B-141971, APR. 20, 1960

B-141971, APR. 20, 1960

TO MR. CARROLL F. GENOVESE, EXECUTIVE SECRETARY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 1, 1959, IN WHICH YOU REQUEST REVIEW OF OVERCHARGES DISCLOSED IN OUR AUDIT OF TRANSPORTATION CHARGES PAID TO THE REPUBLIC VAN AND STORAGE COMPANY AND DELCHER BROTHERS STORAGE COMPANY, MEMBERS OF YOUR ASSOCIATION, FOR NON DOMESTIC SHIPMENTS OF HOUSEHOLD GOODS WHICH WERE TRANSPORTED BETWEEN POINTS IN THE UNITED STATES AND POINTS IN JAPAN AND HAWAII AT VARIOUS TIMES DURING 1958.

REPUBLIC VAN AND STORAGE COMPANY AND DELCHER BROTHERS STORAGE COMPANY ORIGINALLY BILLED AND WERE PAID TRANSPORTATION CHARGES WHICH APPEAR TO HAVE BEEN BASED UPON RATES STATED IN MILITARY RATE TENDERS NOS. I.C.C. NO. 2 AND I.C.C. NO. 5. IN THE COMPUTATION OF THE CHARGES, THE RATE TENDERS SEEM TO HAVE BEEN TREATED AS BEING SUBJECT TO RESTRICTIVE ROUTING CONTAINED IN SERVICE TENDERS FILED BY THE CARRIERS AT THE VARIOUS MILITARY INSTALLATIONS. THE SERVICE TENDERS DESCRIBE THE TRANSPORTATION SERVICES TO BE PERFORMED BY THE CARRIER. THE CARRIERS FILE THESE SERVICE TENDERS TO SHOW THEIR QUALIFICATIONS, ABILITY AND WILLINGNESS TO PERFORM THE NECESSARY SERVICES FOR THE MOVEMENT OF HOUSEHOLD GOODS FOR MILITARY PERSONNEL.

UPON AUDIT OF THE PAYMENT VOUCHER, OUR OFFICE DETERMINED THAT THE CHARGES SHOULD HAVE BEEN COMPUTED ON THE BASIS OF THE RATES PUBLISHED IN THE MILITARY RATE TENDERS, BUT SUBJECT ONLY TO THE ROUTING PROVISIONS SHOWN THEREIN UNDER SECTION IV (THE NEAREST POINT OF EMBARKATION AND/OR DEBARKATION) AND SECTION V, AND NOT SUBJECT TO ROUTING RESTRICTIONS IN SERVICE TENDERS ON FILE WITH THE MILITARY INSTALLATIONS WHICH ARE INCONSISTENT WITH THE ROUTING SHOWN IN THE RATE TENDERS. THEREFORE, THE CARRIERS WERE ASKED TO REFUND THE OVERCHARGES.

TO SUPPORT YOUR REQUEST FOR REVIEW, YOU CONTEND THAT THE NON DOMESTIC SERVICE TENDER FILED BY THE CARRIERS WITH THE MILITARY INSTALLATIONS SHOULD BE CONSIDERED A BINDING CONTACT BETWEEN THE GOVERNMENT AND THE CARRIER. THIS CONTENTION, BASED ON THE FACTS SHOWN IN THE PRESENT RECORD, CANNOT BE SUSTAINED, SINCE THE SERVICE TENDER SEEMS TO BE LITTLE MORE THAN A DESCRIPTION OF THE CARRIER'S SERVICES WHICH ARE AVAILABLE FOR THE MOVEMENT OF HOUSEHOLD GOODS FOR MILITARY PERSONNEL. THIS VIEW IS EVIDENCED FURTHER BY THE TITLE OF THE SERVICE TENDER,"DESCRIPTION OF SERVICE----------------------------.' WHICH CERTAINLY CONNOTES

(DESTINATION) THAT THE SERVICE TENDER IS NOT AN OFFER TO ENTER INTO OR TO PERFORM A CONTRACT FOR THE CARRIAGE OF HOUSEHOLD GOODS, BUT IS BASICALLY A DESCRIPTION OF THE SERVICES MADE AVAILABLE BY THE CARRIERS. THE TYPE OF MILITARY RATE TENDER WITH WHICH WE ARE HERE CONCERNED (I.C.C. NOS. 2 AND 5) WAS MADE VOLUNTARILY TO THE GOVERNMENT PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT. IT IS IN THE NATURE OF A CONTINUING OFFER AND THE MANNER AND EFFECT OF ITS ACCEPTANCE IS SET FORTH IN ITEM 10 OF THE TENDER, WHICH PROVIDES, IN PERTINENT PART:

"THIS TENDER, WHEN ACCEPTED BY THE GOVERNMENT BY MAKING ANY SHIPMENT OR SETTLEMENT UNDER THE TERMS HEREOF OR OTHERWISE, WILL CONSTITUTE AN AGREEMENT BETWEEN THE PARTIES HERETO AS TO THE TRANSPORTATION SERVICES HEREIN DESCRIBED. * * *"

NOTHING IS STATED HERE ABOUT A PRIOR BINDING CONTRACT BASED UPON THE FILING OF THE SERVICE TENDER, NOR ABOUT ENTERING INTO A CONTINUING CONTRACT UPON TENDER OF THE FIRST SHIPMENT. SEE 37 COMP. GEN. 753 AND 39 ID. 352.

YOU CONTEND, ALSO, THAT THE RATES STATED IN THE MILITARY RATE TENDERS WERE RESTRICTED TO ROUTING THROUGH SPECIFIC PORTS NAMED IN SERVICE TENDERS ON FILE WITH THE MILITARY INSTALLATIONS. HOWEVER, AT THE TIME THESE SHIPMENTS MOVED THERE WAS NOTHING IN THE MILITARY RATE TENDER TO SHOW THAT THE RATES THEREIN WERE SUBJECT TO ANY PROVISIONS OR CONDITIONS IN THE CARRIERS' SERVICE TENDERS. IN FACT, THE RATE TENDER APPEARED, ON ITS FACE, TO BE COMPLETE IN ITSELF. INCIDENTALLY, WE NOTE THAT THIS OMISSION HAS BEEN CORRECTED AND THAT THE TITLE PAGE OF SUPPLEMENTS 7 AND 8 OF MILITARY RATE TENDER NO. 5, WHICH BECAME EFFECTIVE AFTER THESE SHIPMENTS MOVED, CONTAINS THE WORDS "SUBJECT TO CARRIER'S APPROVED SERVICE TENDER ON FILE.'

DURING THE YEAR 1958, ITEM 3E ON PAGE 2 OF BOTH OF THE MILITARY RATE TENDERS PROVIDED THAT THE ROUTES WERE "THE SAME AS B AND C ABOVE.' ITEMS 3B AND 3C PROVIDED THAT THE TENDER COVERED SHIPMENTS BETWEEN "POINTS IN THE UNITED STATES AND CANADA AND POINTS IN THE TERRITORY OF HAWAII.' DURING THE SAME PERIOD, SECTION IV OF THE TENDER UNDER THE HEADING "TRANSPORTATION RATES, APPLICATION,"READ: "/APPLICABLE BETWEEN POINTS WITHIN THE UNITED STATES OR CANADA AND NEAREST POINT OF EMBARKATION AND/OR DEBARKATION OF LOS ANGELES, OAKLAND AND SAN FRANCISCO, CALIFORNIA, NORFOLK,VIRGINIA, OR SEATTLE, WASHINGTON.)" LIKEWISE, SECTION V HAD NO ROUTING RESTRICTIONS. FROM READING THE ENTIRE TENDER, IT IS OUR VIEW THAT THE APPLICABLE CHARGES FOR SHIPMENTS SHOULD HAVE BEEN COMPUTED ON THE BASIS OF THE NEAREST POINT OF EMBARKATION AND/OR DEBARKATION, SINCE THE CARRIERS DID NOT INDICATE IN THE MILITARY RATE TENDER THE PORTS THROUGH WHICH THE CARRIERS WOULD MOVE THE TRAFFIC, ALTHOUGH THIS INFORMATION WAS CONTAINED IN SERVICE TENDERS ON FILE AT THE MILITARY INSTALLATIONS. EVEN IF THE RATE TENDER MADE SPECIFIC REFERENCE TO THE SERVICE TENDER (WHICH IT DID NOT), WITHOUT FURTHER SPECIFIC ROUTING INSTRUCTIONS IN THE RATE TENDER, THE SERVICE TENDER COULD REASONABLY BE CONSTRUED AS SHOWING THE PORTS THROUGH WHICH THE SHIPMENTS WOULD BE MOVED, AND THE RATE TENDER AS SHOWING THE PORTS THROUGH WHICH THE CHARGES FOR THE THROUGH SERVICE WOULD BE COMPUTED. THUS, THE CHARGES FOR THE SERVICE WOULD BE BASED ON THE NEAREST PORT, BUT THE CARRIER WOULD BE FREE TO MOVE THE SHIPMENT THROUGH THE PORT MOST CONVENIENT AND ECONOMICAL FROM A TRANSPORTATION OR OPERATING STANDPOINT. THEREFORE, ON THE BASIS OF THE COMPLETE SEPARABILITY OF THE SERVICE TENDER AND THE RATE TENDER, INSOFAR AS UNITY, CROSS-REFERENCING AND INCONSISTENT PROVISIONS ARE CONCERNED, WE WOULD NOT BE JUSTIFIED--- IN THE ABSENCE OF A FINAL JUDICIAL DETERMINATION TO THE CONTRARY--- IN PAYING ANY CHARGES IN EXCESS OF THOSE UPON WHICH OUR AUDIT ACTION HERE CONCERNED WAS PREDICATED.

ACCORDINGLY, IT APPEARS THAT OUR AUDIT ACTION ON THE SHIPMENTS HERE INVOLVED WAS CORRECT AND THE OVERCHARGES SHOULD BE REFUNDED PROMPTLY.