B-4196, JUNE 19, 1939, 18 COMP. GEN. 953

B-4196: Jun 19, 1939

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THE FACT THAT THE FREIGHT CHARGES PAID BY THE GOVERNMENT TO THE CONTRACT DESTINATION POINT ARE LESS THAN THE CHARGES WHICH WOULD HAVE BEEN PAID HAD SHIPMENT BEEN MADE FROM THE CONTRACT SHIPPING POINT CANNOT OPERATE TO AUTHORIZE PAYMENT TO THE CONTRACTOR OF THE DIFFERENCE IN FREIGHT CHARGES SAVED TO THE GOVERNMENT. THE FUEL OIL IN QUESTION WAS TO BE DELIVERED AS ORDERED TO THE UNITED STATES ENGINEERS. PURCHASE ORDER NO. 38 2684 WAS ISSUED. CALLING FOR THE DELIVERY OF 12 CARS OF FUEL OIL AND YOU WERE ADVISED TO SHIP FROM NEODESHA. WHICH YOU INFER WAS OCCASIONED BY SUDDEN DEMANDS OF THE GOVERNMENT FOR LARGE SHIPMENTS AT ONE TIME. YOU HAVE BEEN PAID FOR THE FUEL OIL AT THE PRICE STIPULATED IN THE CONTRACT AND THE GOVERNMENT HAS PAID THE FREIGHT CHARGES THEREON FROM POINT OF SHIPMENT TO DESTINATION.

B-4196, JUNE 19, 1939, 18 COMP. GEN. 953

CONTRACTS - FREIGHT CHARGES - SHIPMENT FROM OTHER THAN SPECIFIED POINT - PAYMENT TO CONTRACTOR OF GOVERNMENT SAVINGS WHERE THE GOVERNMENT, FOR THE CONVENIENCE OF THE CONTRACTOR, PERMITTED SHIPMENT FROM A PLACE OTHER THAN F.O.B. POINT DESIGNATED IN THE CONTRACT, THE FACT THAT THE FREIGHT CHARGES PAID BY THE GOVERNMENT TO THE CONTRACT DESTINATION POINT ARE LESS THAN THE CHARGES WHICH WOULD HAVE BEEN PAID HAD SHIPMENT BEEN MADE FROM THE CONTRACT SHIPPING POINT CANNOT OPERATE TO AUTHORIZE PAYMENT TO THE CONTRACTOR OF THE DIFFERENCE IN FREIGHT CHARGES SAVED TO THE GOVERNMENT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE STANDARD OIL CO. (INDIANA), JUNE 19, 1939:

YOUR LETTER OF MAY 2, 1939, REQUESTS REVIEW OF SETTLEMENT DATED NOVEMBER 5, 1938, WHICH DISALLOWED THE AMOUNT OF $1,459.76 CLAIMED BY YOU AS DIFFERENCE IN FREIGHT RATES BY REASON OF SHIPMENT FROM OTHER THAN CONTRACT SHIPPING POINT OF FUEL OIL DELIVERED TO THE UNITED STATES ENGINEERS, FOOT OF ARSENAL STREET, ST. LOUIS, MO., UNDER CONTRACT NO. TPS-21035, DATED DECEMBER 17, 1937.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO DELIVER, F.O.B. NEODESHA, KANS., WITHIN 6 DAYS AFTER RECEIPT OF ORDER, AN ESTIMATED QUANTITY OF 3,000 BARRELS OF FUEL OIL DURING THE 6-MONTH PERIOD JANUARY 1 TO JUNE 30, 1938, AT YOUR BID PRICE OF $1.47 PER BARREL. THE FUEL OIL IN QUESTION WAS TO BE DELIVERED AS ORDERED TO THE UNITED STATES ENGINEERS, FOOT OF ARSENAL STREET, ST. LOUIS, MO.

THE RECORD SHOWS THAT ON JANUARY 17, 1938, PURCHASE ORDER NO. 38 2684 WAS ISSUED, CALLING FOR THE DELIVERY OF 12 CARS OF FUEL OIL AND YOU WERE ADVISED TO SHIP FROM NEODESHA, KANS., ON GOVERNMENT BILLS OF LADING NOS. 166949 AND 166951, FURNISHED YOU WITH A PREVIOUS ORDER BUT WHICH HAD NOT BEEN USED. IN FILLING THE ORDER, YOU ELECTED TO MAKE SHIPMENT OF THE 12 CARS OF FUEL OIL FROM WOOD RIVER, ILL., INSTEAD OF NEODESHA, KANS., THE CONTRACT SHIPPING POINT, THIS APPARENTLY FOR THE REASON THAT YOU COULD NOT FILL THE ORDER FROM YOUR NEODESHA, KANS., REFINERY, WHICH YOU INFER WAS OCCASIONED BY SUDDEN DEMANDS OF THE GOVERNMENT FOR LARGE SHIPMENTS AT ONE TIME. YOU HAVE BEEN PAID FOR THE FUEL OIL AT THE PRICE STIPULATED IN THE CONTRACT AND THE GOVERNMENT HAS PAID THE FREIGHT CHARGES THEREON FROM POINT OF SHIPMENT TO DESTINATION. YOUR CLAIM IS FOR THE SAVING IN FREIGHT WHICH ACCRUED TO THE GOVERNMENT BY REASON OF SHIPMENT FROM WOOD RIVER, ILL., INSTEAD OF NEODESHA, KANS.

IT HAS BEEN HELD IN NUMEROUS CASES BEFORE THE ACCOUNTING OFFICES OF THE GOVERNMENT THAT THE NAMING OF AN F.O.B. POINT IN A CONTRACT FOR SUPPLIES FIXES THE MAXIMUM LIABILITY OF THE GOVERNMENT FOR FREIGHT, AND THAT LIABILITY UNDER SUCH A CONTRACT PROVISION CANNOT BE GREATER THAN THE FREIGHT ACTUALLY INCURRED, AND CANNOT BE CONSTRUED AS AUTHORIZING PAYMENT TO A CONTRACTOR OF THE DIFFERENCE IN FREIGHT CHARGES IF SHIPMENT IS MADE FROM OTHER THAN THE DESIGNATED F.O.B. POINT. SEE 25 COMP. DEC. 413; 3 COMP. GEN. 56.

YOUR ELECTION TO SHIP FROM WOOD RIVER, ILL., INSTEAD OF NEODESHA, KANS., DID NOT ENTITLE YOU TO PAYMENT OF A GREATER SUM FOR THE FUEL OIL THAN WOULD HAVE BEEN PAYABLE THEREFOR HAD YOU MADE DELIVERY AT NEODESHA. MAY BE TRUE THAT DELIVERY AT WOOD RIVER FACILITATED DELIVERY TO THE GOVERNMENT BUT DELIVERY AS MADE WAS PRIMARILY FOR YOUR OWN CONVENIENCE FOR HAD YOU FAILED TO DELIVER WITHIN THE CONTRACT TIME, YOU MIGHT HAVE BEEN DECLARED IN DEFAULT, IN WHICH CASE PURCHASE WOULD HAVE BEEN MADE AGAINST YOUR ACCOUNT AND YOU CHARGED WITH THE EXCESS COST, IF ANY, RESULTING THEREFROM. THE QUANTITY OF FUEL OIL NEEDED TO SUPPLY THE GOVERNMENT'S REQUIREMENTS WAS APPARENTLY PRODUCED AT YOUR WOOD RIVER REFINERY, AND THERE IS NO ALLEGATION THAT YOU SUSTAINED ANY FREIGHT COSTS IN EFFECTING DELIVERY TO THE GOVERNMENT AT WOOD RIVER.

THE FACT THAT YOU NOTIFIED THE CONTRACTING OFFICER OF YOUR INTENTION TO SHIP FROM WOOD RIVER AFTER RECEIVING THE PURCHASE ORDER CANNOT OPERATE TO OBLIGATE THE GOVERNMENT FOR ANY AMOUNT IN ADDITION TO THAT STIPULATED IN THE CONTRACT.

ACCORDINGLY, UPON THE FACTS OF RECORD AND UNDER THE TERMS OF THE CONTRACT, THE SETTLEMENT OF NOVEMBER 5, 1938, MUST BE AND IS SUSTAINED.