B-14544, FEBRUARY 6, 1941, 20 COMP. GEN. 438

B-14544: Feb 6, 1941

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WHILE THE GOVERNMENT IS ENTITLED TO LAND-GRANT RATES FOR TRANSPORTATION OF "MILITARY OR NAVAL PROPERTY * * * MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE. LAND-GRANT RATES ARE NOT FOR APPLICATION TO TRANSPORTATION OF PROPERTY FOR USE ON PROJECTS AUTHORIZED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1941 MERELY BECAUSE THE PROJECTS INVOLVE WORK AT ARMY OR NAVY AIR FIELDS. OR HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES PURSUANT TO CERTAIN PROVISIONS OF THE RELIEF ACT. OR WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES. BIDS SHOULD BE EVALUATED ON THE BASIS OF TRANSPORTATION CHARGES COMPUTED WITHOUT DEDUCTION FOR LAND GRANT IN THE ABSENCE OF A DEFINITE ADMINISTRATION DETERMINATION THAT THE PROJECTS CONCERNED ARE MILITARY OR NAVAL RATHER THAN CIVIL IN CHARACTER AND PURPOSE.

B-14544, FEBRUARY 6, 1941, 20 COMP. GEN. 438

TRANSPORTATION - LAND-GRANT DEDUCTIONS - MATERIALS USED ON RELIEF ACT PROJECTS AT ARMY AND NAVY CAMPS, ETC. WHILE THE GOVERNMENT IS ENTITLED TO LAND-GRANT RATES FOR TRANSPORTATION OF "MILITARY OR NAVAL PROPERTY * * * MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE," IN ACCORDANCE WITH SECTION 321 OF THE TRANSPORTATION ACT OF 1940, LAND-GRANT RATES ARE NOT FOR APPLICATION TO TRANSPORTATION OF PROPERTY FOR USE ON PROJECTS AUTHORIZED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1941 MERELY BECAUSE THE PROJECTS INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, CAMPS, ETC., OR HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES PURSUANT TO CERTAIN PROVISIONS OF THE RELIEF ACT. IN AWARDING CONTRACTS FOR MATERIALS FOR USE ON PROJECTS AUTHORIZED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1941 WHICH INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, CAMPS, ETC., OR WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES, BIDS SHOULD BE EVALUATED ON THE BASIS OF TRANSPORTATION CHARGES COMPUTED WITHOUT DEDUCTION FOR LAND GRANT IN THE ABSENCE OF A DEFINITE ADMINISTRATION DETERMINATION THAT THE PROJECTS CONCERNED ARE MILITARY OR NAVAL RATHER THAN CIVIL IN CHARACTER AND PURPOSE.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, FEBRUARY 6, 1941:

THERE HAS BEEN CONSIDERED YOUR LETTER, DATED JANUARY 16, 1941, AS FOLLOWS:

IN CONNECTION WITH PURCHASES CURRENTLY BEING MADE BY THE PROCUREMENT DIVISION OF THIS DEPARTMENT FOR WORK PROJECTS ADMINISTRATION PROJECTS THE QUESTION HAS ARISEN WHETHER PROPERTY TRANSPORTED BY LAND-GRANT RAILROADS UNDER GOVERNMENT BILLS OF LADING IS "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE," AND SO IS ENTITLED TO MOVE AT LAND-GRANT RATES UNDER SECTION 321 (A) OF TITLE III, PART II, OF THE TRANSPORTATION ACT OF 1940 ( PUBLIC, NO. 785, 76TH CONGRESS, APPROVED SEPTEMBER 18, 1940, NOTWITHSTANDING THE FILING OF APPROVED RELEASES BY THE CARRIERS CONCERNED UNDER SECTION 321 (B) OF THAT ACT, WHERE THE PROPERTY IS TO BE DEVOTED TO ULTIMATE MILITARY OR NAVAL USE AS HEREINAFTER INDICATED.

SECTION 1 (C) OF THE EMERGENCY RELIEF APPROPRIATION ACT, FISCAL YEAR 1941 ( PUB. RES. NO. 88, 76TH CONGRESS, APPROVED JUNE 26, 1940), LIMITS EXPENDITURES FOR OTHER THAN LABOR COSTS FROM THE FUNDS APPROPRIATED IN SECTION 1 OF THAT ACT, EXISTING OF THOSE USED FOR ADMINISTRATIVE EXPENSES. THIS LIMITATION, HOWEVER, IS SUBJECT TO THE FOLLOWING PROVISO:

"PROVIDED FURTHER, THAT NOT TO EXCEED $25,000,000 OF FUNDS HEREIN APPROPRIATED TO THE WORK PROJECTS ADMINISTRATION MAY BE USED BY THE COMMISSIONER TO STATE, TERRITORY, POSSESSION, OR THE DISTRICT OF COLUMBIA IN CONNECTION WITH THE PROSECUTION OF PROJECTS WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR AND THE SECRETARY OF THE NAVY, RESPECTIVELY, AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES.'

THIS PROVISION IS APPLICABLE TO MANY OF THE PROJECTS FOR WHICH NECESSARY MATERIALS ARE BEING PURCHASED BY THE PROCUREMENT DIVISION. SOME OF THE PROJECTS INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, CAMPS, FORTS, RESERVATIONS, ETC. OTHERS, HOWEVER, ARE NON-FEDERAL PROJECTS INVOLVING THE IMPROVEMENT OF MUNICIPAL AIRPORTS, STATE AND COUNTY ROADS, ETC., WHICH HAVE IMPORTANCE FOR MILITARY OR NAVAL PURPOSES.

FOR BID EVALUATION PURPOSES A DECISION AS TO THE AVAILABILITY OF LAND- GRANT RATES IN CASES INVOLVING SHIPMENTS OF MATERIALS FOR PROJECTS OF THESE TYPES WOULD APPEAR DESIRABLE IN ADVANCE OF THE TIME WHEN FINAL SETTLEMENTS WITH THE CARRIERS CONCERNED WILL BE POSSIBLE. IN THIS CONNECTION IT SEEMS TO THE DEPARTMENT THAT MATERIALS PURCHASED BY THE PROCUREMENT DIVISION FOR PROJECTS ON MILITARY OR NAVAL RESERVATIONS, ETC., ARE CLEARLY DESTINED FOR ULTIMATE MILITARY OR NAVAL USE, BUT THERE IS SOME DOUBT WHETHER SUCH MATERIALS MAY BE REGARDED AS "MILITARY OR NAVAL PROPERTY" WITHIN THE MEANING OF THE STATUTE SINCE THEIR SHIPMENT AND THE CONDUCT OF THE PROJECTS ARE NOT UNDER THE JURISDICTION OF THE MILITARY OR NAVAL ESTABLISHMENTS. MATERIALS FOR PROJECTS NOT ON MILITARY OR NAVAL RESERVATIONS, ETC., PROBABLY COULD NOT IN ANY CASE BE REGARDED AS "MILITARY OR NAVAL PROPERTY," NOR AS "MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE," NOTWITHSTANDING A CERTIFICATION UNDER SECTION 1 (C) OF THE APPROPRIATION ACT THAT THE PROJECT IS IMPORTANT FOR MILITARY OR NAVAL PURPOSES.

THE ASSISTANT COMPTROLLER GENERAL'S DECISION TO THE SECRETARY OF WAR OF NOVEMBER 25, 1940, B-13422, DOES NOT APPEAR TO ANSWER THE QUESTIONS HERE PRESENTED SINCE ALL SHIPMENTS THERE CONSIDERED WERE UNDER THE JURISDICTION OF THE WAR DEPARTMENT AND THE ONLY QUESTION AS TO ANY OF THE TYPES OF SHIPMENTS THERE INVOLVED WAS WHETHER THE PROPERTY SHIPPED WOULD MOVE FOR MILITARY AND NOT FOR CIVIL USE. THE DEPARTMENT ACCORDINGLY REQUESTS YOUR DECISION AS TO THE AVAILABILITY OF LAND-GRANT RATES UNDER THE CIRCUMSTANCES ABOVE OUTLINED FROM CARRIERS WHOSE RELEASES UNDER SECTION 321 (B) OF THE ACT HAVE BEEN APPROVED.

PENDING RECEIPT OF YOUR DECISION IT HAS BEEN NECESSARY TO ADOPT AN INTERIM WORKING BASIS IN ORDER TO PREVENT DELAY IN THE PROSECUTION OF THESE PROJECTS. IN THIS CONNECTION, IT HAS BEEN CONSIDERED ADVISABLE, AS REGARDS RELATIONS WITH THE CARRIERS CONCERNED, TO TAKE THE POSITION MORE FAVORABLE TO THE GOVERNMENT AND TO CLAIM THAT LAND-GRANT RATES APPLY WHERE SHIPMENTS ARE MADE FOR PROJECTS BEING CONDUCTED AT MILITARY OR NAVAL AIR FIELDS, CAMPS, FORTS, RESERVATIONS, ETC., BUT NOT FOR THE ABOVE-INDICATED NON-FEDERAL PROJECTS. IN VIEW, HOWEVER, OF THE DOUBT AS TO THE GOVERNMENT'S RIGHT TO LAND-GRANT RATES ON ANY OF THE SHIPMENTS HERE CONSIDERED, IT IS BELIEVED ADVISABLE FOR BID EVALUATION PURPOSES TO DISREGARD POSSIBLE LAND-GRANT SAVINGS UNTIL OUR DECISION IS REACHED. THE PROCUREMENT DIVISION IS NOW PROCEEDING ON THIS TENTATIVE BASIS. IN THE EVENT THAT YOUR DECISION AS TO THE AVAILABILITY OF LAND-GRANT RATES UNDER THE FOREGOING CIRCUMSTANCES WILL NECESSITATE THEREAFTER USE OF SOME OTHER BASIS FOR BID EVALUATION, IT WILL BE APPRECIATED IF YOU WILL INCLUDE IN THE DECISION A STATEMENT WHETHER YOUR OFFICE WILL OBJECT TO ANY OTHERWISE PROPER PAYMENTS MADE UNDER CONTRACTS AWARDED WHILE THE TENTATIVE BASIS JUST INDICATED IS IN EFFECT.

UNDER THE PROVISIONS OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940, PUBLIC, NO. 785, SEVENTY-SIXTH CONGRESS, AND IN THE ABSENCE OF ANY REDUCTIONS IN CHARGES AS AUTHORIZED BY SECTIONS 1 (7) AND 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, FULL APPLICABLE COMMERCIAL RATES AND CHARGES ARE REQUIRED TO BE PAID, FROM AND AFTER THE EFFECTIVE DATE OF RELEASES FILED AND APPROVED AS PROVIDED IN THE TRANSPORTATION ACT OF 1940, FOR THE TRANSPORTATION OF PROPERTY FOR OR ON BEHALF OF THE UNITED STATES, SUBJECT TO THE LIMITATION THAT THIS REQUIREMENT "SHALL NOT APPLY TO THE TRANSPORTATION OF MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE.' YOUR SUBMISSION PRESENTS THE QUESTION WHETHER TRANSPORTATION SERVICES PROCURED UNDER THE CIRCUMSTANCES AND PURSUANT TO THE AUTHORITY DETAILED IN YOUR LETTER COME WITHIN THE EXCEPTION OR LIMITATION QUOTED ABOVE SO AS TO SUBJECT THE CHARGES FOR SUCH TRANSPORTATION TO DEDUCTION FOR LAND GRANT WHERE THE OTHER CONDITIONS ESSENTIAL TO SUCH DEDUCTION APPLY.

THE " EMERGENCY RELIEF APPROPRIATION ACT, FISCAL YEAR 1941," TO WHICH YOU REFER, MAKES APPROPRIATION IN SECTION 1 (A) OF THE SUM OF $975,650,000 TO THE WORK PROJECTS ADMINISTRATION "IN ORDER TO CONTINUE TO PROVIDE WORK FOR NEEDY PERSONS ON USEFUL PUBLIC PROJECTS IN THE UNITED STATES AND ITS TERRITORIES AND POSSESSIONS.' SECTION 1 (B) OF SAID ACT PROVIDES THAT THE MONEY SO APPROPRIATED TO THE WORK PROJECTS ADMINISTRATION SHALL BE AVAILABLE FOR---

* * * (1) ADMINISTRATION; (2) THE PROSECUTION OF PROJECTS APPROVED BY THE PRESIDENT UNDER THE PROVISIONS OF THE EMERGENCY RELIEF APPROPRIATION ACTS OF 1937, 1938, AND 1939; AND (3) THE PROSECUTION OF THE FOLLOWING TYPES OF PUBLIC PROJECTS, FEDERAL AND NON-FEDERAL, SUBJECT TO THE APPROVAL OF THE PRESIDENT, NAMELY: HIGHWAYS, ROADS, AND STREETS; PUBLIC BUILDINGS; PARKS; AND OTHER RECREATIONAL FACILITIES, INCLUDING BUILDINGS THEREIN; PUBLIC UTILITIES; ELECTRIC TRANSMISSION AND DISTRIBUTION LINES OR SYSTEMS TO SERVE PERSONS IN RURAL AREAS, INCLUDING PROJECTS SPONSORED BY AND FOR THE BENEFIT OF NONPROFIT AND COOPERATIVE ASSOCIATIONS; SEWER SYSTEMS, WATER SUPPLY, AND PURIFICATION SYSTEMS; AIRPORTS AND OTHER TRANSPORTATION FACILITIES; FLOOD CONTROL; DRAINAGE; IRRIGATION, INCLUDING PROJECTS SPONSORED BY COMMUNITY DITCH ORGANIZATIONS; WATER CONSERVATION; SOIL CONSERVATION, INCLUDING PROJECTS SPONSORED BY SOIL CONSERVATION DISTRICTS AND OTHER BODIES DULY ORGANIZED UNDER STATE LAW FOR SOIL EROSION CONTROL AND SOIL CONSERVATION, PREFERENCE BEING GIVEN TO PROJECTS WHICH WILL CONTRIBUTE TO THE REHABILITATION OF INDIVIDUALS AND AN INCREASE IN THE NATIONAL INCOME; FORESTATION, REFORESTATION, AND OTHER IMPROVEMENTS OF FOREST AREAS, INCLUDING THE ESTABLISHMENT OF FIRE LANES; FISH, GAME, AND OTHER WILDLIFE CONSERVATION; ERADICATION OF INSECT, PLANT, AND FUNGUS PESTS; THE PRODUCTION OF LIME AND MARL FOR FERTILIZING SOIL FOR DISTRIBUTION TO FARMERS UNDER SUCH CONDITIONS AS MAY BE DETERMINED BY THE SPONSORS OF SUCH PROJECTS UNDER THE PROVISIONS OF STATE LAW; EDUCATIONAL, PROFESSIONAL, CLERICAL, CULTURAL, RECREATIONAL, PRODUCTION, AND SERVICE PROJECTS, INCLUDING TRAINING FOR NURSING AND FOR DOMESTIC SERVICE; AID TO SELF-HELP AND COOPERATIVE ASSOCIATIONS FOR THE BENEFIT OF NEEDY PERSONS; AND MISCELLANEOUS PROJECTS: * * *

SECTION 1 (C) OF THE ACT PROVIDES THAT THE FUNDS SO APPROPRIATED, EXCLUSIVE OF THOSE USED FOR ADMINISTRATIVE EXPENSES, SHALL BE SO ADMINISTERED THAT EXPENDITURE AUTHORIZATIONS FOR OTHER THAN LABOR COSTS FOR PROJECTS FINANCED FROM SUCH FUNDS SHALL IN NO EVENT EXCEED AN AVERAGE OF $7 PER MONTH PER WORKER, BUT THIS LIMITATION UPON EXPENDITURE AUTHORIZATIONS FOR OTHER THAN LABOR COSTS IS SUBJECT TO THE FURTHER PROVISION---

* * * NOT TO EXCEED $25,000,000 OF FUNDS HEREIN APPROPRIATED TO THE WORK PROJECTS ADMINISTRATION MAY BE USED BY THE COMMISSIONER TO SUPPLEMENT THE AMOUNTS SO AUTHORIZED FOR OTHER THAN LABOR COSTS IN ANY STATE, TERRITORY, POSSESSION, OR THE DISTRICT OF COLUMBIA IN CONNECTION WITH THE PROSECUTION OF PROJECTS WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR AND THE SECRETARY OF THE NAVY, RESPECTIVELY, AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES.

A SOMEWHAT SIMILAR PROVISION OCCURS IN SECTION 1 (D) OF THE ACT WHICH, WHILE REQUIRING GENERALLY THAT NOT LESS THAN ONE-FOURTH OF THE TOTAL COST OF ALL NON-FEDERAL PROJECTS APPROVED AFTER JANUARY 1, 1940, TO BE UNDERTAKEN WITHIN ANY STATE, ETC., SHALL BE BORNE BY THE STATE, ETC., PROVIDES THAT THIS REQUIREMENT---

* * * SHALL NOT APPLY TO PROJECTS (1) WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR AND THE SECRETARY OF THE NAVY, RESPECTIVELY, AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES, OR (2) WHICH AUTHORIZE NECESSARY TEMPORARY MEASURES TO AVERT DANGER TO LIFE, PROPERTY, OR HEALTH IN THE EVENT OF DISASTER OR GRAVE EMERGENCY CAUSED BY FLOOD, STORM, FIRE, EARTHQUAKE, DROUGHT, OR SIMILAR CAUSE. THE FACTS CONSTITUTING COMPLIANCE WITH THE REQUIREMENTS OF THIS SUBSECTION SHALL BE DETERMINED BY THE COMMISSIONER, AND HIS DETERMINATIONS, MADE IN CONFORMITY WITH RULES AND REGULATIONS PRESCRIBED BY HIM, SHALL BE FINAL AND CONCLUSIVE.

YOUR INQUIRY IS PROMPTED APPARENTLY BY REASON OF THE PROVISIONS FOR CERTIFICATION OF PROJECTS BY THE SECRETARY OF WAR AND THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES AND THE FACT THAT MANY PROJECTS FOR WHICH MATERIALS ARE BEING PURCHASED BY THE PROCUREMENT DIVISION "INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, CAMPS, FORTS, RESERVATIONS, ETC.'

IN CONNECTION WITH THE QUESTION SO PRESENTED THERE APPEARS PROPERLY FOR CONSIDERATION THE FACT THAT IN SECTION 9 OF THE " EMERGENCY RELIEF APPROPRIATION ACT, FISCAL YEAR 1941" IT IS PROVIDED:

THE FUNDS MADE AVAILABLE BY THIS JOINT RESOLUTION SHALL BE USED ONLY FOR WORK RELIEF OR RELIEF FOR PERSONS IN NEED EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN. AND THE FURTHER FACT THAT A PROHIBITION AGAINST THE USE OF SAID FUNDS FOR THE PURCHASE OF MUNITIONS AND ARMAMENTS FOR THE MILITARY AND NAVAL FORCES OCCURS IN SECTION 34, WHICH PROVIDES---

NONE OF THE FUNDS APPROPRIATED BY THIS JOINT RESOLUTION SHALL BE USED FOR THE MANUFACTURE, PURCHASE, OR CONSTRUCTION OF ANY NAVAL VESSEL, ANY ARMAMENT, MUNITIONS, OR IMPLEMENT OF WAR, FOR MILITARY OR NAVAL FORCES, AND NO FUNDS HEREIN APPROPRIATED OR AUTHORIZED SHALL BE DIVERTED OR ALLOCATED TO ANY OTHER DEPARTMENT OR BUREAU FOR SUCH PURPOSE.

IN VIEW OF THE CLEARLY INDICATED PURPOSE, EXPRESSED IN THE ACT, TO PROVIDE FOR THE RELIEF OF THE NEEDY, AS DISTINGUISHED FROM ANY PURPOSE TO AUTHORIZE THE PROCUREMENT OF MILITARY OR NAVAL SUPPLIES, IT WOULD SEEM TO BE A REASONABLE CONCLUSION THAT THE PROVISIONS FOR THE CERTIFICATION OF PROJECTS BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES WAS ENACTED IN THE CONTEMPLATION THAT SOME RELIEF PROJECTS, PROPERLY AUTHORIZED UNDER THE ACT, WHEN COMPLETED, WOULD BE OF GREATER POTENTIAL VALUE OR IMPORTANCE THAN OTHERS, FOR MILITARY OR NAVAL PURPOSES, SHOULD NECESSITY OR OCCASION FOR THEIR USE FOR SUCH PURPOSES ARISE, AND, ACCORDINGLY, BE ENTITLED TO THE PREFERENCES SPECIFIED, RATHER THAN THAT SUCH CERTIFICATIONS SHOULD BE TAKEN AS ESTABLISHING THAT THE PROJECTS THEMSELVES ARE MILITARY OR NAVAL IN CHARACTER AND ARE UNDERTAKEN PRIMARILY FOR MILITARY OR NAVAL PURPOSES. OTHER WORDS, WHEN CONSIDERATION IS GIVEN THE PURPOSE AND EFFECT OF THE VARIOUS PROVISIONS OF THE ACT IT WOULD SEEM THAT THE CERTIFICATIONS THEREUNDER AS TO IMPORTANCE FOR MILITARY OR NAVAL PURPOSES PROPERLY MAY BE REGARDED, IN THE ABSENCE OF ANY SHOWING OF FACT OR INTENTION OTHERWISE ON THE PART OF THE MILITARY OR NAVAL AUTHORITIES, AS PERTAINING TO THE INCIDENTAL CONSEQUENCES OR THE SECONDARY NATURE OF THE PROJECTS CONCERNED RATHER THAN AS INDICATING THE PRIMARY CHARACTER OF SAID PROJECTS OR THE CONTROLLING AND PREPONDERANT PURPOSES TO BE SERVED BY THEM. IN THAT VIEW THE CONCLUSION APPEARS WARRANTED THAT SINCE IN SUCH CIRCUMSTANCES THE SHIPMENT AND TRANSPORTATION OF PROPERTY OR MATERIALS FOR USE IN THE CONSTRUCTION OF SUCH PROJECTS APPARENTLY IS MADE PRIMARILY FOR OTHER THAN MILITARY OR NAVAL PURPOSES AND SERVES THOSE PURPOSES ONLY INCIDENTALLY OR POTENTIALLY, THE SERVICE PROPERLY MAY BE CONSIDERED AS NOT EMBRACED WITHIN THE PROVISIONS OF THE TRANSPORTATION ACT OF 1940 EXCEPTING THE TRANSPORTATION OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" FROM THE REQUIREMENT FOR PAYMENT OF FULL COMMERCIAL RATES AND CHARGES. NOR DOES IT APPEAR THAT THE CONCLUSION SO REACHED IS REQUIRED TO BE MODIFIED BY REASON OF THE CIRCUMSTANCES THAT THE PROJECTS IN QUESTION MAY INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, FORTS, RESERVATIONS, C., WHERE, AS APPEARS REASONABLE TO ASSUME IN THE ABSENCE OF EVIDENCE OTHERWISE, THE PROJECTS IN QUESTION ARE UNDERTAKEN PRIMARILY FOR THE CIVIL PURPOSE OF AFFORDING RELIEF FOR THE NEEDY RATHER THAN AS CONSTITUTING AN ESSENTIAL OR INTEGRAL PART IN THE PROGRAM OF ARMAMENT AND MILITARY DEFENSE AND EFFECTIVENESS. IN THIS CONNECTION, THE SITUATION APPEARS SOMEWHAT SIMILAR TO THAT INVOLVED IN SOUTHERN PACIFIC COMPANY V. UNITED STATES, 285 U.S. 240, IN WHICH IT WAS SAID:

WHILE, AS IS ARGUED BY THE UNITED STATES, RIVER AND HARBOR IMPROVEMENT HAS IN ONE ASPECT A BEARING UPON THE MILITARY DEFENSE OF THE UNITED STATES, OBVIOUSLY THE PRINCIPAL PURPOSE OF THIS WORK IS THE PROMOTION OF COMMERCE AND TRANSPORTATION, BY MAINTAINING AND DEEPENING CHANNELS, AND CONSTRUCTING DIKES, JETTIES, AND OTHER WORKS WHICH EFFECT THE IMPROVEMENT OF NAVIGATION GENERALLY.

WHILE, THEREFORE, IN THE AUDIT OF TRANSPORTATION ACCOUNTS THIS OFFICE NECESSARILY WILL BE REQUIRED TO APPLY LAND-GRANT RATES, WHEN THE OTHER CONDITIONS NECESSARY TO THEIR APPLICATION ARE PRESENT, TO THE TRANSPORTATION OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" AS PROVIDED IN SECTION 321 OF THE TRANSPORTATION ACT OF 1940, AND, IN ARRIVING AT A CONCLUSION AS TO WHETHER OR NOT A GIVEN TRANSPORTATION SERVICE COMES WITHIN THE SCOPE OF SAID PROVISION, WILL GIVE DUE CONSIDERATION TO ADMINISTRATIVE DETERMINATIONS AS TO THE MILITARY OR NAVAL CHARACTER OF THE PURPOSES OF SUCH TRANSPORTATION, IT DOE DOES NOT APPEAR THAT THE APPLICATION OF LAND- GRANT RATES TO THE TRANSPORTATION OF PROPERTY AND MATERIALS FOR PROJECTS AUTHORIZED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1941 IS REQUIRED MERELY BY REASON OF THE FACT THAT THE MATERIALS OR PROPERTY IN QUESTION INVOLVE WORK AT ARMY OR NAVY AIR FIELDS, CAMPS, FORTS, RESERVATIONS, ETC., OR ARE FOR USE ON PROJECTS WHICH HAVE BEEN CERTIFIED BY THE SECRETARY OF WAR OR THE SECRETARY OF THE NAVY AS BEING IMPORTANT FOR MILITARY OR NAVAL PURPOSES, WHERE THERE IS NOTHING TO INDICATE THAT SUCH CERTIFICATIONS WERE MADE OTHERWISE THAN IN CONFORMITY WITH THE APPARENT PURPOSE OF THE ACT TO AFFORD PREFERENCES TO THOSE RELIEF PROJECTS WHICH, FROM A MILITARY POINT OF VIEW, MAY BE CONSIDERED AS IMPORTANT. OTHER WORDS, IT DOES NOT APPEAR NECESSARY TO REGARD THESE CIRCUMSTANCES AS SURPASSING OR OVERCOMING THE CLEARLY INDICATED CIVIL PURPOSES OF SUCH PROJECTS, AS SHOWN BY THE PROVISIONS OF THE ACT HEREINABOVE QUOTED, IN THE ABSENCE OF SOME SHOWING OF A DEFINITE DETERMINATION OTHERWISE IN INDIVIDUAL INSTANCES BY THE MILITARY OR NAVAL AUTHORITIES CONCERNED. THE AUDIT OF TRANSPORTATION ACCOUNTS IN THIS OFFICE WILL BE ACCORDINGLY.

AS TO THE MATTER OF AWARD OF CONTRACTS FOR MATERIALS FOR USE UPON PROJECTS SUCH AS ABOVE, I CONCUR IN THE VIEW THAT EVALUATIONS ON THE BASIS OF TRANSPORTATION CHARGES COMPUTED WITHOUT DEDUCTION FOR LAND GRANT IS PROPER IN THE ABSENCE OF A DEFINITE ADMINISTRATIVE DETERMINATION THAT THE PROJECTS CONCERNED ARE MILITARY OR NAVAL RATHER THAN CIVIL IN CHARACTER AND PURPOSE.