[B-159621]

Transportation-Overcharges-Recovery-Abeyance Pending Re

view of Issue

Withholding collection of transportation overcharges pending review of a disallowance involving the same issue may not be approved, as absent evidence demonstrating need for special treatment of a carrier, departure from the procedures established to implement 49 U.S.C. 66, providing for payment of carrier transportation bills prior to audit or settlement and the deduction of overcharges from amounts subsequently found due, is not warranted. However, the carrier may file a claim for refund of any collection, and the resolution of the issue pending will control bills involving the identical issue.

To Navajo Freight Lines, Inc., July 20, 1966:

Your letter of July 1, 1966, with enclosures, refers to your request of June 23, 1966, that we review our Transportation Division's disallowance of Navajo claim 18446-0 which is pending under our file B-159564. The review of such disallowance as indicated in our letter of July 5, 1966, B-159564, to you is receiving consideration and you will be advised as to the result at as early a date as practicable. Among the enclosures to your letter of July 1, 1966, are copies of two letters to your company from our Transportation Division sustaining its audit action on your bill. Nos. 2301-7274 and 2950-9224 and advising you in effect that in the absence of refund the overcharges will be collected by deduction or other available means.

You say that your request for review of Navajo claim 18446-0 and the charges on the two bills (2301-7274 and 2950-9224) involve the same issue; and, you ask that we instruct our Transportation Division to withhold any further action on the two bills pending completion of our review of the disallowance of Navajo claim 18446-0. Section 322 of the Transportation Act of 1940, as amended, 49 U.S.C. 66, provides for the payment upon presentation of carrier's bills for transportation charges prior to audit or settlement by our Office and reserves to the United States the right to deduct amounts considered to have been overcharged by carriers from any amount subsequently found to be due those carriers. Procedures implementing these and other laws and relating to the examination of claims for transportation services by and against the United States are contained in parts 53 and 54 of Title 4 of the Code of Federal Regulations.

In discharging our obligations and audits under these laws and regulations, exceptions to the procedures deemed necessary to maintain uniform and orderly accounting for public funds are not ordinarily warranted unless there exist compelling circumstances establishing a definite need for the special treatment of particular carriers. For these reasons and in the absence of any evidence demonstrating

a need for special treatment, we would not be warranted in instructing our Transportation Division to deviate from its usual procedures in connection with the overcharges on your bill Nos. 2301-7274 and 2950-9224. However, under such procedures, you are, of course, privileged to file a claim for refund of any amount refunded or collected by deduction which you consider was properly payable to you setting forth fully the basis relied upon to support your position. Also, if the issue as to such bills is identical with that involved in Navajo claim 18446-0, our decision as to such bill should be controlling as to your bills Nos. 2301-7274 and 2950-9224 and if favorable to you, a reference thereto in your claims may expedite settlement of any claims you may file with respect to such two bills.

[B-130010]

Pay-Retired—Annuity Elections for Dependents—Time for Election-Advance Retirement Eligibility Knowledge

Persons who were former members of the uniformed services on November 1, 1953 and are awarded retired pay pursuant to 10 U.S.C. 1331-1337 upon reaching age 60 are not eligible to elect a survivor's annuity under the Retired Serviceman's Family Protection Plan after the expiration of 30 days following notice of the award of retired pay, 10 U.S.C. 1431 (b), prescribing a 90-day period for the election of an annuity intended for members who do not know whether or when they will be retired until their retirement is approved not applying to those former members inchoately eligible for retirement under sections 1331-1337, who in advance of reaching retirement age know of their eligi bility to be awarded retired pay and the earliest time of qualifying and, therefore, can make an intelligent election within 30 days following notice of the award of retired pay.

To the Secretary of the Army, July 21, 1966:

Reference is made to your letter of June 20, 1966, requesting a decision whether Captain James W. Johnson, AUS, retired, a former member of the Army, may within 90 days after being awarded retired pay make an election under the provisions of the Retired Serviceman's Family Protection Plan to provide an annuity for his beneficiary. Your request for decision was assigned No. SS-A 895 by the Department of Defense Military Pay and Allowance Committee.

You say that Captain Johnson was born on November 30, 1903, and has had no military status since April 27, 1945, on which date his commissioned status terminated; that he applied for retired pay based on 20 years' creditable service under authority of 10 U.S.C. 1331-1337, on January 26, 1965, and on March 4, 1965, was granted retired pay from December 1, 1963, the first day of the month follow

ing the month in which he reached age 60 (although the date of notification of award of retired pay is not disclosed); that on April 15, 1965, 42 days after retirement pay was awarded he elected to participate in the Retired Serviceman's Family Protection Plan, selecting options 1 and 4 at one-fourth of reduced retired pay; that by letter dated May 3, 1965, the Adjutant General informed Captain Johnson that applicable regulations require that persons who had no military status on November 1, 1953, but who had completed 20 years of qualifying Federal service and were waiting to attain age 60 and ultimate eligibility for retirement, must deliver their elections to Army officials or mail them in time to be postmarked not later than 30 days after the award of retired pay. You say, however, that no Army regulation contains a reference to a 30-day election period.

Section 3(a) of the Uniformed Services Contingency Option Act of 1953, ch. 393, 67 Stat. 502, provided with respect to persons who had performed the service requisite for qualifying for retired pay under the provisions of law now codified in 10 U.S.C. 1331–1337 that:

A person who is a former member on the effective date of the Act and who is thereafter awarded retired pay by a uniformed service may make the election at the time he is awarded that pay.

In decision of May 11, 1955, 34 Comp. Gen. 582, we said that the phrase "at the "time" of award of retired pay in the above-quoted provision meant within a short time after such award, but that a period of 60 days or more would be too long a period to allow the persons concerned to make their elections, and that, in fact, there would be grave doubt that any time in excess of 30 days after award of retired pay to former members reasonably could be allowed for that purpose. In decision of February 8, 1957, 36 Comp. Gen. 586, we held that former members whose records are corrected to grant them retired pay retroactively may not have more than 30 days from the date of notification of the award of retired pay to make a survivor's annuity election under the 1953 act.

Insofar as is material here the above-quoted provision of law was codified without substantive change in 10 U.S.C. 1432 by the act of August 10, 1956, ch. 1041, 70A Stat. 109. No change was made therein by the act of October 4, 1961, Public Law 87-381, 75 Stat. 810, which changed the name of the program to Retired Serviceman's Family Protection Plan and made certain changes in the law providing greater flexibility in making original elections and in effecting changes in elections, eliminated certain poor risks from the program thereby improving the fiscal soundness of the program, and simplified administration by authorizing, among other things, the adminis

trative correction of administrative errors. Among the changes was the addition of the provision now contained in 10 U.S.C. 1431(b) that:

A member to whom retired pay or retainer pay is granted retroactively, and who is otherwise eligible to make an election, may make the election within 90 days after receiving notice that such pay has been granted to him.

You say that the legislative history of the 1961 act, which added that provision, indicates that the 90-day period was included to overcome the above-cited decisions of this Office limiting the election period to 30 days, pointing out that the Department of Defense representative indicated that the 30-day period did not give sufficient time to process the case, compute costs, and properly advise the retired person, citing the hearings before Subcommittee No. 1 of the House Committee on Armed Services on H.R. 4329, 87th Cong., 1st sess. 1753, and the hearings before the Senate Committee on Armed Services on H.R. 6668, 87th Cong., 1st sess. 35-36. You point out that the example given by a Department of Defense representative to the congressional committee considering the proposed amendment was that of a person who had been discharged, but who was subsequently determined to be eligible for physical disability retirement and was awarded retired pay retroactively. You suggest that the basic reason given by the Department of Defense for the inclusion of the 90-day election period in section 1431 (b) is just as applicable to a person who was a former member on November 1, 1953, "to whom retired pay is granted retroactively" as it is to a person whose records are corrected under 10 U.S.C. 1552 to show a retroactive award of retired pay under any other provision of law.

We do not believe that the factual situations are similar with respect to making an intelligent election. In the case of members and former members of the armed services granted disability retired pay retroactively under the provisions of 10 U.S.C. 1552 and related provisions of law, the member usually does not know whether or when he will be retired until his retirement is approved. See the above-cited House hearings at pages 1753 and 1801. In contrast former members, such as Captain Johnson, awarded retired pay under the provisions of 10 U.S.C. 1331-1337 whose cases are governed by the provisions of 10 U.S.C. 1432 should know well in advance of reaching retirement age not only that they are eligible to be awarded retired pay but also the earliest time (when they reach age 60 or at any time they choose thereafter) they will qualify therefor, since they should know or can ascertain long in advance whether they have met the service requirements for such retirement. Hence, in cases of retirement under the provisions of 10 U.S.C. 1331-1337, there is no reason why the former members should not be able in

all cases to make an intelligent election within 30 days after award of retired pay. By delaying application for retirement such former members can defer the date of award of such pay until after receipt of the proper information necessary for such an election and receive retired pay retroactively effective to the first day of the month following the month in which retirement age is reached. See decisions in 38 Comp. Gen. 146 and 38 id. 647.

That it was not the intent of the Department of Defense that the above-quoted provision of section 1431 (b) should apply to persons who were former members inchoately eligible for retired pay under 10 U.S.C. 1331-1337 on the effective date of the Uniformed Services Contingency Option Act of 1953 seems clear from the letter of January 3, 1961, from the Department of the Air Force (which had been designated as the representative of the Department of Defense for the legislation which culminated in the 1961 law) forwarding to the Speaker of the House of Representatives and the President of the Senate a draft and explanation of the 1961 legislation, in which this statement concerning retroactive elections appears:

(d) Retroactive elections.-Under present interpretation of the law members to whom retired or retainer pay is granted retroactively would not be eligible to participate unless they had made an election prior to the time the retired pay is awarded.

This provision has resulted in members being granted retroactive retirement benefits without the opportunity to elect participation in the plan that would have been given them had they retired in the normal manner.

The bill provides that an election in such cases may be made within 90 days after the date of receipt of notice by the member that such pay has been awarded him. [Italic supplied.]

Inasmuch as persons who were not members on November 1, 1953, and who are thereafter retired under the provisions of 10 U.S.C. 1331–1337 could not make an election prior to the time retired pay is awarded, we do not think that the above-quoted provision of section 1431(b) was intended to apply to them. Under the law a former member inchoately eligible for retirement pay under the provisions of 10 U.S.C. 1331-1337 was eligible to make an election of a survivor's annuity at the time of retirement, having been precluded from making "an election prior to the time the retired pay is awarded," since the statute expressly authorized him to make an election only "at the time he is granted that pay;" likewise, under the interpretation of the law then followed such a former member could make an election within 30 days after "The time the retired pay is granted." See 34 Comp. Gen. 582 and 36 Comp. Gen. 586. Also, since a former member awarded retired pay contemporaneously or retroactively under 10 U.S.C. 1331-1337 was theretofore and is now afforded an opportunity to elect to participate in the Retired Serviceman's Family Protection Plan at the time he is granted retired pay,