Skip to Highlights

A trucking firm requested review of the General Services Administration (GSA) determination that it overcharged the government under a government bill of lading. The shipment was a truckload (TL) quantity consisting of a consolidation of less than truckload (LTL) quantities of different articles, including two cartons of radioactive material, or contraband. In its audit, GSA considered the shipment as two separate shipments and applied an LTL class rate to the contraband and a TL freight all kinds (FAK) rate to the other articles under the firm's tender. The FAK rate could not be applied to the entire shipment, because one of the items of the tender expressly stated that the FAK rates therein would not apply to contraband. The firm contended that the lower TL FAK rate was not applicable, because the tender was governed by a National Motor Freight Classification (NMFC) rule which provides for dividing shipments into TL and LTL shipments for rate purposes where it results in lower charges. However, the rule also prohibits the use of FAK rates on mixed shipments. Both parties agreed that, because of the contraband, the shipment must be considered two shipments but disagreed as to whether the FAK TL rate or a higher TL rate was applicable to the noncontraband articles. GAO found that the firm's tender was governed by the NMFC rule and that the rule was applicable to the shipment. However, it also found that the GSA action was correct. While the tender did not prohibit application of FAK rates to noncontraband articles in a mixed shipment and application of a different tariff to the contraband, it provided that the rates would not apply to the contraband articles. Accordingly, the GSA audit action was sustained.


GAO Contacts