B-139675, JUN 19, 1959

B-139675, JUN 19, 1959

PRECIS-UNAVAILABLE

FINANCE AND ACCOUNTING OFFICER:

REFERENCE IS MADE TO YOUR LETTER OF MAY 15, 1959 (FINXE-B 167/9 MAR 59), TRANSMITTING A VOUCHER STATED IN FAVOR OF CHERRY TRANSFER AND STORAGE COMPANY, ATLANTA, GEORGIA, FOR $336.96 COVERING CHARGES FOR STORAGE OF HOUSEHOLD GOODS OF M/SGT. EUGENE WELLER, AND REQUESTING AN ADVANCE DECISION THEREON.

SERVICES FOR WHICH PAYMENT IS CLAIMED WERE RENDERED UNDER AUTHORITY OF BASIC AGREEMENT NO. DA 09-030-QM 10-420, DATED NOVEMBER 26, 1956, WHICH QUOTES RATES BY ITEMS OF SERVICE. PAYMENT IS TO BE MADE UPON DELIVERY OF HOUSEHOLD GOODS TO STORAGE WAREHOUSE PLUS ONE MONTH'S STORAGE CHARGE AND EACH SIX MONTHS THEREAFTER UNTIL GOODS ARE REMOVED.

SUPPLEMENTAL AGREEMENT NUMBER 5, UPON WHICH THE VOUCHER WAS SUBMITTED, QUOTES THE FOLLOWING RATES:

"ITEM I PACKING $2.25 PER GROSS CWT

" II WARDROBE NO CHARGE

" III DRAYAGE ZONE #1 3.00 PER CWT

" IV HANDLING IN 5.15 PER CWT

" V STORAGE NO CHARGE

" VI HANDLING OUT .85 PER CWT

" VII DELIVERY NO CHARGE

" VIII UNPACKING NO CHARGE"

ITEM V SHOWS "NO CHARGE" FOR STORAGE, YET THIRTY MONTHS STORAGE IS INVOLVED. SINCE THE $5.15 PER CWT "HANDLING IN" CHARGE APPEARS TO INCLUDE ENOUGH TO TAKE CARE OF STORAGE EXPENSE QUESTION ARISES AS TO WHETHER THIS CONSTITUTES AN ADVANCE PAYMENT OF STORAGE CHARGES.

DEPARTMENT OF DEFENSE DIRECTIVE NUMBER 4145.16-R REGARDING "COMMERCIAL WAREHOUSING AND RELATED SERVICES FOR HOUSEHOLD GOODS OF MILITARY PERSONNEL" REQUIRES USING ACTIVITIES TO ISSUE SERVICE ORDERS TO THE FIRM WHOSE BASIC AGREEMENT OFFERS THE LOWEST OVERALL COST TO THE GOVERNMENT, WHETHER OR NOT THE RATES STIPULATED IN THE BASIC AGREEMENT INCLUDE ANY CHARGE FOR STORAGE.

THIS OFFICE IS IN AGREEMENT WITH THE VIEW EXPRESSED BY THE OFFICE OF THE GENERAL COUNSEL, OFFICE OF THE QUARTERMASTER GENERAL, IN THIS MATTER, NAMELY THAT:

"ONCE A SERVICE ORDER HAS BEEN ISSUED, THE GOVERNMENT BECOMES CONTRACTUALLY BOUND TO MAKE PAYMENT TO THE CONTRACTOR AT THE RATES STIPULATED IN THE BASIC AGREEMENT. INASMUCH AS THE BASIC AGREEMENT IN THIS INSTANCE SPECIFIES NO CHARGE FOR STORAGE, PAYMENT OF THE STIPULATED HANDLING IN CHARGE DOES NOT CONSTITUTE AN ADVANCE PAYMENT FOR STORAGE CHARGES."

WHILE IT IS QUITE PROBABLE THAT THE CONTRACTOR HAS INCLUDED HIS STORAGE CHARGES IN OTHER TEMS, THERE IS NO WAY BY WHICH WE CAN DETERMINE THE AMOUNT REPRESENTING STORAGE CHARGES WHICH IS HIDDEN UNDER OTHER ITEMS. THE SAME TOKEN IT MAY ALSO BE SAID THAT THE STORAGE CHARGES UNDER SUPPLEMENTAL AGREEMENT NUMBER 9, EFFECTIVE MARCH 24, 1959, WHICH IS $.05 PER CWT PER MONTH, INDICATES THAT THE STORAGE CHARGES ARE COVERED UNDER OTHER ITEMS THERE.

THE GOVERNMENT, HAVING ISSUED A SERVICE ORDER BY WHICH IT IS AGREED THAT "NO CHARGE" IS TO BE MADE FOR STORAGE, OR THAT A NOMINAL CHARGE WILL BE MADE, DOES NOT APPEAR TO BE IN A POSITION SUBSEQUENTLY TO QUESTION THE VALIDITY OF THE PAYMENT ON THE GROUND THAT IT CONSTITUTES AN ADVANCE PAYMENT FOR STORAGE. STRICTLY SPEAKING THE STORAGE CHARGES ARE AS THEY ARE SET FORTH IN THE SUPPLEMENTAL AGREEMENT. FURTHERMORE THIS OFFICE KNOWS OF NO BASIS UPON WHICH PAYMENT COULD BE MADE OTHER THAN UPON THE TERMS AGREED UPON.

ACCORDINGLY, THIS OFFICE PERCEIVES NO LEGAL OBJECTION TO PAYMENT OF THE ENCLOSED VOUCHER IN THE AMOUNT OF $336.96, IF OTHERWISE CORRECT. IT IS NOTED THAT THE AMOUNT OF $339.96 WAS ERRONEOUSLY ENTERED UNDER THE HEADING "AMOUNT VERIFIED; CORRECT FOR," ON THE VOUCHER.