B-899, FEBRUARY 7, 1939, 18 COMP. GEN. 641

B-899, FEBRUARY 7, 1939, 18 COMP. GEN. 641

TRANSPORTATION - HOUSEHOLD EFFECTS - MOTOR CARRIERS - ADVERTISING REQUIREMENTS SECTION 3709, REVISED STATUTES, HAVING BEEN DESIGNED TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT "PURCHASES AND CONTRACTS FOR SUPPLIES OR SERVICES; " TO SECURE TO THE GOVERNMENT THE BENEFITS WHICH FLOW FROM COMPETITION; TO PREVENT UNJUST FAVORITISM; AND TO PREVENT COLLUSION AND FRAUD, ADVERTISING IS REQUIRED EXCEPT WHEN AN EMERGENCY EXISTS REQUIRING THE IMMEDIATE PROCUREMENT OF THE SUPPLIES OR SERVICES; WHEN BY LEGISLATION EXEMPTION IS GRANTED THEREFROM; OR WHEN ADVERTISING CAN ACCOMPLISH NO USEFUL PURPOSE. A CONTRACT FOR TRANSPORTATION IS ONE FOR "SUPPLIES OR SERVICES" WITHIN THE MEANING OF SECTION 3709, REVISED STATUTES, REQUIRING ADVERTISING FOR GOVERNMENT NEEDS AS THEREIN OUTLINED AND UNLESS OTHERWISE EXEMPTED. TRANSPORTATION OF THE HOUSEHOLD EFFECTS OF A CONSULAR OFFICER BY MOTOR VEHICLE IS NOT WITHIN THE ADVERTISING EXEMPTION PROVISIONS OF THE STATE DEPARTMENT APPROPRIATION ACT, 1939, 52 STAT. 8,"WHEN THE PURCHASE OR SERVICE RELATES TO THE PACKING OF PERSONAL AND HOUSEHOLD EFFECTS OF DIPLOMATIC, CONSULAR, AND FOREIGN SERVICE OFFICERS AND CLERKS FOR FOREIGN SHIPMENT.' SINCE MOTOR-CARRIERS--- BOTH COMMON CARRIERS BY MOTOR VEHICLE AND CONTRACT CARRIERS--- ARE AUTHORIZED TO, AND SOME WILL, GIVE LOWER RATES TO THE UNITED STATES FOR TRANSPORTATION SERVICES THAN TO THE PUBLIC GENERALLY, SUCH SERVICES ARE TO BE OBTAINED ONLY AFTER ADVERTISING IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 3709. REVISED STATUTES, IN THE ABSENCE OF AN EMERGENCY, STATUTORY AUTHORITY FOR PROCEEDING OTHERWISE, OR A CLEAR SHOWING THAT COMPETITION COULD NOT HAVE BEEN OBTAINED, NOTWITHSTANDING THAT THE SAID CARRIERS ARE REQUIRED BY THE MOTOR CARRIER ACT, 1935, 49 STAT. 543, TO FILE, WITH THE INTERSTATE COMMERCE COMMISSION, TARIFFS OR SCHEDULES SHOWING THEIR RATES, ETC., AND NOT TO DEPART THEREFROM, THE REQUIREMENT AS TO THE NONCOLLECTION, ETC., OF RATES, LESS THAN THOSE FILED BEING FOR APPLICATION TO PRIVATE SHIPPERS ONLY.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF STATE, FEBRUARY 7, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 17, 1938, AS FOLLOWS:

THERE HAS BEEN RECEIVED FROM THE CLAIMS DIVISION OF YOUR OFFICE PREAUDIT RATE MEMORANDA FILE (T-EMS) OF NOVEMBER 17, AND DECEMBER 6, 1938, RETURNING WITHOUT CERTIFICATION PREAUDIT VOUCHER NO. 3339, COVERING THE SHIPMENT OF THE EFFECTS OF CONSUL GENERAL JOHN FARR SIMMONS FROM WASHINGTON, D.C., TO OTTAWA, CANADA, BY MOTOR VEHICLE OF THE SECURITY STORAGE COMPANY, FOR THE REASON THAT COMPETITIVE BIDS WERE NOT OBTAINED PURSUANT TO THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES.

IT IS THE UNDERSTANDING OF THE DEPARTMENT THAT THE SECURITY STORAGE COMPANY HAS FILED ITS TARIFF WITH THE INTERSTATE COMMERCE COMMISSION, AND THAT ITS RATES ARE IDENTICAL WITH THE RATES OF ALL OTHER MOTOR TRANSPORT COMPANIES FILED WITH THE COMMISSION FOR SHIPMENTS BETWEEN WASHINGTON, D.C., AND OTTAWA. MOREOVER, SINCE MOTOR CARRIERS ARE UNDER FEDERAL REGULATIONS REQUIRED TO FILE TARIFFS TO BE APPROVED BY THE INTERSTATE COMMERCE COMMISSION, AND WHEN APPROVED ARE AVAILABLE FOR PUBLIC INSPECTION, IT IS BELIEVED COMPLIANCE WITH THE REVISED STATUTE CITED HAS IN EFFECT BEEN MET, AND IN THE CIRCUMSTANCES FULFILLMENT BY THE CARRIERS OF THE REQUIREMENTS OF THE MOTOR CARRIERS ACT PLACES SUCH CARRIERS IN A POSITION TO RENDER SERVICE IF OTHERWISE EQUIPPED ANALOGOUS TO THAT OFFERED BY ESTABLISHED RAIL CARRIERS, OF WHOM BIDS ARE NOT DEMANDED.

IN THE CASE UNDER DISCUSSION, MR. SIMMONS HAD HIS EFFECTS PACKED BY THE SECURITY STORAGE COMPANY, AND AS UNDER THE TARIFFS FILED THERE COULD HAVE BEEN NO LOWER BIDDER AUTHORIZED TO PERFORM THE SERVICES REQUIRED IN EFFECTING DELIVERY AT OTTAWA, IT WAS BOTH REASONABLE AND LOGICAL TO OBTAIN FULFILLMENT OF THE ENTIRE CONTRACT BY THE COMPANY CHOSEN.

CONSEQUENTLY, I SHALL APPRECIATE CERTIFICATION FOR PAYMENT OF THE VOUCHER SUBMITTED FOR PREAUDIT, AND FOR THE FUTURE GUIDANCE OF THE DEPARTMENT IT IS HOPED TO HAVE YOUR CONCURRENCE IN ITS VIEW THAT IT IS UNNECESSARY TO PROCURE BIDS IN CASES WHERE MOTOR CARRIERS HAVE COMPLIED WITH THE PROVISIONS OF THE MOTOR VEHICLE ACT AND THEIR TARIFFS FILED WITH AND APPROVED BY THE INTERSTATE COMMERCE COMMISSION.

THE GOODS IN QUESTION WERE SHIPPED UNDER GOVERNMENT BILL OF LADING S- 20274, AUGUST 19, 1938, FROM WASHINGTON, D.C., TO OTTAWA, CANADA, BY THE SECURITY STORAGE CO., AND CHARGES HAVE BEEN CLAIMED IN THE SUM OF $211.37, BASED ON THE MOVEMENT OF 950 CUBIC FEET OF GOODS (2,990 POUNDS), PRESUMABLY IN ACCORDANCE WITH TARIFFS FILED WITH THE INTERSTATE COMMERCE COMMISSION PURSUANT TO THE MOTOR CARRIER ACT, 1935. THE AUTHORITY FOR SHIPMENT OF THE GOODS AT GOVERNMENT EXPENSE IS CONTAINED IN THE TRAVEL ORDER ASSIGNING THE EMPLOYEE TO DUTY AT OTTAWA, AND THE DEPARTMENT OF STATE APPROPRIATION ACT, 1939, NO. 495, APPROVED APRIL 27, 1938, 52 STAT. 250, WHICH PROVIDES IN PART AS FOLLOWS:

TRANSPORTATION, FOREIGN SERVICE: TO PAY THE TRAVELING EXPENSES * * * OF DIPLOMATIC, CONSULAR, AND FOREIGN SERVICE OFFICERS, AND OTHER EMPLOYEES OF THE FOREIGN SERVICE, INCLUDING FOREIGN SERVICE INSPECTORS, AND UNDER SUCH REGULATIONS AS THE SECRETARY OF STATE MAY PRESCRIBE, OF THEIR FAMILIES AND EXPENSES OF TRANSPORTATION OF EFFECTS, IN GOING TO AND RETURNING FROM THEIR POSTS, * * *

WHEN THE SUBJECT VOUCHER WAS FIRST SUBMITTED FOR PREAUDIT IT WAS RETURNED WITHOUT CERTIFICATION FOR AN EXPLANATION AS TO THE FAILURE TO SOLICIT BIDS FOR THE SERVICE, IT BEING STATED THAT:

* * * THE FACT THAT A COMMON CARRIER BY MOTOR VEHICLE IS AVAILABLE DOES NOT AUTHORIZE DISREGARDING THE PROVISIONS OF SECTION 3709, REVISED STATUTES, IN ANY CASE WHERE COMPETITIVE BIDS CAN BE OBTAINED.

THE VOUCHER WAS RESUBMITTED FOR PREAUDIT WITH AN EXPLANATION AS FOLLOWS:

GENERAL PROVISIONS IN THE APPROPRIATION ACT, TITLE I--- DEPARTMENT OF STATE, 52 STATE. 258, STATE:

"SECTION 3709 OF THE REVISED STATUTES (41 U.S.C. 5) SHALL NOT APPLY TO ANY PURCHASE BY OR SERVICE RENDERED FOR THE DEPARTMENT OF STATE WHEN THE AGGREGATE AMOUNT INVOLVED DOES NOT EXCEED $100 OR WHEN THE PURCHASE OR SERVICE RELATES TO THE PACKING OF PERSONAL AND HOUSEHOLD EFFECTS OF DIPLOMATIC, CONSULAR, AND FOREIGN SERVICE OFFICERS AND CLERKS FOR FOREIGN SHIPMENT.'

THE VOUCHER WAS AGAIN RETURNED WITHOUT CERTIFICATION FOR THE REASON THAT CHARGES CLAIMED WERE IN EXCESS OF THE OPEN MARKET PURCHASE LIMITATION OF $100 AND WERE FOR TRANSPORTATION SERVICE AS DISTINGUISHED FROM "PACKING OF PERSONAL AND HOUSEHOLD EFFECTS," ETC. THEREUPON, IT WAS AGAIN RESUBMITTED WITH YOUR LETTER OF DECEMBER 17, 1938, QUOTED ABOVE.

SECTION 3709, REVISED STATUTES, PROVIDES:

ALL PURCHASES AND CONTRACTS FOR SUPPLIES OR SERVICES, IN ANY OF THE DEPARTMENTS OF THE GOVERNMENT, EXCEPT FOR PERSONAL SERVICES, SHALL BE MADE BY ADVERTISING A SUFFICIENT TIME PREVIOUSLY FOR PROPOSALS RESPECTING THE SAME, WHEN THE PUBLIC EXIGENCIES DO NOT REQUIRE THE IMMEDIATE DELIVERY OF THE ARTICLES, OR PERFORMANCE OF THE SERVICE. WHEN IMMEDIATE DELIVERY OR PERFORMANCE IS REQUIRED BY THE PUBLIC EXIGENCY, THE ARTICLES OR SERVICE REQUIRED MAY BE PROCURED BY OPEN PURCHASE OR CONTRACT, AT THE PLACES AND IN THE MANNER IN WHICH SUCH ARTICLES ARE USUALLY BOUGHT AND SOLD, OR SUCH SERVICES ENGAGED, BETWEEN INDIVIDUALS.

IT HAS BEEN FREQUENTLY HELD BY THE COURTS AND BY THE ACCOUNTING OFFICERS OF THE UNITED STATES THAT THE PROVISIONS OF THE STATUTE ARE DESIGNED TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT BUSINESS; TO SECURE TO THE GOVERNMENT THE BENEFITS WHICH FLOW FROM COMPETITION; TO PREVENT UNJUST FAVORITISM BY REPRESENTATIVES OF THE GOVERNMENT IN MAKING PURCHASES ON PUBLIC ACCOUNT; AND TO PREVENT COLLUSION AND FRAUD IN PROCURING SUPPLIES OR LETTING CONTRACTS.

BY THE EXPRESS TERMS OF THE STATUTE, ADVERTISING MAY BE DISPENSED WITH WHEN AN EMERGENCY EXISTS REQUIRING THE IMMEDIATE PROCUREMENT OF THE SUPPLIES OR SERVICES. ALSO, THE 1939 APPROPRIATION ACT, SUPRA, AUTHORIZES THE PROCUREMENT OF SUPPLIES OR SERVICES BY THE DEPARTMENT OF STATE WITHOUT ADVERTISING WHEN THE AGGREGATE AMOUNT INVOLVED IS NOT IN EXCESS OF $100 OR WHERE THE PURCHASE OR SERVICE RELATES TO THE PACKING OF PERSONAL AND HOUSEHOLD EFFECTS OF DIPLOMATIC, CONSULAR, AND FOREIGN SERVICE OFFICERS AND CLERKS FOR FOREIGN SHIPMENT. IT HAS BEEN CONSISTENTLY HELD, TOO, THAT ADVERTISING IS NOT REQUIRED WHERE IT COULD ACCOMPLISH NO USEFUL PURPOSE. 1 COMP. GEN. 748; 5 ID. 963; 17 OP.ATTY.GEN. 84.

A CONTRACT FOR TRANSPORTATION IS ONE FOR "SUPPLIES OR SERVICES" WITHIN THE MEANING OF SECTION 3709, REVISED STATUTES. 30 OP.ATTY.GEN. 381. CONSEQUENTLY, SUCH SERVICES MUST BE OBTAINED PURSUANT TO THE PROVISIONS OF THAT STATUTE. IN THE PRESENT CASE IT IS NOT CONTENDED THAT THE PUBLIC EXIGENCY WOULD NOT ADMIT OF THE DELAY INCIDENT TO ADVERTISING AND, OBVIOUSLY, THE SERVICE WAS NOT WITHIN THE EXCEPTION TO SECTION 3709 AS CONTAINED IN THE 1939 APPROPRIATION ACT, SUPRA. NEITHER HAS THERE BEEN A SHOWING THAT ADVERTISING WOULD HAVE ACCOMPLISHED NO USEFUL PURPOSE.

YOUR VIEW THAT ADVERTISING FOR MOTOR TRANSPORTATION SHOULD NOT BE REQUIRED APPARENTLY IS BASED UPON THE PROVISIONS OF THE MOTOR CARRIER ACT, 1935, 49 STAT. 543, PLACING MOTOR CARRIERS UNDER FEDERAL REGULATION SIMILAR TO THAT OF OTHER COMMON CARRIERS OPERATING IN INTERSTATE AND FOREIGN COMMERCE. UNDER SECTION 217 OF THE ACT, COMMON CARRIERS BY MOTOR VEHICLE ARE REQUIRED TO FILE WITH THE INTERSTATE COMMERCE COMMISSION, AND KEEP OPEN TO PUBLIC INSPECTION, TARIFFS SHOWING ALL THE RATES, FARES, CHARGES, ETC., FOR THE TRANSPORTATION AND SERVICES OFFERED. SECTION 217 (B) PROVIDES THAT:

(B) NO COMMON CARRIER BY MOTOR VEHICLE SHALL CHARGE OR DEMAND OR COLLECT OR RECEIVE A GREATER OR LESS OR DIFFERENT COMPENSATION FOR TRANSPORTATION OR FOR ANY SERVICE IN CONNECTION THEREWITH BETWEEN THE POINTS ENUMERATED IN SUCH TARIFF THAN THE RATES, FARES, AND CHARGES SPECIFIED IN THE TARIFFS IN EFFECT AT THE TIME; AND NO SUCH CARRIER SHALL REFUND OR REMIT IN ANY MANNER OR BY ANY DEVICE, DIRECTLY OR INDIRECTLY, OR THROUGH ANY AGENT OR BROKER OR OTHERWISE, ANY PORTION OF THE RATES, FARES, OR CHARGES SO SPECIFIED, OR EXTEND TO ANY PERSON ANY PRIVILEGES OR FACILITIES FOR TRANSPORTATION IN INTERSTATE OR FOREIGN COMMERCE EXCEPT SUCH AS ARE SPECIFIED IN ITS TARIFFS: PROVIDED, THAT THE PROVISIONS OF SECTIONS 1 (7) AND 22 (1) OF PART I SHALL APPLY TO COMMON CARRIERS BY MOTOR VEHICLES SUBJECT TO THIS PART.

THE REFERENCE TO PART I IS TO THE INTERSTATE COMMERCE ACT AS IT EXISTED PRIOR TO THE ENACTMENT OF THE MOTOR CARRIER ACT AS AN AMENDMENT THERETO, AND SECTION 22 (1) OF THAT ACT, WHICH RELATES TO THE PROVISIONS GOVERNING RATES WHICH MAY BE CHARGED BY CARRIERS BY RAIL AND WATER, PROVIDES IN PART:

* * * NOTHING IN THIS CHAPTER SHALL PREVENT THE CARRIAGE, STORAGE, OR HANDLING OF PROPERTY FREE OR AT REDUCED RATES FOR THE UNITED STATES, * *

WHILE IT IS STATED IN YOUR LETTER OF DECEMBER 17, 1938, THAT:

* * * UNDER THE TARIFFS FILED THERE COULD HAVE BEEN NO LOWER BIDDER AUTHORIZED TO PERFORM THE SERVICES REQUIRED IN EFFECTING DELIVERY AT OTTAWA, * * * IT WILL BE SEEN FROM THE FOREGOING THAT COMMON CARRIERS BY MOTOR VEHICLE ARE AUTHORIZED TO PERFORM SERVICES "FREE OR AT REDUCED RATES FOR THE UNITED STATES," AND IT IS AN ESTABLISHED FACT THAT ADVERTISING FOR BIDS FOR TRANSPORTATION SERVICES BY MOTOR VEHICLES HAS BEEN PRODUCTIVE OF THE RESULTS CONTEMPLATED BY SECTION 3709, REVISED STATUTES.

SECTION 218 OF THE MOTOR CARRIER ACT, 1935, REQUIRES CONTRACT CARRIERS TO FILE SCHEDULES OF CHARGES WITH THE INTERSTATE COMMERCE COMMISSION AND PROVIDES THAT SUCH CARRIERS SHALL NOT DEMAND, CHARGE, OR COLLECT COMPENSATION LESS THAN THAT STATED IN THE SCHEDULES SO FILED. PROVISION IS MADE THEREIN EXCEPTING THE UNITED STATES FROM PAYMENT OF THOSE FILED CHARGES. HOWEVER, ATTORNEY GENERAL CUMMINGS HELD IN AN OPINION RENDERED APRIL 20, 1936 (38 OP.ATTY.GEN. 452), THAT SUCH CARRIERS, ALSO, COULD FURNISH SERVICES TO THE GOVERNMENT FREE OR AT REDUCED RATES AND THIS OPINION CLEARLY INDICATES THE REQUIREMENT FOR ADVERTISING FOR SUCH SERVICES. NOTE PARTICULARLY THE FOLLOWING EXCERPTS FROM THE OPINION (PP. 455, 456):

THE EXEMPTION OF CONTRACTS WITH THE GOVERNMENT OF THE PROVISIONS OF SECTION 217 AND TITLE I OF THE ACT DOES NOT CREATE ANY NEW LAW. SUCH CONTRACTS WOULD BE EXEMPT WITHOUT ANY EXPRESS STATEMENT IN THE ACT TO THAT EFFECT. THE EXEMPTION IS THEREFORE MERELY DECLARATORY OF THE LAW AS IT ALREADY EXISTED, AND IS NOT CREATIVE. MOREOVER, TO APPLY THE RULE IN THIS CASE, THEREBY MAKING THE PROVISION OF SECTION 218 APPLICABLE TO CONTRACTS WITH THE GOVERNMENT, WOULD NOT ONLY BE IN DEROGATION OF THE RIGHTS OF THE GOVERNMENT, BUT WOULD ALSO BE CONTRARY TO THE PUBLIC POLICY OF THE UNITED STATES AS EXPRESSED BY THE CONGRESS IN VARIOUS STATUTES REQUIRING THAT ALL GOVERNMENT CONTRACTS, EXCEPT IN CASES OF EMERGENCY, BE LET TO THE LOWEST RESPONSIBLE BIDDER AFTER PROPER ADVERTISING. THIS POLICY OF THE GOVERNMENT WITH RESPECT TO CONTRACTS IS NOT TO BE LIGHTLY PASSED OVER, AND CERTAINLY IT SHOULD NOT BE CAST ASIDE UNLESS THE CONGRESS BY CLEAR EXPRESSION SO DIRECTS.

THE PURPOSE OF THE MOTOR VEHICLE ACT, EXPRESSLY STATED THEREIN, IS TO REGULATE TRANSPORTATION BY MOTOR CARRIERS IN SUCH MANNER AS TO FOSTER, PROMOTE, AND PROTECT INTERSTATE AND FOREIGN COMMERCE BY MOTOR CARRIERS, AND TO PREVENT IN CONNECTION THEREWITH UNREASONABLE CHARGES AND UNJUST DISCRIMINATIONS RESULTING IN UNDUE PREFERENCES OR ADVANTAGES AND UNFAIR OR DESTRUCTIVE COMPETITIVE PRACTICES. IT IS NOT NECESSARY FOR SUCH PURPOSES THAT SECTION 218 BE BINDING UPON THE GOVERNMENT. THE UNREASONABLE CHARGES, UNJUST DISCRIMINATIONS, UNDUE PREFERENCES, AND UNFAIR DESTRUCTIVE COMPETITIVE PRACTICES SOUGHT TO BE PREVENTED RELATE ENTIRELY TO PRIVATE SHIPPERS. AS WAS SAID BY THE SUPREME COURT IN NASHVILLE RY. V. TENNESSEE, 262 U.S. 318, 323, IN DISCUSSING THE ANALOGOUS REQUIREMENTS CONTAINED IN THE INTERSTATE COMMERCE ACT,"THE GRANT OF A LOWER RATE * * * TO A GOVERNMENT * * * MAY BENEFIT THE GOVERNMENT WITHOUT SUBJECTING TO PREJUDICE ANY PERSON, LOCALITY, OR CLASS OF TRAFFIC.' * * *

SINCE MOTOR CARRIERS ARE AUTHORIZED TO, AND SOME WILL, GIVE LOWER RATES TO THE UNITED STATES FOR TRANSPORTATION SERVICES THAN TO THE PUBLIC GENERALLY, IT MUST BE HELD THAT SUCH SERVICES ARE TO BE OBTAINED ONLY AFTER ADVERTISING IN ACCORDANCE WITH SECTION 3709, REVISED STATUTES, IN THE ABSENCE OF AN EMERGENCY, STATUTORY AUTHORITY FOR PROCEEDING OTHERWISE, OR A CLEAR SHOWING THAT COMPETITION COULD NOT HAVE BEEN OBTAINED.

IN VIEW OF THE ADMINISTRATIVE MISUNDERSTANDING IN THE MATTER THE SUBJECT VOUCHER WILL BE APPROVED FOR PAYMENT, IF OTHERWISE CORRECT, BUT HEREAFTER SUCH SERVICES ARE TO BE OBTAINED AS STATED ABOVE.