B-180861, JUN 7, 1974

B-180861: Jun 7, 1974

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THE DISALLOWANCE BY THE GENERAL ACCOUNTING OFFICE'S TRANSPORTATION AND CLAIMS DIVISION OF A CLAIM FOR ADDITIONAL INTERNATIONAL TRANSPORTATION CHARGES ON A SHIPMENT OF HOUSEHOLD GOODS IS SUSTAINED WHERE CARRIER'S AGENT QUOTED SPECIFIC LOWER RATE WITHOUT DESIGNATING THE TYPE FLAG SHIP TO BE USED. BECAUSE WHEN AN AMERICAN FLAG SHIP IS AVAILABLE. ITS USE IS MANDATORY. ALLIED ASSESSED A RATE OF $67.90 PER 100 POUNDS AND WAS PAID $7. IT WAS DETERMINED THAT POLLY'S HAD TENDERED THE UNITED STATES EMBASSY (EMBASSY) AT LIMA IN WRITING A RATE OF $46.90 PER 100 POUNDS FOR THE SHIPMENT. IT WAS COLLECTED BY ADMINISTRATIVE DEDUCTION AND ALLIED'S CLAIM FOR THE AMOUNT DEDUCTED WAS DISALLOWED BY THE GENERAL ACCOUNTING OFFICE'S TRANSPORTATION AND CLAIMS DIVISION.

B-180861, JUN 7, 1974

THE DISALLOWANCE BY THE GENERAL ACCOUNTING OFFICE'S TRANSPORTATION AND CLAIMS DIVISION OF A CLAIM FOR ADDITIONAL INTERNATIONAL TRANSPORTATION CHARGES ON A SHIPMENT OF HOUSEHOLD GOODS IS SUSTAINED WHERE CARRIER'S AGENT QUOTED SPECIFIC LOWER RATE WITHOUT DESIGNATING THE TYPE FLAG SHIP TO BE USED, AND BECAUSE WHEN AN AMERICAN FLAG SHIP IS AVAILABLE, ITS USE IS MANDATORY. SEC. 901 OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1241(A).

TO ALLIED VAN LINES, INC.:

ALLIED VAN LINES, INC. (ALLIED), THROUGH ITS AGENT, POLLY'S PACKING SERVICE S.A. (POLLY'S), RECEIVED ON AUGUST 6, 1968, A SHIPMENT OF HOUSEHOLD GOODS TO BE SHIPPED UNDER GOVERNMENT BILL OF LADING NO. D 4930042 FROM LIMA, PERU, TO ANDREWS AIR FORCE BASE, MARYLAND. ALLIED ASSESSED A RATE OF $67.90 PER 100 POUNDS AND WAS PAID $7,388.88 BY THE ARMY FINANCE CENTER. UPON AUDIT HERE, IT WAS DETERMINED THAT POLLY'S HAD TENDERED THE UNITED STATES EMBASSY (EMBASSY) AT LIMA IN WRITING A RATE OF $46.90 PER 100 POUNDS FOR THE SHIPMENT. WHEN APPLIED TO THE ACTUAL WEIGHT OF THE SHIPMENT, THIS RATE PRODUCED CHARGES OF $5,103.66, OR $2,285.22 LESS THAN THAT PAID TO ALLIED. UPON ALLIED'S FAILURE TO REFUND THE AMOUNT OF THE OVERCHARGE, IT WAS COLLECTED BY ADMINISTRATIVE DEDUCTION AND ALLIED'S CLAIM FOR THE AMOUNT DEDUCTED WAS DISALLOWED BY THE GENERAL ACCOUNTING OFFICE'S TRANSPORTATION AND CLAIMS DIVISION.

ALLIED CONTENDS THAT (1) THE FOREIGN FLAG SHIP RATE WAS LOWER THAN THE AMERICAN FLAG SHIP RATE; (2) POLLY'S TENDER DID NOT SPECIFY THE MEANS OF TRANSPORTATION TO BE USED AND AS A RESULT POLLY'S HAD THE OPTION AND INTENTION OF USING A FOREIGN FLAG SHIP AT A LOWER RATE; (3) THE EMBASSY HAD THE OPTION OF ISSUING A CERTIFICATE OF AUTHORIZATION TO USE A FOREIGN FLAG SHIP BUT DID NOT DO SO AND IN EFFECT AGREED TO A HIGHER RATE, WHICH APPARENTLY WAS PLACED BY ALLIED IN THE APPROPRIATE SPACE ON THE GOVERNMENT BILL OF LADING.

THE APPLICABLE TARIFF RATES FOR THIS TRANSPORTATION ARE FOUND IN WEST COAST OF SOUTH AMERICA NORTHBOUND CONFERENCE TARIFF NB SA-6, FMC 1. THE TARIFF LISTS BOTH AMERICAN FLAG AND FOREIGN FLAG CARRIERS AS PARTICIPANTS, AND THE RATES BETWEEN THE ORIGIN AND DESTINATION POINTS ARE THE SAME WHETHER A FOREIGN OR AMERICAN FLAG SHIP IS USED. THEREFORE, IF POLLY'S OR THE EMBASSY COULD HAVE CHOSEN A FOREIGN FLAG SHIP, NO ADVANTAGE WOULD HAVE ACCRUED TO THE GOVERNMENT IN THE FORM OF LOWER TRANSPORTATION CHARGES.

FURTHER, BOTH POLLY'S AND THE EMBASSY WERE WITHOUT AUTHORITY TO UTILIZE A FOREIGN FLAG SHIP, EVEN IF ITS RATE HAD BEEN LOWER. SECTION 901 OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1241(A), REQUIRES THE DISALLOWANCE OF TRAVEL OR SHIPPING EXPENSES INCURRED THROUGH THE USE OF FOREIGN FLAG SHIPS, ABSENT SATISFACTORY PROOF OF THE NECESSITY FOR THE USE OF SUCH SHIP. PROOF OF THAT NECESSITY GENERALLY IS SHOWN BY EVIDENCE THAT AMERICAN FLAG SHIPS EITHER WERE NOT AVAILABLE OR COULD NOT PERFORM THE SERVICE. AS AN AMERICAN FLAG SHIP WAS AVAILABLE AND USED, THERE WAS NO JUSTIFICATION FOR ISSUANCE BY THE EMBASSY OF THE NECESSARY CERTIFICATE. AND IF POLLY'S HAD UTILIZED A FOREIGN FLAG SHIP, EXCEPTION WOULD HAVE BEEN TAKEN TO THE TRANSPORTATION CHARGES.

POLLY'S TENDER RATE IS APPLICABLE AND THE ACTION TAKEN BY THE TRANSPORTATION AND CLAIMS DIVISION IN DISALLOWING THE CLAIM IS HEREBY SUSTAINED.