There are generally two methods of shipping the household goods of federal employees within the continental United States: (1) the actual-expense method; and (2) the commuted-rate system. Under the actual-expense method, the government assumes responsibility for awarding contracts and negotiating with the carriers. Household goods are shipped on a government bill of lading. Employees make their own arrangements under the commuted-rate system. They select and pay carriers or transport their own household goods, and are reimbursed by the government in accordance with rate schedules compiled and distributed by the General Services Administration.
A limited test showed that the commuted-rate method generally resulted in lower overall cost to the government when compared to costs computed by using the Standard Government Rate Tenders applicable under the actual-expense method. However, Department of Defense and civilian agencies are sometimes able to negotiate for lower than standard rates. The possibility of and conditions influencing lower rates depend on locality, time of year, carriers' workload, and other variables that make general conclusions about the most cost favorable method impossible. The existing procedures are sufficiently flexible to permit use of the method which is in the best financial interest of the government.