B-129549, MAR. 23, 1960

B-129549, MAR. 23, 1960

TO HONORABLE SUMNER G. WHITTIER, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR SEVERAL PROPOSALS RESPECTING THE USE OF COMMERCIAL BILLS OF LADING ON SHIPMENTS OF GOVERNMENT PROPERTY WHERE THE COSTS OF TRANSPORTATION ARE SMALL.

IN OUR LETTER OF APRIL 4, 1957, B-129549, WE AUTHORIZED ON A TEST BASIS, SHIPMENTS OF SMALL PURCHASES--- WHERE THE TRANSPORTATION CHARGES WERE NOT IN EXCESS OF $10 PER SHIPMENT--- ON COMMERCIAL PREPAID FREIGHT OR EXPRESS BILLS, THE TRANSPORTATION COSTS TO BE PAID INITIALLY BY THE VENDOR WITH SUBSEQUENT REIMBURSEMENT TO HIM FOR SUCH TRANSPORTATION COSTS THROUGH ITS INCLUSION AS A SEPARATE ITEM, SUPPORTED BY THE ORIGINAL PREPAID FREIGHT BILL, IN BILLING FOR THE PRICE OF THE ARTICLES PURCHASED. SUCH PROCEDURE WAS AUTHORIZED "AS A TRIAL OPERATION UNTIL FURTHER NOTICE" ON THE BASIS OF REPRESENTATIONS THAT CONSIDERABLE SAVINGS COULD BE ANTICIPATED THEREFROM. OUR LETTER OF FEBRUARY 25, 1959, B-129549, TO YOU INDICATED THAT, ON THE THEN EXISTING RECORD, WE WERE NOT SATISFIED THAT THE TEST PROCEDURES SHOULD BE CONTINUED NOR THAT THE AMOUNT OF THE $10 LIMITATION SHOULD BE INCREASED TO $25 AS PROPOSED IN YOUR LETTER OF JUNE 11, 1958. WE STATED HOWEVER WE WOULD KEEP THE MATTER OPEN FOR 60 DAYS TO CONSIDER ANY ADDITIONAL MATERIAL YOU MIGHT WISH TO SUBMIT.

BY LETTER OF APRIL 30, 1959, YOUR ASSOCIATE DEPUTY ADMINISTRATOR, WHILE EXPRESSING THE VIEW THAT THE TEST PROCEDURE HAD BEEN OF SUFFICIENT BENEFIT TO WARRANT REQUESTING ITS CONTINUANCE ON A PERMANENT AND ENLARGED BASIS, SUGGESTED A MEETING BETWEEN REPRESENTATIVES OF OUR RESPECTIVE OFFICES PRIOR TO A FINAL DECISION BEING REACHED AND THAT THERE MAY BE OTHER WAYS IN WHICH THE BENEFITS SOUGHT BY YOUR ADMINISTRATION MIGHT BE OBTAINED. SUCH LETTER ALSO MENTIONED SITUATIONS IN WHICH THE USE OF GOVERNMENT BILLS OF LADING DID NOT SEEM TO BE FEASIBLE AND THAT A DISCUSSION OF SUCH SITUATIONS MIGHT BE HELPFUL IN DETERMINING HOW SUCH PRACTICAL PROBLEMS MIGHT BEST BE HANDLED. A MEETING WAS HELD ON MAY 14, 1959, AND IT WAS AGREED, SINCE CERTAIN OF THE PROBLEMS DISCUSSED HAD NOT BEEN MENTIONED IN PRIOR LETTERS OF YOUR ADMINISTRATION, THAT A WRITTEN PRESENTATION OF THEM AND ANY PROPOSAL FOR THEIR SOLUTIONS SHOULD BE MADE. THIS RESULTED IN MR. LAMPHERE'S LETTER OF JUNE 25, 1959, TO US.

THAT LETTER REPORTS THAT ON APPROXIMATELY HALF THE NUMBER OF YOUR ADMINISTRATION'S SHIPMENTS, INVOLVING ONLY 3.2 PERCENT OF ITS ANNUAL TRANSPORTATION COSTS, THE TRANSPORTATION CHARGES WERE $10 OR LESS, THE AVERAGE CHARGE BEING $4.21. IT WAS SUGGESTED THAT YOUR PROBLEMS AS TO SUCH LOW COST TRAFFIC WOULD BE RESOLVED BY PROPOSALS SET FORTH THEREIN AS FOLLOWS:

"1. INBOUND SHIPMENT FROM VENDOR WHERE TRANSPORTATION CHARGES ARE $10 OR LESS: SHIPMENT TO BE MADE ON COMMERCIAL BILL OF LADING COLLECT. PAYMENT TO BE MADE BY THE RECEIVING STATION IN CASH (IMPREST FUNDS OR PETTY CASH). PAID WAYBILLS AND COMMERCIAL BILLS OF LADING CAN EITHER BE FORWARDED PERIODICALLY TO YOUR OFFICE OR RETAINED AT THE STATION FOR REVIEW BY GAO SITE AUDITORS. IN THE LATTER CASE, THE SITE AUDITORS COULD DETERMINE WHETHER THE VOLUME AND TOTAL VALUE OF THE BILLS WARRANT FURTHER AUDIT BY THE TRANSPORTATION DIVISION OF YOUR OFFICE. IF THE TRANSPORTATION CHARGES ARE OCCASIONALLY UNDERESTIMATED AND EXCEED $10, THE COMMERCIAL BILL OF LADING CAN BE CONVERTED TO A GOVERNMENT BILL OF LADING, THEREBY INSURING GAO TRANSPORTATION AUDIT.

"2. OUTBOUND SHIPMENT FROM VA INSTALLATION WHERE TRANSPORTATION CHARGES ARE LESS THAN $10: SHIPMENT TO BE MADE ON COMMERCIAL BILL OF LADING PREPAID. PAYMENT TO BE MADE BY SHIPPING STATION IN CASH (IMPREST FUNDS OR PETTY CASH). PAID BILLS TO BE PROCESSED AS IN 1. ABOVE.'

THE FIRST PROPOSAL AS TO INBOUND SHIPMENTS IS ESSENTIALLY NO DIFFERENT THAN THAT CONSIDERED IN B-135157 OF JANUARY 6, 1959, 38 COMP. GEN. 462, A COPY OF WHICH WAS FORWARDED TO YOU WITH OUR LETTER OF FEBRUARY 25, 1959. AS YOU WILL NOTE IT COMBINES SUGGESTION NO. 1 OF THE GENERAL SERVICES ADMINISTRATION (EXCEPT FOR A DIFFERENCE IN AMOUNT), WITH SUGGESTION NO. 2 RELATING TO PAYMENT FROM IMPREST FUNDS, AND NO. 3 AS TO AUDIT OF SUCH PAYMENTS. THE SECOND PROPOSAL AS TO OUTBOUND SHIPMENTS COMBINES SUGGESTIONS NOS. 1, 2 AND 3 OF THE GENERAL SERVICES ADMINISTRATION WITH A PROPOSAL FOR PREPAYMENT OF THE COMMERCIAL BILLS OF LADING.

AS POINTED OUT IN OUR DECISION TO THE ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION, SUCH SUGGESTIONS WERE MADE THE MATTER OF THOROUGH STUDY BY OUR STAFF AND FOR THE REASONS SUMMARIZED THEREIN MAY NOT PROPERLY BE APPROVED. IN ADDITION, THE PROVISION FOR PREPAYMENT OF THE COMMERCIAL BILLS OF LADING APPEARS TO BE PROHIBITED BY R.S. 3648; 31 U.S.C. 529 WHICH PROVIDES IN PART:

"NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE UNLESS AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. AND IN ALL CASES OF CONTRACT FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT.'

SEE 30 COMP. GEN. 348 APPLYING SUCH STATUTE TO TRANSPORTATION CHARGES.

ACCORDINGLY THE PROPOSALS NOW MADE AS QUOTED ABOVE MAY NOT BE APPROVED. ALSO, ON THE BASIS OF THE PRESENT RECORD WE HAVE CONCLUDED THAT THERE IS NOT A SUFFICIENT BASIS TO WARRANT CONTINUANCE OR EXPANSION OF THE PROCEDURE AUTHORIZED ON A TRIAL BASIS BY OUR LETTER OF APRIL 4, 1957, AND THOSE PROCEDURES SHOULD BE DISCONTINUED AS SOON AS IT IS PRACTICABLE TO DO SO.

WITH REGARD TO THE FOUR PROBLEM AREAS SET OUT IN MR. LAMPHERE'S LETTER OF JUNE 25, 1959, OUR VIEWS ARE AS FOLLOWS:

(1) SINCE THE PROSTHETIC APPLIANCES ARE NOT GOVERNMENT PROPERTY UNTIL THEIR ARRIVAL AT THE FIELD STATION, THERE IS NO REQUIREMENT THAT THEY MOVE ON GOVERNMENT BILLS OF LADING, AND WHERE THE FREIGHT IS NOT PREPAID BY THE FAMILY OF THE DECEASED VETERAN, CONSIDERING THE SMALL AMOUNT INVOLVED, AND YOUR REPORT THAT SUCH FREIGHT HAS HISTORICALLY BEEN PAID FROM PETTY CASH OR IMPREST FUNDS, WE WILL NOT OBJECT TO THE CONTINUANCE OF SUCH PRACTICE.

(2) IT WOULD APPEAR THAT MORE REALISTIC SCHEDULING OF MOVIE FILM EXHIBITIONS AT V.A. HOSPITALS MIGHT MAKE THE MAILING OF THESE FILMS FEASIBLE. THE USE OF PARCEL POST MIGHT BE PRACTICABLE IN SHIPPING DRUGS, PROSTHETIC DEVICES AND RECORDS TO PATIENTS SO AS TO REDUCE THE NEED FOR USE OF PASSENGER BUSSES FOR SUCH TRANSPORTATION. ALSO, IF SUCH SERVICES ARE REQUIRED, IT WOULD APPEAR THAT ARRANGEMENTS COULD BE WORKED OUT WITH THE BUS COMPANIES CONCERNED TO ACCEPT GOVERNMENT BILLS OF LADING.

(3) WHERE, BY VIRTUE OF CONTRACTUAL PROVISIONS, SHIPMENTS ON COMMERCIAL BILLS OF LADING ARE REQUIRED AND SAVINGS TO THE GOVERNMENT ACCRUE BY REASON OF POOLING GOVERNMENT PROPERTY WITH THAT PRIVATELY OWNED TO SECURE CARLOAD OR TRUCKLOAD RATES, NO OBJECTION IS PERCEIVED TO THE USE OF COMMERCIAL BILLS OF LADING.

(4) IN VIEW OF THE FACT THAT THESE SHIPMENTS ARE MADE IN A FOREIGN COUNTRY, YOUR REPORT THAT THE CARRIERS WILL NOT ACCEPT GOVERNMENT BILLS OF LADING AND THE SMALL AMOUNT OF THE FREIGHT CHARGES ($1.30 AVERAGE PER SHIPMENT) WE WILL INTERPOSE NO OBJECTION TO THE CONSIGNEE-FIELD EXAMINERS PAYING THE COLLECT CHARGES AND CLAIMING REIMBURSEMENT ON THEIR TRAVEL REIMBURSEMENT VOUCHERS.