQUIRED BY THE PURCHASE ORDER. THE APPLICABLE TARIFFS ARE SOUTHWESTERN LINES FREIGHT TARIFF NO. SW/E 1005, AGENT F. C. KRATZMEIR'S I.C.C. 3998 (ITEM 116-0, SUPPLEMENT 103) AND FREIGHT FORWARDERS TARIFF BUREAU, INC., AGENT'S TARIFF NO. 12-B, I.C.C.-FF NO. 38. ON SUCH BASIS THE TRANSPORTATION CHARGES FOR THE SHIPMENTS FROM POUGHKEEPSIE, NEW YORK, WEIGHING 487, 1,131 AND 249 POUNDS, SHOULD BE COMPUTED AT THE RATE OF $6.84 PER 100 POUNDS AND THE CHARGES FOR THE SHIPMENT FROM GREENCASTLE, INDIANA (CRATED WEIGHT 2,944 POUNDS), SHOULD BE COMPUTED AT THE RATE OF $4.25 PLUS 15 PERCENT PER 100 POUNDS.

ACCORDINGLY, PAYMENTS OF $33.31, $77.36, $17.03, AND $143.89 MAY BE MADE, IF OTHERWISE PROPER, ON INVOICES NUMBERED 633500 TD, 633502 TD, 633504 TD, AND 438829 GT, RESPECTIVELY, WHICH ARE RETURNED HEREWITH. THE APPROPRIATION TO BE CHARGED IS SALARIES AND EXPENSES, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO, APPEARING IN THE DEPARTMENT OF STATE APPROPRIATION ACT, 1956, 69 STAT. 266.