Military Airlift Command Savings in use of commercial air service for transportation of cargo to Southeast Asia and Europe, B-157476, Nov. 24, 1967 We examined into the costs of less-than-planeload shipments of Military Airlift Command cargo on regularly scheduled commercial flights between the continental United States and overseas areas. We found that the Department of Defense could have saved about $1.7 million during fiscal year 1966, if cargo had been tendered in larger volume shipments qualifying for the lowest tariff rates available. We discussed our findings with officials of the Military Airlift Command and proposed they plan their cargo shipments to take advantage of the lowest rates. In May 1967, the Civil Aeronautics Board amended its Economic Regulations and established a single uniform rate on military cargo, regardless of weight. This action solved the cargo rate problem on large shipments, and provided the DOD with the reduced rates and charges which it could have realized under the previous tariffs had its cargoes been tendered in the manner we had proposed. Need for improvement in airlift of cargo to Southeast Asia, B-157476, May 14, 1968 This review showed that during the period July 1, 1965, through October 31. 1966, airlift capacity for about 21 million pounds of cargo was unused, even | though ample cargo was available for shipment. This critically needed cargo space, primarily on commercial contract aircraft, was valued at about $15 milion at the contract rates in effect. We brought our findings to the attention of the Secretary of Defense and proposed certain corrective actions. In reply, the Secretary of the Air Force agreed in general with our findings and advised us that improvements were being made. A subsequent review showed that space utilization rates had been increased. but not to the degree considered fully effective. Accordingly, we recommended that the Secretary of the Air Force take additional steps to ensure that accurate load information is prepared and forwarded to the appropriate air bases to increase the use of aircraft cargo space. We also recommended to the Secretary of Defense that periodic internal audits be made of aircraft loading results to provide additional assurance that the necessary corrective actions are taken and effectively implemented. ASSISTANCE IN THE LEGAL FIELD We continued to provide technical assistance to the Department of Justice in the prosecution and defense of transportation suits by or against the United States and in proceedings before the Interstate Commerce Commission. As part of this assistance, transportation specialists participated in four pretrial conferences in the Court of Claims and two trials before a Commissioner of the Court of Claims. We reported to the Department of Justice for collection debts against carriers involving 291 items in the total amount of $152,295. During the fiscal year similarly reported debts covering 172 items in the total amount of $382,216 were settled by the collection of $354,564 through judgments, compromises, or otherwise. Included in the amount collected a $250,000 judgment against an ocean carrier for overcharges on vernment-financed shipments of grain. We received from the Department of Justice notice of the filing of 121 ts by carriers covering 166,497 shipments. Eighty of the suits filed d about 130,000 of the shipments were on overseas movements of usehold goods by the Department of Defense. The amount sued for is >t stated in the petitions filed in these suits but we estimate the liability the United States on the 180 suits filed in this and prior years to be bout $100 million, if the carriers prevail on all of the issues. In the same eriod we furnished technical advice and other assistance to the Departent of Justice in 47 suits for $945,439 involving 43,254 shipments. ixty-three suits, the subject of reports in this or prior years, involving 0,826 shipments and $819,209 were settled by payment of judgments or $194,249 and by dismissal or withdrawal of the balance. Three of the five representative cases selected for trial of the issues in he 180 household goods suits were the subject of hearings before a Commissioner of the Court of Claims. The hearing in Trans Ocean Van Service v. United States, Ct. Cl. No. 137-66, was concluded in December 1967 after hearings in San Francisco and Los Angeles, Calif., and in Washington, D.C. The hearing in the consolidated cases Global Van Lines v. United States, Ct. Cl. Nos. 259-65 and 355-65, was concluded in July 1968 after hearings in Los Angeles and Washington, D.C. We furnished technical witnesses in each of the hearings and an attorney from our Office of the General Counsel also was assigned to both cases to assist the Department of Justice attorney. Another activity of increasing importance in our audit and legal assistance work relates to the collection of motor carrier overpayments. Overpayments arise as a result of the application by carriers of unjust and unreasonable rates as defined by the Interstate Commerce Act. This act provides that reparations for such overpayment to motor carriers may be recovered only through suits filed in the United States District Courts. During this year we identified and prepared reports on 28 motor overpayments involving 84 shipments and claimed reparations of $113,539. All of these cases were referred to the Department of Justice and we understand that as of June 30, 1968, suits had been filed on most of them. ASSISTANCE IN THE TRAFFIC AND TRANSPORTATION FIELD We assisted various Government agencies in their traffic management and transportation activities. Our assistance included— 1. Working with the State Department to eliminate errors, incon sistencies, and ambiguities from the terms of their proposed basic tender covering overseas movements of household goods. 2. Providing the General Services Administration with statistical data from Government bills of lading to assist GSA's study of the feasibility of consolidating freight shipments of civilian agencies on a nationwide basis to achieve lower transportation costs. 3. Reviewing and approving an arrangement between an air freight carrier and the Department of Defense for the consolidation of surface cargo shipments at a central receiving point for reshipment by air at beneficial volume rates. 4. Furnishing passenger fares and other transportation data to the Department of Labor for preparation of the monthly consumer price index. 5. Providing guest lecturers at the U.S. Army Transportation School, Fort Eustis, Va. 6. Considering and acting upon several requests from the administrative agencies for permission to deviate from established procedures to provide more economical and efficient traffic management. We continued our practice of meeting with representatives of individual carriers or members of their trade associations to discuss and resolve mutual problems relating to our audit of carriers' bills. During the year, we participated in 11 meetings with various domestic and international carrier associations and had numerous discussions in Washington with carrier and carrier association representatives. In April 1968, under the Joint Financial Management Improvement Program, we initiated a joint agency study of freight and passenger transportation in the civil agencies. The study is under the chairmanship of the General Services Administration with full-time staff members assigned from the General Accounting Office, the General Services Administration, Bureau of the Budget, Treasury Department, and the Departments of Commerce, Agriculture, and Health, Education, and Welfare. The study group, after reviewing the current systems of the civil agencies for paying, auditing, and settling with the carriers for transportation services, will suggest improvements or needed changes for the mutual benefit of the carriers and the Government. |