B-141151, APR. 12, 1960

B-141151: Apr 12, 1960

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TRANSPORTATION CONSULTANT: WE HAVE FOR CONSIDERATION YOUR REQUEST FOR A REVIEW OF SETTLEMENT NO. WAS COLLECTED BY DEDUCTION FROM AMOUNTS OTHERWISE DUE HAYES FREIGHT LINES. FIVE COVERING BILLS OF LADING WERE ISSUED. ON EACH THE AMMUNITION WAS DESCRIBED AS "AMMUNITION CARTRIDGE FOR SMALL ARMS W/SOLID PROJECTILES. " AND EACH BORE THE NOTATION "/CARRIERS SEC. 22 QUO. 82 S AND A CONTROL 128 APPLICABLE.) " CHARGES WERE BILLED AND COLLECTED AT 65 PERCENT OF THE FIRST CLASS RATE SUBJECT TO A MINIMUM WEIGHT OF 50. WHEN THE PAID CHARGES WERE AUDITED. WE DETERMINED THAT THEY SHOULD HAVE BEEN BASED UPON THE FOURTH CLASS RATING PROVIDED IN ITEM 3820. THAT THE AMMUNITION WAS IN FACT CARTRIDGES WITH SOLID PROJECTILES FOR 20 MILLIMETER GUNS.

B-141151, APR. 12, 1960

TO E. F. MACMILLAN, TRANSPORTATION CONSULTANT:

WE HAVE FOR CONSIDERATION YOUR REQUEST FOR A REVIEW OF SETTLEMENT NO. TK- 670658, DATED SEPTEMBER 30, 1959, WHICH DISALLOWED HAYES FREIGHT LINES, INC. SUPPLEMENTAL BILL NO. 15000-A, CLAIMING ADDITIONAL FREIGHT CHARGES OF $639.75 FOR TRANSPORTATION FURNISHED THE DEPARTMENT OF THE NAVY IN SEPTEMBER 1950. THIS SUM HAD BEEN FOUND OVERPAID ON THE ORIGINAL BILL FOR TRANSPORTATION CHARGES, AND WAS COLLECTED BY DEDUCTION FROM AMOUNTS OTHERWISE DUE HAYES FREIGHT LINES, INC.

ON SEPTEMBER 11, 1950, THE TRANSPORTATION OFFICER AT KINGSBURY ORDNANCE PLANT, KINGSBURY, INDIANA, TENDERED TO HAYES FREIGHT LINES FOR CARRIAGE TO THE SUPPLY OFFICER AT THE NAVAL AMMUNITION DEPOT, CRANE, INDIANA, FIVE TRUCKLOADS OF AMMUNITION WEIGHING 44,070 POUNDS EACH. FIVE COVERING BILLS OF LADING WERE ISSUED; ON EACH THE AMMUNITION WAS DESCRIBED AS "AMMUNITION CARTRIDGE FOR SMALL ARMS W/SOLID PROJECTILES; " AND EACH BORE THE NOTATION "/CARRIERS SEC. 22 QUO. 82 S AND A CONTROL 128 APPLICABLE.) " CHARGES WERE BILLED AND COLLECTED AT 65 PERCENT OF THE FIRST CLASS RATE SUBJECT TO A MINIMUM WEIGHT OF 50,000 POUNDS, AS PROVIDED IN HAYES FREIGHT LINES, INC. GOVERNMENT RATE SHEET NO. 82 FOR SHIPMENTS OF "AMMUNITION AND/OR EXPLOSIVES.' WHEN THE PAID CHARGES WERE AUDITED, WE DETERMINED THAT THEY SHOULD HAVE BEEN BASED UPON THE FOURTH CLASS RATING PROVIDED IN ITEM 3820, NATIONAL MOTOR FREIGHT CLASSIFICATION NO. 10, P.S.C.I. NO. TR-18, FOR "AMMUNITION, FIXED, FOR CANNON, WITH EMPTY, SAND-LOADED OR SOLID PROJECTILES," SINCE THE DIRECTOR, FREIGHT DIVISION, DEPARTMENT OF THE NAVY, IN A LETTER DATED SEPTEMBER 18, 1952, HAD ADVISED, THAT THE AMMUNITION WAS IN FACT CARTRIDGES WITH SOLID PROJECTILES FOR 20 MILLIMETER GUNS. A COPY OF THIS LETTER WAS SENT TO YOU WITH SETTLEMENT CERTIFICATE NO. TK-670658. WHEN HAYES FREIGHT LINES FAILED TO REFUND THE OVERPAYMENTS ON THOSE SHIPMENTS, THE TOTAL AMOUNT, $639.75, WAS COLLECTED BY DEDUCTION IN DECEMBER 1953. WITH YOUR LETTER OF MARCH 17, 1959, YOU SUBMITTED ON BEHALF ON HAYES FREIGHT LINES THEIR SUPPLEMENTAL BILL NO. 15000-A, WHICH WAS THE SUBJECT OF THE DISALLOWANCE NOW COMPLAINED OF.

YOUR REQUEST FOR REVIEW IS BOTTOMED ON THE DECISION OF THE COURT OF CLAIMS IN W. T. COWAN, INC. V. THE UNITED STATES, 130 C. CLS. 585, AND UPON OUR DECISION B-44794, DATED JULY 25, 1955, IN WHICH WE INFORMED THE MANAGING DIRECTOR OF THE MUNITIONS CARRIERS' CONFERENCE THAT WE WOULD CONSIDER CLAIMS INVOLVING TRAFFIC SIMILAR TO THAT IN THE COWAN CASE IN THE LIGHT OF THE COURT OF CLAIMS DECISION AND OF THEIR INDIVIDUAL FACTS AND CIRCUMSTANCES TO THE EXTENT OF OUR AUTHORIZATION. YOUR REQUEST, HOWEVER, DOES NOT INDICATE IN WHAT WAY YOU BELIEVE WE HAVE FAILED TO FOLLOW THOSE PRECEDENTS, NOR DOES IT EXPLAIN HOW THEY SERVE TO SUPPORT THE CLAIM FOR ADDITIONAL CHARGES.

OUR AUDIT ACTION, PREDICATED ON THE NAVY DEPARTMENT'S CORRECTED DESCRIPTION OF THE AMMUNITION SHIPPED AS CARTRIDGES WITH SOLID PROJECTILES FOR 20 MILLIMETER GUNS, AND THUS RATABLE UNDER ITEM 3820, NATIONAL MOTOR FREIGHT CLASSIFICATION NO. 10, AS CANNON AMMUNITION WITH SOLID PROJECTILES, WAS IN COMPLETE HARMONY WITH THE DECISION IN THE COWAN CASE (JANUARY 11, 1955) AND WITH B-44794 (JULY 25, 1955), ALTHOUGH IT PRECEDED BOTH IN TIME. AT ISSUE IN THE COWAN CASE WAS THE PROPER CLASSIFICATION OF AMMUNITION WITH EXPLOSIVE BULLETS FOR USE IN 20 MILLIMETER GUNS. THE COURT HELD THAT SINCE A 20 MILLIMETER GUN IS A CANNON (HAVING A BORE OF .787 INCHES, LESS THAN 6 INCHES BUT MORE THAN 3/4 INCHES), IT NECESSARILY FOLLOWS THAT 20 MILLIMETER AMMUNITION IS CANNON AMMUNITION. THUS, IN RATING THESE SHIPMENTS OF 20 MILLIMETER AMMUNITION WITH SOLID PROJECTILES AS CANNON AMMUNITION UNDER ITEM 3820, WE ANTICIPATED THE COURT'S HOLDING IN THE COWAN CASE AND OUR EXPRESSION THEREON IN B-44794.

GOVERNMENT RATE SHEET NO. 82 OFFERS TO CARRY "AMMUNITION AND/OR EXPLOSIVES" EITHER AT 75 PERCENT OF THE FIRST CLASS RATE, SUBJECT TO A MINIMUM WEIGHT OF 20,000 POUNDS, OR AT 65 PERCENT OF THE FIRST CLASS RATE, SUBJECT TO A MINIMUM WEIGHT OF 50,000 POUNDS. NATIONAL MOTOR FREIGHT CLASSIFICATION NO. 10, IN WHICH HAYES FREIGHT LINES, INC., IS LISTED AS A PARTICIPATING CARRIER, IN ITEM 3820 HOLDS OUT TO THE GENERAL PUBLIC, INCLUDING THE GOVERNMENT, A FOURTH CLASS RATING SUBJECT TO A VOLUME MINIMUM WEIGHT OF 36,000 POUNDS FOR APPLICATION TO SHIPMENTS OF "AMMUNITION, FIXED, FOR CANNON, WITH EMPTY, SAND-LOADED OR SOLID PROJECTILES.' IN THIS SITUATION, IT NECESSARILY FOLLOWS THAT THE SHIPMENTS OF CANNON AMMUNITION (CARTRIDGES WITH SOLID PROJECTILES FOR 20 MILLIMETER GUNS) HERE CONCERNED WERE NOT PROPERLY RATABLE UNDER RATE SHEET NO. 82, BUT RATHER UNDER THE LOWER RATING IN ITEM 3820 OF THE CLASSIFICATION.

IN THE CIRCUMSTANCES, OUR SETTLEMENT OF SEPTEMBER 30, 1959, WAS CORRECT AND IS SUSTAINED.