B-178307, FEB 25, 1974, 53 COMP GEN 620

B-178307: Feb 25, 1974

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CARRIER AUTHORITY LACKING - PARTIAL CONTRACT PERFORMANCE THE AMOUNT CLAIMED FOR THE MOVEMENT OF A TUB AND BARGE UNDER A CANCELED CONTRACT BECAUSE THE CONTRACTOR DID NOT HAVE THE REQUIRED ICC AUTHORITY IS NOT REIMBURSABLE AS AN AGENT OF THE GOVERNMENT MAY NOT WAIVE THE REQUIREMENT THAT A WATER CARRIER IN INTERSTATE COMMERCE IS SUBJECT TO REGULATION UNDER THE INTERSTATE COMMERCE ACT. SOLICITATION OF TENDERS OF RATES AND CHARGES WERE MADE TO THREE CONCERNS. LOWE WAS ADVISED THAT IT HAD BEEN SELECTED TO HANDLE THE MOVEMENT. IT IS LOWE'S CONTENTION (1) THAT ICC OPERATING AUTHORITY WAS NOT A REQUIREMENT OF THE CONTRACT. (2) THAT THE TRANSPORTATION WAS AN OPEN SEA TOW BETWEEN TWO NAVY FACILITIES AND AS SUCH SHOULD HAVE BEEN HANDLED BY THE MILITARY SEALIFT COMMAND (MSC).

B-178307, FEB 25, 1974, 53 COMP GEN 620

CONTRACTS - CANCELLATION - I.C.C. CARRIER AUTHORITY LACKING - PARTIAL CONTRACT PERFORMANCE THE AMOUNT CLAIMED FOR THE MOVEMENT OF A TUB AND BARGE UNDER A CANCELED CONTRACT BECAUSE THE CONTRACTOR DID NOT HAVE THE REQUIRED ICC AUTHORITY IS NOT REIMBURSABLE AS AN AGENT OF THE GOVERNMENT MAY NOT WAIVE THE REQUIREMENT THAT A WATER CARRIER IN INTERSTATE COMMERCE IS SUBJECT TO REGULATION UNDER THE INTERSTATE COMMERCE ACT, AND SINCE NO BENEFIT ACCRUED TO THE GOVERNMENT PAYMENT ON A QUANTUM MERUIT BASIS MAY NOT BE MADE.

IN THE MATTER OF HARRY L. LOWE & ASSOCIATES, FEBRUARY 25, 1974:

THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) RECEIVED A REQUEST FOR THE TRANSPORTATION OF A STEEL HULL BY BARGE FROM PASCAGOULA, MISSISSIPPI, TO PORTSMOUTH, NEW HAMPSHIRE, TO BE PERFORMED ON MAY 26, 1972. SOLICITATION OF TENDERS OF RATES AND CHARGES WERE MADE TO THREE CONCERNS; TWO BARGE LINES: S.C. LOVELAND CO., AND JAMES HUGHES, INC., AND A MARINE BROKER, HARRY L. LOWE & ASSOCIATES (LOWE), WHOSE AGENT, MARINE EXPLORATION CO., INC. (MARINE), WOULD PERFORM THE ACTUAL TRANSPORTATION. LOWE WAS ADVISED THAT IT HAD BEEN SELECTED TO HANDLE THE MOVEMENT. MTMTS THEN DETERMINED THAT NEITHER LOWE NOR MARINE HAD THE PROPER INTERSTATE COMMERCE COMMISSION (ICC) OPERATING AUTHORITY FOR THE INTERCOASTAL SHIPMENT. BASED ON THIS LACK OF AUTHORITY, MTMTS CANCELED THE CONTRACT ON MAY 24, 1972.

IT IS LOWE'S CONTENTION (1) THAT ICC OPERATING AUTHORITY WAS NOT A REQUIREMENT OF THE CONTRACT; (2) THAT THE TRANSPORTATION WAS AN OPEN SEA TOW BETWEEN TWO NAVY FACILITIES AND AS SUCH SHOULD HAVE BEEN HANDLED BY THE MILITARY SEALIFT COMMAND (MSC), AND WOULD NOT HAVE REQUIRED ICC AUTHORITY; AND (3) THAT MARINE'S SHIP WAS DISPATCHED IN GOOD FAITH TO MAKE THE PICKUP. LOWE CLAIMS $3,200 IN DAMAGES FOR THE DISPATCH AND RETURN OF THE TUG AND BARGE. BY LETTER OF OCTOBER 24, 1972, FROM THE DEPARTMENT OF THE ARMY, LOWE'S CLAIM WAS DENIED.

PART III OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 901, ET SEQ., PERTAINS TO COMMON AND CONTRACT CARRIERS BY WATER AND TO ALL TOWAGE IN INTERSTATE TRANSPORTATION, EXCEPT TO THE EXTENT THAT SPECIFIC EXEMPTIONS ARE PROVIDED. CORNELL STEAMBOAT CO. V. UNITED STATES, 321 U.S. 634 (1944). INTERSTATE TRANSPORTATION AS IT RELATES TO PART III IS DEFINED IN 49 U.S.C. 902(I) TO MEAN TRANSPORTATION OF PERSONS OR PROPERTY WHOLLY BY WATER FROM A PLACE IN A STATE TO A PLACE IN ANY OTHER STATE, WHETHER OR NOT SUCH TRANSPORTATION TAKES PLACE WHOLLY IN THE UNITED STATES. THUS, THE FACT THAT THE SHIPMENT WOULD HAVE BEEN TRANSPORTED FROM MISSISSIPPI TO NEW HAMPSHIRE, BY DEFINITION, AND REGARDLESS OF THE ROUTE TAKEN, WOULD BE CONSIDERED INTERSTATE TRANSPORTATION AND AS SUCH SUBJECT TO THE ECONOMIC CONTROL OF THE ICC.

LOWE CORRECTLY STATES IN THE RECORD THAT MTMTS WOULD HAVE AUTHORITY FOR INTERCOASTAL TOWS AS IT IS THE SINGLE MANAGER OPERATING AGENCY FOR MILITARY TRAFFIC WITHIN THE CONTINENTAL UNITED STATES. SEE DEFENSE SUPPLY AGENCY REGULATION 4500.3, PARAGRAPH 101002. AS THIS TRANSPORTATION DID TAKE PLACE WITHIN THE CONTINENTAL UNITED STATES, MTMTS COULD HAVE HANDLED IT UNLESS POLICY REASONS DICTATED OTHERWISE. WE WERE INFORMED BY MSC THAT PROCUREMENT OF TRANSPORTATION BY TUG AND BARGE LIKE THAT INVOLVED HERE WAS FORMERLY HANDLED BY MTMTS. APPROXIMATELY A YEAR TO 18 MONTHS AGO, MSC AND MTMTS AGREED THAT PROCUREMENT OF SUCH TRANSPORTATION WAS PROPERLY WITHIN THE PROVINCE OF MSC; HOWEVER, THIS WAS A MATTER OF POLICY, AND BASED ON MTMTS AUTHORITY AND GOVERNING REGULATIONS, WE DO NOT CONSIDER THAT THE PROCUREMENT BY MTMTS WAS AT ANY TIME ILLEGAL.

THE RECORD CONTAINS A LETTER FROM THE CHIEF OF THE ICC'S SECTION OF WATER CARRIERS AND FREIGHT FORWARDERS INDICATING THAT OPERATING AUTHORITY DEFINITELY WAS REQUIRED, AND THE FACT THAT LOWE ATTEMPTED TO OBTAIN TEMPORARY AUTHORITY FROM THE ICC TENDS TO ESTABLISH THAT LOWE AGREED THAT IT WAS NECESSARY. IN ANY EVENT, MSC WOULD BE REQUIRED BY LAW TO MAKE THIS A REQUIREMENT FOR ANY SIMILAR TYPE OF BID.

THERE IS NO DISCRETION OR AUTHORITY IN OFFICERS OR AGENTS OF THE UNITED STATES TO WAIVE ANY PROVISION OF A STATUTE. THE COURTS HAVE CONSISTENTLY FOLLOWED THE WELL-ESTABLISHED RULE THAT THE GOVERNMENT ACTS ONLY THROUGH ITS AGENTS WITH POWER DELEGATED AND DEFINED BY STATUTE OR REGULATION, AND THE GOVERNMENT CAN BE BOUND ONLY BY AGENTS ACTING WITHIN THE SCOPE OF AUTHORITY DELEGATED TO THEM. FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380, 384 (1947); UNITED STATES V. ZENITH-GODLEY COMPANY, INC., 180 F. SUPP. 611, AFFIRMED 295 F.2D 634 (1961).

WE HAVE HELD IN CASES INVOLVING BIDS FOR MOTOR CARRIER SERVICE THAT THE EXISTENCE OF VALID OPERATING RIGHTS IS AN ESSENTIAL CONDITION TO A VALID AWARD OF A TRANSPORTATION-SERVICES CONTRACT IN FOREIGN OR INTERSTATE COMMERCE BECAUSE OF THE STATUTORY REQUIREMENTS IN 49 U.S.C. 301, WHICH PROHIBIT SUCH ACTIVITIES WITHOUT PROPER AUTHORIZATION FROM THE ICC. COMP. GEN. 175 (1954); 47 ID. 539 (1968). THE SAME PRINCIPLE WOULD APPLY TO WATER CARRIERS SUBJECT TO PART III OF THE ACT, 49 U.S.C. 901, SUPRA. WE NOTE ALSO THAT LOWE IN ITEM 17 OF ITS "UNIFORM TENDER OF RATES AND/OR CHARGES FOR TRANSPORTATION SERVICES," UNDER THE HEADING "LAWFUL PERFORMANCE: OPERATING AUTHORITIES," HELD ITSELF OUT AS HAVING OPERATING AUTHORITY, ALTHOUGH NOT THE REQUISITE ICC OPERATING AUTHORITY.

THE RECORD FURTHER INDICATES THAT THE TENDER PRESENTED BY LOWE, AND CALLING FOR A PERFORMANCE DATE OF MAY 31, 1972, WAS RECEIVED BY MTMTS ON MAY 24, 1972. MTMTS WAS MADE AWARE, ON THAT DATE, THAT LOWE DID NOT HAVE THE PROPER ICC OPERATING AUTHORITY, AND THAT IT WOULD NOT BE FORTHCOMING BY THE DESIRED PICKUP DATE. MTMTS ALSO WAS AWARE THAT TEMPORARY AUTHORITY MIGHT BE GRANTED BY THE COMMISSION WHERE THERE IS AN IMMEDIATE AND URGENT NEED FOR SERVICE TO A POINT OR POINTS OR IN THE ABSENCE OF CARRIER SERVICE CAPABLE OF MEETING SUCH NEED. ALABAMA GREAT SOUTHERN R. CO. V. UNITED STATES, 103 F. SUPP. 223 (1952); 49 U.S.C. 911. BUT IN THIS CASE TWO OTHER CARRIERS WERE AVAILABLE TO PERFORM THE SERVICE.

THE CONTRACT WAS CANCELED ON MAY 24, 1972, AND BASED ON THE PRINCIPLES AND CASES ENUMERATED HEREIN AND THE RECORD BEFORE US WE CANNOT SAY THAT THE CONTRACTING OFFICER FAILED TO ACT IN A REASONABLE MANNER.

NOR DOES IT APPEAR THAT RECOVERY MAY BE HAD BY LOWE ON A QUANTUM MERUIT BASIS, FOR SUCH REMEDY IS APPROPRIATE ONLY WHERE ONE PARTY TO A TRANSACTION HAS RECEIVED AND RETAINED TANGIBLE BENEFITS, AND NO BENEFITS ARE SHOWN TO HAVE PASSED TO THE UNITED STATES FROM LOWE FOR THE TUG AND BARGE MOVEMENT. CROCKER V. UNITED STATES, 240 U.S. 74 (1916); UNITED STATES V. MISSISSIPPI VALLEY GENERATING CO., 364 U.S. 520, 566, FOOTNOTE 22 (1961).

THEREFORE, AND BASED ON THE FOREGOING, LOWE'S CLAIM MUST BE AND IS DISALLOWED.