B-172312, AUG 4, 1972

B-172312, AUG 4, 1972

PUBLIC LAW 90-268 - INTERPRETATION - CARGO CONTAINER SIZE SPECIFICATIONS DECISION REGARDING THE INTERPRETATION BY GAO OF PUBLIC LAW 90-268, SECTIONS 2304(H) AND 2305(A) OF TITLE 10, U.S. CODE, RELATING TO THE LEASING OF CARGO CONTAINERS. THE ACT CLEARLY RELATES TO INVITATIONS FOR BIDS AND CONTRACTS ISSUED BY THE GOVERNMENT FOR THE CARRIAGE OF PROPERTY BY WATER CARRIERS. GAO DOES NOT BELIEVE THAT THE ACT HAS ANY APPLICATION WHERE THE GOVERNMENT IS NOT CONTRACTING FOR THE CARRIAGE OF PROPERTY, BUT IS SIMPLY LEASING OR PURCHASING CARGO CONTAINERS TO BE USED IN CONNECTION WITH GOVERNMENT OWNED OR CONTROLLED SHIPS. THERE IS NOTHING IN THE ACT OR ITS LEGISLATIVE HISTORY INDICATING ANY INTENTION OF PROHIBITING THE GOVERNMENT FROM LEASING OR PURCHASING CONTAINERS OF THE SIZE REQUIRED FOR USE IN CONNECTION WITH ITS OWN VESSELS.

TO RAGAN & MASON:

REFERENCE IS MADE TO YOUR REQUEST FOR RECONSIDERATION OF DECISION DATED MAY 25, 1971, B-172312, WHICH INVOLVED AN INTERPRETATION OF PUBLIC LAW 90- 268, SECTIONS 2304(H) AND 2305(A) OF TITLE 10, U.S.C. WHICH PROVIDE AS FOLLOWS:

SECTION 2304:

"(H) EXCEPT IN A CASE WHERE THE SECRETARY OF DEFENSE DETERMINES THAT MILITARY REQUIREMENTS NECESSITATE SPECIFICATION OF CONTAINER SIZES, NO CONTRACT FOR THE CARRIAGE OF GOVERNMENT PROPERTY IN OTHER THAN GOVERNMENT- OWNED CARGO CONTAINERS SHALL REQUIRE CARRIAGE OF SUCH PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT, OR WIDTH."

SECTION 2305(A):

"EXCEPT IN A CASE WHERE THE SECRETARY OF DEFENSE DETERMINES THAT MILITARY REQUIREMENTS NECESSITATE SPECIFICATION OF CONTAINER SIZES, NO ADVERTISEMENT OR INVITATION TO BID FOR THE CARRIAGE OF GOVERNMENT PROPERTY IN OTHER THAN GOVERNMENT-OWNED CARGO CONTAINERS SHALL SPECIFY CARRIAGE OF SUCH PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT, OR WIDTH."

IT WAS HELD IN THE DECISION OF MAY 25, 1971, THAT A SOLICITATION FOR THE LONG-TERM LEASING OF CARGO CONTAINERS OF A SPECIFIC SIZE FOR USE IN PROVIDING SHIPPING SERVICE TO ALASKA BY TWO GOVERNMENT-OWNED NUCLEUS SHIPS, DID NOT DIRECTLY OR INDIRECTLY VIOLATE THE STATUTORY PROHIBITION AGAINST INVITATIONS FOR BIDS ON CONTRACTS SPECIFYING THE CARRIAGE OF GOVERNMENT PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT, OR WIDTH. THE DECISION STATED THAT THE PROVISIONS OF THE ACT CLEARLY RELATED TO ADVERTISEMENTS, INVITATIONS FOR BIDS AND CONTRACTS FOR THE CARRIAGE OF GOVERNMENT PROPERTY, AND, THAT AS USED IN THE ACT, "CARRIAGE" MEANS "COMMERCIAL CARRIAGE," SINCE CONTRACTS FOR CARRIAGE WOULD NOT BE AWARDED BY A GOVERNMENT AGENCY TO ANOTHER GOVERNMENT AGENCY PURSUANT TO ADVERTISEMENTS OR INVITATIONS FOR BIDS. IT WAS FURTHER STATED THAT THE LEGISLATIVE HISTORY OF THE ACT SHOWS IT WAS ENACTED TO PREVENT DISCRIMINATORY POLICIES OR PRACTICES BY ANY GOVERNMENT AGENCY AGAINST ANY WATER CARRIER BY GIVING PREFERENCE ON THE BASIS OF SIZES OF CARGO CONTAINERS OR CARGO CONTAINER CELLS. IT WAS ALSO STATED THAT WHEN THE GOVERNMENT CARRIES ITS PROPERTY IN ITS OWN SHIPS THERE CAN BE NO QUESTION OF A PREFERENCE GIVEN AS BETWEEN CARRIERS.

YOU CONTEND THE CONCLUSION THAT THE WORD "CARRIAGE" MEANS "COMMERCIAL CARRIAGE" IS ERRONEOUS AND THAT THE PROHIBITION IN THE ACT AGAINST SPECIFICATION OF SIZE OF CARGO CONTAINERS APPLIES EVEN THOUGH THE CONTAINERS ARE TO BE USED IN THE SHIPMENT OF PROPERTY IN GOVERNMENT OWNED OR CONTROLLED VESSELS. IT IS FURTHER CONTENDED THAT THE STATEMENT "WHEN THE GOVERNMENT CARRIES ITS OWN PROPERTY THERE CAN BE NO QUESTION OF A PREFERENCE GIVEN AS BETWEEN CARRIERS," IS UNREALISTIC. YOU STATE THAT IN THIS CASE A CARRIER WITH 20 FEET CONTAINERS OBTAINED A PREFERENCE OVER OTHER CARRIERS WHO OWNED DIFFERENT SIZE CONTAINERS, AND THAT THIS WAS CLEARLY A PREFERENCE OF ONE CONTAINER OWNER OVER OTHERS SIMPLY BECAUSE OF THE SIZE OF THE CONTAINER. YOU ALSO INDICATE THAT THE DECISION IS NOT CONSISTENT WITH OUR SUBSEQUENT DECISION OF JUNE 25, 1971, B-172420.

THE ACT, IN OUR OPINION, CLEARLY RELATES TO INVITATIONS FOR BIDS AND CONTRACTS ISSUED BY THE GOVERNMENT FOR THE CARRIAGE OF PROPERTY BY WATER CARRIERS. WE DO NOT BELIEVE THAT THE ACT HAS ANY APPLICATION WHERE THE GOVERNMENT IS NOT CONTRACTING FOR THE CARRIAGE OF PROPERTY, BUT IS SIMPLY LEASING OR PURCHASING CARGO CONTAINERS TO BE USED IN CONNECTION WITH GOVERNMENT-OWNED OR CONTROLLED SHIPS. GOVERNMENT AS WELL AS COMMERCIAL CONTAINER-VESSELS ARE SO CONSTRUCTED THAT THEY CANNOT, OR NOT READILY, ACCOMMODATE CONTAINERS OF ALL SIZES. ONE OF THE REASONS FOR THE ENACTMENT OF PUBLIC LAW 92-268 WAS TO PREVENT THE GOVERNMENT WHEN CONTRACTING FOR THE CARRIAGE OF PROPERTY FROM DISCRIMINATING AMONG CARRIERS ON THE BASIS OF CONTAINER SIZES. THERE IS NOTHING IN THE ACT OR ITS LEGISLATIVE HISTORY INDICATING ANY INTENTION OF PROHIBITING THE GOVERNMENT FROM LEASING OR PURCHASING CONTAINERS OF THE SIZE REQUIRED FOR USE IN CONNECTION WITH ITS OWN VESSELS.

IN THE DECISION DATED JUNE 25, 1971, B-172420, WE CONSIDERED A PROTEST BY YOU AGAINST A SOLICITATION ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., FOR THE LEASING OF A NUMBER OF CARGO CONTAINERS OF A SPECIFIC SIZE FOR A PERIOD OF APPROXIMATELY 90 DAYS. IN THAT CASE THE CONTAINERS WERE INTENDED TO BE USED BY THE NAVY IN DEVELOPING THE CAPABILITY TO CONTAINERIZE AMMUNITION SHIPMENTS, AND THE NAVY PROPOSED TO HAVE THE MILITARY SEALIFT COMMAND CHARTER A CONTAINER SHIP TO CARRY THE COMMERCIAL CONTAINERS ON A ROUND TRIP FROM THE NAVAL AMMUNITION DEPOT, EARLE, NEW JERSEY, TO SUBIC BAY, THE PHILIPPINE ISLANDS, AND RETURN, A PERIOD NOT TO EXCEED 90 DAYS.

WHILE THAT SOLICITATION WAS ONLY FOR THE LEASING OF CONTAINERS, IT WAS CONSIDERED THAT THE SHORT TERM LEASE OF THE CONTAINERS WAS ONLY MEANINGFUL WHEN CONSIDERED IN CONJUNCTION WITH THE SUBSEQUENT CHARTERING OF A COMMERCIAL VESSEL SPECIFICALLY FOR THE PURPOSE OF CARRIAGE AND THAT BY SPECIFYING THE SIZES OF THE CONTAINERS CERTAIN CARRIERS COULD BE PRECLUDED FROM OFFERING THEIR VESSELS FOR THE MOVEMENT. IN VIEW THEREOF, IT WAS HELD THAT THE SOLICITATION AS ORIGINALLY ISSUED WAS A CIRCUMVENTION OF THE STATUTORY PROHIBITION AGAINST SPECIFYING CONTAINER SIZES WHERE COMMERCIAL CARRIAGE WAS INVOLVED. HOWEVER, THE SECRETARY OF DEFENSE, IN ACCORDANCE WITH 10 U.S.C. 2304(H), LATER DETERMINED THAT MILITARY REQUIREMENTS NECESSITATED THE SPECIFICATION OF CONTAINER SIZES IN THAT CASE AND, THEREFORE, THE PROTEST WAS DENIED.

WE BELIEVE THAT THE TWO DECISIONS ARE ENTIRELY CONSISTENT. IN THE INSTANT CASE THE SPECIFIC SIZE CONTAINERS WERE FOR USE IN CONNECTION WITH GOVERNMENT VESSELS AND WERE NOT INTENDED FOR USE IN PROCURING COMMERCIAL CARRIAGE. IN THE OTHER CASE IT WAS CONSIDERED THAT THE LEASING OF SPECIFIC SIZE CONTAINERS AND THE SUBSEQUENT CHARTERING OF A COMMERCIAL VESSEL TO CARRY SUCH CONTAINERS WERE SO CLOSELY RELATED AS, ABSENT THE APPROPRIATE SECRETARIAL DETERMINATION, TO CONSTITUTE A CIRCUMVENTION OF THE STATUTORY PROHIBITION AGAINST SPECIFYING CONTAINER SIZES IN PROCUREMENTS FOR COMMERCIAL CARRIAGE.

YOU ALSO CONTEND THAT THE DECISION OF MAY 25, 1971, WAS ERRONEOUS BECAUSE IT WAS BASED ON THE ASSUMPTION THAT ONLY GOVERNMENT PROPERTY WOULD BE CARRIED BY THE GOVERNMENT-OWNED NUCLEUS SHIPS, WHEREAS YOU HAVE SUBMITTED EVIDENCE THAT SUCH SHIPS MIGHT CARRY SOME COMMERCIAL CARGO. OUR EARLIER DECISION WAS NOT BASED ON SUCH ASSUMPTION, NOR DO WE AGREE THAT THE FACTOR IS DETERMINATIVE OF THE RIGHT OF THE GOVERNMENT TO LEASE OR PURCHASE CONTAINERS FOR USE IN CONNECTION WITH SUCH SHIPS.

FOR THE FOREGOING REASONS, WE FIND NO BASIS TO MODIFY THE CONCLUSION REACHED IN THE DECISION OF MAY 25, 1971.