B-129006, NOVEMBER 1, 1956, 36 COMP. GEN. 352

B-129006: Nov 1, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

POST OFFICE DEPARTMENT - OFFICIAL MAIL - PAYMENT PROCEDURE ARRANGEMENTS BETWEEN THE POST OFFICE DEPARTMENT AND OTHER DEPARTMENTS AND AGENCIES FOR THE PAYMENT OF POSTAGE ON OFFICIAL MAIL WEIGHING OVER FOUR POUNDS ON THE BASIS OF A COMPOSITE RATE DETERMINED BY PERIODIC SAMPLINGS AND ESTIMATES OF AGENCY MAILINGS RATHER THAN ON THE BASIS OF PREPAYMENT AND STAMPING THE MAIL ARE LEGALLY PROPER. 1956: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 16 AND 23. THE POSTAGE CHARGEABLE THEREON IS TO BE COMPUTED ON THE BASIS OF A COMPOSITE RATE DETERMINED BY PERIODIC SAMPLING AND ESTIMATE OF AGENCY MAILINGS. DOES NOT COMPLY WITH SAID SECTION 304 BECAUSE THE EXACT AMOUNT OF POSTAGE IS NOT COMPUTED AND CHARGED TO THE DEPARTMENTS AND AGENCIES OPERATING THEREUNDER.

B-129006, NOVEMBER 1, 1956, 36 COMP. GEN. 352

POST OFFICE DEPARTMENT - OFFICIAL MAIL - PAYMENT PROCEDURE ARRANGEMENTS BETWEEN THE POST OFFICE DEPARTMENT AND OTHER DEPARTMENTS AND AGENCIES FOR THE PAYMENT OF POSTAGE ON OFFICIAL MAIL WEIGHING OVER FOUR POUNDS ON THE BASIS OF A COMPOSITE RATE DETERMINED BY PERIODIC SAMPLINGS AND ESTIMATES OF AGENCY MAILINGS RATHER THAN ON THE BASIS OF PREPAYMENT AND STAMPING THE MAIL ARE LEGALLY PROPER.

TO PITNEY-BOWES, INC., NOVEMBER 1, 1956:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 16 AND 23, 1956, AND TO YOUR SUPPLEMENTAL LETTERS, CONCERNING THE LEGAL PROPRIETY OF ARRANGEMENTS ENTERED INTO BETWEEN THE POST OFFICE DEPARTMENT AND CERTAIN DEPARTMENTS AND AGENCIES OF THE GOVERNMENT FOR THE PAYMENT OF POSTAGE AND FEES INCIDENT TO THE TRANSMISSION OF THEIR OFFICIAL MAIL WEIGHING OVER FOUR POUNDS.

THE ARRANGEMENTS PROVIDED FOR BY POST OFFICE DEPARTMENT CIRCULAR LETTER DATED AUGUST 3, 1956 (PARAGRAPH IV), CONTEMPLATE DISCONTINUING THE PRACTICE OF PREPAYING AND AFFIXING POSTAGE ON SUCH MAIL. IN LIEU THEREOF, THE POSTAGE CHARGEABLE THEREON IS TO BE COMPUTED ON THE BASIS OF A COMPOSITE RATE DETERMINED BY PERIODIC SAMPLING AND ESTIMATE OF AGENCY MAILINGS, AND COLLECTION EFFECTED QUARTERLY FROM THE AGENCIES CONCERNED FOR THE AMOUNT OF POSTAGE INCURRED.

IT APPEARS TO BE YOUR CONTENTION THAT SECTIONS 303 AND 304 OF THE PENALTY MAIL ACT OF 1948, AS AMENDED, 62 STAT. 1048, 39 U.S.C. 321K AND 321L, IN PROVIDING FOR PAYMENT OF POSTAGE AT FOURTH-CLASS RATES (39 U.S.C. 292) ON OFFICIAL GOVERNMENT MAIL WEIGHING IN EXCESS OF FOUR POUNDS, REQUIRES WEIGHING AND RATING EACH PARCEL OF MAIL IN ORDER TO COMPUTE AND COLLECT THE EXACT AMOUNT OF POSTAGE DUE FROM THE AGENCIES CONCERNED. THUS, YOU EXPRESS THE VIEW THAT THE NEW POSTAGE PAYMENT PROCEDURE, IN RESPECT TO SUCH MAILINGS, DOES NOT COMPLY WITH SAID SECTION 304 BECAUSE THE EXACT AMOUNT OF POSTAGE IS NOT COMPUTED AND CHARGED TO THE DEPARTMENTS AND AGENCIES OPERATING THEREUNDER.

IN SUPPORT OF THAT VIEW, YOU REFER TO THE SEVERAL ACTS AMENDING THE PENALTY MAIL ACT OF 1948 AND SUGGEST THAT THESE AMENDATORY LAWS DID NOT ALTER OR CHANGE THE PROVISIONS OF SAID SECTIONS 303 AND 304. PARTICULARLY, YOU CITE PUBLIC LAW 286, 83D CONGRESS, 67 STAT. 614, 39 U.S.C. 321I, SECTION 1 OF WHICH AMENDED SECTION 301 OF THE PENALTY MAIL ACT OF 1948, BY THE ADDITION OF A SENTENCE TO REQUIRE GOVERNMENT DEPARTMENTS AND AGENCIES TO REIMBURSE THE POST OFFICE DEPARTMENT IN AMOUNTS EQUIVALENT TO REGULAR POSTAGE RATES FOR THEIR PENALTY MAIL USED. WITH REFERENCE THERETO, YOUR LETTER OF OCTOBER 15 QUOTES CERTAIN STATEMENTS CONTAINED IN HOUSE REPORT NO. 1004 AND SENATE REPORT NO. 732, ON THE BILL ( H.R. 6281) WHICH BECAME SAID PUBLIC LAW 286, TO THE EFFECT THAT THE LEGISLATION DID NOT BROADEN OR RESTRICT THE EXISTING AUTHORITY TO USE PENALTY MAIL. THESE STATEMENTS, YOU SAY, CLEARLY INDICATE THAT THE CONGRESS DID NOT EXTEND THE USE OF PENALTY MAIL TO ARTICLES OR PACKAGES EXCEEDING FOUR POUNDS IN WEIGHT WHICH ARE SUBJECT TO PAYMENT OF POSTAGE AT FOURTH-CLASS RATES UNDER SECTION 304.

SECTIONS 303 AND 304 (A) OF THE PENALTY MAIL ACT OF 1948, 39 U.S.C. 321L (A), QUOTED IN YOUR LETTERS PROVIDE:

SEC. 303. NO ARTICLE OR PACKAGE OF OFFICIAL MATTER, OR NUMBER OF ARTICLES OR PACKAGES OF OFFICIAL MATTER CONSTITUTING IN FACT A SINGLE SHIPMENT, EXCEEDING FOUR POUNDS IN WEIGHT SHALL BE ADMITTED TO THE MAILS UNDER THE PENALTY PRIVILEGE, EXCEPT (1) STAMPED PAPER AND SUPPLIES SOLD OR USED BY THE POSTAL SERVICE; AND (2) BOOKS AND DOCUMENTS PUBLISHED OR CIRCULATED BY ORDER OF CONGRESS WHEN MAILED BY THE SUPERINTENDENT OF PUBLIC DOCUMENTS OR UNDER THE FRANKING PRIVILEGE.

SEC. 304. (A) OFFICIAL MATTER NOT WITHIN THE PROVISIONS OF SECTION 303 WHICH IS OVER FOUR POUNDS IN WEIGHT, IF OTHERWISE MAILABLE, WHETHER SEALED OR UNSEALED, INCLUDING WRITTEN MATTER, SHALL, IF SUCH MATTER DOES NOT EXCEED THE LIMIT OF WEIGHT OR SIZE PRESCRIBED FOR FOURTH-CLASS MATTER, BE ACCEPTED FOR MAILING UPON THE PAYMENT OF POSTAGE AT FOURTH-CLASS RATES.

IN REPLY TO OUR REQUEST FOR A REPORT IN THE MATTER, THE DEPUTY POSTMASTER GENERAL HAS EXPRESSED THE VIEW THAT THE QUOTED SECTION 304 (A) NEITHER REQUIRES THAT POSTAGE BE AFFIXED OR COLLECTED IN ADVANCE NOR DOES IT SPECIFY THAT IT BE PAID FOR BY ANY PARTICULAR METHOD, SUCH AS BY THE USE OF STAMPS OR METERS. THE STATUTE, IT IS SAID, ONLY REQUIRES THAT THE SENDING AGENCY PAY THE POSTAGE COST IF IT WISHES TO SEND OFFICIAL MAIL MATTER OVER FOUR POUNDS BY MEANS OF THE MAIL, AND THAT THE METHOD OF PAYMENT IS A MATTER OF AGREEMENT BETWEEN THE POST OFFICE DEPARTMENT AND THE AGENCIES CONCERNED.

THE DEPUTY POSTMASTER GENERAL ALSO MAKES REFERENCE TO PUBLIC LAW 286 CITED BY YOU, AND IN CONNECTION THEREWITH STATES THAT---

* * * THE CONGRESS RECOGNIZED THAT REIMBURSEMENT UNDER PUBLIC LAW 286 IMPOSED A COSTLY ADMINISTRATIVE BURDEN UPON THE AGENCIES. ACCORDINGLY, PUBLIC LAW 451, 84TH CONGRESS, AND PUBLIC LAW 705 ELIMINATED CERTAIN COSTLY AND UNNECESSARY ADMINISTRATIVE REQUIREMENTS RELATIVE TO THE MAKING OF REIMBURSEMENT. IN ITS REPORT OF H.R. 5856, WHICH WHEN ENACTED BECAME PUBLIC LAW 451, THIS DEPARTMENT STATED THAT IN SOME INSTANCES USAGE FOR REIMBURSEMENT PURPOSES COULD BE SATISFACTORILY COMPUTED BY OBSERVING THE MAIL PATTERN OF THE AGENCIES FOR A SHORT SAMPLING PERIOD, AND IN OTHER CASES, THE NUMBER OF PENALTY ENVELOPES USED ANNUALLY WAS SO CONSTANT THAT A FIXED REIMBURSEMENT COULD BE NEGOTIATED IN ADVANCE. CONGRESS DID NOT OBJECT TO THE USE OF SAMPLING TO DETERMINE REIMBURSEMENT UNDER PUBLIC LAW 286. NO REASON CAN BE PERCEIVED WHY CONGRESS SHOULD OBJECT TO THE SAMPLING METHOD TO COMPUTE REIMBURSEMENT FOR OVER FOUR POUND MAIL.

IT IS RECOGNIZED THAT THE SAMPLING METHOD MAY NOT BE 100 PERCENT ACCURATE. SOMETIMES THIS DEPARTMENT WILL BE OVERPAID AND SOMETIMES IT WILL BE UNDERPAID. HOWEVER, ON BALANCE A FAIR RESULT IS OBTAINED. MOREOVER, PERIODIC SAMPLINGS WILL BE TAKEN TO CHECK ON THE PREVIOUSLY ESTABLISHED REIMBURSEMENT RATE.

PROCEEDING FURTHER, THE DEPUTY POSTMASTER GENERAL EXPLAINS THAT THE USE OF THE SIMPLIFIED REIMBURSEMENT PROCEDURE HAS RESULTED IN IMPROVED SERVICE BY EXPEDITING THE DISPATCH OF MAIL BOTH IN THE MAILING AGENCY AND IN POST OFFICES. IN ADDITION, IT IS STATED THAT THIS PROCEDURE WILL PRODUCE MANY ECONOMIES IN THE MAILING AGENCY AND IN THE POST OFFICES BY REASON OF ITS ELIMINATION OF THE PURCHASING, STOCKING, ACCOUNTING FOR AND AFFIXING OF POSTAGE STAMPS, THE RENTAL OF METERS, AND THE DAILY WEIGHING, RATING AND COMPUTING OF POSTAGE ON EVERY PIECE OF MAIL MATTER WEIGHING OVER FOUR POUNDS. IN SUMMARIZING, IT IS REPORTED THAT THE REIMBURSEMENT PROCEDURE IN QUESTION IS THE MOST PRACTICABLE AND REALISTIC YET DEVISED TO FACILITATE THE HANDLING AND ACCOUNTING FOR POSTAGE AND FEES OF OFFICIAL MAIL MATTER, AND THAT IS THE OPINION OF THE DEPARTMENT THAT THE PROCEDURE IS LEGALLY PROPER.

SECTIONS 303 AND 304 (A) QUOTED ABOVE REQUIRE THE PAYMENT OF FOURTH CLASS POSTAGE IN ALL CASES INVOLVING OFFICIAL MAIL IN EXCESS OF FOUR POUNDS. WHILE 39 U.S.C. 292 (A) PROVIDES THAT "THE POSTAGE (ON FOURTH CLASS MATTER) IN ALL CASES (IS) TO BE PREPAID BY STAMPS AFFIXED THERETO OR AS OTHERWISE PRESCRIBED BY THE POSTMASTER GENERAL" THE REASON FOR REQUIRING PERSONS OUTSIDE THE GOVERNMENT TO PREPAY FOR THEIR MAILINGS-- TO ASSURE THE GOVERNMENT'S REVENUE FOR THE SERVICES TO BE RENDERED--- OBVIOUSLY DO NOT APPLY TO MAILINGS FOR GOVERNMENT DEPARTMENTS AND AGENCIES. PARTICULARLY IS THIS TRUE WHERE SUCH GOVERNMENT DEPARTMENTS AND AGENCIES HAVE ENTERED INTO AGREEMENTS WITH THE POST OFFICE DEPARTMENT IN RESPECT TO PAYMENT FOR THE CARRIAGE OF SUCH MAIL AND THE MANNER IN WHICH SUCH PAYMENTS ARE TO BE MADE, AND IT DOES NOT APPEAR THAT WE WOULD BE JUSTIFIED IN APPLYING SUCH TECHNICAL REQUIREMENT OF PREPAYMENT TO GOVERNMENT MAILINGS.

THE CONGRESS IN AN EFFORT TO PROVIDE A SIMPLIFIED AND ECONOMICAL METHOD OF REIMBURSING THE POST OFFICE DEPARTMENT FOR THE COST OF HANDLING PENALTY MAIL HAS SANCTIONED LUMP-SUM PAYMENT THEREFOR ON THE BASIS OF AN "EQUIVALENT AMOUNT OF POSTAGE DUE" WHICH PAYMENT IS DETERMINED BY THE USE OF FIXED POSTAGE RATE DEVELOPED BY PERIODIC SAMPLING AND ESTIMATE OF AGENCY MAILINGS. THE CONGRESS THUS HAVING EXPRESSED ITSELF ON THE MATTER OF HANDLING PENALTY MAIL, IT REASONABLY FOLLOWS THAT IT IS NOT LESS CONCERNED WITH THE EFFICIENT AND ECONOMICAL HANDLING OF OFFICIAL MAIL WEIGHING OVER FOUR POUNDS AND, THEREFORE, AS STATED BY THE DEPUTY POSTMASTER GENERAL, IT MAY BE PRESUMED FAIRLY THAT THE CONGRESS WOULD NOT DISAPPROVE EXTENSION OF THE APPLICATION OF THIS PROCEDURE TO THE LATTER CLASS OF MAIL.

WHILE A COMPUTATION OF THE AMOUNT OF POSTAGE CHARGES DUE FROM DEPARTMENTS AND AGENCIES ON THE MAIL IN QUESTION BY THE USE OF THE SAMPLING METHOD MAY NOT BE 100 PERCENT ACCURATE, THERE MAY NOT BE OVERLOOKED THE MATERIAL ADVANTAGES REPORTED BY THE DEPUTY POSTMASTER GENERAL TO BE DERIVED THEREFROM. MOREOVER, IT IS OBSERVED THAT THESE POSTAL TRANSACTIONS PERTAIN SOLELY TO DEPARTMENTS AND AGENCIES OF THE GOVERNMENT THERE BEING INVOLVED, IN EFFECT, AN ADJUSTMENT OF APPROPRIATIONS OF THE DEPARTMENTS AND AGENCIES CONCERNED--- AS DISTINGUISHED FROM A PAYMENT IN DISCHARGE OF A GOVERNMENT OBLIGATION--- IN WHICH LATTER CASE AN EXCESSIVE PAYMENT MIGHT RESULT IN A FINANCIAL LOSS TO THE UNITED STATES.

IN VIEW OF THE EXPLANATION FURNISHED BY THE DEPUTY POSTMASTER GENERAL AND FOR THE REASONS STATED ABOVE, IT DOES NOT APPEAR THAT WE LEGALLY ARE REQUIRED TO OBJECT TO THE ACTION OF THE POST OFFICE DEPARTMENT IN THIS MATTER.