Matter of: Advanced Distribution System File: B-248291 Date: July 20, 1992

B-248291: Jul 20, 1992

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000 pounds but which otherwise is exactly the same. If a carrier cannot assess an additional charge for exclusive use when such service is requested by the government in a shipment based upon a minimum weight of 45. Even though the van was not filled to full visible capacity. The basis for the Navy's action was Item 106 of MFTRP 1A. Which provides that exclusive use service must be furnished without charge when "line-haul charges are based upon a minimum weight of 45. 000 pounds" or actual weight is more than 45. With the elimination of the exclusive use charge the total charge was lower than billed. When $504.05 for exclusive use was eliminated the result was a net reduction of the ADS bill by $503.36.

Matter of: Advanced Distribution System File: B-248291 Date: July 20, 1992

PROCUREMENT Payment/Discharge Shipment costs Additional costs Evidence sufficiency Under the Military Traffic Command's Freight Traffic Rules Publication No. 1A, the charge for a shipment weighing 7,000 pounds cannot exceed the charge for a shipment weighing 45,000 pounds but which otherwise is exactly the same. Therefore, if a carrier cannot assess an additional charge for exclusive use when such service is requested by the government in a shipment based upon a minimum weight of 45,000 pounds, then it cannot charge for such service on the 7,000 pound shipment where the government computes the charge for the 7,000 pound shipment as if it weighed 45,000 pounds.

DECISION

Advanced Distribution System (ADS), a motor carrier, requests review of the audit action of the General Services Administration (GSA) denying its claim for an exclusive use charge for services provided under Government Bill of Lading (GBL) C-8,888,483. We sustain GSA's settlement.

On December 9, 1991, the Navy tendered to ADS freight designated as "Freight All Kinds" weighing 7,000 pounds for van transportation from Jacksonville, Florida to Norfolk, Virginia, a distance of 593 miles. The Navy requested exclusive use service for the shipment, even though the van was not filled to full visible capacity.

ADS's bill to the government included an additional charge for exclusive use, as permitted by Item 105 of the Military Traffic Management Command's Freight Traffic Rules Publication No. 1A (MFTRP 1A), and as provided for in ADS's Tender 362. On prepayment audit, however, the Navy eliminated the exclusive use charge and simply rated ADS's bill as if the shipment weighed 45,000 pounds, multiplying the per-hundredweight, per-mile rate in the tender for a minimum of 40,000 pounds (the highest minimum in the tender) by 45,000 pounds and the mileage. The basis for the Navy's action was Item 106 of MFTRP 1A, which provides that exclusive use service must be furnished without charge when "line-haul charges are based upon a minimum weight of 45,000 pounds" or actual weight is more than 45,000 pounds.

The audit action resulted in an increased line-haul charge, but with the elimination of the exclusive use charge the total charge was lower than billed. Specifically, the line-haul charge became $1,000.69, instead of $1,000, and when $504.05 for exclusive use was eliminated the result was a net reduction of the ADS bill by $503.36. On appeal, GSA affirmed the Navy's audit action and disallowed ADS's claim.

ADS questions the Navy and GSA actions, in view of the provision for an exclusive use premium in Item 105 of MFTRP 1A. ADS argues that Item 106 necessarily only precludes exclusive use charges where the minimum truckload weight in the carrier's tender is 45,000 pounds or more, or if the shipment weighs more than 45,000 pounds. ADS contends that Item 106 therefore does not preclude the charges in issue here, since the minimum truckload weight in ADS's Tender 362 was 40,000 pounds, and the shipment weighed only 7,000 pounds. ADS also contends that it is improper to artificially apply 45,000 pounds to the shipment because Item 1001 of MFTRP 1A requires that a truckload charge be assessed at the truckload minimum weight shown in the carrier's tender, unless actual weight exceeds truckload minimum weight.

We agree with the GSA/Navy audit action. The restriction in Item 106 on exclusive use charges is not dependent on the way the carrier structures its tender in terms of minimum weight, or on actual weight of the shipment. Instead, the focus of Item 106, which MFTRP 1A describes as an "exception" to Item 105, is on what the charges would be if the government's shipment had used the truck's entire capacity anyway. As we stated in Phoenix Motor Express, Inc., B-235886, June 4, 1990, the point of Item 106 is that there can be no exclusive use charge when the government already in effect pays for the vehicle's full capacity. See also, Consolidated Freightways, Inc., B-236389, July 25, 1990.

Moreover, accepting ADS's argument would lead to the government paying more to ship 7,000 pounds -- or any weight up to 45,000 pounds -- on an exclusive use basis (with the charge payable) than it would to ship 45,000 pounds, the weight at which the carrier concedes that no exclusive use premium would apply, according to Item 106. [1] However, Item 140 of MFTRP 1A provides that the charge for a shipment cannot exceed the charge to ship a greater quantity of the same commodity over the same route, at the rate and weight applicable to the greater quantity. This provision essentially overrides the normal charge assessment rule of Item 1001, and is consistent with settled industry practice that, for the same commodity with the same service, a carrier may not charge a shipper a greater amount to transport a lesser weight. See Milne Truck Lines, Inc., 62 Comp.Gen. 29 (1982). In our view, the maximum charge provision in Item 140 requires that the line-haul charge here be based on a minimum weight of 45,000 pounds.

GSA's audit action is sustained.

1. Presumably, ADS would not have contested the Navy/GSA action if the shipment weighed 45,000 instead of 7,000 pounds, or if Tender 362 provided for a minimum of 45,000 instead of 40,000 pounds.