Request by Carrier for Review of Deduction Action Taken by GSA

A trucking company requested a review of General Services Administration (GSA) deductions from monies due the carrier for the transportation of Foreign Military Sales (FMS) shipments. A GSA audit determined that the company had collected overcharges on all of its bills. The company applied commercial tariff rates, whereas GSA believed that a second and lower rate quotation was applicable. The company contended that the foreign customers are required to reimburse the United States for all contract costs, thus there would be no benefit to the Government by paying the lower amount. However, GAO noted that the U.S. Government had not been receiving full reimbursement from the foreign countries at the time the shipments were made. Since the company failed to carry its burden of proving that the United States did not incur the cost and would not obtain the economic benefit of the lower rates, it was held that the Government was not obligated to pay the higher rates of the original bills. Where two published charges are equally applicable to the same FMS shipments, the Government is entitled to the lower rates. Therefore, the deduction action by GSA was sustained.