B-245385, Jan 15, 1992

B-245385, Jan 15, 1992

DIGEST: For military motor shipments of 10,000 pounds or more governed by the Department of Defense (DOD) Standard Tender of Freight Services and the Military Traffic Management Command's Rules Publication No. 1A, the government may alternate from rates in the 10,000 pounds or greater category to the same carrier's rates under the less-than-10,000 pound category when lower overall charges will result. The carrier's indication on the face the lower-charge tender that it should be distributed to routing authorities having jurisdiction over the routing of shipments of less than 10,000 pounds does not preclude alternation, because alternation requirements in the contract of carriage are unrelated to the tender's distribution.

Eck Miller Transportation Corporation:

Eck Miller Transportation Corporation, a motor carrier, requests that we review the Navy's and the General Services Administration's (GSA) audit actions involving various Government Bill of Lading transactions. Eck Miller complains that for shipments of 10,000 pounds or more, the Navy and GSA used rates the carrier says were intended for shipments under 10,000 pounds; the government's alternation /1/ led to lower overall charges for the shipments. We sustain the actions of GSA and the Navy.

Eck Miller offered service under two rate publications, Tender 401 and Tender 419, submitted in Department of Defense (DOD) Standard Tender format. Both tenders generally covered the same commodities, and the origins and destinations of the transactions involved were origins and destinations under both tenders. But, Tender 419 shows on its face sheet in Block 17, Tender Distribution, an "X" in the "Less than 10,000 pounds" space, while Tender 401 shows an "X" in the "10,000 pounds or greater" space. Rates under Tender 401 were higher than the $.87 per mile-rate under Tender 419 for the origins/destinations involved here.

The Navy and GSA applied Tender 419 rates to shipments exceeding 10,000 pounds. Eck Miller contends that Tender 401 applied to the exclusion of Tender 419 where shipments weighed 10,000 or more pounds because of the entries in Block 17. The carrier notes that the instruction for completing Block 17 of the Standard Tender states that "carriers may indicate application for both weight brackets only if the tender contains rates for both weight categories." The carrier also contends that Tenders 401 and 419 covered different services. In our view, Eck Miller's entry in Block 17 does not preclude alternation. The object of Block 17 is tender distribution by the carrier, not rate alternation by the government. Shipments of less than 10,000 pounds are routed by local DOD shippers themselves, while heavier shipments are routed by the Military Traffic Management Command (MTMC). All tenders are submitted to MTMC headquarters, from which they are distributed. The instruction to carriers for completing Block 17 permits the carrier to mark, "For Administrative Purposes," whether the tender applies to one or both weight brackets. Although such a mark may indicate the carrier's intent for the tender's application, it is unrelated to the government's right of alternation. That right is clearly set out in the Standard Tender-- as stated above, both tenders involved here were submitted in that format-- and in items 60 and 140 of MTMC's Freight Traffic Rules Publication No. 1A (MFTRP 1A).

Section B, paragraph (e) of the Standard Tender states that "this tender shall not apply where charges for service provided under this tender exceed charges otherwise applicable for the same service in tenders filed with MTMC." For Tender 401, Tender 419, covering the same commodities and origins/destinations, is "otherwise applicable." Further, by its terms Tender 401 is subject to MFTRP 1A. Item 60 of MFTRP 1A advises that, in general, rates on the same articles shipped between the same origins and destinations will alternate to produce the lowest charge. Also, Item 140 states that "when alternating truckload charges ... charges will be the lowest that can be computed. ..."

Finally, we see no merit in Eck Miller's argument that Tender 419 covers a different service then does Tender 401. Both tenders generally covered the same commodities, and the origins and destinations of the shipments in the transactions involved were origins and destinations under both tenders. An increase or decrease of weight by 1 pound (between 9,999 and 10,000) is not different service. See Davidson Forwarding Co., B-243730, Aug. 6, 1991; AA Sunshine Movers, Inc., B-195219, Dec. 27, 1979.

The audit actions of GSA and the Navy are sustained.

/1/ Alternation is the practice of selecting the lowest charge for a shipment from any of the rates and rate publications that could apply.