B-233601, Mar 8, 1990, 90-1 CPD ***

B-233601: Mar 8, 1990

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PROCUREMENT - Payment/Discharge - Shipment costs - Rate schedules - Applicability DIGEST: Solicitation for tenders cautioned carriers that because the purpose of the solicitation was to maximize competition by individual carriers the government would not accept the tenders of ratemaking bureaus or associations. The provision is irrelevant to the computation of charges for shipments ordered from a carrier that did not participate in the solicitation with a tender for the routes involved. Which generally were set out in an individual tender offered by the carrier involved. Or in tenders offered by bureaus and associations on behalf of their carrier-members. /1/ A tender basically is a continuing offer to enter into a series of contracts on the terms and conditions it sets out.

B-233601, Mar 8, 1990, 90-1 CPD ***

PROCUREMENT - Payment/Discharge - Shipment costs - Rate schedules - Applicability DIGEST: Solicitation for tenders cautioned carriers that because the purpose of the solicitation was to maximize competition by individual carriers the government would not accept the tenders of ratemaking bureaus or associations. The provision is irrelevant to the computation of charges for shipments ordered from a carrier that did not participate in the solicitation with a tender for the routes involved, so that in computing charges the government may follow the normal practice of referring to bureau or association tenders for applicable rates.

Quality Moving & Storage, Inc.:

Quality Moving & Storage, Inc., requests that we review the General Services Administration's (GSA) audit determination that Quality collected overcharges for transporting a number of government shipments. We agree with GSA's determination.

The government historically had paid for shipments of household goods based on the carrier's lowest published rates, which generally were set out in an individual tender offered by the carrier involved, or in tenders offered by bureaus and associations on behalf of their carrier-members. /1/ A tender basically is a continuing offer to enter into a series of contracts on the terms and conditions it sets out. See ABF Freight System, Inc., B-218694, Nov. 25, 1985.

On November 18, 1983, in an attempt to generate more competitively priced tenders for Department of Defense shipments, the Military Traffic Management Command (MTMC) issued Household Goods Domestic Rate Solicitation 4-1 for individual tenders to cover shipments over routes the responding carrier would offer to service. Item 14 of Rate Solicitation 4 -1 provided that traffic requirements would be offered to those low-rate responsible carriers and forwarders whose tenders were responsive and most advantageous to the government. Item 14 also provided:

"Tenders of rate bureaus and associations engaged in collective ratemaking functions inconsistent with the Government's goal to maximize competition are not solicited and will not be received."

Quality filed a tender in response to Rate Solicitation 4-1 on January 5, 1984, which MTMC accepted on May 1, 1984. On July 10, 1984, Quality filed a supplement to the January 5 tender to delete rates for numerous states that it initially had included. MTMC accepted this supplement on August 12, 1984.

Quality subsequently carried goods for the Department of the Navy to states whose rates had been deleted by the supplement, and charged the Navy at the rates set forth in the commercial tariff of the Movers' Warehousemen's Association of America (Association), in which Quality then participated. GSA determined that the government was being over charged on the basis that the applicable rates were the ones set forth in the Association's government tender, which was effective with respect to Department of Defense shipments until December 31, 1985.

Quality argues that the government is estopped from using any rate bureau or association government tender in view of the item 14 language quoted above. Quality contends that the government's only alternative in computing charges for shipments that could have been effected through Rate Solicitation 4-1 therefore is to use a public tariff.

We see no legal merit to Quality's argument. By its terms, item 14 simply precludes responses to the solicitation in the form of bureau or association tenders. It has no application in the computation of charges for shipments, and clearly is irrelevant to payment for services ordered from a firm that did not participate in the Rate Solicitation for those routes. We see no logic to reading it to preclude the government from treating non-Rate Solicitation shipments in the usual non-Rate Solicitation manner.

It is unclear why the Navy selected Quality instead of Rate Solicitation 4-1 carriers for the shipments along the routes in issue. Whatever the reason, we agree with GSA and MTMC that item 14 has no effect on the government's otherwise usual practice of referring to bureau or association tenders to compute charges for such shipments. We therefore affirm GSA's audit action.

/1/ Tenders are offered to the government under section 22 of the Interstate Commerce Act, 49 U.S.C. Sec. 10721, which authorizes common carriers to deviate from published tariff rates that are applicable to the public generally.