B-190757, JUL 28, 1978

B-190757, JUL 28, 1978

DIGEST: 1. CARRIER TENDERS UNDER SECTION 22 OF INTERSTATE COMMERCE ACT, 49 U.S.C. 22 (1970), ARE CONTINUING OFFERS TO FURNISH TRANSPORTATION SERVICES AT SPECIAL RATES AND CONDITIONS AND REMAIN VALID UNTIL EFFECTIVELY REVOKED. 2. RATE TENDER CONTAINED CLAUSE PERMITTING ALTERNATION OF RATES WITH OTHERWISE APPLICABLE RATES; SINCE IT INCREASED RATES AND WAS FILED AND ACCEPTED BY DOD AS AN EXCEPTION TO OTHERWISE APPLICABLE RATES IN EXISTING TENDER, IT SUPERSEDED RATES IN EXISTING TENDER AND THEY WERE NOT OTHERWISE APPLICABLE UNDER RATE TENDER'S ALTERNATION CLAUSE. 3. WHERE CARRIER HAS BEEN PAID SHIPMENT CHARGE BASED ON NET WEIGHT OF CONSOLIDATED SHIPMENT, ADDITIONAL SHIPMENT CHARGE BASED ON NET WEIGHT OF A PORTION OF THAT SHIPMENT MOVING UNDER SEPARATE BILL OF LADING MAY NOT BE ALLOWED.

STAR WORLD WIDE FORWARDERS, INC.:

STAR WORLD WIDE FORWARDERS, INC. (STAR), IN A LETTER DATED NOVEMBER 21, 1977, REQUESTS REVIEW BY THE COMPTROLLER GENERAL OF THE UNITED STATES OF A DEDUCTION ACTION TAKEN BY THE UNITED STATES NAVY FINANCE CENTER AT THE REQUEST OF THE GENERAL SERVICES ADMINISTRATION (GSA). A DEDUCTION ACTION CONSTITUTES A SETTLEMENT WITHIN THE MEANING OF SECTION 201(3) OF THE GENERAL ACCOUNTING OFFICE ACT OF 1974, PUB. L. NO. 93 604, 88 STAT. 1959, APPROVED JANUARY 2, 1975, 49 U.S.C. 66(B) (SUPP. V, 1975) AND WITHIN THE MEANING OF 4 C.F.R. 53.1(B)(1) AND 53.2 (1977). MOREOVER, STAR'S COMMUNICATION OF NOVEMBER 21, 1977, IS IN SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF 4 C.F.R. 53.3 AND 53.4 (1977) FOR ESTABLISHING A CARRIER'S RIGHT TO THE COMPTROLLER GENERAL'S REVIEW OF A GSA SETTLEMENT.

GSA'S ACTION WAS TAKEN ON A SHIPMENT OF HOUSEHOLD GOODS WEIGHING 7,960 POUNDS WHICH WAS TRANSPORTED IN JUNE 1974 FROM PLEASANTON, CALIFORNIA, TO WEST SPRINGFIELD, VIRGINIA, UNDER GOVERNMENT BILL OF LADING (GBL) NO. H- 0033953.

STAR WAS PAID $2,629.58 FOR THIS TRANSPORTATION SERVICE PRIOR TO AUDIT. SEE 49 U.S.C. 66(A) (SUPP. V, 1975). ITS CHARGES WERE BASED ON STAR'S SECTION 22 TENDER ICC NO. 28 (TENDER 28) WHICH SET FORTH RATES THAT WERE INTENDED TO BE AN EXCEPTION TO THE RATES CONTAINED IN SECTION IV OF STAR'S SECTION 22 TENDER ICC NO. 2 (TENDER 2) AND THE SUPPLEMENTS THERETO. THE RECORD INDICATES THAT STAR HAD WISHED TO INCREASE ITS RATES TO THE SAME LEVEL AS THOSE FOUND IN THE EQUIVALENT HOUSEHOLD GOODS CARRIER'S BUREAU TENDER; HOWEVER, IT ALSO WISHED TO RETAIN THE OPTION OF CANCELING THESE NEW RATES ON 30 DAYS NOTICE AND REVERTING TO THE EXISTING RATES CONTAINED IN TENDER 2. TO ACHIEVE THIS OBJECTIVE, STAR FILED TENDER 28 AS WHAT IT TERMED A "RATE EXCEPTION" ON THE APPARENT BELIEF THAT THIS WOULD PROVIDE MORE FLEXIBILITY THAN JUST A SUPPLEMENT TO ITS BASIC TENDER (TENDER 2). WHILE ACCEPTING TENDER 28, THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (NOW THE MILITARY TRAFFIC MANAGEMENT COMMAND) ALSO INFORMED STAR THAT A SUPPLEMENT TO TENDER 2 WOULD HAVE SERVED THE SAME PURPOSE.

STAR'S CHARGES OF $2,629.58 WERE BASED IN PART ON THE TENDER 28 RATE OF $23.75 PER HUNDRED POUNDS AND A SHIPMENT CHARGE OF $22.75. UPON AUDIT OF THE PAYMENT VOUCHER, GSA ELIMINATED THE SHIPMENT CHARGE AND APPLIED A LOWER RATE OF $21.65 PER HUNDRED POUNDS. GSA EXPLAINED THIS ACTION BY STATING THAT SINCE IT HAD ALREADY ALLOWED A SHIPMENT CHARGE OF $39 ON THE TOTAL NET WEIGHT OF A CONSOLIDATED SHIPMENT UNDER GBL NO. H-0033614, WHICH INCLUDED THE NET WEIGHT OF GBL NO. H-0033953, IT WOULD NOT ALLOW AN ADDITIONAL SHIPMENT CHARGE BASED ON THE NET WEIGHT OF GBL NO. H-0033953 ALONE. AS TO THE TRANSPORTATION RATE, GSA HELD THAT UNDER ITEM 23 OF TENDER 28 - A GENERAL ALTERNATION CLAUSE - THE RATE ESTABLISHED BY TENDER 28 WAS NOT APPLICABLE SINCE A LOWER RATE WAS AVAILABLE TO THE GOVERNMENT UNDER TENDER 2.

BASED ON THE FOREGOING, GSA NOTIFIED STAR OF AN OVERCHARGE OF $199.94; AND WHEN STAR FAILED TO REFUND THIS SUM, GSA HAD THE NAVY FINANCE CENTER DEDUCT $199.94 FROM AMOUNTS OTHERWISE DUE STAR. IN SEEKING THE COMPTROLLER GENERAL'S REVIEW OF THIS DEDUCTION ACTION, STAR CONTENDS THAT ITEM 23 OF TENDER 28 DOES NOT APPLY IN THIS INSTANCE BECAUSE ITEM 13 OF THAT SAME TENDER MADE A SPECIFIC EXCEPTION TO THE RATES IN TENDER 2 SO THAT FOR ALTERNATION CLAUSE PURPOSES THE ONLY OTHER RATE AVAILABLE FOR COMPARISON WITH THE TENDER 28 RATE IS THAT FOUND IN STAR'S COMMERCIAL TARIFF. IN ADDITION, STAR MAINTAINS THAT MULTIPLE SHIPMENT CHARGES ARE VALID IN THE CASE OF CONSOLIDATED SHIPMENTS. CONSEQUENTLY, STAR SEEKS PAYMENT OF THE $199.94 PREVIOUSLY DEDUCTED FROM ITS BILLINGS.

THE CENTRAL ISSUE, THEREFORE, IS WHETHER THE RATE LEVEL IN STAR'S TENDER 28, WHICH WAS TERMED AN "EXCEPTION" RATHER THAN A SUPPLEMENT, SUPERSEDED DURING ITS EFFECTIVE PERIOD THE RATES FOUND IN STAR'S TENDER 2 OR WHETHER THE LOWER TENDER 2 RATES CONTINUED TO BE AVAILABLE TO THE GOVERNMENT UNDER TENDER 28'S GENERAL ALTERNATION CLAUSE.

SECTION 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 22 (1970), MADE APPLICABLE TO MOTOR CARRIERS BY SECTION 217(B) OF THAT ACT, 49 U.S.C. 317(B), EXEMPTS TRANSPORTATION SERVICES PERFORMED FOR THE UNITED STATES FROM THE RATE PROVISIONS OF THE ACT AND PERMITS CARRIERS TO TRANSPORT, STORE OR HANDLE PROPERTY FOR THE UNITED STATES FREE OR AT REDUCED RATES. SEE PUBLIC UTILITIES COMMISSION OF CALIFORNIA V. UNITED STATES, 355 U.S. 534 (1958); UNITED STATES V. GEORGIA PUBLIC SERVICE COMMISSION, 371 U.S. 285 (1963). AND IT IS THE GENERAL CONSENSUS THAT A COMMON CARRIER RATE TENDER UNDER SECTION 22 IS A CONTINUING OFFER TO FURNISH TRANSPORTATION SERVICES AT SPECIAL RATES AND CHARGES, SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED. C & H TRANSPORTATION CO., INC. V. UNITED STATES, 436 F.2D 480 (CT.CL. 1971); 51 COMP.GEN. 541 (1972). CONTINUING OFFERS, THESE SECTION 22 TENDERS CREATE IN THE GOVERNMENT THE POWER TO MAKE A SERIES OF SEPARATE CONTRACTS BY A SERIES OF INDEPENDENT ACCEPTANCES, AND THAT POWER IS GOOD UNTIL EFFECTIVELY REVOKED BY THE ONE MAKING THE OFFERS. CORBIN ON CONTRACTS, SECTION 38 (1963); WILLISTON ON CONTRACTS, 3RD ED., SECTION 58 (1957); RESTATEMENT OF CONTRACTS, SECTIONS 34, 41 (1932).

THESE CONTINUING OFFERS, AT LEAST IN THE CONTEXT OF OFFERS TO MOVE HOUSEHOLD GOODS FOR THE DEPARTMENT OF DEFENSE (DOD), CANNOT BE MADE AT THE UNFETTERED CAPRICE OF THE FORWARDER OR CARRIER. DOD HAS CREATED AN ELABORATE SYSTEM PRESCRIBING SOME ASPECTS OF THE FORMAT AND CONTENT THAT THESE TENDERS MUST POSSESS IN ORDER FOR THEM TO BE "ACCEPTED" BY DOD SO THAT THE OFFEROR CAN DO BUSINESS WITH DOD. SEE DOD REGULATION 4500.34R AND RATE FILING INSTRUCTIONS ISSUED BY HEADQUARTERS, MILITARY TRAFFIC MANAGEMENT COMMAND.

IN THE PRESENT CASE, STAR FILED ITS TENDER 28 AS A RATE "EXCEPTION" TO TENDER 2, STATING IN ITEM 13 OF TENDER 28 THAT "RATES IN THIS TENDER ARE AN EXCEPTION TO RATES CONTAINED IN STAR WORLD WIDE FORWARDERS ICC GRT #2 SEC. IV & SUPPLEMENTS THERETO ***." THE EXPRESS PURPOSE OF TENDER 28 WAS TO INCREASE THE TENDER 2 RATES BY SUBSTITUTING THE RATES IN TENDER 28. THIS PURPOSE WAS CLEARLY COMMUNICATED TO DOD BECAUSE THE FILING WAS ACCOMPANIED BY A SERIES OF CORRESPONDENCE AND MEETINGS. IN THE COMMERCIAL TARIFF CONTEXT, AN "EXCEPTION," A SEPARATE INDEPENDENT ENTITY, OPERATES TO EFFECT A SUBSTITUTION FOR A PART OF ANOTHER PRE EXISTING ENTITY, USUALLY A CLASSIFICATION, CONSISTING OF NUMEROUS COMMODITY RATINGS. AS STATED IN PARK & TILFORD DISTILLERS, INC. V. UNITED FREIGHT TERMINAL, INC., 46 M.C.C. 735, 738 (1947), THE "EXCEPTION" "*** REMOVED THE APPLICATION OF THE CLASSIFICATION RATING ***" OR AS STATED IN W.A. BARROWS PORCELAIN ENAMEL CO. V. CUSHMAN MOTOR DELIVERY CO., 11 M.C.C. 365, 369 (1939) "TAKES PRECEDENCE" OVER THE CLASSIFICATION RATING AND SUBSTITUTES ONE OR MORE DIFFERENT "EXCEPTION" RATINGS. AND UNITED STATES V. WESTERN GILLETTE, INC., 343 I.C.C. 29 (1972) MAKES CLEAR THAT AN "EXCEPTION" CAN EFFECT A SUBSTITUTION FOR MORE THAN A CLASSIFICATION RATING, SO THERE APPARENTLY IS NO REASON WHY RATES CANNOT BE SUBSTITUTED. HOWEVER, WE BELIEVE THAT GSA'S LEGITIMATE DOUBT ABOUT WHETHER STAR COULD RAISE TENDER 2 RATES BY THE MEANS CHOSEN IS RESOLVED BY DOD'S EXPLANATION OF ITS ACCEPTANCE OF TENDER 28.

DOD'S EXPLANATORY LETTER OF MAY 6, 1974, EXPLICITLY ACCEPTED STAR'S TENDER 28 AS AN INCREASE OF TENDER 2'S RATES. THE LETTER ALSO ACKNOWLEDGED THAT FOR TENDER 28 AN EXCEPTION HAD BEEN MADE FROM ONE OF THE PRESCRIPTIONS OF TENDER FILING PREVIOUSLY MENTIONED THAT ENABLED STAR TO DO BUSINESS WITH DOD. SINCE DOD'S FILING SYSTEM WAS NOT STATUTORILY MANDATED BUT WAS CREATED FOR THE BENEFIT OF DOD IN ACCOMPLISHING THE MOVEMENT OF HOUSEHOLD GOODS FOR ITS MEMBERS, WE BELIEVE DOD COULD PROPERLY WAIVE ONE OF ITS PROVISIONS, WHICH ALLOWED THE ACCEPTANCE OF TENDER 28. THEREFORE, ITEM 23 OF TENDER 28, PROVIDING FOR ALTERNATION OF "OTHERWISE APPLICABLE" LOWER RATES, DID NOT PROVIDE THE GOVERNMENT LOWER RATES AT THE OLD TENDER 2 LEVEL AS ADVOCATED BY GSA. TENDER 28, AS ACCEPTED BY DOD, INCREASED TENDER 2'S RATES BY SUBSTITUTION IN THE MANNER OF AN "EXCEPTION" SO THAT THE OLD TENDER 2 RATE LEVEL WAS SUPERSEDED AND NOT "OTHERWISE APPLICABLE" FOR THE DURATION OF TENDER 28. WE NOTE THAT CURRENT RATE FILING INSTRUCTIONS EXPLICITLY PRECLUDE INCREASING ONE TENDER'S RATES BY ANOTHER TENDER IN THE MANNER OF AN "EXCEPTION."

STAR ALSO CONTENDS THAT GSA ERRONEOUSLY DISALLOWED ITS SHIPMENT CHARGE OF $22.75 ON GBL NO. H-0033953. YET AS NOTED ABOVE, STAR ALREADY HAS BEEN PAID A SHIPMENT CHARGE OF $39 BASED ON THE NET WEIGHT OF A CONSOLIDATED SHIPMENT CONSISTING OF PART LOTS UNDER GBL NO. H-0033953 AND GBL NO. H- 0033614.

THE NET WEIGHT OF BOTH PART LOTS OF THE CONSOLIDATED SHIPMENT IS 12,380 POUNDS. ITEM 15 OF STAR'S TENDER 2, INCORPORATED BY REFERENCE INTO STAR'S TENDER 28, SHOWS THAT THE SHIPMENT CHARGE FOR 12,380 POUNDS IS $39 WHICH WAS PAID TO STAR ON ITS BILL FOR TRANSPORTATION CHARGES ON GBL NO. H- 0033614.

WHEN THE CONSOLIDATED SHIPMENT WAS MADE, PARAGRAPH 6008(B) OF DOD REGULATION 4500.34-R STATED IN PERTINENT PART THAT "*** EACH PART (LOT OF HOUSEHOLD GOODS) WILL BE CONSIDERED AS A SEPARATE SHIPMENT FOR ALL SERVICES AND CHARGES OTHER THAN LINE-HAUL TRANSPORTATION CHARGES AND SHIPMENT CHARGES." THUS, GSA'S ALLOWANCE OF ONLY ONE SHIPMENT CHARGE ON THE NET WEIGHT OF THE TWO LOTS OF THE CONSOLIDATED SHIPMENT WAS CORRECT.

ACTION SHOULD BE TAKEN BY GSA CONSISTENT WITH THIS DECISION.