[Request for Advance Decision Concerning Propriety of Paying Freight Charges]

B-212991: Nov 28, 1983

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Shirley Jones
(202) 512-8156


Office of Public Affairs
(202) 512-4800

An advance decision was requested concerning the propriety of the payment of freight charges to a trucking firm for transportation services provided under a Government bill of lading. The Army had declined to pay this claim and had submitted it to the General Services Administration (GSA) for disposition because a firm with a similar name and same address appeared on a holdup list of firms filing for bankruptcy; this firm was indebted to the Government for transportation overcharges. In view of the doubtful nature of the claim, GSA requested an advance decision from GAO. GAO found that the transportation charges due should be applied to the bankrupt firm. Since the owner of the claimant firm was an owner of the bankrupt firm, GAO found that it was either the same legal entity or a continuation of that entity. The owner of the new firm failed to show that the new company was not merely a continuation or reorganization of the bankrupt company. Because the new firm was operating in interstate commerce without the required operating authority at the time it performed the transportation services for the Government, the carrier was entitled to recover on a quantum meruit basis for its services. Accordingly, GSA should determine the lowest available Government rate and amend its proof of claim to reflect this as the amount owed by the Government to the bankrupt firm for transportation services.

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