B-174738, MAY 10, 1972, 51 COMP GEN 724

B-174738: May 10, 1972

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WAS PROPERLY DISALLOWED. EVIDENCES THE PLANT AND NEW BRIGHTON ARE NOT DIFFERENT LOCATIONS SINCE IT IS COMMON KNOWLEDGE AMMUNITION PLANTS ARE NOT LOCATED WITHIN MUNICIPALITIES. THE GOVERNMENT AGENT BELIEVED THE SPECIAL TARIFF RATE APPLIED OR OTHER CARRIERS WOULD HAVE BEEN TENDERED THE SHIPMENT. THE TRANSPORTATION SERVICES WERE PERFORMED IN SEPTEMBER 1968 AND WERE AUTHORIZED BY GOVERNMENT BILL OF LADING NO. OUR TRANSPORTATION DIVISION FOUND THAT LOWER CHARGES OF $878.85 WERE APPLICABLE TO THE SHIPMENT. THE LOWER CHARGES ARE BASED ON UNITED BUCKINGHAM FREIGHT LINES SECTION 22 QUOTATION I.C.C. 185 (TENDER I.C.C. 185) (THE REFERENCE ON THE BILL OF LADING IS AN OBVIOUS TYPOGRAPHICAL ERROR) WHICH.

B-174738, MAY 10, 1972, 51 COMP GEN 724

TRANSPORTATION - RATES - SECTION 22 QUOTATIONS - SHIPPING POINT NOT TENDER LISTING A CLAIM FOR THE FREIGHT OVERCHARGES DEDUCTED PURSUANT TO 49 U.S.C. 66 IN PAYMENT OF A SHIPMENT OF PALLETS OF EMPTY PROJECTILES FROM TWIN CITIES ARMY AMMUNITION PLANT, MINNESOTA, UNDER A GOVERNMENT BILL OF LADING THAT MADE REFERENCE TO A SECTION 22 I.C.C. (49 U.S.C. 22) SPECIAL TARIFF RATE - I.C.C. 185 - FOR SHIPMENTS ORIGINATING FROM NEW BRIGHTON, MINNESOTA, LOCATED 2 1/2 MILES FROM THE PLANT, WAS PROPERLY DISALLOWED. INTERPRETING THE TENDER - A CONTINUOUS UNILATERAL OFFER - AS ANY OTHER CONTRACT DOCUMENT TO DETERMINE THE INTENT OF THE PARTIES, EVIDENCES THE PLANT AND NEW BRIGHTON ARE NOT DIFFERENT LOCATIONS SINCE IT IS COMMON KNOWLEDGE AMMUNITION PLANTS ARE NOT LOCATED WITHIN MUNICIPALITIES, THE GOVERNMENT AGENT BELIEVED THE SPECIAL TARIFF RATE APPLIED OR OTHER CARRIERS WOULD HAVE BEEN TENDERED THE SHIPMENT, AND THE CARRIER'S AGENT DID NOT OBJECT TO THE BILL OF LADING REFERENCE TO THE I.C.C. 185 TENDER, ISSUED TO SECURE THE AMMUNITION TRAFFIC.

TO RED BALL MOTOR FREIGHT, INC., MAY 10, 1972:

WE REFER AGAIN TO YOUR LETTER OF DECEMBER 3, 1971, IN WHICH YOU REQUEST REVIEW OF OUR SETTLEMENT CERTIFICATE OF OCTOBER 18, 1971, OUR CLAIM NO. TK -927192. THE SETTLEMENT DISALLOWED YOUR CLAIM FOR $318.06, THE BALANCE OF FREIGHT CHARGES ALLEGEDLY DUE YOUR COMPANY FOR TRANSPORTING A TRUCKLOAD OF 62 PALLETS OF EMPTY PROJECTILES FROM TWIN CITIES ARMY AMMUNITION PLANT, MINNESOTA, TO THE LOUISIANA ARMY AMMUNITION PLANT, DOYLINE, LA. THE PROJECTILES WEIGHED 39,990 POUNDS, THE PALLETS, 1,860 POUNDS, AND THE DUNNAGE, 300 POUNDS. THE TRANSPORTATION SERVICES WERE PERFORMED IN SEPTEMBER 1968 AND WERE AUTHORIZED BY GOVERNMENT BILL OF LADING NO. E- 9994453 WHICH, IN ADDITION TO THE USUAL ENTRIES, REFERS IN THE TARIFF OR SPECIAL RATE AUTHORITIES SPACE TO "UNITED BUCKINGHAM TENDER ICC85 EFF 3/10/67."

FOR THESE TRANSPORTATION SERVICES YOU COLLECTED FREIGHT CHARGES OF $1,205.49, BASED ON A RATE OF $2.86 PER 100 POUNDS APPLIED TO THE TOTAL WEIGHT OF THE SHIPMENT. WHEN REACHED IN THE AUDIT (SEE SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED, 49 U.S.C. 66), OUR TRANSPORTATION DIVISION FOUND THAT LOWER CHARGES OF $878.85 WERE APPLICABLE TO THE SHIPMENT. THE LOWER CHARGES ARE BASED ON UNITED BUCKINGHAM FREIGHT LINES SECTION 22 QUOTATION I.C.C. 185 (TENDER I.C.C. 185) (THE REFERENCE ON THE BILL OF LADING IS AN OBVIOUS TYPOGRAPHICAL ERROR) WHICH, EFFECTIVE MARCH 10, 1967, NAMES A RATE OF $2.10 PER 100 POUNDS, TRUCKLOAD MINIMUM WEIGHT, 40,000 POUNDS, ON SHIPMENTS OF PROJECTILES, OR ROCKET HEADS, EMPTY OR SAND LOADED OR SOLID, MOVING FROM NEW BRIGHTON, MINN., TO DOYLINE, LA., VIA UNITED BUCKINGHAM FREIGHT LINES TO KANSAS CITY, MO., RED BALL MOTOR FREIGHT, INC., BEYOND. A DUNNAGE ALLOWANCE OF 300 POUNDS IS APPLICABLE AND WAS TAKEN.

YOU WERE NOTIFIED OF THE OVERCHARGE OF $326.64; AFTER YOUR PROTESTS WERE DULY CONSIDERED, THE AMOUNT OF THE OVERCHARGE WAS COLLECTED BY DEDUCTION (49 U.S.C. 66) AND YOUR CLAIM FOR PART OF THE AMOUNT DEDUCTED WAS DISALLOWED IN THE SETTLEMENT HERE UNDER REVIEW.

YOU CONTEND THAT SINCE THE BILL OF LADING INDICATES THAT THE SHIPMENT DID NOT ORIGINATE AT NEW BRIGHTON, MINN., THE RATE IN TENDER I.C.C. 185 IS NOT APPLICABLE TO THE SHIPMENT. YOU ENCLOSE A COPY OF A MAP WHICH YOU SAY INDICATES THAT TWIN CITIES AMMUNITION PLANT AND NEW BRIGHTON ARE TWO DISTINCTLY DIFFERENT LOCATIONS AND YOU ALLEGE THAT " *** RATES CANNOT BE MADE ON AN INTENT," A REFERENCE TO THE DIVISION'S RELIANCE ON A LETTER DATED APRIL 7, 1970, FROM UNITED BUCKINGHAM TO THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) IN WHICH THAT CARRIER SAYS THAT TENDER I.C.C. 185 " *** WAS ISSUED WITH THE INTENT THAT IT WAS TO APPLY ON SHIPMENTS ORIGINATING AT THE TWIN CITIES ARMY AMMUNITION PLANT, MINNEAPOLIS, MINN., AS WELL AS FROM NEW BRIGHTON, MINN."

TENDERS LIKE TENDER I.C.C. 185 ARE RATE QUOTATIONS MADE TO THE UNITED STATES BY CARRIERS UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 22, AND ARE CONTINUING UNILATERAL OFFERS TO PERFORM TRANSPORTATION SERVICES AT NAMED RATINGS OR RATES SUBJECT TO THE TERMS AND CONDITIONS NAMED THEREIN. C & H TRANSPORTATION CO. V. UNITED STATES, 193 CT. CL. 872, 436 F.2D 480 (1971). THE PRINCIPLES FOLLOWED IN INTERPRETING THEM ARE NO DIFFERENT FROM THOSE PRESENTED IN THE INTERPRETATION OF ANY OTHER DOCUMENT. 44 COMP. GEN. 419, 420 (1965).

A FUNDAMENTAL PRINCIPLE USED IN THE INTERPRETATION OF CONTRACTS GENERALLY IS THE ASCERTAINMENT OF THE PARTIES' INTENTION. CROWN IRON WORKS CO. V. COMMISSIONER OF INTERNAL REVENUE, 245 F.2D 357, 359 (1957). THIS MAY BE DONE BY LOOKING TO THE CIRCUMSTANCES SURROUNDING THE MAKING OF THE AGREEMENT, INCLUDING THE OBJECT, NATURE AND SUBJECT MATTER OF THE WRITING, AND THE SITUATION IN WHICH THE PARTIES WERE AT THE TIME OF CONTRACTING. PEKAR V. LOCAL U. NO. 181, INT. U. OF UNITED BREWERY, ETC. WKRS., 311 F.2D 628, 636 (1962). THE TERMS OF THE CONTRACT MUST RECEIVE THE CONSTRUCTION WHICH IS MOST PROBABLE AND NATURAL UNDER THE CIRCUMSTANCES SO AS TO ATTAIN THE OBJECT WHICH THE PARTIES TO IT HAD IN CONTEMPLATION IN MAKING IT. DECATUR BANK V. ST. LOUIS BANK, 83 U.S. 294, 298 (1874); OLD DUTCH FARMS, INC. V. MILK DRIVERS & DAIRY EMP. U. LOCAL 584, 222 F. SUPP. 125 (1963).

APPLYING THESE PRINCIPLES HERE, IT IS CLEAR THAT THE $2.10 RATE IN TENDER I.C.C. 185 IS APPLICABLE TO THIS SHIPMENT.

WE NOTE FIRST THAT THE TWIN CITIES ARMY AMMUNITION PLANT WAS REACTIVATED IN 1966, THAT IT IS LOCATED ABOUT 2 1/2 HIGHWAY MILES NORTH OF NEW BRIGHTON, MINN., AND THAT IT IS COMMON KNOWLEDGE THAT AMMUNITION PLANTS USUALLY ARE NOT LOCATED WITHIN MUNICIPALITIES. SEE O.K. TRANSFER & STORAGE CO., INC., COM. CAR APPLICATION, 32 M.C.C. 107, 113 (1942), WHERE THE INTERSTATE COMMERCE COMMISSION IN AUTHORIZING TERRITORY FOR TRANSPORTATION OF EXPLOSIVES RECOGNIZED THAT " *** POINTS OF ORIGIN *** ARE NOT ENTIRELY EXACT BECAUSE MUNICIPALITIES USUALLY REQUIRE POWDER MAGAZINES OR MILLS TO BE LOCATED BEYOND THE CITY LIMITS."

MORE IMPORTANTLY, HOWEVER, IS THE FACT THAT THE GOVERNMENT AGENT RESPONSIBLE FOR THE SHIPMENT BELIEVED THAT THE RATE OFFERED IN TENDER I.C.C. 185 APPLIED FROM THE ARMY AMMUNITION PLANT. (WE NOTE THAT AT LEAST SEVEN OTHER SIMILAR SHIPMENTS WERE MADE.) IF THE GOVERNMENT AGENT BELIEVED OTHERWISE, THIS SHIPMENT AS WELL AS THE OTHERS MOST LIKELY WOULD HAVE BEEN TENDERED TO OTHER CARRIERS READY, WILLING, AND ABLE TO TRANSPORT THEM AT THE $2.10 RATE.

BILL OF LADING NO. E-9994453 ITSELF SHOWS THAT THE PARTIES AGREED AT THE TIME OF SHIPMENT THAT TENDER NO. 185 WAS APPLICABLE TO THE SHIPMENT.

WHEN THE BILL OF LADING WAS TENDERED TO UNITED BUCKINGHAM'S AGENT FOR HIS ACCEPTANCE, HE WAS ON NOTICE BY REASON OF THE PERTINENT REFERENCE TO TENDER NO. 185 IN THE BILL OF LADING THAT THE GOVERNMENT'S AGENT CONTEMPLATED THE TRANSPORTATION OF THE SHIPMENT UNDER THE TERMS OF THE TENDER. AND UNITED BUCKINGHAM'S AGENT RAISED NO OBJECTION TO THE REFERENCE TO THE TENDER.

THE COMPETITIVE NATURE OF THIS TRAFFIC, THE FACT THAT NO GOVERNMENT FACILITIES FOR RECEIPT AND SHIPMENT OF AMMUNITION SO FAR AS WE KNOW ARE LOCATED AT NEW BRIGHTON AND THE OTHER CIRCUMSTANCES INVOLVED CLEARLY NEGATE THE IDEA THAT UNITED BUCKINGHAM WITH THE CONCURRENCE OF W. P. FURRH, ASSISTANT GENERAL TRAFFIC MANAGER OF RED BALL, PERFORMED A USELESS ACT IN ISSUING TENDER I.C.C. 185; INDEED, THE RECORD SHOWS THAT IT WAS ISSUED WITH THE INTENT TO SECURE AMMUNITION TRAFFIC FROM THE TWIN CITIES AMMUNITION PLANT. THIS CONCLUSION IS SUPPORTED BY UNITED BUCKINGHAM'S LETTER OF APRIL 7, 1970, TO MTMTS WHICH SERVES TO CLARIFY THE CARRIER'S INTENT IN MAKING THE OFFER. SEE C & H TRANSPORTATION CO., INC. V. UNITED STATES, SUPRA; PENNSYLVANIA RAILROAD COMPANY V. UNITED STATES, 165 CT. CL. 1, 10 (1964); AND UNION PACIFIC RAILROAD COMPANY V. UNITED STATES, 152 CT. CL. 523, 287 F.2D 593 (1961).

IN THESE CIRCUMSTANCES AND BECAUSE THE SETTLEMENT OF OCTOBER 18, 1971, IS NOT OTHERWISE SHOWN TO HAVE BEEN ERRONEOUS, IT IS SUSTAINED.