B-168581, MAY 13, 1970

B-168581: May 13, 1970

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NOW REQUESTS REVIEW BY GAO IS ADVISED THAT USE OF CARLOAD RATES FOR LESS THAN CARLOAD SHIPMENTS WOULD BE PERMISSIBLE ONLY IF CARLOAD RATES COULD HAVE BEEN OBTAINED ON SHIPMENTS INVOLVED WITHOUT DELAYING DELIVERY. TOTAL INDEBTEDNESS IS $445.96. ROBERTS COMPANY: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18. THE CONTRACTOR SHALL DEDUCT FROM HIS INVOICE THE TRANSPORTATION CHARGES WHICH WOULD HAVE APPLIED UNDER THE ORIGINAL CONTRACT. TRANSPORTATION CHARGES WILL. STATE REGULATORY BODY OR LEGAL CONTRACT CARRIER RATES PROVIDED A CERTIFIED COPY OF SUCH LEGAL CONTRACT CARRIER RATES IS ON FILE WITH THE GENERAL SERVICES ADMINISTRATION OR ACCOMPANIES THE CONTRACTOR'S INVOICE FOR PAYMENT. THESE CASES CONTRACTOR SHALL INVOICE FOR REIMBURSEMENT OF THE TRANSPORTATION CHARGES AS A SEPARATE ITEM WHICH SHALL BE SUPPORTED BY PAID FREIGHT BILLS OR EXPRESS RECEIPTS WHEN THE AMOUNT THEREOF IS IN EXCESS OF $25.00.

B-168581, MAY 13, 1970

CONTRACTS--DELIVERIES--ADDITIONAL COST TO GOVERNMENT--TRANSPORTATION RATE EXCESSIVE CONTRACTOR, WHO REFUSED TO ACCEPT GENERAL SERVICES ADMINISTRATION'S COMPUTATION OF ITS INDEBTEDNESS--RESULTING FROM CONTRACTOR'S FAILURE TO ADJUST TRANSPORTATION CHARGES SUBSEQUENT TO GOVERNMENT'S DIVERSION OF CERTAIN SHIPMENTS FROM AUBURN, WASHINGTON; TO NORFOLK, VA.--AND NOW REQUESTS REVIEW BY GAO IS ADVISED THAT USE OF CARLOAD RATES FOR LESS THAN CARLOAD SHIPMENTS WOULD BE PERMISSIBLE ONLY IF CARLOAD RATES COULD HAVE BEEN OBTAINED ON SHIPMENTS INVOLVED WITHOUT DELAYING DELIVERY, UNLESS CARLOAD RATES FOR MINIMUM WEIGHT PROVIDED BY APPLICABLE TARIFFS WOULD PRODUCE LOWER COST THAN LESS THAN CARLOAD RATES FOR WEIGHT SHIPPED; AND THAT BASED ON LOWEST RATES AVAILABLE, TOTAL INDEBTEDNESS IS $445.96.

TO CHARLES D. ROBERTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18, 1969, AND SUBSEQUENT CORRESPONDENCE TO THIS OFFICE REQUESTING REVIEW OF A DETERMINATION BY OUR CLAIMS DIVISION OF YOUR INDEBTEDNESS TO THE UNITED STATES AS AN ADJUSTMENT OF TRANSPORTATION COSTS IN CONNECTION WITH DELIVERIES MADE UNDER CONTRACT NO. GS-00S-69659 ISSUED BY THE GENERAL SERVICES ADMINISTRATION IN APRIL 1967.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO FURNISH THE NEEDS OF CERTAIN SUPPLY DEPOTS OF THE GENERAL SERVICES ADMINISTRATION FOR HANDLE, BRUSH, WOOD, AT SPECIFIED UNIT PRICES F.O.B. DESTINATION, SUBJECT TO PROMPT PAYMENT DISCOUNT OF 1 PERCENT FOR PAYMENT IN 20 DAYS.

CLAUSE 2 OF THE SUPPLEMENTAL PROVISIONS OF THE CONTRACT (GSA FORM 1424, SEPTEMBER 1964, INCORPORATED BY REFERENCE) PROVIDES IN PERTINENT PART THAT THE GOVERNMENT RESERVES THE RIGHT TO DIRECT DELIVERIES TO DESTINATIONS OR TO CONSIGNEES OTHER THAN THOSE ORIGINALLY NAMED IN THE CONTRACT FOR ANY PART OR ALL OF THE QUANTITIES ORIGINALLY STIPULATED IN THE CONTRACT, SHIPMENT TO BE MADE AT THE LOWEST POSSIBLE COST COMMENSURATE WITH THE TYPE OF SERVICE REQUIRED. IN SUCH CASES, THE CONTRACTOR SHALL DEDUCT FROM HIS INVOICE THE TRANSPORTATION CHARGES WHICH WOULD HAVE APPLIED UNDER THE ORIGINAL CONTRACT, AND SHALL ADD THE TRANSPORTATION CHARGES FOR DELIVERIES ACTUALLY MADE. TRANSPORTATION CHARGES WILL, IN ALL CASES BE BASED UPON THE LOWEST REGULARLY ESTABLISHED RATES ON FILE WITH THE INTERSTATE COMMERCE COMMISSION, THE U. S. MARITIME COMMISSION, AND STATE REGULATORY BODY OR LEGAL CONTRACT CARRIER RATES PROVIDED A CERTIFIED COPY OF SUCH LEGAL CONTRACT CARRIER RATES IS ON FILE WITH THE GENERAL SERVICES ADMINISTRATION OR ACCOMPANIES THE CONTRACTOR'S INVOICE FOR PAYMENT. THESE CASES CONTRACTOR SHALL INVOICE FOR REIMBURSEMENT OF THE TRANSPORTATION CHARGES AS A SEPARATE ITEM WHICH SHALL BE SUPPORTED BY PAID FREIGHT BILLS OR EXPRESS RECEIPTS WHEN THE AMOUNT THEREOF IS IN EXCESS OF $25.00.

THE SUBJECT CONTRACT INCLUDED ITEM NO. 7920-263-0324, HANDLE, BRUSH, WOOD, PRICED AT ?314 PER UNIT, DELIVERED TO THE GENERAL SERVICES ADMINISTRATION DEPOT, AUBURN, WASHINGTON. THE GENERAL SERVICES ADMINISTRATION EXERCISED THE DELIVERY OPTION UNDER CLAUSE 2, SUPRA, AND ISSUED PURCHASE ORDER NO. T-X-45010-1, DATED JULY 7, 1967, FOR 1,260 UNITS WEIGHING 1,505 POUNDS, AND PURCHASE ORDER NO. T-X-G4654-1 DATED OCTOBER 16, 1967, FOR 15,408 UNITS WEIGHING 18,404 POUNDS, TO BE DELIVERED TO THE GENERAL SERVICES ADMINISTRATION AT NORFOLK, VIRGINIA, INSTEAD OF AUBURN, WASHINGTON.

SUBSEQUENT TO DELIVERY OF THE SUPPLIES TO NORFOLK, VIRGINIA, YOU ISSUED INVOICE NO. 2770, DATED SEPTEMBER 8, 1967, IN THE AMOUNT OF $395.64, TO COVER DELIVERY MADE UNDER PURCHASE ORDER NO. T-X-45010-1 AND INVOICE NO. 3108, DATED DECEMBER 20, 1967, IN THE AMOUNT OF $4,838.11, TO COVER DELIVERY MADE UNDER PURCHASE ORDER NO. T-X-G4654 1. THE INVOICES SHOWED NO ADJUSTMENT OF TRANSPORTATION CHARGES AND WERE PAID IN FULL EXCEPT FOR DEDUCTION OF 1 PERCENT AS PROMPT PAYMENT DISCOUNT.

SINCE YOU FAILED TO MAKE AN ADJUSTMENT OF TRANSPORTATION CHARGES DUE TO THE DIVERSION OF THE SHIPMENTS FROM AUBURN, WASHINGTON TO NORFOLK, VIRGINIA, GENERAL SERVICES ADMINISTRATION, UNDER DATE OF JUNE 14, 1968, MADE DEMAND UPON YOU FOR $838.27, BASED ON ITS DETERMINATION OF APPLICABLE FREIGHT RATES FOR THE WEIGHT OF EACH SHIPMENT. UPON RECEIPT THEREOF, YOU PREPARED A COMPUTATION OF THE FREIGHT ADJUSTMENT USING THE ACTUAL WEIGHTS OF THE SHIPMENTS AND CARLOAD RATES ALLEGED BY YOU TO BE APPLICABLE. YOUR COMPUTATION RESULTED IN AN ADJUSTMENT OF $414.18, OR $424.09 LESS THAN THE ADJUSTMENT CLAIMED BY THE GENERAL SERVICES ADMINISTRATION. A CHECK IN THE AMOUNT OF $414.18 WAS FORWARDED BY YOU TO THE GENERAL SERVICES ADMINISTRATION BY LETTER DATED JUNE 17, 1969. IN YOUR COMPUTATION YOU APPLIED CARLOAD RATES TO BOTH ORDERS, STATING THAT YOU ALWAYS COMBINED SHIPMENTS TO THE WEST COAST WITH CARLOAD LOTS SO AS TO OBTAIN LOWER RATES.

ON NOVEMBER 19, 1968, THE GENERAL SERVICES ADMINISTRATION ADVISED YOU THAT THE CONTRACT IN QUESTION CONTAINED NO PROVISION FOR SHIPMENTS OF CARLOAD LOTS AND ACCORDINGLY, TRANSPORTATION RATES USED IN THE ADJUSTMENTS MUST BE COMPUTED ON THE ACTUAL WEIGHT OF EACH SHIPMENT IN ACCORDANCE WITH ARTICLE 2, PARAGRAPH (C) OF GSA FORM 1424, SUPRA.

IN A LETTER DATED NOVEMBER 21, 1968, YOU ADVISED GENERAL SERVICES ADMINISTRATION THAT YOU HAD BEEN SHIPPING VIA TRUCK FROM GREENSBORO, NORTH CAROLINA TO AUBURN, WASHINGTON, FOR A RATE OF $3.55 PER CWT; WHICH WOULD MAKE A FURTHER ADJUSTMENT OF $86.74 AND YOU ARGUED THAT YOU SHOULD NOT ADJUST ANY MORE THAN THE ACTUAL FREIGHT RATE YOU COULD USE FROM GREENSBORO TO AUBURN.

SINCE YOU REFUSED TO ACCEPT THE COMPUTATIONS OF THE GENERAL SERVICES ADMINISTRATION IN DETERMINING THE TRANSPORTATION ADJUSTMENT, THE INDEBTEDNESS OF $424.09 WAS REFERRED TO OUR CLAIMS DIVISION AS UNCOLLECTIBLE.

ON AUGUST 4, 1969, OUR CLAIMS DIVISION MADE DEMAND UPON YOU FOR THE AMOUNT OF $850.93, COMPUTED ON THE BASIS OF MOTOR RATES, FOR THE REASON THAT YOU ACTUALLY SHIPPED BY TRUCK FROM GREENSBORO TO NORFOLK AND INDICATED THAT YOU HAD BEEN SHIPPING VIA TRUCK TO AUBURN, WASHINGTON. THIS BASIS, THE ADJUSTMENT WAS COMPUTED AT $1,265.11, LESS REMITTANCE OF $414.18, LEAVING A BALANCE OF $850.93 DUE THE GOVERNMENT. THIS COMPUTATION WAS $452.83 IN EXCESS OF THE DEBT AS COMPUTED BY THE GENERAL SERVICES ADMINISTRATION.

FOLLOWING A FURTHER EXCHANGE OF CORRESPONDENCE, YOU REQUESTED BY YOUR LETTER OF SEPTEMBER 18, 1969, THAT THE MATTER BE REVIEWED, IN CONSIDERATION OF THE SEVERAL DIFFERENT COMPUTATIONS WHICH HAD BEEN MADE.

BY LETTER DATED MARCH 6, 1970, WE REQUESTED ADDITIONAL INFORMATION FROM YOU IN SUPPORT OF THE TRANSPORTATION CHARGES WHICH YOU CLAIMED TO BE APPLICABLE. SPECIFICALLY WE ASKED FOR AN AFFIDAVIT STATING THAT CARLOAD RATES WITH STOPOVER PRIVILEGES WERE AVAILABLE TO YOU ENABLING YOU TO SHIP THE TWO ORDERS IN QUESTION AT CARLOAD RATES TO AUBURN, WASHINGTON, BY THE REQUIRED DELIVERY DATE; EVIDENCE OF THE SPECIFIC TARIFF AUTHORITY, INCLUDING THE ITEM NUMBER AND SPECIFIC TARIFF, SUPPORTING THE RATES USED BY YOU; AND A WORKSHEET SHOWING YOUR COMPUTATION OF THE ADJUSTMENT REQUIRED BY CLAUSE 2 OF THE SUPPLEMENTAL PROVISIONS OF THE CONTRACT (GSA FORM 1424, SUPRA).

YOU REPLIED BY LETTER DATED APRIL 7, 1970, BUT YOU DID NOT SUBMIT AN AFFIDAVIT AS REQUESTED, NOR DID YOU SUBMIT CITATIONS OF SPECIFIC TARIFF AUTHORITY FOR THE RATES USED IN YOUR COMPUTATION.

IT IS CLEAR THAT THE GOVERNMENT IS ENTITLED TO A REFUND OF FREIGHT CHARGES BASED ON THE LOWEST COMMERCIAL RATE AVAILABLE WHEN NO CERTAIN TYPE OF TRANSPORTATION HAS BEEN SPECIFIED IN THE CONTRACT. ANTHONY M. MEYERSTEIN, INC. (1950) NAVY BCA NO. 193. HOWEVER, THE USE OF CARLOAD RATES FOR LESS THAN CARLOAD SHIPMENTS WOULD BE PERMISSIBLE ONLY UPON A CLEAR SHOWING THAT CARLOAD RATES COULD HAVE BEEN OBTAINED ON THE SHIPMENTS INVOLVED WITHOUT DELAY IN THE REQUIRED DELIVERY, UNLESS CARLOAD RATES FOR THE MINIMUM WEIGHT PROVIDED BY APPLICABLE TARIFFS WOULD PRODUCE A LOWER COST THAN LESS THAN CARLOAD RATES FOR THE WEIGHT SHIPPED.

OUR TRANSPORTATION DIVISION REPORTS THAT THE RAILROAD FREIGHT BILL SUBMITTED WITH YOUR LETTER OF APRIL 7, AS EVIDENCE OF THE TARIFF RATE AVAILABLE TO YOU, COVERS A SHIPMENT CHARGED FOR AS UNFINISHED LUMBER, AND THAT THIS RATE IS NOT PROPERLY APPLICABLE TO FINISHED WOODEN BRUSH HANDLES. THE PURCHASE ORDERS ENCLOSED WITH YOUR LETTER (WHICH CALL FOR SHIPMENTS OVER A PERIOD OF 3 MONTHS), SHOW NOTHING AS TO THE METHOD, DATE OR COST OF SHIPPING INVOLVED.

WE ARE ADVISED BY OUR TRANSPORTATION DIVISION THAT UNDER 1967 TARIFF SCHEDULES THE LOWEST RATES AVAILABLE FOR THE TWO ORDERS INVOLVED IN THIS CONTROVERSY WERE AS FOLLOWS:

GREENSBORO TO AUBURN, WASHINGTON:

MOTOR CARRIER, LESS THAN TRUCKLOAD $7.44 PER CWT.

(ROCKY MT. MOTOR TARIFF BUR. 20-F,

GROUPS 8013-W326A)

(ROCKY MT. MOTOR TARIFF BUR. 22-E,

ITEM 905, CGN 155)

(ROCKY MT. MOTOR TARIFF BUR. 25-C,

SECTION 7, SUPL. NO. 108)

RAIL, CARLOAD, 30,000 LB. MINIMUM $3.01 PER CWT.

(TCFB TARIFF 1-P, ICC-1751, ITEM 9630, PT. 1)

GREENSBORO TO NORFOLK, VIRGINIA:

MOTOR CARRIER, LTL (LESS THAN 2,000 LBS.) $1.87 PER CWT.

(CLASS 65, ITEM 92780 NMFCA-9)

(SOUTHERN MOTORS TARIFF 501-BMF, ICC 1313)

(RATE BASE 228 SUPL. 82 INC.)

RAIL, CARLOAD, 20,000 LB. MINIMUM $ .59 PER CWT.

(SFTB TARIFF S-1011-A, RATE BASE 228)

(SFA SECTION 22, QUOTATION NO. A-3784-B)

APPLYING THE ABOVE LTL MOTOR RATES TO THE SMALLER ORDER OF 1,505 POUNDS, AND THE CARLOAD RAIL RATES TO THE 18,404 POUND ORDER, WE COMPUTE THE ADJUSTMENT AS FOLLOWS: PURCHASE ORDER T-X-45010

1,260 UNITS WEIGHING 1,505 LBS.

TOTAL CONTRACT PRICE, UNADJUSTED $ 395.64

LESS 1% FOR 20-DAY PROMPT PAYMENT 3.96

PAID BY GOVERNMENT $ 391.68

TOTAL CONTRACT PRICE 395.64

LESS TRANSPORTATION, GREENSBORO TO AUBURN-(LTL MOTOR) 1505# $7.44 CWT. 111.97

283.67

PLUS TRANSPORTATION, GREENSBORO TO NORFOLK-(LTL MOTOR) 1505# $1.87 CWT. 28.14

TOTAL ADJUSTED PRICE 311.81

LESS 1% FOR 20-DAY PROMPT PAYMENT 3.12

GOVERNMENT SHOULD HAVE PAID 308.69

REBATE DUE TO GOVERNMENT $ 82.99 PURCHASE ORDER T-X-G-4654-1

15,408 UNITS WEIGHING 18,404 LBS.

TOTAL CONTRACT PRICE, UNADJUSTED 4,838.11

LESS 1% FOR 20-DAY PROMPT PAYMENT 48.38

PAID BY GOVERNMENT 4,789.73

TOTAL CONTRACT PRICE 4,838.11

LESS TRANSPORTATION, GREENSBORO TO

AUBURN-(CL RAIL) 18,404 AS 30,000#

$3.01 CWT. 903.00

3,935.11

PLUS TRANSPORTATION, GREENSBORO TO

NORFOLK-(CL RAIL) 18,404 AS 20,000#

$0.59 CWT. 118.00

TOTAL ADJUSTED PRICE 4,053.11

LESS 1% FOR 20-DAY PROMPT PAYMENT 40.53

GOVERNMENT SHOULD HAVE PAID 4,012.58

REBATE DUE GOVERNMENT 777.15

PLUS REBATE FROM T-X-45010-1 82.99 TOTAL REBATE DUE GOVERNMENT . . . . . . $ 860.14 LESS REMITTANCE BY CHECK OF JUNE 1

414.18 TOTAL AMOUNT DUE GOVERNMENT . . . . .. $ 445.96

ACCORDINGLY, WE CONCLUDE THAT THE TOTAL AMOUNT OF YOUR INDEBTEDNESS TO THE GOVERNMENT IS $445.96. REMITTANCE OF THAT AMOUNT SHOULD BE FORWARDED TO OUR CLAIMS DIVISION.