B-135157, JANUARY 6, 1959, 38 COMP. GEN. 462

B-135157, JANUARY 6, 1959, 38 COMP. GEN. 462

TRANSPORTATION - GOVERNMENT PROPERTY - SMALL SHIPMENTS - IMPREST FUNDS - DOCUMENTATION A THOROUGH STUDY OF SUGGESTED CHANGES INCIDENT TO TRANSPORTATION OF GOVERNMENT PROPERTY (1) TO ELIMINATE THE REQUIREMENT FOR THE USE OF GOVERNMENT BILLS OF LADING ON SHIPMENTS OF GOVERNMENT PROPERTY WHEN THE TRANSPORTATION CHARGES DO NOT EXCEED $15, (2) PERMIT THE USE OF IMPREST FUNDS FOR PAYMENT OF TRANSPORTATION CHARGES OF $15 OR LESS, (3) TO ELIMINATE SUBMISSION OF DOCUMENTATION ON SUCH PAYMENTS AND, (4) TO ELIMINATE THE REQUIREMENT FOR CARRIER CERTIFICATION ON BILLS FOR TRANSPORTATION AND ACCESSORIAL SERVICES, INDICATES THAT THE CHANGES WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT AND ARE, THEREFORE, NOT RECOMMENDED FOR ADOPTION. A PROPOSAL FOR ELIMINATING THE USE OF GOVERNMENT BILLS OF LADING ON SHIPMENTS OF GOVERNMENT PROPERTY WHEN THE TRANSPORTATION CHARGES DO NOT EXCEED $15 IS NOT RECOMMENDED FOR ADOPTION IN VIEW OF THE COMPLEXITIES OF CURRENT FREIGHT CLASSIFICATIONS AND TARIFFS WHICH MAKE DETERMINATION OF TRANSPORTATION COSTS IN ADVANCE OF SHIPMENT IMPRACTICAL, THE COST OF SUBSTITUTE DOCUMENTS OR CHANGES IN ORGANIZATIONAL PROCEDURES WHICH MIGHT EXCEED ANY POTENTIAL SAVINGS, AND THE POSSIBILITY THAT THE PROPOSAL MIGHT TEND TO JEOPARDIZE SAVINGS UNDER REDUCED RATE TENDERS. THE PROPOSAL FOR USE OF IMPREST FUNDS TO PAY TRANSPORTATION AND RELATED CHARGES WHICH DO NOT EXCEED $15 WOULD NOT RESULT IN ANY SUBSTANTIAL REDUCTION IN THE WORKLOAD AT THE RECEIVING OR SHIPPING INSTALLATIONS AND WOULD NOT BE CONSISTENT WITH THE MARKED TREND IN INDUSTRY TO DISCONTINUE CASH PAYMENT PROCEDURES AND SUBSTITUTE CREDIT ARRANGEMENTS AND MECHANIZED BILLING TECHNIQUES AND, THEREFORE, ITS ADOPTION IS NOT RECOMMENDED. ELIMINATION OF THE REQUIRED DOCUMENTATION FOR PAYMENT OF TRANSPORTATION AND RELATED CHARGES AMOUNTING TO $15 OR LESS FROM IMPREST FUNDS IS NOT RECOMMENDED FOR ADOPTION SINCE IT WOULD MEAN A VIRTUAL ABANDONMENT OF AN EFFECTIVE AUDIT, WOULD CREATE DIFFICULTIES IN CONNECTION WITH LOSS AND DAMAGE CLAIMS, AND WOULD MAKE THE TASK OF SETTLEMENT OF BILLS MORE DIFFICULT AND MORE TIME CONSUMING, THEREFORE THE CHANGE IS NOT RECOMMENDED. ELIMINATION OF THE CERTIFICATION REQUIREMENT ON BILLS FOR TRANSPORTATION OR ACCESSORIAL SERVICES IS NOT APPROVED IN VIEW OF THE IMPORTANT FUNCTION THE CERTIFICATION SERVES, IN THAT CARRIERS WILL TEND TO BE MORE CAREFUL IN THE BILLINGS, AND IN VIEW OF THE ACCORDED CERTIFICATION WEIGHT IN LITIGATION TO DETERMINE THE RIGHTS AND DUTIES OF THE PARTIES TO THE TRANSACTION.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JANUARY 6, 1959:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 31, 1958, IN WHICH YOU MAKE REFERENCE TO THE WORK OF THE TASK FORCE FOR REVIEW OF GOVERNMENT PROCUREMENT POLICIES AND PROCEDURES, WITH RESPECT TO CHANGES IN EXISTING PROCEDURES AND PRACTICES DESIGNED TO PRODUCE ECONOMIES AND IMPROVEMENTS IN GOVERNMENT PROCUREMENT, TRANSPORTATION, PROPERTY, FINANCIAL AND PAPERWORK MANAGEMENT. YOU SUBMIT IN LINE WITH THE OBJECTIVES OF SUCH WORK A REPORT OF A STUDY MADE BY THE GENERAL SERVICES ADMINISTRATION, IN COOPERATION WITH OTHER GOVERNMENT DEPARTMENTS AND AGENCIES, CONCERNING THE ELIMINATION OF HIGH COST DOCUMENTATION ON LOW COST TRAFFIC. THE REPORT CONCLUDES WITH SPECIFIC SUGGESTIONS OR RECOMMENDATIONS FOR CHANGES IN EXISTING PRACTICES AND PROCEDURES, AS FOLLOWS:

1. ELIMINATE THE REQUIREMENT FOR THE USE OF GOVERNMENT BILLS OF LADING ( GBL) FORMS ON SHIPMENTS OF GOVERNMENT PROPERTY WHENEVER THE TRANSPORTATION CHARGES DO NOT EXCEED $15 (EXCLUSIVE OF 3 PERCENT FEDERAL TRANSPORTATION TAX).

2. AUTHORIZE PAYMENT BY IMPREST FUNDS OF TRANSPORTATION AND RELATED CHARGES AMOUNTING TO $15 AND LESS (EXCLUSIVE OF 3 PERCENT FEDERAL TRANSPORTATION TAX).

3. ELIMINATE THE REQUIREMENT FOR SUBMISSION OF DOCUMENTATION OF SUCH PAYMENTS TO THE TRANSPORTATION DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR CENTRALIZED AUDIT.

4. ELIMINATE THE REQUIREMENT THAT ANY BILL OR INVOICE SUBMITTED BY TRANSPORTATION COMPANIES FOR TRANSPORTATION AND ACCESSORIAL CHARGES BE CERTIFIED BY REPRESENTATIVE OF THE CARRIER.

YOU EXPRESS THE VIEW THAT THE ADOPTION OF THESE SUGGESTIONS WILL PRODUCE CONSIDERABLE SAVINGS WHICH WILL RECUR ANNUALLY AND SUGGEST APPROPRIATE ACTION LOOKING TOWARDS THEIR ADOPTION. YOU STATE THAT ALLEVIATION OF THE PROBLEM OF HIGH COST DOCUMENTATION ON LOW COST TRAFFIC WILL PROMOTE THE OBJECTIVES OF FOUR MAJOR GOVERNMENT PROGRAMS, WHICH YOU DESCRIBE AS FOLLOWS:

1. IMPROVEMENT OF GOVERNMENT PROCUREMENT POLICIES AND PROCEDURES (BASED UPON THE PRESIDENT'S DIRECTIVE LEADING TO THE ESTABLISHMENT OF THE INTERAGENCY TASK FORCE FOR REVIEW OF GOVERNMENT PROCUREMENT POLICIES AND PROCEDURES).

2. IMPLEMENTATION OF THE GOVERNMENT-WIDE PAPERWORK MANAGEMENT PROGRAM (ALSO UNDERTAKEN AT THE DIRECTION OF THE PRESIDENT).

3. PROVIDING INTERAGENCY SERVICE AND LEADERSHIP IN THE FIELD OF TRAFFIC MANAGEMENT AND TRANSPORTATION OF GOVERNMENT PROPERTY (PART OF THE PURPOSE IN THE ESTABLISHMENT OF THE SEPARATE TRANSPORTATION AND PUBLIC UTILITY SERVICE ( TPUS) WITHIN THE GENERAL SERVICE ADMINISTRATION).

4. IMPROVEMENT IN GOVERNMENT FISCAL MANAGEMENT.

WE ARE VITALLY INTERESTED IN THE FURTHERANCE OF THE FOUR GOVERNMENT WIDE PROGRAMS MENTIONED, AND ARE PLEASED TO RECEIVE AND TO GIVE CONSIDERATION TO SUGGESTIONS FOR CHANGES IN EXISTING PRACTICES AND PROCEDURES WHICH ARE DESIGNED TO AID IN THE ATTAINMENT OF SUCH OBJECTIVES.

AS A MATTER OF FACT, AT THE TIME OF RECEIPT OF YOUR LETTER OF JANUARY 31, 1958, WE HAD PREVIOUSLY RECEIVED OTHER SUGGESTIONS TO AUTHORIZE THE PAYMENT FROM IMPREST FUNDS OF TRANSPORTATION AND RELATED CHARGES WHEN LESS THAN A STATED MINIMUM AMOUNT AND HAD COMMENCED AN INDEPENDENT STUDY BY OUR STAFF TO DETERMINE THE FEASIBILITY OF SUCH A CHANGE IN EXISTING PROCEDURES. SINCE THE TWO MATTERS WERE SO NEARLY IDENTICAL, WE AWAITED COMPLETION OF OUR STUDY BEFORE REPLYING TO YOUR LETTER.

DURING THE COURSE OF THE STUDY WHICH WE MADE, MEMBERS OF OUR STAFF INTERVIEWED MORE THAN 80 INDIVIDUAL GOVERNMENT EMPLOYEES ASSIGNED TO DUTY AT 11 SEPARATE GOVERNMENT INSTALLATIONS. VISITS WERE MADE TO THE HOME OFFICES OF 14 RAIL AND MOTOR COMMON CARRIERS AND INTERVIEWS WERE CONDUCTED WITH RESPONSIBLE OFFICIALS OF 9 INDUSTRIAL FIRMS WHO REGULARLY SUPPLY GOODS TO A NUMBER OF GOVERNMENT DEPARTMENTS AND AGENCIES. IN ADDITION, SOME OF THE PROPOSALS WERE DISCUSSED WITH REPRESENTATIVES OF THE ASSOCIATION OF AMERICAN RAILROADS AND OF THE AMERICAN TRUCKING ASSOCIATIONS IN ORDER THAT WE MIGHT SECURE THE VIEWS AND REACTIONS OF A REPRESENTATIVE CROSS SECTION OF GOVERNMENTAL, CARRIER AND INDUSTRY PERSONNEL, WHO WOULD BE AFFECTED BY THE ADOPTION OF THE RECOMMENDATIONS. WE HAVE CONCLUDED, AS A RESULT OF THIS COMPREHENSIVE STUDY, THAT NONE OF THE FOUR SPECIFIC RECOMMENDATIONS WOULD BENEFIT THE GOVERNMENT'S INTERESTS. WE WILL DISCUSS EACH OF THE FOUR RECOMMENDATIONS HEREINAFTER AND, IN CONNECTION WITH EACH, INDICATE THE REASONS FOR OUR CONCLUSIONS.

SUGGESTION NO. 1. ELIMINATE THE REQUIREMENT FOR THE USE OF GOVERNMENT BILLS OF LADING ( GBL) FORMS ON SHIPMENTS OF GOVERNMENT PROPERTY WHENEVER THE TRANSPORTATION CHARGES DO NOT EXCEED $15 (EXCLUSIVE OF FEDERAL TRANSPORTATION TAX).

THE RESULTS OF OUR STUDY INDICATE THAT THIS SUGGESTION IS UNDESIRABLE FOR THE FOLLOWING REASONS:

1. ANY DOLLAR DEFINITION OF SMALL SHIPMENTS IS BELIEVED TO BE UNREALISTIC, DUE TO THE DIFFICULTY INHERENT IN THE COMPUTATION OF TRANSPORTATION COSTS IN ADVANCE OF SHIPMENT. THE COMPLEXITIES OF CURRENT FREIGHT CLASSIFICATIONS AND FREIGHT TARIFFS AND THE LACK OF A COMPLETE TARIFF FILE AT ALL SHIPPING POINTS WILL FREQUENTLY REDUCE ANY ATTEMPT TO DETERMINE TRANSPORTATION COSTS IN ADVANCE OF SHIPMENT TO NOTHING MORE THAN A GUESS ON THE PART OF A SHIPPER. FOR THESE REASONS ALONE, IT WOULD NOT BE PRACTICAL TO ADOPT THIS SUGGESTION, SINCE THE DETERMINATION OF THE UNIT COST OF THE TRANSPORTATION WOULD BE REQUIRED TO BE MADE BEFORE THE GOODS ARE TENDERED TO THE INITIAL CARRIER AT THE POINT OF ORIGIN OF THE SHIPMENT.

2. MULTIPLICITY OF PROCEDURES IN AND OF ITSELF TENDS TO CREATE CONFUSION FOR THE GOVERNMENT SHIPPER, THE CARRIERS, AND FOR VENDORS SUPPLYING GOODS TO THE GOVERNMENT. MANY OF THE ADVERSE CRITICISMS ADVANCED TO OUR STUDY COMMITTEE WERE GENERATED BY THE EXISTENCE OF CURRENTLY AUTHORIZED DEVIATIONS OR EXCEPTIONS TO OUR REGULATIONS WHICH GENERALLY REQUIRE THE USE OF GOVERNMENT BILLS OF LADING FOR ALL SHIPMENTS OF GOVERNMENT PROPERTY. THE ADOPTION OF YOUR FIRST SUGGESTION WOULD SERVE MERELY TO ADD TO WHATEVER BASIS FOR CRITICISM EXISTS IN THIS RESPECT.

3. THE MOVEMENT OF ANY SIGNIFICANT VOLUME OF GOVERNMENT FREIGHT ON COMMERCIAL BILLS OF LADING, REGARDLESS OF THE UNIT COST OF THE TRANSPORTATION SERVICES, WILL CREATE ORGANIZATIONAL, OPERATIONAL, AND ACCOUNTING PROBLEMS FOR THE CARRIERS AS WELL AS FOR THE GOVERNMENT PROCUREMENT, ACCOUNTABLE, AND TRAFFIC PERSONNEL. NUMEROUS CHANGES WOULD BE REQUIRED IN ESTABLISHED PROCEDURES IN ORDER TO GIVE EFFECT TO THE AUTHORIZATION HERE SOUGHT TO USE COMMERCIAL BILLS OF LADING RATHER THAN GOVERNMENT BILLS OF LADING FOR A LARGE SEGMENT OF THE TOTAL NUMBER OF SHIPMENTS OF GOVERNMENT PROPERTY. SUCH CHANGES MIGHT RESULT IN INCREASED OVERALL COSTS, BOTH TO THE CARRIERS AND TO THE GOVERNMENT.

4. REGARDLESS OF THE FORM OF BILL OF LADING UTILIZED FOR THE SMALL SHIPMENTS, THE SHIPPER AT THE POINT OF ORIGIN, WHETHER A GOVERNMENT EMPLOYEE OR AN EMPLOYEE OF THE VENDOR OF THE GOODS, WOULD BE REQUIRED TO FURNISH THE CARRIER A WRITTEN DESCRIPTION OF THE GOODS TO BE SHIPPED, THE NAMES OF THE CONSIGNOR AND THE CONSIGNEE, AND WOULD BE REQUIRED TO DESIGNATE WHO IS TO PAY THE TRANSPORTATION CHARGES.

5. THERE IS NO MATERIAL DIFFERENCE IN THE AMOUNT OF SHIPPER SUPPLIED INFORMATION THAT MUST APPEAR ON BOTH THE COMMERCIAL AND THE GOVERNMENT BILL OF LADING. SEVERAL OF THE VENDORS INTERVIEWED BY OUR STAFF MEMBERS REPORTED THAT NO GREATER TIME OR EFFORT WAS REQUIRED TO PREPARE A GOVERNMENT BILL OF LADING THAN THAT REQUIRED TO PREPARE A COMMERCIAL BILL OF LADING. SOME EXPRESSED A PREFERENCE FOR THE GOVERNMENT BILL OF LADING BECAUSE OF THEIR UNIFORMITY AND THE NOTATIONS THEREON CONCERNING PROCUREMENT CONTRACTS.

6. THE GOVERNMENT BILL OF LADING NOW IN USE HAS BEEN DEVELOPED OVER THE YEARS WITH THE ASSISTANCE AND COOPERATION OF THE CARRIERS. SPECIFIC USES FOR THE SEVERAL COPIES NOW PREPARED ALONG WITH THE ORIGINAL GOVERNMENT BILL OF LADING HAVE BEEN DEVISED AND INCORPORATED INTO THE ACCOUNTING SYSTEMS OF THE CARRIERS AND THOSE OF THE GOVERNMENT. THE ADOPTION OF YOUR FIRST SUGGESTION WOULD REQUIRE EITHER (A) THE USE OF SUBSTITUTE DOCUMENTS, OR (B) SUBSTANTIAL CHANGES IN THE EXISTING ACCOUNTING SYSTEMS AND PROCEDURES. THE COST OF THE SUBSTITUTE DOCUMENTS OR THE CHANGES IN PROCEDURES COULD WELL EXCEED ANY POTENTIAL SAVINGS TO BE REALIZED BY THE ADOPTION OF THIS SUGGESTION.

7. MOST OF THE CARRIER REPRESENTATIVES INTERVIEWED BY OUR STAFF MEMBERS EXPRESSED THE FEAR THAT THE ADOPTION OF THIS SUGGESTION WOULD ADD TO THEIR COSTS. THE RAIL CARRIERS, IN PARTICULAR, WERE OF THE OPINION THAT THE ADOPTION OF THIS PROPOSAL WOULD REQUIRE RECONSIDERATION OF EXISTING REDUCED-RATE TENDERS ON GOVERNMENT TRAFFIC, AND STATED DEFINITELY THAT, IF APPROVED, THIS DUAL METHOD OF MAKING GOVERNMENT SHIPMENTS WOULD BE A FACTOR FOR CONSIDERATION IN CONNECTION WITH THE SERVICING OF REQUESTS FOR REDUCED RATES THAT MIGHT BE THEREAFTER PRESENTED TO THEM. WE BELIEVE THAT THE BENEFITS NOW REALIZED BY THE GOVERNMENT FROM THE REDUCED RATE TENDERS ARE FAR MORE SUBSTANTIAL THAN ANY POSSIBLE SAVINGS WHICH MIGHT RESULT FROM THE ADOPTION OF THIS SUGGESTION. CONSEQUENTLY WE DO NOT FAVOR THE ADOPTION OF A PROPOSAL THAT MIGHT TEND TO JEOPARDIZE THE SAVINGS BELIEVED TO BE AVAILABLE UNDER THE REDUCE RATE TENDERS.

SUGGESTION NO. 2. AUTHORIZE PAYMENT BY IMPREST FUNDS OF TRANSPORTATION AND RELATED CHARGES AMOUNTING TO $15 AND LESS (EXCLUSIVE OF 3 PERCENT FEDERAL TRANSPORTATION TAX).

ON THE BASIS OF OUR STUDY WE CANNOT SUPPORT THIS SUGGESTION FOR REASONS AS FOLLOWS:

1. NO SUBSTANTIAL REDUCTION IN WORKLOAD AT RECEIVING OR SHIPPING INSTALLATIONS COULD BE EXPECTED TO RESULT FROM THE ADOPTION OF THIS SUGGESTION. INSTEAD, WHEN CONSIDERED AT SPECIFIC LOCATIONS, A NEED FOR ADDITIONAL PERSONNEL WAS INDICATED.

2. THERE IS A MARKED TREND IN THE TRANSPORTATION INDUSTRY TOWARD THE SIMPLIFICATION OF COLLECTION PROCEDURES. THE PERCENTAGE OF REGULAR PATRONS OF THE CARRIERS WHO PAY FREIGHT BILLS IN CASH HAS BEEN STEADILY DECREASING. THE USE OF SIGHT DRAFTS, THE ESTABLISHMENT OF CLEARING HOUSES, AND THE DEVELOPMENT AND IMPROVEMENT OF MECHANIZED BILLING TECHNIQUES ILLUSTRATE THE ALMOST UNIVERSAL USE OF CREDIT ARRANGEMENTS IN THIS AREA.

3. NONE OF THE REPRESENTATIVES OF THE RAIL CARRIERS WITH WHOM WE DISCUSSED THIS PROPOSAL WERE IN FAVOR OF ITS ADOPTION. REPRESENTATIVES OF THE TRUCKING INDUSTRY, WHILE LESS EMPHATIC IN THEIR OPPOSITION, NEVERTHELESS FELT THAT CONSIDERABLE DIFFICULTIES COULD BE EXPECTED FROM THE ADOPTION OF THIS SUGGESTION. DELAYS AT THE CASHIERS' WINDOWS, UNION DIFFICULTIES, AND THE CONFUSION THAT NATURALLY WOULD RESULT FROM THE USE OF DUAL PROCEDURES, ESPECIALLY IN THE CASE OF PREPAID SHIPMENTS, WERE AMONG THE ANTICIPATED DIFFICULTIES. REPRESENTATIVES OF BOTH THE ASSOCIATION OF AMERICAN RAILROADS AND THE AMERICAN TRUCKING ASSOCIATIONS EXPRESSED OPPOSITION TO CASH PAYMENTS AND, SPECIFICALLY, TO THIS PROPOSAL.

SUGGESTION NO. 3. ELIMINATE THE REQUIREMENT FOR SUBMISSION OF DOCUMENTATION OF SUCH PAYMENTS TO THE TRANSPORTATION DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR CENTRALIZED AUDIT.

WE CANNOT FAVORABLY CONSIDER THIS SUGGESTION FOR THE FOLLOWING REASONS:

1. APPARENTLY THIS SUGGESTION WOULD MEAN A VIRTUAL ABANDONEMENT OF ANY EFFECTIVE AUDIT OF SUCH PAYMENTS. WHILE THE AMOUNTS PAID ON THE INDIVIDUAL SMALL SHIPMENTS MAY BE INCONSEQUENTIAL, THE REPORTED NUMBER OF SUCH SMALL SHIPMENTS MADE ANNUALLY BY THE SEVERAL DEPARTMENTS AND AGENCIES CONCERNED IS SO LARGE AS TO WARRANT THE CONCLUSION THAT THE AGGREGATE AMOUNT OF SUCH CHARGES REPRESENTS A SUBSTANTIAL DISBURSEMENT OF PUBLIC FUNDS.

2. IN THE INTERVIEWS WHICH OUR STAFF MEMBERS HAD WITH REPRESENTATIVES OF INDUSTRIAL FIRMS, IT WAS LEARNED THAT ALL FREIGHT BILLS OF SUCH FIRMS, REGARDLESS OF THE AMOUNT INVOLVED, ARE AUDITED PRIOR TO PAYMENT, AT WHICH TIME A MINIMUM AS LOW AS $1 IS OBSERVED FOR THE CORRECTION OF ERRORS. AFTER PAYMENT, THESE FREIGHT BILLS ARE AGAIN AUDITED BY MORE EXPERIENCED TRANSPORTATION PERSONNEL, EMPLOYED EITHER BY THE INDUSTRY INVOLVED, OR BY PRIVATE RATE AUDIT FIRMS, WHO CONTRACT TO AUDIT THE FREIGHT BILLS GENERALLY ON A FIXED PERCENTAGE OF THE AMOUNTS RECOVERED DURING THE COURSE OF SUCH AUDIT. IN ALL INSTANCES, IT WAS REPORTED THAT THESE AUDIT PROGRAMS MORE THAN PAID THEIR OWN COSTS, AND OUR OWN EXPERIENCES IN THE AUDIT OF FREIGHT BILLS WHEN GOVERNMENT BILLS OF LADING ARE USED HAS PRODUCED THE SAME RESULTS.

3. IN ADDITION TO THE MONETARY BENEFITS OF A DETAILED AUDIT PROGRAM, THERE ARE OTHER RESULTS WHICH JUSTIFY THE MAINTENANCE OF SUCH PROGRAMS. SUCH AN EXAMINATION OF PAID FREIGHT BILLS FREQUENTLY DISCLOSES IRREGULARITIES IN SHIPPING PRACTICES WHICH, WHEN CORRECTED, RESULT IN SAVINGS FOR THE FUTURE. AN EXAMPLE OF SUCH IRREGULARITIES IS THE FAILURE TO PROPERLY DESCRIBE THE GOODS SHIPPED IN ORDER TO INSURE THE BENEFITS OF THE LOWEST AVAILABLE TRANSPORTATION SERVICES NOT ACTUALLY NEEDED IN GIVEN INSTANCES. A DETAILED AUDIT IS AN ESSENTIAL PART OF THE PROPER MANAGEMENT OF FEDERAL PROCUREMENT PROGRAMS, AND WE COULD NOT RECOMMEND ADOPTION OF A SUGGESTED CHANGE THAT WOULD RESULT IN THE ELIMINATION OF AN EFFECTIVE AUDIT ON SO LARGE A PORTION OF THE TOTAL NUMBER OF GOVERNMENT SHIPMENTS. 4. THE PAYMENT OF TRANSPORTATION AND ACCESSORIAL CHARGES FROM IMPREST FUNDS WITHOUT THE DOCUMENTATION OF SUCH CHARGES FOR AUDIT BY OUR TRANSPORTATION DIVISION WOULD TEND TO CREATE DIFFICULTIES IN CONNECTION WITH LOSS AND DAMAGE CLAIMS, SUPPLEMENTAL BILLS, AND TRANSIT ARRANGEMENTS, SINCE THE TASK OF FINDING OUT WHAT PAYMENTS HAD BEEN MADE ORIGINALLY FOR THE SERVICES INVOLVED WOULD BE ALMOST IMPOSSIBLE. WE WOULD NOT BE WARRANTED IN AUTHORIZING ANY PROCEDURE WHICH WOULD MAKE THE TASK OF THE SETTLEMENT OF SUPPLEMENTAL BILLS OR OTHER CLAIMS BY OR AGAINST THE UNITED STATES ANY MORE DIFFICULT AND TIME CONSUMING THAN IS NOW THE CASE.

SUGGESTION NO. 4. ELIMINATE THE REQUIREMENT THAT ANY BILL OR INVOICE SUBMITTED BY TRANSPORTATION COMPANIES FOR TRANSPORTATION AND ACCESSORIAL CHARGES BE CERTIFIED BY A REPRESENTATIVE OF THE CARRIER.

THIS SUGGESTION WOULD APPLY TO ALL TRANSPORTATION BILLS, REGARDLESS OF THE UNIT COST OF THE TRANSPORTATION SERVICES OR OF THE TYPE OF BILL OF LADING USED TO MOVE THE TRAFFIC, AND WOULD REQUIRE A REVISION OF 5 GAO MANUAL 3060.25.

WE WERE AWARE OF THE "JUSTIFICATIONS" FOR THIS SUGGESTION, AS CONTAINED IN THE REPORT OF YOUR ADMINISTRATION, WHEN OUR GENERAL REGULATIONS 134--- NOW SET FORTH IN OUR MANUAL OF POLICY AND PROCEDURES -- WAS REVISED LAST YEAR. IN SPITE OF THE FACT THAT NO RELIANCE IS PLACED ON THE CERTIFICATION AT THE TIME OF THE ADMINISTRATIVE AUDIT AND PAYMENT OF THE CARRIERS' BILLS, THERE ARE OTHER CONSIDERATIONS AS DETAILED BELOW, WHICH WE BELIEVE ARE OF SUFFICIENT IMPORTANCE TO CONTINUE THE REQUIREMENT FOR CERTIFICATION OF SUCH BILLS.

1. UNLIKE INVOICES FOR GOODS OR OTHER SERVICES, WHERE THE TERMS OF PAYMENT ARE FIRMLY FIXED BY CONTRACT AND READILY AVAILABLE FROM A PERUSAL OF THE CONTRACT TERMS AND CONDITIONS, THE CHARGES FOR TRANSPORTATION SERVICES ARE FIXED BY LAW AND PUBLISHED IN TARIFFS FILED WITH THE REGULATORY COMMISSIONS OR COVERED BY SPECIAL AGREEMENTS WITH THE CARRIERS. THESE RATES AND CHARGES ARE SELDOM, IF EVER, SPELLED OUT IN DETAIL IN THE BILLS OF LADING OR OTHER SUPPORTING DOCUMENTS ATTACHED TO THE CARRIERS' BILLS FOR TRANSPORTATION SERVICES, BUT CAN ONLY BE DETERMINED FROM A DETAILED EXAMINATION OF THE SHIPPING DOCUMENTS AND OF THE TARIFFS OR SPECIAL RATE TENDERS WHICH ARE AUTOMATICALLY INCORPORATED INTO THE CONTRACTS OF AFFREIGHTMENT MADE BETWEEN THE PARTIES. WE BELIEVE THAT THE CERTIFICATION OF BILLS FOR TRANSPORTATION AND ACCESSORIAL CHARGES SERVES AN IMPORTANT FUNCTION, IN THAT CARRIERS WILL TEND TO BE MORE CAREFUL IN THEIR BILLINGS IF A CERTIFICATION IS REQUIRED.

2. OUR STAFF MEMBERS DISCUSSED THIS PROPOSAL WITH THE SEVERAL CARRIER REPRESENTATIVES INTERVIEWED DURING THE COURSE OF OUR STUDY AND WERE ADVISED THAT THE CARRIERS DID NOT CONSIDER THE REQUIREMENT FOR CERTIFICATION AS BEING AN UNREASONABLY BURDENSOME REQUIREMENT. THEY INDICATED THAT THE SIGNING OF THE CERTIFICATION ON THE FACE OF THE STANDARD VOUCHER FORMS SERVED TO IDENTIFY THE EMPLOYEE WHO IS RESPONSIBLE FOR THE PREPARATION OF THE BILL AND THAT THIS IDENTIFICATION WOULD BE REQUIRED EVEN IF THE GOVERNMENT'S REQUIREMENT FOR CERTIFICATION SHOULD BE RESCINDED.

3. WHILE THE PRESENCE OF THE CERTIFICATION MAY NOT BE OF A GREAT DEAL OF SIGNIFICANCE TO THE ADMINISTRATIVE DEPARTMENTS AND AGENCIES, THERE ARE A NUMBER OF INSTANCES WHERE LITIGATION SUBSEQUENTLY ENSUED IN WHICH THE CERTIFICATION WAS ACCORDED GREAT WEIGHT IN THE DETERMINATION OF THE RIGHTS AND DUTIES OF THE PARTIES TO THE TRANSACTION. SEE, IN THIS CONNECTION, UNITED STATES V. COLLYER-1INSULATED WIRE COMPANY, 94 F. SUPP. 493 AND R. E. SHUTT V. UNITED STATES, 218 F.2D. 10, REHEARING DENIED, CERTIORARI DENIED BY THE SUPREME COURT, 350 U.S. 822 (1954). UNDER THE CIRCUMSTANCES, PARTICULARLY IN VIEW OF THE PROVISION FOR PAYMENT OF BILLS FOR TRANSPORTATION CHARGES UPON PRESENTATION PRIOR TO AUDIT BY THE GENERAL ACCOUNTING OFFICE AS SET OUT IN SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED, 49 U.S.C. 66, WE ARE OF THE VIEW THAT THE REQUIREMENT FOR CERTIFICATION OF CARRIERS' BILLS FOR TRANSPORTATION AND ACCESSORIAL CHARGES SHOULD NOT BE RELAXED. THEREFORE, THIS SUGGESTION CANNOT BE APPROVED.

WHILE WE HAVE NOT BEEN ABLE, FOR THE REASONS OUTLINED, TO APPROVE THE SPECIFIC SUGGESTIONS OR RECOMMENDATIONS FOR CHANGES IN EXISTING PROCEDURES THAT YOU HAVE PRESENTED, WE ARE NOT UNMINDFUL OF THE PROBLEM OF HIGH COSTS OF DOCUMENTATION AND ADMINISTRATION ON LOW COST TRAFFIC. RATHER THAN A SUBSTITUTION OF COMMERCIAL TYPE BILLS OF LADING FOR THE GOVERNMENT FORMS NOW REQUIRED TO BE USED ON SUCH TRAFFIC, IT SEEMS TO US THAT THE INTEREST OF THE GOVERNMENT WOULD BE BETTER SERVED BY THE ADOPTION OF MORE EFFICIENT SHIPPING PRACTICES AND PROCEDURES DESIGNED TO CONSOLIDATE THE SMALL INDIVIDUAL SHIPMENTS WHENEVER FEASIBLE INTO LARGER SHIPPING UNITS. THIS WOULD HAVE THE EFFECT OF REDUCING THE NUMBER OF SEPARATE SHIPMENTS TO BE MADE AND, IN MANY INSTANCES, MIGHT RESULT IN SUBSTANTIAL SAVINGS IN TRANSPORTATION COSTS, ESPECIALLY IF SUFFICIENT QUANTITIES CAN BE ASSEMBLED TO MOVE IN CARLOAD OR TRUCKLOAD QUANTITIES. SEE ALSO THE PROCEDURE AUTHORIZED IN OUR LETTER OF AUGUST 9, 1955, B-123782, IN RESPONSE TO YOUR SUBMISSION OF APRIL 26, 1955, FOR ANOTHER EXAMPLE OF PROGRAMS WHICH MIGHT PROVE OF SUBSTANTIAL BENEFIT TOWARD THE SOLUTION OF THE SMALL FREIGHT SHIPMENT PROBLEM. WE UNDERSTAND THIS PROGRAM HAS NEVER BEEN IMPLEMENTED, DESPITE THE ASSURANCES CONTAINED IN LETTER DATED AUGUST 14, 1955, FROM THE ACTING DEPUTY COMMISSIONER, TRANSPORTATION AND PUBLIC UTILITIES SERVICE OF YOUR ADMINISTRATION.