A-24222, MAR. 11, 1970

A-24222, MAR. 11, 1970

TRANSPORTATION--BILLS OF LADING--GOVERNMENT SHORT FORM PROCEDURE DEPARTMENT OF DEFENSE (DOD) IS AUTHORIZED TO USE SHORT FORM--U.S. GOVT. BILL OF LADING, ON PERMANENT BASIS, FOR ALL SHIPMENTS INTO DOD FREIGHT CONSOLIDATION POINTS, WITHOUT REGARD TO FREIGHT CHARGE AMOUNT, SUBJECT TO SUCH ADMINISTRATIVE CONTROLS AND PROCEDURES AS ARE NECESSARY TO PROTECT GOVT.'S INTEREST; ALL OTHER LIMITATIONS AND RESTRICTIONS IN GAO MANUAL ON USE OF SHORT FORM REMAIN IN EFFECT. GAO SHOULD BE INFORMED WHEN THIS WAIVER IS EFFECTED AT ANY DOD FREIGHT CONSOLIDATION FACILITY EXCEPT PHILADELPHIA. WHILE DOD ANALYSIS INDICATED SHIPMENTS COSTING OVER $100 OVERAGED APPROXIMATELY 6 PERCENT IN 2-MONTH TEST PERIOD, ANY SIGNIFICANT INCREASE IN THIS PERCENTAGE COULD INFLUENCE THEIR EXCLUSION FROM SHORT FORM COVERAGE IN VIEW OF ADVANCE PAYMENTS PROHIBITION IN 31 U.S.C. 529.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED JUNE 16, 1969, FILE MTMTS-FTO-M, FROM GENERAL CLARENCE J. LANG, COMMANDER, MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS), AND TO LETTER DATED SEPTEMBER 22, 1969, FILE MTMTS-INOM, FROM GENERAL THOMAS L. HAYES, DEPUTY COMMANDER/RESOURCES AND MANAGEMENT, MTMTS, RELATIVE TO A PERMANENT WAIVER OF THE COST LIMITATION ON THE USE OF SHORT FORM--U.S. GOVERNMENT BILL OF LADING, STANDARD FORM 1196, FOR SHIPMENTS MOVING INTO FREIGHT CONSOLIDATION FACILITIES.

THE LETTER FROM GENERAL HAYES CONTAINS AN ANALYSIS OF A REPRESENTATIVE 2- MONTH TEST PERIOD ON THE USE OF THE SHORT FORM BILL OF LADING ON SHIPMENTS MOVING INTO THE PHILADELPHIA CONSOLIDATION POINT. AS REPORTED IN THE LETTER, NO DISADVANTAGES IN THE USE OF THE SHORT FORM WERE ENCOUNTERED BY SHIPPERS PARTICIPATING IN THE CONSOLIDATION PROGRAM. THE PRINCIPAL ADVANTAGE EXPERIENCED BY SHIPPERS IS STATED TO BE THE REDUCTION IN ADMINISTRATIVE HANDLING AND COST. IT WAS ALSO REPORTED THAT, OF THE TOTAL NUMBER OF SHIPMENTS MOVING DURING THE 2 MONTH TEST, APPROXIMATELY 55 PERCENT MOVED ON THE SHORT FORM BILL OF LADING.

IN THE SHORT FORM SYSTEM, THERE IS A DEFINITE EXCHANGE OF SOME LOSS OF CONTROLS FOR GAINS IN ADMINISTRATIVE SAVINGS AND SIMPLICITY. THE USE OF THE SHORT FORM SYSTEM IS SUITABLE, THEREFORE, ONLY IN THOSE CIRCUMSTANCES AND CONDITIONS WHERE THE EXCHANGE IS FAVORABLE TO THE GOVERNMENT.

THE ANALYSIS SUBMITTED BY GENERAL HAYES ALSO SHOWS THAT THE AVERAGE AMOUNT OF FREIGHT CHARGES IN THE $100-AND-OVER CATEGORY WAS APPROXIMATELY $150. THIS, AND THE FACT THAT 45 PERCENT OF THE SHIPMENTS DURING THE 2- MONTH PERIOD WERE REQUIRED TO MOVE ON THE LONG FORM BILL OF LADING, MIGHT SUGGEST THAT, IN THIS PARTICULAR PROGRAM, THE DECREASE IN THE ELEMENT OF CONTROLS WOULD BE NEGLIGIBLE. WHILE THE SMALL NUMBER OF SHIPMENTS WHICH WOULD HAVE REQUIRED THE LONG FORM INSTEAD OF THE SHORT FORM, IN THE ABSENCE OF THE EXCEPTION, DOES NOT SEEM ENOUGH TO AFFECT ADMINISTRATIVE COSTS TO ANY SIGNIFICANT DEGREE, IT APPEARS THAT, IN THE INTEREST OF SIMPLIFYING THE PAPERWORK ON SMALL TRANSPORTATION TRANSACTIONS AND FURTHERING ECONOMY AND EFFICIENCY THROUGH THE CONSOLIDATION PROGRAM, AN EXCEPTION TO THE NORMAL USE OF THE SHORT FORM IS JUSTIFIED.

ACCORDINGLY, THE DEPARTMENT OF DEFENSE (DOD) IS AUTHORIZED TO USE THE SHORT FORM--U.S. GOVERNMENT BILL OF LADING, ON A PERMANENT BASIS, FOR ALL SHIPMENTS INTO DOD FREIGHT CONSOLIDATION POINTS, WITHOUT REGARD TO THE AMOUNT OF THE FREIGHT CHARGES, SUBJECT TO SUCH ADMINISTRATIVE CONTROLS AND PROCEDURES AS MAY BE NECESSARY TO PROTECT THE GOVERNMENT'S INTEREST. THIS CONNECTION, HOWEVER, THERE IS FOR CONSIDERATION THE QUESTION OF CONFLICT WITH THE PROHIBITION AGAINST ADVANCE PAYMENTS, CONTAINED IN 31 U.S.C. 529, WHICH MAY ARISE BY THE USE OF THE SHORT-FORM GOVERNMENT BILL OF LADING ON AN INCREASING NUMBER OF HIGHER PRICED SHIPMENTS. WHILE IT IS INDICATED THAT SHIPMENTS COSTING OVER $100 AVERAGED APPROXIMATELY 6 PERCENT FOR THE 2-MONTH TEST PERIOD, ANY SIGNIFICANT INCREASE IN THE PROPORTION OF SUCH SHIPMENTS COULD INFLUENCE THEIR EXCLUSION FROM THE SHORT FORM COVERAGE. IN ADDITION, IT SHOULD BE UNDERSTOOD THAT THIS DEVIATION FROM THE PROVISIONS OF THE GAO MANUAL APPLIES ONLY TO THE ESTABLISHED MONETARY LIMITATION AND THAT ALL OTHER LIMITATIONS AND RESTRICTIONS REGARDING THE USE OF THE SHORT FORM BILL OF LADING REMAIN IN EFFECT.

THIS OFFICE SHOULD BE INFORMED WHEN THE WAIVER OF THE $100 LIMITATION IS PUT INTO EFFECT AT ANY DEPARTMENT OF DEFENSE FREIGHT CONSOLIDATION FACILITY OTHER THAN AT PHILADELPHIA.

WE ASSURE YOU OF OUR CONTINUING INTEREST IN THE FREIGHT CONSOLIDATION PROGRAM AND OF OUR DESIRE TO BE OF ASSISTANCE AT ANY TIME.