Request for Review of GSA Deduction Action

A rail carrier requested review of a deduction by the General Services Administration (GSA) from monies otherwise due the carrier. The government paid the carrier's bill upon presentation, but a GSA audit performed later determined that an overcharge had been assessed and GSA deducted the amount from subsequent bills from the carrier. GSA based its determination on a rate schedule which applied only to charges paid by the government for shipment of goods involved in foreign military sales when any benefit from lower rates would accrue solely to the government. The carrier based its request for review solely on an annotation on the government bill of lading (GBL) which stated that the section of the foreign military sales schedule relied upon by GSA in its determination did not apply to the shipment indicated on the GBL. GAO held in an earlier decision that this language simply reflected the opinion of the Acting General Counsel of the Department of Defense, and was based on the belief that the government's customers reimburse the United States for part of the shipping costs. A subsequent GAO report determined that foreign military sales customers were not fully reimbursing the United States for transportation and handling costs. In this case the burden was upon the carrier to prove that the United States did not incur the cost and would not obtain the economic benefit from the lower rates. Since the carrier did not provide this proof, the GSA deduction action was sustained.