B-134871, MAR. 13, 1958

B-134871: Mar 13, 1958

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INC.: REFERENCE IS MADE TO LETTERS OF JANUARY 6 AND JANUARY 13. THE RECORD SHOWS THAT THE RESPONSIBILITY FOR TRANSPORTATION AND DELIVERY OF THE RESUPPLY MATERIAL TO THE ABOVE BASES WAS ASSIGNED TO THE ARMY. THAT PRIOR TO 1957 THE RESUPPLY OPERATION OF THE SITES WAS ACCOMPLISHED BY MILITARY TASK FORCES. THAT THROUGH THE EXPERIENCE GAINED FROM MILITARY OPERATION IT WAS DEEMED DESIRABLE. NEGOTIATIONS WERE CONDUCTED WITH SEVERAL COMMERCIAL CARRIERS FOR RESUPPLYING THE MONA LISA AND KUSKOKWIM RIVER SITES FOR THE YEAR 1957. IT IS ADMINISTRATIVELY REPORTED THAT SINCE THE GOVERNMENT WAS NOT CERTAIN OF THE ABILITY OF ANY SINGLE CARRIER TO PERFORM THE ENTIRE RESUPPLY OPERATION AND SINCE IT WAS FACED WITH THE NECESSITY OF HAVING THE RESUPPLY OPERATION ACCOMPLISHED BY ALTERNATE CARRIERS IF THE ONE SELECTED DEFAULTED.

B-134871, MAR. 13, 1958

TO ALASKA FREIGHT LINES, INC.:

REFERENCE IS MADE TO LETTERS OF JANUARY 6 AND JANUARY 13, 1958, FROM YOUR ATTORNEYS PROTESTING THE ACTION OF CHIEF OF TRANSPORTATION, U.S. ARMY (OCT), IN REFUSING TO ACCEPT YOUR RATE TENDER NO. 8-M FOR THE MOVEMENT OF SUPPLIES DURING THE 1958 SHIPPING SEASON TO CERTAIN AIR FORCE BASES IN ALASKA.

THE RECORD SHOWS THAT THE RESPONSIBILITY FOR TRANSPORTATION AND DELIVERY OF THE RESUPPLY MATERIAL TO THE ABOVE BASES WAS ASSIGNED TO THE ARMY; THAT PRIOR TO 1957 THE RESUPPLY OPERATION OF THE SITES WAS ACCOMPLISHED BY MILITARY TASK FORCES; THAT THROUGH THE EXPERIENCE GAINED FROM MILITARY OPERATION IT WAS DEEMED DESIRABLE, IN 1957, TO ATTEMPT TO RESUPPLY THE MONA LISA AND KUSKOKWIM RIVER SITES BY THE USE OF COMMERCIAL CARRIERS LEAVING THE RESUPPLY OF THE DEWLINE SITES TO A MILITARY TASK FORCE. NEGOTIATIONS WERE CONDUCTED WITH SEVERAL COMMERCIAL CARRIERS FOR RESUPPLYING THE MONA LISA AND KUSKOKWIM RIVER SITES FOR THE YEAR 1957. FIRVE CARRIERS, INCLUDING YOUR COMPANY, INDICATED A WILLINGNESS TO PARTICIPATE IN THIS OPERATION ON CONDITION THAT A DEADLINE BE ESTABLISHED FOR SUBMISSION OF THE RATE TENDERS AND ON THE FURTHER CONDITION THAT EACH CARRIER WOULD BE PERMITTED TO MEET THE LOWEST RATE SO THAT EACH COULD RECEIVE A PRO RATA SHARE OF THE CARGO. IT IS ADMINISTRATIVELY REPORTED THAT SINCE THE GOVERNMENT WAS NOT CERTAIN OF THE ABILITY OF ANY SINGLE CARRIER TO PERFORM THE ENTIRE RESUPPLY OPERATION AND SINCE IT WAS FACED WITH THE NECESSITY OF HAVING THE RESUPPLY OPERATION ACCOMPLISHED BY ALTERNATE CARRIERS IF THE ONE SELECTED DEFAULTED, THE GOVERNMENT ACCEPTED THE CARRIERS' CONDITIONS AND PERMITTED THOSE SUBMITTING TENDERS TO MEET THE LOWEST RATE TENDERED AND TO PARTICIPATE IN THE 1957 OPERATION. IT IS FURTHER REPORTED THAT THIS NEGOTIATION AND RESUBMISSION OF TENDERS CONSUMED AN EXCESSIVE AMOUNT OF TIME; THAT IT CONTRIBUTED TO THE DIFFICULTIES OF COORDINATING SUPPLY AND TRANSPORTATION ACTIONS IN THE FIELD; AND THAT THIS EXPERIENCE POINTED UP THE NECESSITY OF ESTABLISHING A TIMETABLE AND CERTAIN CRITERIA FOR THE 1958 OPERATION, INCLUDING AMONG OTHERS THE FOLLOWING:

1. A SINGLE POINT AND TIME WAS TO BE ESTABLISHED FOR CARRIERS TO SUBMIT TENDERS FOR MOVEMENT FROM OUR WEST COAST PORTS AND DUTCH HARBOR, ALASKA.

2. TENDERS WERE TO BE STANDARD AND COMPARABLE, SO THAT CARRIERS COULD BE SELECTED ON A COMPETITIVE BASIS.

3. RATES SUBMITTED WERE TO COVER EACH COMMODITY AS A SEPARATE ITEM.

4. CARRIERS WOULD NOT BE GUARANTEED A SPECIFIC VOLUME.

5. THE CARRIER WAS TO BE SELF-SUSTAINING.

6. THAT THE DEADLINE FOR RECEIVING TENDERS SHOULD BE NO LATER THAN NOVEMBER 15, 1957.

7. THAT EVALUATION OF TENDERS MUST BE IN HIGHER HEADQUARTER, NO LATER THAN DECEMBER 1, 1957, TO PERMIT AN EARLY DETERMINATION CONCERNING COMMERCIALIZATION OF DEWLINE.

8. A RELATIVELY LONG LEAD TIME WAS NECESSARY PRIOR TO SHIPMENT IN ORDER THAT---

(A) THE SELECTED CARRIER OR CARRIERS COULD PROCURE THE SPECIAL EQUIPMENT REQUIRED TO AUGMENT THE STANDARD EQUIPMENT FOR THIS DIFFICULT AND NON- STANDARD OPERATION; AND

(B) CARRIER PLANNING AND ORGANIZATION SHOULD BE ESTABLISHED TO FIT THE OPERATIONAL CONDITIONS UNDER WHICH THE RESUPPLY WOULD BE CONDUCTED.

9. RESUPPLY TO DEWLINE SITES COULD BE HANDLED COMMERCIALLY.

10. CARRIERS TO BE NOTIFIED THAT COMPETITIVE PROCESS WOULD BE ENFORCED IN THE 1958 RESUPPLY OPERATION AND THAT THE GOVERNMENT WAS NOT CONTEMPLATING THE NEGOTIATION OF A COMMON SET OF RATES APPLICABLE TO ALL CARRIERS AND ALL SITES.

BY LETTER DATED OCTOBER 30, 1957, ALL INTERESTED CARRIERS WERE NOTIFIED THAT AN OPEN MEETING WOULD BE HELD AT FORT MASON, SAN FRANCISCO, CALIFORNIA, FOR THE PURPOSE OF FURNISHING THEM WITH THE NECESSARY DATA RELATIVE TO THE PROPOSED RESUPPLY OPERATION FOR 1958. THE LETTER, TOGETHER WITH THE ENCLOSURE, REQUESTED SEALED BIDS AND FURNISHED THE CARRIERS WITH ALL NECESSARY DATA, INFORMATION AND INSTRUCTIONS REQUIRED FOR FORMULATING THEIR TENDERS OF SERVICE. SPECIFICALLY, IT PUT ALL INTERESTED CARRIERS ON NOTICE THAT IN ORDER TO BE ACCEPTABLE ALL TENDERS MUST BE SUBMITTED TO THE DIRECTOR OF OPERATIONS, U.S. ARMY TERMINAL COMMAND, PACIFIC, FORT MASON, CALIFORNIA, AT 1300 HOURS NOVEMBER 15, 1957. IN ADDITION TO THE ARMY PERSONNEL AND YOUR COMPANY'S REPRESENTATIVE EIGHT OTHER INTERESTED COMPANIES ATTENDED THE MEETING.

IT IS REPORTED THAT AT THIS OPEN MEETING THE CARRIERS WERE INFORMED OF ALL MILITARY REQUIREMENTS; THAT THEY WERE FURNISHED WITH A SAMPLE OF THE DESIRED TENDER FORMAT; THAT THEY WERE INFORMED THAT THE RATE TENDERS SUBMITTED AS OF NOVEMBER 15, 1957, WOULD STAND; AND THAT THERE WOULD BE NO REVISION OR RENEGOTIATION OF RATES AFTER THAT DATE. IT IS FURTHER REPORTED THAT ALL VERBAL INSTRUCTIONS GIVEN TO THE CARRIERS AT THE OCTOBER 30TH MEETING WERE CONFIRMED IN WRITING BY LETTER OF THE SAME DATE AND THAT A COPY THEREOF WAS FURNISHED EACH REPRESENTATIVE PRESENT. ALSO, PRIOR TO ADJOURNMENT OF THE MEETING EACH CARRIER'S REPRESENTATIVE WAS GIVEN A SEPARATE INTERVIEW SCHEDULE FOR THE FOLLOWING DAY, OCTOBER 31, 1957, TO PERMIT DISCUSSION AND CLARIFICATION OF ANY MATTER NOT PREVIOUSLY DEFINED. IT IS REPORTED THAT APPROXIMATELY ONE HOUR AFTER THE MEETING HAD ADJOURNED, MR. HUNDLEY, YOUR COMPANY'S REPRESENTATIVE, NOTIFIED THE DIRECTOR OF OPERATIONS, U.S. ARMY TRANSPORTATION TERMINAL COMMAND, THAT HE WOULD NOT ATTEND THE MEETING ON OCTOBER 31, 1957. IT IS REPORTED THAT AT THE SAME TIME YOUR REPRESENTATIVE CONGRATULATED THE COMMAND FOR HAVING PRESENTED A COMPLETE PACKAGE AND STATED THAT HE HAD ALL THE INFORMATION TO COMPLY WITH THE INSTRUCTIONS FOR SUBMISSION OF TENDERS.

FOLLOWING REVIEW OF THE TENDERS SUBMITTED ON NOVEMBER 15, 1957, ALASKA BARGE AND TRANSPORT WAS NOTIFIED THAT THEIR TENDER WAS LOW FOR BULK POL AND DRY CARGO FROM DUTCH HARBOR TO DEWLINE SITES AND FOR BULK POL FROM DUTCH HARBOR TO MONA LISA SITES. GARRISON FAST FREIGHT WAS NOTIFIED THAT ITS TENDER WAS LOW FOR BULK POL FROM DUTCH HARBOR TO KUSKOKWIM RIVER SITES AND DRY CARGO FROM CONUS WEST COAST TO KUSKOKWIM RIVER SITES. ALSO, THE SAME CARRIER WAS NOTIFIED THAT ITS TENDER WAS LOW FOR DRY CARGO FROM CONUS WEST COAST TO MONA LISA SITES AND THAT TENDER CHANGES SUBMITTED NOVEMBER 15, 1957, WOULD NOT BE UTILIZED. AT THE SAME TIME THE COMPANY WAS NOTIFIED THAT ITS TENDER SUBMITTED NOVEMBER 15, 1957, NO. 7-M WAS NOT THE MOST FAVORABLE RECEIVED AND THAT IT WOULD NOT BE UTILIZED.

THE REASONS ASSIGNED FOR REJECTION OF YOUR TENDER ARE SET FORTH IN LETTER OF NOVEMBER 27, 1957, FROM THE PACIFIC TRANSPORTATION TERMINAL COMMAND, AS FOLLOWS:

"ALASKA FREIGHT LINES DID NOT OFFER SERVICE FROM DUTCH HARBOR. THE TENDER RECEIVED FROM THIS CARRIER WAS COMPLETELY UNRESPONSIVE TO THE REQUIREMENTS UNDER RULES AND CONDITIONS. THIS CARRIER DID NOT OFFER GENERAL CARGO RATES FROM CALIFORNIA PORTS; OFFERED RATES BY SECTOR INSTEAD OF BY SITE WITHIN A SECTOR; RETROGRADE RATES RESTRICTIVE, SHOULD HAVE BEEN "FREIGHT ALL KINDS; " DID NOT OFFER RATES TO ALL KUSKOKWIM SECTOR SITES. THIS CARRIER ALSO FAILED TO FURNISH A PROPOSED PLAN OF OPERATION, FINANCIAL RESPONSIBILITY, OR EQUIPMENT AVAILABLE FOR THE OPERATION.

"* * * ALASKA FREIGHT LINES SUBMITTED RATES TO MONA LISA SITES EQUAL TO THE 1957 LEVEL. THE OTHER CARRIERS WERE APPROXIMATELY 30 PERCENT LOWER. THIS CARRIER WAS ALSO APPROXIMATELY $250,000.00 HIGH FOR DEWLINE.'

IN MEMORANDUM OF NOVEMBER 19, 1957, SUBMITTED BY ARMY AND AIR FORCE REPRESENTATIVES, PERTAINING TO REVIEW OF THE TENDER, IT IS STATED THAT- -

"3. AN ANALYSIS OF CARRIER CAPABILITIES AS INDICATED BY LETTERS ACCOMPANYING TENDERS REVEALS THE FOLLOWING:

"C. ALASKA FREIGHT LINES: LETTER IS WRITTEN IN GENERAL TERMS. IT FAILS TO LIST EQUIPMENT TO BE UTILIZED BY NAME OR NUMBER, FAILS TO LIST REFERENCES CONCERNING FINANCIAL ABILITY OR INSURANCE COVERAGE, DOES NOT SPECIFY EXTENT OF GOVERNMENT SUPPORT REQUIREMENT, FAILS TO SUBMIT OPERATIONAL PLAN IN ANY FORM. THE ONLY EVIDENCE SUBMITTED TO INDICATE ABILITY IS REFERENCE TO PREVIOUS EXPERIENCE AND PAST PERFORMANCE. TENDERS, COUPLED WITH LETTER FROM CARRIER, INDICATE A LACK OF RESPONSIBILITY TO REQUEST FOR TENDERS. MISSING INFORMATION SHOULD BE FURNISHED BY CARRIER. CARRIER, BASED ON PAST EXPERIENCE, NOT ON EVIDENCE SUBMITTED, CONSIDERED QUALIFIED FOR LIMITED PARTICIPATION IN 1958 PROGRAM. ADDITIONAL EVIDENCE REQUIRED PRIOR TO CONSIDERATION FOR ALLOCATION OF BULK FUEL MOVEMENTS.'

THE RECORD DISCLOSES THAT SUBSEQUENT TO THE ESTABLISHED DEADLINE OF NOVEMBER 15, 1957, GARRISON FAST FREIGHT SOUGHT TO REVISE THEIR RATE TENDERS, IN AN APPARENT ATTEMPT TO SECURE A LARGER VOLUME OF TRAFFIC TO THE ALASKAN AREA SITES. THE PROPOSED REVISIONS WERE ACCEPTED BY THE PACIFIC TRANSPORTATION TERMINAL COMMAND BUT SUBSEQUENTLY THEY WERE REJECTED BASED UPON INSTRUCTIONS FROM THE OFFICE OF THE CHIEF OF TRANSPORTATION, WASHINGTON, D.C., FOR THE STATED REASON THAT "THE NOVEMBER 15, 1957, DEADLINE WOULD BE ADHERED TO AND ALL CHANGES AFTER THAT DATE WOULD BE DISREGARDED.'

YOUR ATTORNEY STATES THAT YOUR COMPANY MAKES NO OBJECTION TO THE NONACCEPTANCE OF YOUR TENDER NO. 7-M, SINCE IT WAS HIGHER THAN THE TENDERS OFFERED BY THE TWO CARRIERS TO WHOM THE FREIGHT WAS AWARDED. ON DECEMBER 10, 1957, HOWEVER, YOUR COMPANY SENT A TELEGRAM TO THE OFFICE OF THE CHIEF OF TRANSPORTATION, WASHINGTON, D.C., OFFERING TO MEET THE RATES SUBMITTED BY ANY OF THE OTHER CARRIERS. IN REPLY THERETO, OCT NOTIFIED YOUR COMPANY TO CONTACT THE PACIFIC TRANSPORTATION TERMINAL COMMAND. ON DECEMBER 17, 1957, YOUR COMPANY, IN JOINT VENTURE WITH THE DELONG CORPORATION, FILED TENDER NUMBERED 8 M, SETTING FORTH RATES SUBSTANTIALLY LOWER THAN THOSE PREVIOUSLY OFFERED BY ANY OF THE OTHER CARRIERS. THIS TENDER WAS REFUSED BECAUSE IT WAS RECEIVED AFTER THE NOVEMBER 15, 1957, DEADLINE. YOUR ATTORNEYS' PROTEST IS BASED UPON SUCH REFUSAL.

PRIMARILY, THE ABOVE PROTEST IS THAT, BASED UPON THE PRINCIPLES STATED IN OUR DECISION REPORTED IN 35 COMP. GEN. 681, THE TENDERS SUBMITTED IN RESPONSE TO THE INVITATION OF OCTOBER 30, 1957, ARE MERELY CONTINUING OFFERS ON THE PART OF THE CARRIERS TO PERFORM SERVICES PURSUANT TO THE TERMS OF SUCH TENDERS AND THAT THE ACCEPTANCE THEREOF CONFERRED NO CONTRACTUAL RIGHTS ON THE CARRIERS SUBMITTING THE SUCCESSFUL TENDERS NOR DID SUCH ACCEPTANCE CONSTITUTE ANY GUARANTEE BY THE GOVERNMENT OF ANY TONNAGE. IT IS URGED THAT THE FAILURE TO ACCEPT YOUR TENDER NO. 8-M WILL COST THE GOVERNMENT $200,000; THAT, IN EFFECT, WHAT OCT HAS DONE IS TO ATTEMPT TO ENTER INTO AN EXCLUSIVE CONTRACTUAL ARRANGEMENT WITH CARRIERS OTHER THAN ALASKA FREIGHT LINES UNDER THE GUISE OF RATE TENDERS; AND THAT OCT, WHILE RECOGNIZING THAT THE RATE TENDERS ARE MERELY CONTINUING OFFERS, ENDEAVORED TO CLOAK THEM WITH THE RESPONSIBILITY OF A CONTRACT BY STIPULATING A DEADLINE AND CALLING FOR SEALED BIDS. IN SUPPORT OF THE ARGUMENT THAT THE SUCCESSFUL TENDERS MAY NOT BE REGARDED AS CONTRACTS THEY REFER TO ARTICLE 10 OF THE TENDER, ENTITLED "ACCEPTANCE OF TENDER," AS FOLLOWS:

"THIS TENDER, WHEN ACCEPTED BY THE DEPARTMENT OF DEFENSE BY MAKING ANY SHIPMENT UNDER THE TERMS HEREOF, OR OTHERWISE, SHALL CONSTITUTE AN AGREEMENT BETWEEN THE PARTIES HERETO AS TO THE TRANSPORTATION SERVICES HEREIN DESCRIBED.'

YOUR ATTORNEYS CONCLUDE THAT SINCE THERE IS NO CONTRACTUAL ARRANGEMENT, THE OCT MUST UTILIZE THE LOWEST COST TRANSPORTATION SERVICE AVAILABLE AT THE TIME A PARTICULAR SHIPMENT IS TO BE MADE. AS A BASIS FOR SUCH CONCLUSION THEY QUOTE FROM OUR DECISION REPORTED IN 20 COMP. GEN. 793.

ALSO, IT IS URGED THAT WHILE AN ATTEMPT MAY BE MADE TO JUSTIFY THE PROCEDURE FOLLOWED IN THIS INSTANCE ON THE GROUND THAT IT REPRESENTS A PECULIAR SITUATION RELATING TO ALASKA, THE PROCEDURE NOW OBTAINING WAS NOT FOLLOWED LAST YEAR WHEN SIMILAR TRANSPORTATION REQUIREMENTS IN ALASKA WERE MET AND STILL THE GOVERNMENT PAID THE LOWEST RATE.

AS JUSTIFICATION FOR QUESTIONING THE PROPRIETY OF THE PRESENT TRANSACTION REFERENCE IS MADE ALSO TO OUR DECISION OF JUNE 3, 1952, B 107334, WHEREIN WE STATED THAT WHILE OUR OFFICE RECOGNIZED THAT THE FUNCTION OF PROCURING NEEDED TRANSPORTATION SERVICES AND EXECUTING THE REQUISITE CONTRACTS IS PRIMARILY THE ADMINISTRATIVE RESPONSIBILITY OF THE DEPARTMENT CONCERNED, IT WOULD APPEAR DEFINITELY UNDESIRABLE TO ATTEMPT TO PREVENT OUR OFFICE FROM QUESTIONING RATES WHICH MAY BE IN EXCESS OF THOSE OTHERWISE AVAILABLE.

IN YOUR ATTORNEYS' LETTER OF JANUARY 13, 1958, SEVERAL ALTERNATIVE ACTIONS ARE SUGGESTED, THE PRIMARY PURPOSE, OF COURSE, BEING TO NULLIFY THE AWARD BASED UPON THE SOLICITATION OF OCTOBER 30, 1957, TO PERMIT YOUR COMPANY TO PARTICIPATE IN THE 1958 MOVEMENT.

THE DECISION REPORTED IN 35 COMP. GEN. 681, CITED BY YOUR ATTORNEYS AS AUTHORITY FOR THEIR CONTENTION THAT OCT PROPERLY MAY NOT REFUSE TO TAKE ADVANTAGE OF YOUR 8-M TENDER CONCERNS TENDERS SUBMITTED BY A MOTOR CARRIER PURSUANT TO SECTION 322 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 22, PROVIDING "THAT NOTHING IN THIS CHAPTER SHALL PREVENT THE CARRIAGE, STORAGE AND HANDLING OF PROPERTY FREE OR AT REDUCED RATES FOR THE UNITED STATES.' IN THE CITED CASE, WE REJECTED THE COMPLAINANTS' CONTENTION THAT THE RATE TENDER WAS A CONTRACT AND STATED THAT--- "THE CITED QUOTATION IS MERELY A CONTINUING OFFER ON THE PART OF THE CARRIERS TO PERFORM SERVICES FOR THE UNITED STATES PURSUANT TO ITS TERMS.' WHILE THE RATE TENDERS HERE INVOLVED WERE NOT SUBMITTED PURSUANT TO THE PROVISIONS OF THE ABOVE STATUTORY PROVISIONS WHICH ARE NOT APPLICABLE TO ALASKA TRAFFIC, THEY ARE SIMILAR TO THE TENDERS INVOLVED IN THE CITED DECISION COMMONLY REFERRED TO AS ,SECTION 22 QUOTATIONS.' THUS, THE INSTANT RATE TENDERS PROPERLY MAY BE REGARDED AS "CONTINUING OFFERS" WHICH RIPEN INTO CONTRACTS ONLY WHEN COMBINED WITH THE BILL OF LADING DOCUMENTS SIGNIFYING THE TENDER ACCEPTANCE AND TRANSPORTATION OF THE SHIPMENT UNDER THE TERMS AND CONDITIONS THEREOF. THESE CONTINUING OFFERS PROVIDE AS FOLLOWS:

"THIS TENDER, WHEN ACCEPTED BY THE DEPARTMENT OF DEFENSE BY MAKING ANY SHIPMENT UNDER THE TERMS HEREOF, OR OTHERWISE, SHALL CONSTITUTE AN AGREEMENT BETWEEN THE PARTIES HERETO AS TO THE TRANSPORTATION SERVICES HEREIN DESCRIBED.'

IT IS RECOGNIZED THAT GOVERNMENT SHIPPING OFFICERS GENERALLY HAVE THE OBLIGATION AND DUTY TO OBTAIN THE LOWEST COST TRANSPORTATION SERVICES AVAILABLE. THIS POLICY IS CLEARLY SET FORTH IN THE ABOVE DECISION REPORTED IN 20 COMP. GEN. 793, 795, WHEREIN IT IS STATED, AS FOLLOWS:

"* * * THERE WOULD APPEAR TO BE NO AUTHORITY FOR PROCURING TRANSPORTATION SERVICES FROM ONE COMMON CARRIER AT A COST IN EXCESS OF THAT FOR WHICH EQUALLY SATISFACTORY TRANSPORTATION COULD HAVE BEEN PROCURED--- WITHOUT ADVERTISING--- FROM ANOTHER COMMON CARRIER "LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED.'"

IN THIS DECISION OUR OFFICE HAD TO RESOLVE THE QUESTION AS TO WHETHER GOVERNMENT SHIPPING OFFICERS WERE REQUIRED, PRIOR TO SHIPPING GOVERNMENT FREIGHT ON GOVERNMENT BILLS OF LADING, TO DETERMINE THE METHOD OF SHIPPING (MOTOR OR RAIL) WHICH WOULD PRODUCE THE LOWEST TRANSPORTATION COSTS BY USE OF THE RATE SCHEDULES AVAILABLE TO THE GENERAL PUBLIC, WITHOUT ADVERTISING. THIS QUESTION AROSE BECAUSE OF THE TRANSPORTATION ACT OF 1940, SECTION 321A OF PART II, TITLE III (54 STAT. 954), OF WHICH ACT PROVIDES SPECIFIC STATUTORY AUTHORITY FOR PROCURING TRANSPORTATION SERVICES WITHOUT ADVERTISING FOR BIDS WHEN THE SERVICES CAN BE PROCURED FROM ANY COMMON CARRIER LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES CAN BE PERFORMED. THE CIRCUMSTANCES IN THE INSTANT CASE, HOWEVER, ARE UNLIKE THOSE CITED IN 20 COMP. GEN. 793 AND THE RULE IN THAT DECISION CANNOT BE APPLIED TO THE PRESENT CASE. HERE THERE ARE NO PUBLISHED RATES AVAILABLE TO THE GENERAL PUBLIC FOR THE INVOLVED SERVICES BY CARRIERS LAWFULLY ENTITLED TO OPERATE IN THE TERRITORY WHERE THE SERVICE IS REQUIRED. HENCE, IT WAS NECESSARY TO INVITE CARRIERS TO SUBMIT RATE TENDERS FOR SUCH SERVICE. FURTHER, IT WAS DETERMINED, THAT IN ORDER TO MAINTAIN THE COMPETITIVE NATURE OF THESE TENDERS, THE CARRIER OR CARRIERS SUBMITTING THE TENDER WHICH PRODUCED THE LOWEST TRANSPORTATION COST TO THE GOVERNMENT WOULD RECEIVE THE TRAFFIC. OBVIOUSLY, IF THIS PROCEDURE WAS TO PREVAIL, A CUT-OFF DATE FOR SUBMITTING SUCH TENDERS WAS ABSOLUTELY ESSENTIAL, PARTICULARLY IN THE LIGHT OF THE NATURE OF THE SERVICES AND THE CONDITIONS INCIDENT TO THE PERFORMANCE OF SAME. ALL CARRIERS WERE NOTIFIED, BOTH VERBALLY AND IN WRITING, OF THE REQUIREMENTS AND THE REASONS THEREFOR, AND IT IS NOT APPARENT WHY ANY CARRIER SHOULD HAVE MISCONSTRUED THESE INSTRUCTIONS.

IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT IN THE ABSENCE OF ANY LAWFULLY AUTHORIZED, OR DULY FILED, TARIFFS MAKING SPECIFIED RATES AVAILABLE TO THE PUBLIC WHICH COULD BE DEMANDED UNDER AUTHORITY OF LAW, THE SITUATION WITH RESPECT TO THE PROCUREMENT OF THE TRANSPORTATION SERVICES HERE CONTEMPLATED WOULD SEEM TO BE, IN NO ESSENTIAL RESPECT, DIFFERENT FROM THAT WHICH WOULD OBTAIN WITH RESPECT TO THE PROCUREMENT OF SUPPLIES AND SERVICES GENERALLY. ACCORDINGLY, ALASKA FREIGHT LINES, IN FAILING TO COMPLY WITH THE TERMS OF SOLICITATIONS FOR TENDERS OR BIDS, HAS NO SOUND LEGAL BASIS TO REQUIRE THAT NEGOTIATIONS WITH OTHER CARRIERS, CONDUCTED PURSUANT TO AND IN CONFORMITY WITH THE TERMS OF SOLICITATION, SHALL BE SET ASIDE AND THAT IT BE AWARDED ALL OR PART OF THE SERVICES CONTEMPLATED. EVEN IF IT BE CONCEDED THAT THE COMPLYING CARRIERS' TENDERS WERE ONLY CONTINUING OFFERS UNTIL RIPENED INTO BILATERAL CONTRACTS THROUGH DEMAND FOR AND PERFORMANCE OF PARTICULARLY DESIGNATED SERVICES, THERE MUST BE RECOGNIZED THE RIGHT, IF NOT INDEED THE DUTY, OF THE ADMINISTRATIVE AGENCIES TO EXPLORE AND ASCERTAIN THE AVAILABILITY OF REQUIRED SERVICES AND OF THE CHARGES AT WHICH THEY COULD BE OBTAINED, AND, IN CONNECTION WITH THEIR FINDINGS, TO SET SUCH DEADLINE DATES FOR THE FURNISHING BY INTERESTED CARRIERS OF INFORMATION CONCERNING THE EXTENT OF THEIR POSSIBLE PARTICIPATION AND THEIR CHARGES, AS ADMINISTRATIVE NECESSITY SHOULD DICTATE. NUMEROUS CARRIERS HAVING COMPLIED WITH THE TERMS OF SOLICITATION, WE WOULD NOT BE JUSTIFIED IN CONCLUDING THAT THE ADMINISTRATIVE AGENCIES MUST IGNORE THE INFORMATION SO FURNISHED AND REFUSE TO AWARD PURSUANT THERETO SUCH TRAFFIC AS IT CONCLUDES IS PROPERLY REQUIRED, MERELY BECAUSE ALASKA FREIGHT LINES, WITHOUT COMPLYING WITH THE TERMS OF SOLICITATION, OFFERS AT A LATER DATE TO PERFORM AT LOWER RATES. THE RECORD SPECIFICALLY REFLECTS THAT ALASKA FREIGHT LINES WAS FULLY INFORMED OF THE ADMINISTRATIVE AGENCY'S REQUIREMENT FOR SUBMISSION OF TENDERS ON OR BEFORE THE DATE SPECIFIED, AND THE TENDERING OF LOWER RATES THEREAFTER WAS NOT RESPONSIVE TO THE SOLICITATION OF TENDERS.

AS INDICATED ABOVE THE QUESTION OF WHETHER IT WOULD BE IN THE INTEREST OF THE UNITED STATES, BY REASON OF THE PECULIAR CLIMATIC CONDITIONS OR OTHERWISE, TO UTILIZE THE SERVICES OF THE CARRIERS WHICH COMPLIED WITH THE SOLICITATION WOULD APPEAR TO BE ONE FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY, ASSUMING AS ALLEGED, THAT NO BINDING CONTRACTUAL OBLIGATION HAD ARISEN PRIOR TO DEMAND FOR SERVICE. HOWEVER, AS LONG AS THE OFFERS CONTINUE, WE ARE NOT JUSTIFIED IN CONCLUDING THAT THE AGENCY CAN BE REQUIRED TO ACCEPT THE BELATED TENDER OF LOWER RATES BY ALASKA FREIGHT LINES OR TO RENEGOTIATE THE RATES, OR THAT THE RATES SET FORTH IN TENDERS OF CARRIERS QUALIFYING ON NOVEMBER 15, 1957, BE EQUALIZED.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THE PROTEST FILED BY YOUR ATTORNEYS FURNISHES NO PROPER BASIS ON WHICH WE WOULD BE JUSTIFIED IN QUESTIONING THE ADMINISTRATIVE ACTION IN THIS CASE.