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B-154967, NOV. 9, 1965

B-154967 Nov 09, 1965
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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16. ASKED WHETHER FREIGHT CHARGES ON SHIPMENTS MOVING UNDER LEE WAY SECTION 22 QUOTATION NO. 298 ARE SUBJECT TO AUDIT IN THE GENERAL ACCOUNTING OFFICE. AS YOU WILL NOTE FROM THE ATTACHED COPY. OUR DECISION B-154967 WAS ADDRESSED TO MR. IT WAS ALSO PROPOSED THAT IF INITIAL USE OF THE EXPERIMENTAL QUOTATIONS PROVED SUCCESSFUL. INFORMATION AS TO THE METHODS EMPLOYED BY GSA IN DETERMINING THE AVERAGES USED IN FORMULATING THE QUOTATIONS WAS FURNISHED THIS OFFICE. THERE WAS FOR CONSIDERATION. IF OUR AUDIT DISCLOSED THAT THE BEST INTERESTS OF THE GOVERNMENT WERE NOT BEING SERVED. KNOTT IS NOT INTENDED TO SUGGEST ANY DEPARTURE FROM OUR STATUTORY DUTY TO AUDIT PAYMENTS MADE FOR TRANSPORTATION SERVICES.

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B-154967, NOV. 9, 1965

TO LEE WAY MOTOR FREIGHT, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1965, FILE TD- 1389/65-N, IN WHICH YOUR REQUESTED A COPY OF OUR DECISION B 154967, DATED DECEMBER 21, 1964, AND ASKED WHETHER FREIGHT CHARGES ON SHIPMENTS MOVING UNDER LEE WAY SECTION 22 QUOTATION NO. 298 ARE SUBJECT TO AUDIT IN THE GENERAL ACCOUNTING OFFICE.

AS YOU WILL NOTE FROM THE ATTACHED COPY, OUR DECISION B-154967 WAS ADDRESSED TO MR. LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION (GSA), IN CONNECTION WITH A PILOT PROGRAM BEING CONDUCTED AT THE GSA SUPPLY DEPOT, HINGHAM, MASSACHUSETTS, TO DEVISE A COMPLETE AUTOMATIC DATA PROCESSING SYSTEM FOR THE SUPPLY CYCLE, INVOLVING, AMONG OTHER OPERATIONS, SELECTION OF TRANSPORTATION MODE AND CARRIER, DETERMINATION OF TRANSPORTATION COSTS AND PREPARATION OF BILLS OF LADING. IT WAS ALSO PROPOSED THAT IF INITIAL USE OF THE EXPERIMENTAL QUOTATIONS PROVED SUCCESSFUL, SIMILAR ARRANGEMENTS WOULD BE EXTENDED TO OTHER SECTIONS OF THE COUNTRY.

INFORMATION AS TO THE METHODS EMPLOYED BY GSA IN DETERMINING THE AVERAGES USED IN FORMULATING THE QUOTATIONS WAS FURNISHED THIS OFFICE, AND THE PROCEDURE AND CONTROLS USED IN THE FORMULATION OF A SIMPLIFIED SYSTEM OF RATES APPEARED TO BE ADEQUATE. THERE WAS FOR CONSIDERATION, IN ADDITION TO LOWER OVERALL TRANSPORTATION CHARGES, THE SAVINGS IN MANPOWER AND PAPER WORK IN CONNECTION WITH ADMINISTRATIVE AND ACCOUNTING OPERATIONS, AND IT COULD BE EXPECTED THAT THE USE OF THE FREIGHT, ALL KINDS (FAK), QUOTATIONS WOULD FACILITATE OUR AUDIT OF THE PAYMENT VOUCHERS. BECAUSE, HOWEVER, THE SIMPLIFIED RATE STRUCTURE SET UP IN THE QUOTATIONS MIGHT, IN A FEW INSTANCES, RESULT IN THE PAYMENT OF HIGHER CHARGES ON CERTAIN COMMODITIES THAN THOSE RESULTING FROM PUBLISHED TARIFFS, GSA SOUGHT ASSURANCE THAT OUR OFFICE WOULD NOT STATE OVERCHARGES IN SUCH EXCEPTIONAL INSTANCES. APPROVING THE PROJECT AND GRANTING SUCH ASSURANCE, WE INDICATED THAT WE EXPECTED TO REVIEW OPERATIONS UNDER THE FAK QUOTATIONS INVOLVED, AND IF OUR AUDIT DISCLOSED THAT THE BEST INTERESTS OF THE GOVERNMENT WERE NOT BEING SERVED, WE WOULD CONTACT GSA IN ORDER TO OBTAIN NECESSARY ADJUSTMENTS OR DISCONTINUANCE OF THE PROGRAM.

IT SHOULD BE NOTED THAT OUR DECISION TO MR. KNOTT IS NOT INTENDED TO SUGGEST ANY DEPARTURE FROM OUR STATUTORY DUTY TO AUDIT PAYMENTS MADE FOR TRANSPORTATION SERVICES. WHILE OUR PURPOSE IS TO COOPERATE WITH ADMINISTRATIVE AGENCIES IN THE ADOPTION OF ADVANTAGEOUS SIMPLIFIED RATE PROCEDURES IN CONNECTION WITH GOVERNMENT SHIPMENTS, WE WILL CONTINUE TO AUDIT PAYMENTS MADE PURSUANT TO SECTION 22 QUOTATIONS ISSUED UNDER SUCH ARRANGEMENTS TO DETERMINE WHETHER THEY ARE IN COMPLIANCE WITH THE APPLICABLE QUOTATIONS.

WITH RESPECT TO OUR AUDIT OF CHARGES ACCRUING UNDER INDIVIDUAL QUOTATIONS, WE WILL ADHERE GENERALLY TO THE POLICY STATED, SUBJECT TO THE TERMS AND PROVISIONS CONTAINED IN SUCH QUOTATIONS. IN THE CASE OF YOUR QUOTATION NO. I.C.C. 298, WE NOTE THAT ITEM 21, ON FIRST REVISED PAGE 3, PROVIDES: "THIS TENDER SHALL NOT APPLY WHERE CHARGES ACCRUING HEREUNDER EXCEED CHARGES OTHERWISE APPLICABLE FOR THE SAME SERVICE.' UNDER SUCH A PROVISION IT APPEARS THAT THE CHARGE BASIS AFFORDED IN THE QUOTATION IS SUPERSEDED IN ANY INSTANCE WHERE A LOWER CHARGE BASIS IS SET FORTH IN

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