B-15415, MAY 21, 1941, 20 COMP. GEN. 793

B-15415, MAY 21, 1941, 20 COMP. GEN. 793

TRANSPORTATION - WATER, RAIL, OR MOTOR FREIGHT - COMPARATIVE COSTS ALTHOUGH, UNDER SECTION 321 (A), PART II, TITLE III, OF THE TRANSPORTATION ACT OF 1940, ADVERTISING FOR BIDS FOR TRANSPORTATION SERVICES IS NOT REQUIRED "WHEN THE SERVICES REQUIRED CAN BE PROCURED FROM ANY COMMON CARRIER LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED," THERE IS NO AUTHORITY FOR PROCURING SUCH SERVICES FROM ONE COMMON CARRIER AT A COST IN EXCESS OF THAT FOR WHICH EQUALLY SATISFACTORY TRANSPORTATION COULD HAVE BEEN PROCURED--- WITHOUT ADVERTISING--- FROM ANOTHER QUALIFIED CARRIER. IN COMPUTING COMPARATIVE COSTS, UNDER SECTION 5, EXECUTIVE ORDER NO. 8588, DATED NOVEMBER 7, 1940, TO DETERMINE IN ADVANCE OF SHIPMENT THE MOST ECONOMICAL MEANS--- WATER, RAIL, OR MOTOR FREIGHT--- OF TRANSPORTING THE EFFECTS OF A CIVILIAN EMPLOYEE UPON CHANGE OF STATION, COSTS OF PACKING, CRATING, ETC., CONSIDERED, WHERE THE ACTUAL TOTAL WEIGHT IS UNKNOWN UNTIL THE TIME OF ACTUAL SHIPMENT, THE AVERAGE OF THE ESTIMATED WEIGHTS SUBMITTED BY BIDDERS ON PACKING, CRATING, C., SHOULD BE USED RATHER THAN THE LOWEST OR HIGHEST ESTIMATED WEIGHT, OR USING FOR EACH BIDDER THE ESTIMATED WEIGHT SUBMITTED BY HIM. EVEN THOUGH, AFTER INVITING BIDS FOR PACKING, CRATING, ETC., THE HOUSEHOLD EFFECTS OF A CIVILIAN EMPLOYEE UPON CHANGE OF STATION, THE COST THEREOF, PLUS RAIL OR WATER TRANSPORTATION COST, EXCEEDS THE COST OF MOTOR FREIGHT, THE AWARD SHOULD NEVERTHELESS BE MADE FOR SHIPMENT BY RAIL OR WATER IF BY USING THE LESSER ARBITRARY $2.50 RATE PER HUNDRED POUNDS SAVING ON COST OF PACKING, CRATING, C., RESULTING FROM THE USE OF MOTOR FREIGHT, FIXED BY SECTION 5 OF EXECUTIVE ORDER NO. 8588, AS THE MAXIMUM SAVINGS ALLOWANCE FOR COST COMPARISON PURPOSES, THE COST OF THE RAIL OR WATER SHIPMENT IS THEN LESS THAN THE COST BY MOTOR FREIGHT. THE MAXIMUM AMOUNT WHICH MAY BE ALLOWED FOR PACKING, CRATING, ETC., THE EFFECTS OF A CIVILIAN EMPLOYEE UPON CHANGE OF STATION, IN DETERMINING WHETHER IT IS MORE ECONOMICAL TO SHIP THE EFFECTS BY RAIL, WATER, OR MOTOR FREIGHT, IS THE $2.50 PER HUNDRED POUNDS SPECIFIED IN SECTION 5 OF EXECUTIVE ORDER NO. 8588, BUT WHERE THE DETERMINATION IS TO BE MADE ONLY AS BETWEEN RAIL AND WATER CARRIERS THE SAID MAXIMUM ALLOWANCE PROVISION IS NOT FOR APPLICATION.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, MAY 21, 1941:

THERE HAVE BEEN CONSIDERED THE QUESTIONS PRESENTED IN YOUR LETTER OF MARCH 8, 1941, AS FOLLOWS:

THIS WILL REFER TO YOUR DECISION B-13987 OF JANUARY 10, 1941, ADDRESSED TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, AND WITH PARTICULAR REFERENCE TO THE LAST PARAGRAPH THEREOF WHEREIN YOU POINT OUT THAT SECTION 321A OF PART II, TITLE III, OF THE TRANSPORTATION ACT OF 1940, PUBLIC 785, APPROVED SEPTEMBER 18, 1940, PROVIDES SPECIFIC STATUTORY AUTHORITY FOR PROCURING TRANSPORTATION SERVICES WITHOUT ADVERTISING FOR BIDS WHEN THE SERVICES CAN BE PROCURED FROM ANY COMMON CARRIER LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED.

IN CONSIDERING THE ABOVE-MENTIONED STATUTORY AUTHORITY THE QUESTION ARISES AS TO WHETHER IT IS REQUIRED, PREPARATORY TO SHIPPING GOVERNMENT PROPERTY ON A GOVERNMENT BILL OF LADING, THAT THE ACTUAL LOWEST COST METHOD OF TRANSPORTATION BE DETERMINED AND THE SHIPMENT MOVE IN THAT MANNER, OR IS IT PERMISSIBLE FOR A GOVERNMENT SHIPPING OFFICER TO SELECT THE METHOD OF SHIPMENT WITHOUT REGARD TO COMPARATIVE COSTS, THAT IS, IF A SHIPMENT OF GOVERNMENT PROPERTY IS ROUTED BY MOTOR VAN AT A RATE NOT EXCEEDING THAT APPROVED BY THE INTERSTATE COMMERCE COMMISSION, YET AT A COST HIGHER THAN THAT INVOLVED HAD THE SHIPMENT MOVED BY RAIL, WILL YOUR OFFICE MAKE SETTLEMENT ON THE GOVERNMENT BILL OF LADING AT THE RATE CHARGED BY THE MOTOR-VAN CARRIER?

IN CONNECTION WITH THE MOVING OF EMPLOYEES' HOUSEHOLD GOODS AND EFFECTS FROM ONE STATION TO ANOTHER, CERTAIN INSTRUCTIONS ARE REQUESTED IN THE LIGHT OF EXECUTIVE ORDER NO. 8588, DATED NOVEMBER 7, 1940.

SECTION 3 OF THE EXECUTIVE ORDER PROVIDES---

" ALLOWANCES FOR PACKING, CRATING, UNPACKING, AND UNCRATING.--- THE ACTUAL COSTS OF PACKING, CRATING, UNPACKING, AND UNCRATING SHALL BE ALLOWED: PROVIDED, THAT NO CHARGES SHALL BE ALLOWED FOR THE PACKING, CRATING, UNPACKING, AND UNCRATING OF PROPERTY IN EXCESS OF THE WEIGHT OR MEASUREMENT ALLOWABLE UNDER SECTION 2 OF THESE REGULATIONS.'

SECTION 5 OF THE EXECUTIVE ORDER PROVIDES IN PART " SHIPMENT SHALL BE MADE BY THE MOST ECONOMICAL MEANS, TAKING INTO CONSIDERATION THE COSTS OF PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING: PROVIDED, THAT, IN COMPUTING COMPARATIVE COSTS, THE ALLOWANCE WHICH MAY BE MADE FOR THE SAVING OF CHARGES FOR PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING, RESULTING FROM THE USE OF MOTOR FREIGHT SHALL IN NO CASE EXCEED $2.50 PER HUNDRED POUNDS.' ( ITALICS SUPPLIED.)

THERE SEEMS TO BE NOTHING IN THE EXECUTIVE ORDER 8588, OR IN THE TRANSPORTATION ACT OF 1940, WHICH EXEMPTS THE PROCUREMENT OF SERVICES AND MATERIALS INVOLVED IN PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING, FROM THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, WHEN THE COSTS INVOLVED EXCEED THE STATUTORY LIMITATION ALLOWED FOR PROCUREMENTS WITHOUT INVITING COMPETITIVE BIDS. OUR INTERPRETATION OF THE EXEMPTION FROM ADVERTISING FOR BIDS AS STATED IN SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, IS THAT IT APPLIES ONLY TO THE ACTUAL TRANSPORTATION SERVICES AS RENDERED BY COMMON CARRIERS.

ONE PROBLEM WHICH HAS RECURRED FROM TIME TO TIME IS THAT THE WEIGHT, EITHER NET OR GROSS, OF THE HOUSEHOLD GOODS TO BE SHIPPED CANNOT BE ARRIVED AT PRIOR TO SHIPMENT, EXCEPT BY GUESSWORK. WHEN BIDS ARE INVITED FOR CRATING AND PACKING, BIDDERS ARE REQUESTED TO STATE THE ESTIMATED GROSS WEIGHT. THESE VARY SOMETIMES AS MUCH AS 100 PERCENT. IN THE ABSENCE OF ANY PERTINENT INSTRUCTIONS IN EXECUTIVE ORDER 8588, WE ARE IN DOUBT AS TO WHETHER THE SHIPPING WEIGHT IN CONNECTION WITH MAKING AN AWARD SHOULD BE DETERMINED BY (1) TAKING THE LOWEST ESTIMATED WEIGHT, (2) THE HIGHEST ESTIMATED WEIGHT, (3) AVERAGING THE ESTIMATED WEIGHTS AND USING ONE OF THESE WEIGHTS FOR ALL BIDDERS OR (4) USE FOR EACH BIDDER THE ESTIMATED WEIGHT SUBMITTED BY HIM. BIDDERS ON PACKING AND CRATING HAVE INFORMALLY INDICATED THAT THEY WILL NOT GUARANTEE SHIPPING WEIGHTS WHEN SUBMITTING THEIR BIDS.

THE EXECUTIVE ORDER REFERRED TO ABOVE PROVIDES THAT AN ARBITRARY MAXIMUM FIGURE OF $2.50 PER HUNDREDWEIGHT BE USED TO DETERMINE THE SAVING OF CHARGES FOR PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING, RESULTING IN THE USE OF MOTOR FREIGHT IN EVALUATING COSTS AS BETWEEN RAIL AND MOTOR- VAN TRANSPORTATION TO ARRIVE AT THE CHEAPEST COST. THE QUESTION OF HOW TO DETERMINE THE WEIGHT TO BE USED IN SO EVALUATING THE COST IS PRESENTED INASMUCH AS THE DEPARTMENT HAS NO METHOD, PRIOR TO THE CRATING AND HAULING OF THE GOODS TO THE FREIGHT STATION, OF DETERMINING THE ACTUAL WEIGHT OF THE SHIPMENT, AND EMPLOYEES WHOSE GOODS ARE BEING MOVED INVARIABLY DO NOT KNOW.

INSTRUCTIONS ARE ALSO DESIRED AS TO WHETHER, SHOULD IT BE ASCERTAINED AFTER INVITING BIDS FOR PACKING AND CRATING, ETC., THAT THE COST THEREOF, PLUS RAIL CHARGES, EXCEEDS THE COST OF MOTOR-VAN HAUL, THE AWARD SHOULD BE MADE FOR MOTOR-VAN SHIPMENT, NOTWITHSTANDING THE FACT THAT BY USING THE ARBITRARY $2.50 PER HUNDRED POUNDS SET UP IN SECTION 5 AS A MAXIMUM FOR EVALUATING THE COST OF PACKING AND CRATING, ETC., PLUS RAILROAD FREIGHT HAUL, THE COST ON THE LATTER BASIS IS LESS THAN THE MOTOR-VAN COST. OTHER WORDS, IS IT PROPER TO USE THE LOWEST ACTUAL BID PRICE, WHICH MAY BE AT A RATE MORE OR LESS THAN $2.50 PERHUNDRED POUNDS, FOR PACKING, CRATING, ETC. IN LIEU OF THE MAXIMUM FIGURE OF $2.50 PER HUNDRED POUNDS SET UP IN EXECUTIVE ORDER 8588, FOR THE PURPOSE OF DETERMINING THE SAVING RESULTING IN THE USE OF MOTOR FREIGHT?

YOUR EARLY DECISION ON THE ABOVE QUESTIONS WILL BE APPRECIATED.

SECTION 321 (A), PART II, TITLE III, OF THE TRANSPORTATION ACT OF 1940, APPROVED SEPTEMBER 18, 1940, 54 STAT. 954, PROVIDES:

NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BUT SUBJECT TO THE PROVISIONS OF SECTIONS 1 (7) AND 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, THE FULL APPLICABLE COMMERCIAL RATES, FARES, OR CHARGES SHALL BE PAID FOR TRANSPORTATION BY ANY COMMON CARRIER SUBJECT TO SUCH ACT OF ANY PERSONS OR PROPERTY FOR THE UNITED STATES, OR ON ITS BEHALF, EXCEPT THAT THE FOREGOING PROVISION SHALL NOT APPLY TO THE TRANSPORTATION OF MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE OR TO THE TRANSPORTATION OF MEMBERS OF THE MILITARY OR NAVAL FORCES OF THE UNITED STATES (OR OF PROPERTY OF SUCH MEMBERS) WHEN SUCH MEMBERS ARE TRAVELING ON OFFICIAL DUTY; AND THE RATE DETERMINED BY THE INTERSTATE COMMERCE COMMISSION AS REASONABLE THEREFOR SHALL BE PAID FOR THE TRANSPORTATION BY RAILROAD OF THE UNITED STATES MAIL: PROVIDED, HOWEVER, THAT ANY CARRIER BY RAILROAD AND THE UNITED STATES MAY ENTER INTO CONTRACTS FOR THE TRANSPORTATION OF THE UNITED STATES MAIL FOR LESS THAN SUCH RATE: PROVIDED FURTHER, THAT SECTION 3709, REVISED STATUTES ( U.S.C., 1934 EDITION, TITLE 41, SEC. 5), SHALL NOT HEREAFTER BE CONSTRUED AS REQUIRING ADVERTISING FOR BIDS IN CONNECTION WITH THE PROCUREMENT OF TRANSPORTATION SERVICES WHEN THE SERVICES REQUIRED CAN BE PROCURED FROM ANY COMMON CARRIER LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED.

ALTHOUGH ADVERTISING FOR BIDS IS THUS NO LONGER REQUIRED UNDER THE CIRCUMSTANCES AS OUTLINED IN THE LAST PROVISO OF THIS SECTION, IT DOES NOT NECESSARILY FOLLOW THAT SUCH SERVICES ARE TO BE PROCURED FROM A COMMON CARRIER WITHOUT REGARD TO COST ECONOMY. IF EQUALLY SATISFACTORY TRANSPORTATION SERVICES BE AVAILABLE FROM TWO OR MORE COMMON CARRIERS, AND A COMPARISON BE MADE OF THEIR ESTABLISHED RATE SCHEDULES DISCLOSING THAT THE SERVICES ARE AVAILABLE AT A LESS COST FROM ONE THAN FROM THE OTHERS, THERE APPEARS NO REASON WHY THE UNITED STATES SHOULD NOT HAVE THE BENEFIT OF THE LOWER COST. THERE IS NOTHING IN THE TERMS OF THE ABOVE STATUTE WHICH REQUIRES, OR EVEN SANCTIONS, A DIFFERENT PROCEDURE. AS A MATTER OF FACT THERE IS CONTAINED IN SECTION 321 (A), SUPRA, AN AFFIRMATIVE INDICATION OF AN INTENTION ON THE PART OF THE CONGRESS THAT THE UNITED STATES SHALL HAVE THE BENEFIT OF THE LOWEST PRICES FOR WHICH SATISFACTORY TRANSPORTATION SERVICES CAN BE PROCURED WITHOUT ADVERTISING. THUS, IT IS PROVIDED THAT SAID SECTION IS SUBJECT TO THE PROVISIONS OF SECTION 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 221, WHICH SECTION PROVIDES, IN PERTINENT PART, THAT:

NOTHING IN THIS ACT SHALL PREVENT THE CARRIAGE, STORAGE, OR HANDLING OF PROPERTY FREE OR AT REDUCED RATES FOR THE UNITED STATES * * * OR THE TRANSPORTATION OF PERSONS FOR THE UNITED STATES GOVERNMENT FREE OR AT REDUCED RATES.

IN ANSWER TO THE FIRST QUESTION PRESENTED IN YOUR LETTER YOU ARE ADVISED THAT THERE WOULD APPEAR TO BE NO AUTHORITY FOR PROCURING TRANSPORTATION SERVICES FROM ONE COMMON CARRIER AT A COST IN EXCESS OF THAT FOR WHICH EQUALLY SATISFACTORY TRANSPORTATION COULD HAVE BEEN PROCURED--- WITHOUT ADVERTISING--- FROM ANOTHER COMMON CARRIER "LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED.'

IT APPEARS FROM EXECUTIVE ORDER 8588, DATED NOVEMBER 7, 1940, THAT WHEN HOUSEHOLD GOODS ARE TRANSPORTED BY RAIL OR WATER CERTAIN ALLOWANCES ARE MADE FOR PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING; BUT THAT WHEN SHIPMENT IS MADE BY MOTOR FREIGHT SUCH ALLOWANCES ARE NOT MADE. UNDER SECTION 5 OF SAID EXECUTIVE ORDER IT IS PROVIDED, AS SET FORTH IN YOUR LETTER, THAT SHIPMENT SHALL BE MADE BY THE MOST "ECONOMICAL MEANS" BUT THAT IN COMPUTING COMPARATIVE COSTS FOR THE PURPOSE OF DETERMINING WHICH MEANS IS THE MOST ECONOMICAL "THE ALLOWANCE WHICH MAY BE MADE FOR THE SAVING OF CHARGES FOR PACKING, CRATING, DRAYAGE, UNPACKING, AND UNCRATING, RESULTING FROM THE USE OF MOTOR FREIGHT SHALL IN NO CASE EXCEED $2.50 PER HUNDRED POUNDS.' YOUR SECOND QUESTION RELATES TO THE METHOD OF DETERMINING SHIPPING WEIGHTS IN CONNECTION WITH THE COMPUTATION OF PROPER PACKING, CRATING, DRAYING, ETC., ALLOWANCES UNDER THIS PROVISION.

BY PROCURING BIDS WITH RESPECT TO PACKING, CRATING, DRAYAGE, ETC., ON A WEIGHT BASIS, IT WOULD, OF COURSE, BE POSSIBLE TO DETERMINE THE EXACT PER 100-POUND COST OF THOSE ITEMS IN ADVANCE. AS A MATTER OF FACT, IF ALL ITEMS OF SHIPMENT COST, INCLUDING THE ACTUAL TRANSPORTATION, COULD BE COMPUTED UPON A WEIGHT BASIS IT WOULD BE POSSIBLE TO MAKE ALL COMPARATIVE COST COMPUTATIONS WITH RESPECT TO A SINGLE UNIT OF 100 POUNDS--- AND WITHOUT REGARD TO WHAT THE WEIGHT OF THE ENTIRE SHIPMENT MIGHT ULTIMATELY PROVE TO BE. IN OTHER WORDS, IF THE COST OF SHIPPING 100 POUNDS BY THE VARIOUS SHIPPING METHODS--- WATER, RAIL, AND MOTOR FREIGHT--- WERE KNOWN, THE NECESSARY COST COMPUTATIONS COULD BE MADE UPON THAT BASIS, AND WITHOUT REGARD TO WHAT THE ENTIRE SHIPMENT WOULD WEIGH. THE DIFFICULTY IN THAT REGARD, HOWEVER, IS THAT MOTOR FREIGHT TARIFFS ARE UNDERSTOOD USUALLY TO BE COMPUTED AND PUBLISHED UPON A CUBIC-FOOT BASIS AND WITHOUT REGARD TO WEIGHT; ALSO, THAT WATER TRANSPORTATION TARIFFS ARE AS A GENERAL RULE PUBLISHED UPON AN ALTERNATE BASIS, NAMELY, WEIGHT OR MEASUREMENT, AND IN COMPUTING CHARGES THE COMPANY USUALLY RESERVES THE RIGHT TO APPLY WHICHEVER RATE WILL RESULT IN THE GREATEST REVENUE WITH RESPECT TO A PARTICULAR SHIPMENT. THIS BEING THE CASE NO SATISFACTORY BASIS OF SHIPMENT-COST COMPARISON SEEMS TO EXIST UNLESS TOTAL WEIGHTS AND MEASUREMENTS ARE KNOWN.

IT IS INDICATED IN YOUR LETTER THAT DIFFICULTY IS ENCOUNTERED AT THIS POINT DUE TO THE FACT THAT "THE DEPARTMENT HAS NO METHOD, PRIOR TO THE CRATING AND HAULING OF THE GOODS TO THE FREIGHT STATION, OF DETERMINING THE ACTUAL WEIGHT OF THE SHIPMENT, AND EMPLOYEES WHOSE GOODS ARE BEING MOVED INVARIABLY DO NOT KNOW.' AS A RESULT, IT APPEARS NECESSARY IN MAKING ADVANCE COST COMPUTATIONS TO RELY LARGELY UPON ESTIMATED WEIGHTS. IN THIS SITUATION YOU INQUIRE AS TO WHETHER SHIPPING WEIGHTS SHOULD BE DETERMINED BY (1) TAKING THE LOWEST ESTIMATED WEIGHT, (2) THE HIGHEST ESTIMATED WEIGHT, (3) THE AVERAGE OF ESTIMATED WEIGHTS, OR (4) BY USING FOR EACH BIDDER THE ESTIMATED WEIGHT SUBMITTED BY HIM.

IT SEEMS APPARENT THAT NONE OF THESE METHODS IS ENTIRELY SATISFACTORY AND THAT REGARDLESS OF WHICH ONE IS USED THE WEIGHTS AS ESTIMATED WILL VARY WIDELY FROM THE ACTUAL WEIGHTS. HOWEVER, IN THE FACE OF THE APPARENT NECESSITY FOR EMPLOYING ONE OF THESE METHODS FOR COMPARATIVE COST- COMPUTATION PURPOSES IN DETERMINING IN ADVANCE THE MOST "ECONOMICAL MEANS" OF SHIPMENT, YOU ARE ADVISED THAT THE USE OF THE AVERAGE OF THE ESTIMATED WEIGHTS SUBMITTED WOULD APPEAR TO CONSTITUTE THE FAIREST, AND PERHAPS THE MOST NEARLY ACCURATE, BASIS. YOUR SECOND QUESTION IS ANSWERED ACCORDINGLY.

THE PURPOSE OF THE PROVISO IN SECTION 5 OF THE EXECUTIVE ORDER WAS APPARENTLY TO TAKE FROM MOTOR FREIGHT CARRIERS A PART OF THE NATURAL ADVANTAGE OR SAVING RESULTING TO THEM FROM THE FACT THAT THEIR METHOD OF SHIPMENT ENTAILS LITTLE OR NO EXPENSE FOR PACKING, CRATING, ETC. IN OTHER WORDS, IN ORDER TO PLACE RAIL AND WATER CARRIERS MORE NEARLY UPON A BASIS OF COMPETITIVE EQUALITY WITH MOTOR CARRIERS SO FAR AS GOVERNMENT BUSINESS OF THE TYPE HERE INVOLVED IS CONCERNED, IT WAS PROVIDED THAT IN COMPARING SHIPMENT COSTS FOR PURPOSES OF DETERMINING THE MOST ECONOMICAL MEANS OF SHIPMENT--- WATER, RAIL, OR MOTOR FREIGHT- - THE MAXIMUM AMOUNT TO BE INCLUDED IN RAIL OR WATER COST COMPUTATION TO COVER PACKING, CRATING, ETC., SHALL BE $2.50 PER HUNDRED POUNDS. ACCORDINGLY, YOU ARE ADVISED IN RESPONSE TO THE THIRD QUESTION THAT SHOULD IT BE ASCERTAINED, AFTER SECURING BIDS FOR PACKING, CRATING, ETC.--- AS REQUIRED UNDER THE CONDITION STATED IN THE FIFTH PARAGRAPH OF YOUR LETTER--- THAT THE COST THEREOF, PLUS RAIL CHARGES, ACTUALLY EXCEEDS THE COST BY MOTOR FREIGHT, BUT THAT WHEN THE ARBITRARY FIGURE OF $2.50 PER HUNDRED POUNDS IS USED THE TOTAL RAIL COST IS LESS THAN THAT BY MOTOR FREIGHT, THEN THE $2.50 FIGURE SHOULD BE USED AND AWARD MADE TO THE RAIL CARRIER. OF COURSE, IN COMPARING WATER TRANSPORTATION COSTS WITH MOTOR FREIGHT COSTS THE COMPUTATION SHOULD BE MADE UPON THE SAME BASIS. HOWEVER, IN CASES WHERE MOTOR FREIGHT TRANSPORTATION IS NOT INVOLVED AND THE DETERMINATION OF COSTS IS MADE ONLY AS BETWEEN RAIL AND WATER CARRIERS THE $2.50 MAXIMUM ALLOWANCE PROVISION AS CONTAINED IN SECTION 5 OF THE EXECUTIVE ORDER WOULD NOT BE FOR APPLICATION.