B-45958, JANUARY 1, 1945, 24 COMP. GEN. 481

B-45958: Jan 1, 1945

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PROVIDED THE SOLICITATION FOR BIDS INCLUDES SUCH OPEN COMPETITION AS THE CIRCUMSTANCES PERMIT AND THE LOWEST QUOTATION RECEIVED IS SELECTED. AS FOLLOWS: CONSIDERABLE DIFFICULTY IS BEING ENCOUNTERED AT FIELD STATIONS IN THIS DEPARTMENT IN SELECTING CARRIERS FOR THE MOVEMENT OF EMPLOYEES' HOUSEHOLD GOODS UNDER THE PROVISIONS OF SECTION 5 OF EXECUTIVE ORDER 8588. SO LONG AS IT WAS WORKABLE IT ALSO HAS AFFORDED THE ONLY PRACTICAL METHOD AVAILABLE TO FIELD STATIONS FOR DETERMINING THE MOST ECONOMICAL MEANS OF SHIPMENT. MOTOR VAN CARRIERS STATE THAT IT IS THEIR AIM. WHETHER THEIR BID IS ON A LUMP SUM OR A PER HUNDRED WEIGHT BASIS. THEY HAVE BECOME INCREASINGLY FREQUENT. IN WHICH NO BID IS RECEIVED.

B-45958, JANUARY 1, 1945, 24 COMP. GEN. 481

TRANSPORTATION OF HOUSEHOLD EFFECTS - MOTOR VAN SHIPMENT - DETERMINATION OF LOWEST AVAILABLE CHARGES THE SECURING OF QUOTATIONS FROM MOTOR VAN CARRIERS, WHO DECLINE TO SIGN FORMAL BIDS SOLICITED FOR THE TRANSPORTATION OF HOUSEHOLD EFFECTS, FOR SERVICE AT THEIR TARIFF RATES WITHOUT REDUCTION TO THE GOVERNMENT MAY BE REGARDED AS SATISFYING THE COMPETITIVE BID METHOD--- AS DISTINGUISHED FROM THE METHOD OF CONSULTING PUBLISHED TARIFFS--- OF SELECTING "THE MOST ECONOMICAL MEANS" OF MOTOR VAN SHIPMENT, UNDER SECTION 5 OF THE UNIFORM TRANSPORTATION OF HOUSEHOLD EFFECTS REGULATIONS ( EXECUTIVE ORDER NO. 8588, AS AMENDED), PROVIDED THE SOLICITATION FOR BIDS INCLUDES SUCH OPEN COMPETITION AS THE CIRCUMSTANCES PERMIT AND THE LOWEST QUOTATION RECEIVED IS SELECTED; AND, TO FACILITATE AUDIT, THE ACCOUNT SHOULD CONTAIN A BRIEF STATEMENT OF PERTINENT FACTS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, JANUARY 1, 1945:

THERE HAS BEEN CONSIDERED YOUR LETTER OF NOVEMBER 23, 1944, AS FOLLOWS:

CONSIDERABLE DIFFICULTY IS BEING ENCOUNTERED AT FIELD STATIONS IN THIS DEPARTMENT IN SELECTING CARRIERS FOR THE MOVEMENT OF EMPLOYEES' HOUSEHOLD GOODS UNDER THE PROVISIONS OF SECTION 5 OF EXECUTIVE ORDER 8588, AS AMENDED BY EXECUTIVE ORDER 9122. THIS SECTION PROVIDES THAT SHIPMENT SHALL BE BY THE MOST ECONOMICAL MEANS. THE LAST SENTENCE OF THE SECTION, WHICH READS AS FOLLOWS, PRESCRIBES ALTERNATE METHODS FOR DETERMINING THE LOWEST AVAILABLE MOTOR VAN CHARGES:

"IN CONSIDERING COMPARATIVE TRANSPORTATION COSTS AS REQUIRED BY THIS SECTION, THE LOWEST AVAILABLE MOTOR VAN CHARGES MAY BE DETERMINED BY CONSULTING PUBLISHED TARIFFS OR BY SECURING COMPETITIVE BIDS, THE USE OF EITHER METHOD TO BE CONSTRUED AS BEING DETERMINATIVE OF THE LOWEST AVAILABLE RATE FOR MOTOR TRANSPORTATION.'

THE FOLLOWING SITUATIONS PREVAIL IN THIS DEPARTMENT WITH RESPECT TO THE TWO METHODS PRESCRIBED UNDER THIS PROVISION:

(1) COMPETITIVE BIDS.--- IN THE FIELD OFFICES IT HAS BEEN THE GENERAL RULE TO DETERMINE "THE LOWEST AVAILABLE MOTOR VAN CHARGES" BY SECURING COMPETITIVE BIDS. THIS METHOD HAS BEEN JUSTIFIABLE IN MANY CASES BECAUSE OF SAVINGS IN TRANSPORTATION COSTS. SO LONG AS IT WAS WORKABLE IT ALSO HAS AFFORDED THE ONLY PRACTICAL METHOD AVAILABLE TO FIELD STATIONS FOR DETERMINING THE MOST ECONOMICAL MEANS OF SHIPMENT. HOWEVER, MOTOR VAN TRANSPORTATION SECURED UPON COMPETITIVE BIDS NO LONGER CAN BE RELIED UPON FOR SHOWING ANY SAVINGS OVER PUBLISHED TARIFFS, TAKING INTO CONSIDERATION OTHER ADMINISTRATIVE EXPENSES THAT ARISE FROM APPLYING THIS METHOD. MOTOR VAN CARRIERS STATE THAT IT IS THEIR AIM, WHEN THEY BID, TO BID THEIR PUBLISHED TARIFFS, WHETHER THEIR BID IS ON A LUMP SUM OR A PER HUNDRED WEIGHT BASIS. BUT CASES ARISE, AND THEY HAVE BECOME INCREASINGLY FREQUENT, IN WHICH NO BID IS RECEIVED, DUE TO DATE OF MOVE, DESTINATION, OR OTHER FACTORS. AT THE SAME TIME IT MAY BE POSSIBLE TO SECURE BY NEGOTIATION TRANSPORTATION SERVICES ON SOME AGREEABLE DATE ON A PUBLISHED TARIFF BASIS. WHEN NO BID IS RECEIVED, THE REGULATION HAS BEEN CONSTRUED AS REQUIRING EITHER READVERTISEMENT TO SECURE A LOW BID OR THE CONSULTATION OF PUBLISHED TARIFFS IN ORDER TO ASCERTAIN THE LOWEST MOTOR VAN CHARGES. THE DELAY THUS INVOLVED IS COSTLY AND PREJUDICIAL TO THE INTERESTS OF BOTH THE GOVERNMENT AND THE EMPLOYEE. MANY SHORT LOCAL MOVES COULD BE MADE ADVANTAGEOUSLY BY NEGOTIATION ON AN OPEN MARKET BASIS, EXCEPT THAT SUCH PROCEDURE DOES NOT APPEAR TO BE PERMISSIBLE ACCORDING TO YOUR DECISION B-34867 OF JUNE 12, 1943. IN THIS DECISION IT IS STATED THAT THE PROVISON IN 41 U.S.C. 6, EXEMPTING FROM THE REQUIREMENTS FOR COMPETITION THOSE PURCHASES, OR NOT EXCEEDING THE OPEN MARKET LIMITATION, HAS NO EFFECT UPON THE APPLICATION OF SECTION 5 OF EXECUTIVE ORDER 9122.

(2) PUBLISHED TARIFFS. THE ACTUAL CONSULTATION OF PUBLISHED MOTOR VAN TARIFFS AND DIRECTORIES OF SERVICES AVAILABLE, IN THE EXACT SENSE OF THE WORD, IS NOT POSSIBLE AT FIELD STATIONS. TARIFF FACILITIES ARE RARELY AVAILABLE IN THE LOCALITY OF MOST OF THE FIELD STATIONS AND IT IS NEITHER POSSIBLE TO MAKE SUCH FACILITIES AVAILABLE TO THE NUMEROUS STATIONS INVOLVED NOR TO PROVIDE QUALIFIED EMPLOYEES TO INTERPRET THEM. NEITHER IS THERE SUFFICIENT TIME IN MOST CASES TO REFER THE QUESTION OF DETERMINATION OF THE "LOWEST AVAILABLE MOTOR VAN CHARGES" TO WASHINGTON OR SOME OTHER CENTRAL POINT WHERE THE TARIFFS ARE AVAILABLE WITHOUT SERIOUS DELAYS, EXTRA COST, AND INCONVENIENCE TO THE GOVERNMENT. IN MANY CASES THE URGENCY OF THE SITUATION RESULTS IN NEGOTIATIONS WITH LOCAL MOTOR VAN CARRIERS UNTIL ONE IS FOUND THAT IS ACTUALLY AVAILABLE AND AGREES TO PERFORM THE SERVICES. THIS SOMETIMES RESULTS IN EXCEPTIONS AND DISALLOWANCES BY THE GENERAL ACCOUNTING OFFICE, SINCE THE CARRIER ENGAGED MAY NOT HAVE THE LOWEST PUBLISHED TARIFF, EVEN THOUGH A REASONABLE CANVASS HAS BEEN MADE TO LOCATE AN AVAILABLE CARRIER.

IN VIEW OF THE ABOVE SITUATIONS YOUR DECISION IS REQUESTED ON THE FOLLOWING QUESTIONS:

(A) IF ADEQUATE SOLICITATION OF BIDS IS MADE FOR MOTOR VAN TRANSPORTATION AND NO BID IS RECEIVED, WOULD IT BE LEGALLY PERMISSIBLE THEN TO ENGAGE ANY MOTOR VAN CARRIER AVAILABLE TO PERFORM THE SERVICE NEEDED WHOSE CHARGES ARE LESS THAN THOSE FOR RAIL OR WATER SHIPMENT?

(B) WOULD IT BE LEGALLY PERMISSIBLE TO MAKE A REASONABLE CANVASS OF THE MOTOR VAN TRANSPORTATION AVAILABLE IN THE LOCALITY WHERE THE SERVICE IS NEEDED AND SELECT A CARRIER WHO IS AVAILABLE FOR THE DATE, OR APPROXIMATE DATE, SET AND WHOSE TARIFF, AS QUOTED BY CARRIERS CONSULTED, IS THE LOWEST ASCERTAINED IN THE CANVASS MADE, SUCH SELECTION OF A CARRIER TO BE CONSTRUED AS DETERMINING "THE LOWEST AVAILABLE MOTOR VAN CHARGES * * * BY CONSULTING PUBLISHED TARIFFS?

IN SANCTIONING ALTERNATE METHODS OF SELECTING "THE MOST ECONOMICAL MEANS" OF MOTOR VAN SHIPMENT, THE EXECUTIVE REGULATIONS, AS AMENDED IN 1942, PERMIT EITHER THE CONSULTING OF TARIFFS OR THE SECURING OF COMPETITIVE BIDS. 23 COMP. GEN. 308. WITH RESPECT TO THE COMPARABLE REQUIREMENT FOR ADVERTISING FOR COMPETITIVE BIDS IN CONNECTION WITH GOVERNMENTAL PURCHASING (SECTION 3709, REVISED STATUTES), IT HAS BEEN RECOGNIZED THAT A LITERAL APPLICATION MAY NOT BE PRACTICABLE OR APPROPRIATE TO CURRENT MARKET CONDITIONS WHEN FORMAL BIDS MAY NOT BE OBTAINABLE. 22 COMP. GEN. 817. UPON THAT BASIS, THE SECURING OF OFFERS OR QUOTATIONS BY CARRIERS TO RENDER SERVICE AT THEIR TARIFF RATES WITHOUT REDUCTION TO THE GOVERNMENT, WHERE THEY DECLINE TO SIGN FORMAL BIDS, WOULD SATISFY THE SECOND ALTERNATIVE (THE SECURING OF COMPETITIVE BIDS), AND YOUR FIRST QUESTION CAN BE ANSWERED AFFIRMATIVELY, ASSUMING THAT (A) THE SOLICITATION OF BIDS INCLUDES SUCH OPEN COMPETITION AS THE CIRCUMSTANCES PERMIT (SUCH AS A PUBLIC POSTING AND FAIRLY REPRESENTATIVE CIRCULARIZATION, NOT LIMITED TO A PARTICULAR CARRIER OR GROUP OF CARRIERS) AND THAT (B) WHERE TWO OR MORE CARRIERS ARE FOUND TO BE AVAILABLE, THE LOWEST QUOTATION RECEIVED IS THE ONE SELECTED.

WITH RESPECT TO YOUR SECOND QUESTION, THE METHOD CALLING FOR "CONSULTING PUBLISHED TARIFFS" IS NOT ACCOMPLISHED BY CONSULTING CARRIERS INSTEAD, BUT SINCE WHAT IS PROPOSED APPEARS IN SUBSTANCE TO BE THE PLAN ABOVE DISCUSSED, IT IS EVIDENT THAT, BY THAT MEANS AND WITHIN THE LIMITATIONS JUST STATED, THE MOST ECONOMICAL MEANS OF VAN SHIPMENT WILL HAVE BEEN DETERMINED, NOT UPON THE BASIS OF CONSULTING TARIFFS, BUT UPON THE BASIS THAT THE LOWEST BID, I.E., TARIFF QUOTATION, HAS BEEN SECURED.

IN ALL SUCH CASES, IT IS SUGGESTED THAT THE ADMINISTRATIVE AUDIT OF THE PAYMENTS AS WELL AS THE AUDIT BY THIS OFFICE WOULD BE EXPEDITED IF THE ACCOUNT SHOULD CONTAIN A BRIEF STATEMENT AS TO (A) WHAT WAS DONE TO SECURE BIDS OR QUOTATIONS AND (B) WHY THE CARRIER BEING PAID WAS THE ONE SELECTED.