MOTIONS FOR SUMMARY RELIEF DENIED: April 16, 2009
Agency decision
Ask Donna
What actually matters in this document.
Text
MOTIONS FOR SUMMARY RELIEF DENIED: April 16, 2009
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
In the Matters of AMERICAN WORLD FORWARDERS, INC. (CBCA 888-RATE);
ACCELERATED INTERNATIONAL (902-RATE); AMERICAN VANPAC CARRIERS,
INC. (903-RATE); CARTWRIGHT INTERNATIONAL VAN LINES, INC. (904-RATE);
COVAN INTERNATIONAL, INC. (905-RATE); CLASSIC FORWARDING, INC. (906
RATE); DESERET FORWARDING INTERNATIONAL, INC. (907-RATE); FOREMOST
FORWARDING, INC. (908-RATE); JET FORWARDING, INC. (909-RATE); AFI
WORLD FORWARDERS, INC. (912-RATE); CAVALIER FORWARDING, INC. (913
RATE); CRYSTAL FORW ARDING, INC. (914-RATE); and LOGISTICS
INTERNATIONAL, INC. (915-RATE)
Alan F. Wohlstetter and Stanley I. Goldman of Denning & Wohlstetter, Washington,
DC, counsel for Claimants.
Aaron J. Pound, Office of General Counsel, General Services Administration,
Washington, DC, counsel for General Services Administration.
Bruce D. Ensor, Headquarters--Surface Deployment and Distribution Command,
Office of the Staff Judge Advocate, Department of the Army, Scott Air Force Base, IL,
counsel for Department of Defense.
VERGILIO, Board Judge.
On August 24, 2007, American World Forwarders, Inc. (claimant) filed at the Board
a claim, CBCA 888-RATE, seeking review of the determination by the Audit Division of the
General Services Administration that the claimant is liable to the Government for
$32,338.01. On September 17, 2007, the Board received additional claims from eight
different claimants challenging similar determinations of liabilities to the Government:
Accelerated International, CBCA 902-RATE; American Vanpac Carriers, Inc., CBCA 903
RATE; Cartwright International Van Lines, Inc., CBCA 904-RATE; Covan International,
Inc., CBCA 905-RATE; Classic Forwarding, Inc., CBCA 906-RATE; Deseret Forwarding
International, Inc., CBCA 907-RATE; Foremost Forwarding, Inc., CBCA 908-RATE; and
Jet Forwarding, Inc., CBCA 909-RATE. On September 18, 2007, the Board received claims
from four additional claimants similarly challenging determinations of liabilities to the
Government: AFI World Forwarders, Inc., CBCA 912-RATE; Cavalier Forwarding, Inc.,
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
2
CBCA 913-RATE; Crystal Forwarding, Inc., CBCA 914-RATE; and Logistics International,
Inc., CBCA 915-RATE.
The claimants, each a transportation service provider, contend that the Government
agreed to reimburse some of their increased costs related to delays of shipments that arose
after the attacks of September 11, 2001. The claimants maintain that they incurred such costs
from their agents who experienced delays at military installations while shipments were in
transit between points of pick-up and delivery. The claimants state that a meeting of the
minds arose from negotiations with a Government employee and is reflected in amendments
to the underlying contracts. The claimants sought reimbursement for the costs as surcharges
under their agreements with the Government. Although the Government initially reimbursed
each claimant, upon later audit the Government concluded that the surcharges were not
reimbursable as submitted. The claimants dispute the various notices of overcharge that the
Government issued. Each claimant asserts entitlement to be paid for the total amount of its
billed surcharges.
Each party has filed a motion for summary relief. The claimants contend that they
billed in accordance with the provisions of the agreements and that the Government has not
provided a viable basis to disallow payment. To the contrary, in its own motion for summary
relief, the Government contends that the claimants did not bill in accordance with the
agreements and that the claimants have not supported payment of the surcharges.
At this stage, in the context of cross-motions for summary relief, neither party has
prevailed. No claimant has established a right to payment, either entitlement or quantum.
While some of the bases relied upon by the Government to disallow payment of surcharges
are not supported, the ultimate burden of proof for recovery is upon the claimants. The
Government has not established that relief is precluded under the agreements.
A claimant is not entitled to reimbursement of a surcharge simply because the
claimant incurred an expense, anticipated or not. Under the contracts, the claimants agreed
to be reimbursed at single factor rates for the transportation of household goods and
unaccompanied baggage; surcharges to the rate are recoverable only as dictated in each
agreement. The present record does not establish that the surcharges for which the claimants
seek reimbursement were permitted under the agreements, or that each surcharge was
actually incurred for a compensable cause at a compensable amount. Similarly, the present
record does establish that any surcharge may not be reimbursed.
In denying these cross-motions, the Board resolves some issues. The Government’s
notices of overcharge that rely upon a document issued on February 24, 2006, as the basis
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
3
for disallowance are not supported in the record. Although that document specifically
restricted available surcharges, the limitations were superceded by a document dated
April 11, 2006.
The claimants’ conclusions regarding the binding authority of a Government
employee engaged in negotiations (Mr. S. for easy reference) are not supported by the record.
Each agreement specifies that it could be modified only by a given individual by letter or
electronic means, and that prior practices or procedures do not influence the agreement. Not
being the sole individual identified in the agreements as possessing modification authority,
Mr. S.’s communications while negotiating and dealing, directly and indirectly, with the
claimants, did not alter the terms of any agreement. The Government employee’s authority
to negotiate does not equate to a delegation from the specified individual to modify the
agreement. The actual modifications to the agreements are not on their face as encompassing
as the claimants maintain.
Findings of Fact
1.
As may be relevant here, the claimants moved household goods (HHG) and/or
unaccompanied baggage (UB) for the Government beginning on October 1, 2001. The
claimants were transportation service providers (TSPs) under successive contracts with the
Government. The contracts arose from agreements issued by the Government, namely the
International Personal Property Rate Solicitation (IPPRS) I-13 (effective October 1, 2001),
IPPRS I-14 (effective October 1, 2003), IPPRS I-15 (effective October 1, 2004), and IPPRS
I-16 (effective October 1, 2005), IPPRS I-17 (effective October 1, 2006), and IPPRS I-18
(effective April 1, 2007).
2.
The solicitation that became a contract or agreement in effect for two years
beginning October 1, 2001, provides: “This solicitation stands alone and is not influenced
by prior practices or procedures. It may be modified only by the Deputy Chief of Staff for
Passenger & Personal Property, by letter or electronic means.” IPPRS I-13 (Item 107.f).
Subsequent agreements state: “This solicitation stands alone and is not influenced by prior
practices or procedures. It may be modified only by the Assistant Deputy Chief of Staff for
Operations, Transportation Services, by letter or electronic means.” IPPRS I-14, I-15, I-16,
I-17, I-18 (Item 107.f).
3.
Payment for services was contractually established by single factor rates. A
transportation single factor rate includes all land, water, and air transportation services,
except for specifically identified items. Of relevance here are two categories of shipments,
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
4
one for the transportation of household goods (item 432), the other for the transportation of
unaccompanied baggage (item 433). IPPRS I-13 at 4-22 (¶ 432a(4)), 4-24 (¶ 433a(3)).
4.
In the initial unamended agreement, for the transportation of household goods,
an exception exists to the inclusiveness of the single factor rates (i.e., surcharges are
permitted) for:
Bunker fuel charges (BSC), air fuel surcharges (100), port congestion
surcharges (CON), and/or war risk surcharges (WAR), where applicable, and
when actually billed to the ITGBL [international through Government bill of
lading (GBL)] carrier by ocean freight carrier or air carrier pursuant to
regularly filed tariff(s) with the Federal Maritime Commission. Such charges
will be separately stated on the GBL and supported by prorated ocean or air
carrier invoices for the actual amount.
IPPRS I-13 at 22 (¶ 432a(4)(d)). Amendment 2 to IPPRS I-13, with an effective date
coincident with the effective date of the contract, changed “Federal Maritime Commission”
to read “Regulatory Bodies/Commission.”
5.
In the initial unamended agreement, for the transportation of unaccompanied
baggage, an exception exists to the inclusiveness of the single factor rates for:
Bunker fuel charges (BSC), air fuel surcharges (100), port congestion
surcharges (CON), and/or war risk surcharges (WAR), where applicable, and
when actually billed to the ITGBL carrier by the ocean freight carrier pursuant
to regularly filed tariff(s) with the Federal Maritime Commission. Such
charges will be separately stated on the GBL and supported by ocean or air
carrier invoices for the actual amount.
IPPRS I-13 at 4-24 (¶ 433a(3)(d)).
6.
The agreement did not define either a port congestion surcharge (CON) or a
war risk surcharge (WAR). IPPRS I-13.
7.
For each of these items, the contract stated that the single factor rate will not
include “[s]torage, waiting time and/or handling charges . . . caused by failure of the origin
transportation officer to furnish acceptable custom documents or by refusal of customs
officials to clear shipments. These charges will be billed at rates provided in this solicitation
when performed by the carrier.” IPPRS I-13 at 4-23 (¶ 432.b(1)), 4-25 (¶ 433.b(1)). Item
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
5
503 contains provisions for surcharges for waiting time. The provisions note that the item
does not apply when waiting time is the fault of the carrier and state that free waiting time
is as follows: “3 hours for direct deliveries, 1 hour for deliveries from SIT [storage-in
transit], and 1 hour for attempted pickup of HHG only.” IPPRS I-13 at 5-36 (¶ 503). This
language remained unchanged in the later contracts here at issue. IPPRS I-14, I-15, I-16, I
17, and I-18.
8.
The service providers and Government officials discussed surcharges being
incurred by the service providers when, after the attacks of September 11, 2001, delays were
occurring at intermediate (other than origin or destination) ports affecting the transportation
of household goods and unaccompanied baggage. Substantive discussions occurred between
the president of the Household Goods Forwarders Association of America, Inc. (association
president), at the behest of association members, and Mr. S., a Government employee of the
Military Management Traffic Command (MTMC), the predecessor to the Surface
Deployment and Distribution Command (SDDC), who retired in 2003. Mr. S. was not the
Deputy Chief of Staff for Passenger and Personal Property. The association president
indicated that because of tightened security and changed gates for entrance to installations,
shipments were being delayed in transit; the service providers were incurring surcharges from
their port agents because of the delays. Mr. S. advised that items 432 and 433 would be
changed to permit reimbursement of surcharges assessed for congestion delays by aerial port
agents to the transportation service providers. The association president understood that
service providers were to be reimbursed under items 432 and 433 for surcharges by port
agents under the port security/congestion surcharge, even when the only paper trail of the
surcharges would be the invoices from the port agents. Some of the correspondence was
provided by e-mail to the Deputy Chief of Staff for Passenger and Personal Property; the
existing record does not substantiate that the Deputy Chief of Staff reviewed, concurred in,
approved, or disapproved of the various communications of Mr. S. Declarations of
Association President and of Mr. S. For example, in an e-mail exchange of October 16,
2001, between the two individuals, with copies provided to others within the Government,
the association president posed a question to Mr. S., seeking guidance on how charges could
be passed along to the Government:
[W]e have received a notification from an [aerial] port agent that they will be
charging a surcharge of $5.00 GCWT to cover the necessary security
restrictions and detention at the gates. Our port agent is quoting the rate
solicitation Item 433 (UB) pg 4-24 (d), we are unable to determine exactly how
to apply this Item, any guidance we receive will be greatly appreciated.
To this, Mr. S. replied:
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
6
[C]harges would normally be covered under port congestion, however, we will
make it easier, by changing “port congestion” to “port/security congestion.”
The change will be made effective for 1 OCT 01 and [a named individual] will
add to the I-13. We will also permit pass thru of this surcharge by the Aerial
Port Agent to the ITGBL carrier for billing under “port/security congestion”.
Association President Declaration, Attachment 1.
9.
During the discussions, the Government amended IPPRS I-13, with an
effective date of October 1, 2001 (i.e., coincident with the effective date of the contract), by
written Amendment 3. The explanation of change for item 432a (for household goods) states
that the “item now includes security surcharges and authorizes surcharges from port agents.”
The explanation of change for item 433a (unaccompanied baggage) states that the “item now
includes security surcharges and authorizes surcharges from port agents and air carriers.”
IPPRS I-13, Amendment 3. With the amendment, the pertinent surcharge provision became
identical (but for the use of the word “prorated” in item 432a) for each item:
Item 432a(4)(d):
Bunker fuel charges (BCS), air fuel surcharges (100), port
security/congestion surcharges (CON), and/or war risk surcharges (WAR),
where applicable, and when actually billed to the ITGBL carrier by ocean
freight carrier, air carrier or port agent pursuant to regularly filed tariff(s) with
the Regulatory Bodies or Commissions. Such charges will be separately stated
on the GBL and supported by prorated ocean, air carrier or port agent invoices
for the actual amount.
Item 433a(3)(d):
Bunker fuel charges (BCS), air fuel surcharges (100), port
security/congestion surcharges (CON), and/or war risk surcharges (WAR),
where applicable, and when actually billed to the ITGBL carrier by ocean
freight carrier, air carrier or port agent pursuant to regularly filed tariff(s) with
the Regulatory Bodies or Commissions. Such charges will be separately stated
on the GBL and supported by ocean, air carrier or port agent invoices for the
actual amount.
IPPRS I-13 (revised through Amendment 3). The amendment did not define either the CON
or the WAR surcharge.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
7
10.
The above-quoted language for these items, 432a and 433a, along with the lack
of accompanying definitions for CON and WAR, did not change in IPPRS I-14. For IPPRS
I-15, the only changes were the replacement of “carrier” with “Transportation Service
Provider”; IPPRS I-16 carried over that identical language. Thus, substantively, the language
remained unchanged through March 1, 2006.
11.
In 2005 and 2006, the Government began to question some of the surcharges
submitted by the claimants. Association President Declaration at 5 (¶ 10). From the disputed
notices of overcharge, the claimants sought payment for surcharges coded as war risk (WAR)
or port security/congestion (CON).
12.
On February 24, 2006, the SDDC issued a document stating that the SDDC has
recognized the need to provide a clearly defined description, as well as to clarify the usage
of surcharge items codes, including those for war risk (WAR), port/terminal security
handling (COF), and port congestion (CON). The document contains definitions, specifies
application, and details responsibilities of the Personal Property Shipping Offices and of the
service providers. The statement indicates that the definitions and notes on application have
an effective date of March 1, 2006, and will be incorporated in the next agreement, IPPRS
I-17. Three definitions are of relevance here:
War Risk Surcharge (WAR) -- Insurance coverage for loss of goods
resulting from any act of war or as a result of the vessel “entering” the war risk
area when billed by the ocean/air TSP. This charge is only applicable to areas
deemed “war risk” areas, as provided for on the SDDC website . . . . This
surcharge is applicable to codes of service 2, 3, 4, 6, 7, and 8.
Port/Terminal Security Handling Surcharge (COF) -- An extra charge that
is billed to the TSP for security of their cargo while at the port of
embarkation/debarkation. This surcharge is applicable to codes of service 2,
3, 5, 6, 7, and 8.
Port Congestion Surcharge (CON) -- An extra charge that is billed to the
TSP for controlling the congestion of vessels entering/departing the port. This
surcharge is applicable to codes 2, 3, 4, and 7.
Regarding the application of the referenced surcharges, the document specifies:
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
8
Note 1: Air fuel, bunker, War Risk, Port/Terminal Security Handling, and Port
Congestion surcharges are not applicable on shipment codes of service T, 5,
and J.
Note 2: Surcharges, other than those identified above, will be considered on
a case-by-case basis with reimbursement decision resting at the sole discretion
of the Surface Deployment and Distribution Command. With the exception
of fuel related surcharges and unless otherwise stated, all surcharges are meant
to be temporary in nature in and [sic] until the TSP has been provided official
notification to incorporate such additional fees into their single factor rate.
Claimants’ Motion, Attachment 10.
13.
In a document dated March 25, 2006, the SDDC documented clarifications to
the recently issued publication; i.e., that discussed in Finding 12. The relevant clarifications
state:
1.
The definitions and applications were clarifications to the current
International Personal Property Rate Solicitation. The clarification
provided guidance as to how TSPs should have always billed and
should continue to bill the listed surcharges. These clarifications will
be incorporated into the next released rate solicitations. The March 1,
2006, effective date was applicable to date of publishing only, as SDDC
has frequently been asked when a document was posted to our website.
....
4.
SDDC has reviewed the feedback and invoices provided from industry
and ha[s] incorporated codes T, J, and 5 into billing code COF.
....
8.
TSP’s should only be invoicing for WAR according to the “JWC
HULL War, Strikes, Terrorism and Related Perils.” SDDC will
provide updates to this list, as they occur. Invoices submitted that fall
outside of the aforementioned listing are erroneous. Repetitious
erroneous billing will result in letters of warning or other action(s), as
SDDC deems appropriate.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
9.
CON may be billed by TSP’s due to delays entering the port, in addition
to extra charges billed to control the congestion of vessels
entering/departing the port.
10.
If there have been charges denied in the past, that were valid and fall
under our recent clarification, TSP’s have the ability to rebill those line
items. When doing so, request that TSP’s add a note in CWA [Central
Web Application] to explain the rebilling.
9
Claimants’ Motion, Attachment 11.
14.
In a document dated April 11, 2006, the SDDC provided further clarifications.
The clarifications include the following (some unchanged and some changed from those of
March 25):
1.
The definitions and applications were clarifications to the current
International Personal Property Rate Solicitation. The clarification
provided guidance as to how TSPs should have always billed and
should continue to bill the listed surcharges. These clarifications will
be incorporated into the next released rate solicitations. The March 1,
2006 effective date was applicable to date of publishing only, as SDDC
has frequently been asked when a document was posted to our website.
....
4.
SDDC has reviewed the feedback and invoices provided from industry
and have incorporated codes T, J, and 5 into billing code COF and
CON.
....
7.
TSP’s should only be invoicing for WAR according to the “JWC
HULL War, Strikes, Terrorism and Related Perils.” SDDC will
provide updates to this list, as they occur. Invoices submitted that fall
outside of the aforementioned listing are erroneous. Repetitious
erroneous billing will result in letters of warning or other action(s), as
SDDC deems appropriate.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
8.
CON may be billed by TSP’s due to delays entering the port, in addition
to extra charges billed to control the congestion of vessels
entering/departing the port.
9.
If there have been charges denied in the past, that were valid and fall
under our recent clarification, TSP’s have the ability to rebill those line
items. When doing so, request that TSP’s add a note in CWA [Central
Web Application] to explain the rebilling.
10
This document specifies that the new definitions and application notes become effective
March 1, 2006, and will be incorporated into the next agreement, IPPRS I-17. The
definitions of relevance to resolving these claims state:
War Risk Surcharge (WAR) -- Insurance coverage for loss of goods
resulting from any act of war or as a result of the vessel “entering” the war risk
area when billed by the ocean/air TSP. This charge is only applicable to areas
deemed “war risk” areas, as provided for on the SDDC website . . . . This
surcharge is applicable to codes of service 1, 2, 3, 4, 6, 7, and 8.
Port/Terminal Security Handling Surcharge (COF) -- An extra charge that
is billed to the TSP for security of their cargo while at the port of
embarkation/debarkation. This surcharge is applicable to codes of service 1,
2, 3, 4, 5, 6, 7, 8, T, and J.
Port Congestion Surcharge (CON) -- An extra charge that is billed to the
TSP for controlling the congestion of vessels entering/departing the port. This
surcharge is applicable to codes 1, 2, 3, 4, 5, 7, T, and J.
Regarding the application of the referenced surcharges, the document specifies:
Note 1: Air fuel, bunker, War Risk surcharges are not applicable on shipment
codes of service T, 5, and J. These charges are all billed by the ocean/air TSP
and this service is performed by the U.S. Government, in codes of service T,
5, and J.
Note 2: Surcharges, other than those identified above, will be considered on
a case-by-case basis with reimbursement decision resting at the sole discretion
of the Surface Deployment and Distribution Command. With the exception
of fuel related surcharges and unless otherwise stated, all surcharges are meant
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
11
to be temporary in nature in and [sic] until the TSP has been provided official
notification to incorporate such additional fees into their single factor rate.
15.
Effective October 1, 2006, IPPRS I-17 and amendment one defined
“surcharge” and incorporated the definitions for WAR, CON, and COF (under item 252); and
added the billing code COF for port security surcharges in items 432 and 433, as follows:
Item 252. Surcharge: An extra fee, levied to a shipment, paid by the
transportation service provider and sometimes reimbursed by the U.S.
Government. Surcharge reimbursement is considered on a case-by-case basis
with reimbursement decision resting at the sole discretion of the Surface
Deployment and Distribution Command. Specific surcharge definitions are
provided below:
....
c. War Risk Surcharge (WAR) -- Insurance coverage for loss of
goods resulting from any act of war or as a result of the vessel “entering” the
war risk area when billed by the ocean/air TSP. This charge is only applicable
to areas deemed “war risk” areas, as provided for on the SDDC website . . . .
This surcharge is applicable to codes of service 1, 2, 3, 4, 6, 7, and 8.
d. Port/Terminal Security Handling Surcharge (COF) -- An extra
charge that is billed to the TSP for security of their cargo while at the port of
embarkation/debarkation. This surcharge is applicable to codes of service 1,
2, 3, 4, 5, 6, 7, 8, T, and J.
e. Port Congestion Surcharge (CON) -- An extra charge that is billed
to the TSP for controlling the congestion of trucks/vessels entering/departing
the port. This surcharge is applicable to codes 1, 2, 3, 4, 5, 7, and T, J.
IPPRS I-17 at 2-6 (with change 1).
Item 432a(4)(d):
Bunker fuel charges (BCS), air fuel surcharges (100), port security
surcharges (COF), port congestion surcharges (CON), and/or war risk
surcharges (WAR), where applicable, and when actually billed to the ITGBL
Transportation Service Provider by ocean freight Transportation Service
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
12
Provider, air Transportation Service Provider or port agent pursuant to
regularly filed tariff(s) with the Regulatory Bodies or Commissions. Such
charges will be separately stated on the GBL and supported by prorated ocean,
air carrier or port agent invoices for the actual amount.
IPPRS I-17 at 4-23.
Item 433a(3)(d):
Bunker fuel charges (BCS), air fuel surcharges (100), port security
surcharges (COF), port congestion surcharges (CON), and/or war risk
surcharges (WAR), where applicable, and when actually billed to the ITGBL
Transportation Service Provider by ocean freight Transportation Service
Provider, air Transportation Service Provider or port agent pursuant to
regularly filed tariff(s) with the Regulatory Bodies or Commissions. Such
charges will be separately stated on the GBL and supported by ocean, air
carrier or port agent invoices for the actual amount.
IPPRS I-17 at 4-25.
16.
The same provisions were carried over into the next contract (with a correcting
transposition at the end of the CON definition). IPPRS I-18 at 2-6, 4-23, 4-25.
17.
Because the Government contends that claimed surcharges potentially could
and can be reimbursed as waiting times under item 503, to the extent that a surcharge reflects
a wait in excess of three hours of free waiting time, the specifics of item 503 are addressed
beyond what is in Finding 7. The parties reference an SDDC issuance, Waiting Time Issue
(3141). The document is designated as providing policy regarding delays incurred by a
carrier due to the security requirements of an installation, and addresses the use of waiting
time and billing for international shipments under item 503. The document itself is undated.
Neither party attempts to attribute a date to the document, which can be found on the SDDC
website, also without a discernable date of creation or issuance. The document must have
been issued after January 1, 2004, when the SDDC was created as the successor to the
MTMC. Also, because the document uses the word “carrier” instead of the phrase
“Transportation Service Provider” implemented as of October 1, 2004, with agreement I-15,
it appears that SDDC issued the document at some time during the first nine months of 2004.
The document states, regarding international shipments:
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
13
a.
When a carrier is delayed at the gate of an installation, through
no fault of its own, the carrier shall expend the applicable free waiting time
allowed (3 hours for direct deliveries and 1 hour for shipments from SIT or
attempted pickups) under the International Personal Property Rate Solicitation
(IPPRS). The carrier must immediately notify the PPSO [personal property
shipping office] of the potential delay upon arriving at the gate or at the line
for entry to the installation. Prior to the expiration of the applicable free
waiting time, the carrier must contact the responsible PPSO to obtain further
instructions:
(1)
A carrier instructed to continue delivery of the shipment or to
proceed in picking up a shipment shall be paid waiting time only when the
applicable waiting time has expired. For example, a carrier delivering
shipment from SIT who is delayed at the gate for 2 hours, through no fault of
its own, is entitled to payment of 1 hour waiting time under the procedures
contained in Item 503 of the IPPRS. Paid waiting time will begin once the
carrier has notified the PPSO and the free waiting time has elapsed.
(2)
A carrier instructed not to continue with a shipment pickup shall
be paid for attempted pickup only, under the procedures contained in Item 511
of the IPPRS.
(3)
A carrier instructed to return the shipment to the storage facility
shall be paid for attempted delivery only, under the procedures contained in
Item 510 of the IPPRS.
Claimants’ Motion for Summary Relief, Attachment 12. Item 510 relates to attempted
delivery to residence from SIT. Item 511 relates to attempted pickup at and delivery to a
residence.
18.
For transportation services rendered beginning in October 2001 and continuing
for several years thereafter, the claimants submitted bills to the Government, claiming
payment for surcharges with the WAR, CON, or COF codes under items 432 (household
goods) and 433 (unaccompanied baggage). The claimants state that they billed to the
Government as surcharges, on a pass-through basis without markup, charges the claimants
incurred from and paid to their agents for delays in shipments to or from military air
terminals. Between October 2001 and April 2006, the Government reimbursed the claimants
for the surcharges.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
14
19.
In performing post-payment oversight functions, the General Services
Administration (GSA) reviewed records and issued notices of overcharge of specific dollar
amounts. The Government has deemed the surcharges as submitted not reimbursable and has
obtained repayments or taken offsets. The notices in the present record fall into two main
categories. In the first category, the GSA relies upon limitations in the SDDC issuance of
February 24, 2006, Finding 12. This category has two subcategories of surcharges addressed:
one relates solely to WAR surcharges for code J shipments; the other relates collectively to
surcharges for WAR, COF, and CON, applied to codes 5, J, and T. These notices were
issued in 2006, 2007, and 2008. The various agreements described the three codes of
services identified (5, J, and T) exactly or substantively as follows under item 403:
Code 5 -- International Door-to-Door Container Government Ocean
Transportation: Movement of HHG in containers whereby a carrier provides
complete through service from origin residence to the destination residence,
EXCEPT the Government provides ocean (JTMO) transportation via
designated military ocean terminals.
Code J -- Land-Air (AMC)-Land Baggage: The movement of UB
whereby a carrier provides packing and pickup at origin, surface transportation
to the designated AMC aerial port, surface transportation from a designated
aerial port to final delivery point, and cutting of the banding and opening of
the box(es) when delivery to residence is completed. AMC will provide origin
and destination terminal services and air transportation between aerial ports.
When unpacking services are ordered, see Chapter V. Additional requirements
included in specific terms and conditions for Code J shipments are in Chapter
XIII.
Code T -- International Door-to-Door (AMC): Movement of HHG in
containers whereby a carrier provides complete through service from origin
residence to the destination except the Government provides air (AMC)
transportation via designated military airports.
The second category relates to item 433(d) shipments and an asserted need for filed tariffs.
These notices were issued in 2008. For these disputed notices of overcharge, the existing
record does not indicate the specific dates of shipment or when the Government paid the
initial bills.
20.
By way of example, in the first category, first subcategory, the notices
addressing WAR surcharges state: “This Notice of Overcharge is issued to recover charges
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
15
that were erroneously billed by your company for WAR, WAR RISK applied to Coded J
shipments.” The notice continues:
The Surface Deployment and Distribution Command (SDDC) issued a letter
dated February 24, 2006, clarifying the description and application of these
surcharges. The letter states in Note 1 that, “Air fuel, bunker, War Risk,
Port/Terminal Security Handling, and Port Congestion surcharges are not
applicable on shipment codes of service T, 5, and J.” Further, SDDC refers to
this statement as a clarification of the billing procedure, not a change. In
accordance with this explanation of the appropriate billing of surcharges, the
Audit Division is requesting a refund of excess charges related to the improper
application of surcharges to Codes T, 5, and J shipments.
21.
In the first category, second subcategory, the notices state:
This Notice of Overcharge is issued to recover charges that were erroneously
billed by your company for War Risk Surcharges (WAR), Port/Terminal
Security handling Surcharges (COF), and Port Congestion Surcharges (CON),
applied to codes T, 5, and J shipments.
The Surface Deployment and Distribution Command (SDDC) issued a letter
dated February 24, 2006, clarifying the description and application of these
surcharges. The letter states in Note 1 that, “Air fuel, bunker, War Risk,
Port/Terminal Security Handling, and Port Congestion surcharges are not
applicable on shipment codes of service T, 5, and J.” Further, SDDC refers to
this statement as a clarification of the billing procedure, not a change. In
accordance with this explanation of the appropriate billing of surcharges, the
Audit Division is requesting a refund of excess charges related to the improper
application of surcharges to Codes T, 5, and J shipments.
22.
In the second category, the notices state:
This Notice of Overcharge is issued to recover monies billed and collected
erroneously by the carrier for WAR/CON/COF charges.
GSA has concluded the carrier has failed to meet the basic provisions of Item
433(d) of the International Rate Solicitation:
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
(1)
(2)
16
that the charges are to be based on Filed Tariffs with Regulatory
Bodies or Commissions:
Separately stated and supported by invoices that reflect the rates
published in a Filed Tariff.
An optional and appropriate means of compensation is provided in Item 503
of the International Rate Solicitation. The carrier must furnish documentation
that substantiates:
(1) that the shipment was delayed at the APOE/APOD [aerial port
of embarkation/ debarkation]
(2) that the responsible PPSO authorized waiting time
DD Form 619/619-1 is required and must be submitted, indicating the total
waiting time.
Discussion
The Board resolves these cases pursuant to statute, 31 U.S.C. § 3726(i)(1) (2006), and
a delegation of authority from the Administrator of General Services to this Board. Board
rules specify that the “burden is on the claimant to establish the timeliness of its claim, the
liability of the agency, and the claimant’s right to payment.” Rule 301(b) (48 CFR
6103.301(b) (2008)).
With a motion for summary relief, the moving party bears the burden of establishing
the absence of any genuine issue of material fact; all significant doubt over factual issues
must be resolved in favor of the party opposing summary relief. At the summary relief stage,
the Board may not make determinations about the credibility of potential witnesses or the
weight of the evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
However, “the party opposing summary judgment must show an evidentiary conflict on the
record; mere denials or conclusory statements are not sufficient.” Mingus Constructors, Inc.
v. United States, 812 F.2d 1387, 1390-91 (Fed. Cir. 1987) (citations omitted). To preclude
the entry of summary relief, the non-movant must make a showing sufficient to establish the
existence of every element essential to the case, and on which the non-movant has the burden
of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If a motion is made
and supported as required in Federal Rule of Civil Procedure 56(a), the adverse party may
not rest upon the mere allegations or denial in its pleadings, but must set forth specific facts
showing there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
17
Given the present record and the cross-motions for summary relief, the Board
concludes that the claimants have not demonstrated entitlement to payment of any surcharge
in any specific amount and the Government has not demonstrated that any claimant is
precluded from being reimbursed for any surcharge in any given amount. The parties have
presented broad arguments, largely without regard to the timing of the incurred surcharges
and the language of the agreement in effect at that time.
Claimants’ motion
In seeking summary relief, the claimants maintain entitlement as a matter of law to
the reimbursement of all surcharges relating to alleged delays that the Government has placed
in dispute. In particular, the claimants seek a refund of all monies offset by the Government
and repayments made by the claimants and a determination that the notices of overcharge are
improper. “The monies claimants seek to recover are surcharges for amounts charged by
their port agents for delays in accessing domestic military aerial terminals due to congestion
(CON) or port security measures (COF) during the transportation of shipments for the
military of household goods . . . or unaccompanied baggage[.]” Claimants’ Motion at 1.
A premise underlying the argument of the claimants is that after the parties recognized
that there would be delays resulting from the attacks of September 11, 2001, the Government
amended the agreement, effective October 1, 2001, to authorize reimbursement of the
surcharges here in dispute.
The amendment permits reimbursement of “port
security/congestion surcharges” expanded from “port congestion surcharges.” Finding 9.
In particular support, the claimants reference the exchanges involving, and affidavits of, the
association president and Mr. S. Finding 8.
The claimants contend that these disputes may be resolved based upon the oral and
written communications of Mr. S., a Government employee engaged in negotiations with the
claimants, or more specifically the association president. The claimants rely upon Stevens
Van Lines, Inc. v. United States, 80 Fed. Cl. 276, 280-81 (Fed. Cl. 2008), in which that court
found that two individuals who negotiated with transportation service providers had implied
actual authority to guarantee that the Government would reimburse a given fee. In these
cases at the Board, each of the agreements specifically states who (either the Deputy Chief
of Staff or the Assistant Deputy Chief of Staff) could modify the agreement and how that
must be done (by letter or electronic means). Finding 2. The specificity in the contractual
language eliminates the application of implied authority principles. A service provider could
not reasonably rely upon the written or oral communications of someone other than the
official designated in the agreement. Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339,
1346 (Fed. Cir. 2007) (“We cannot conclude that [an individual] had implied authority to
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
18
direct changes in the contract in contravention of the unambiguous contract language.”). The
claimants have not established the authority of Mr. S. to alter the terms of any contract, much
less to guarantee that a given surcharge would be reimbursed. Although a negotiator for the
Government, Mr. S. was not the Deputy Chief or Assistant Deputy Chief of Staff for
Operations. The oral understandings between Mr. S. and the claimants, or between Mr. S.
and the association president, do not directly impact upon the resolution of these disputes.
Further, given the limited authority of Mr. S., his understandings, actions, and
communications do not serve as a basis by themselves for estoppel against the Government.
In seeking summary relief, the claimants urge the Board to construe the surcharge
provisions so as to give effect to the intent and purpose of reimbursing service providers for
charges not included in single factor rates. Claimants’ Motion at 6, 10. The claimants
intended to be reimbursed for delay-related costs incurred, and seemingly recognized that
reimbursement may not occur without an amendment to the language of the agreement. The
intent of the claimants has not been demonstrated as the intent of MTMC or SDDC. Any
intent or purpose Mr. S. expressed during his negotiations is not automatically the intent of
the Government. He was not in a position to express the Government’s intent. The language
of the amendments is not as encompassing as the claimants contend.
The actual language of the agreement, as it read effective on October 1, 2001, with
Amendment 3, and thereafter, does not permit the claimants to demonstrate entitlement and
quantum in the posture of summary relief. The agreement does not state that any submitted
surcharge with a code of WAR, CON, or COF will be reimbursed. That is, entitlement to any
given requested amount of reimbursement is not guaranteed; the provisions do not remove
oversight and audit protections available to the Government.
Moreover, the agreement specifies that the surcharges may be reimbursed “when
actually billed to the ITGBL carrier by ocean freight carrier, air carrier or port agent pursuant
to regularly filed tariff(s) with the Regulatory Bodies or Commissions. Such charges will be
separately stated on the GBL and supported by prorated ocean, air carrier or port agent
invoices for the actual amount.” Finding 9. The claimants contend that no such tariffs were
filed with bodies or commissions, such that the only reasonable reading of the language could
not require a filing that was not occurring. Claimants’ Motion at 6. The claimants fail to
address or recognize that Amendment 2 to the agreement revised the sentence addressing
regularly filed tariffs for surcharges relating to the shipment of household goods. Finding
4. The actual language of the agreement, with the requirement for regularly filed tariffs,
provides for a measure of regularity and potential oversight that is absent from the reading
urged by the claimants. At this summary relief stage, the interpretation urged by the
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
19
claimants, which is contrary to the language of the agreement, is not apparent as the one to
be adopted. The Board denies the motion of the claimants.
Government’s motion
The Government moves for summary relief, contending that each surcharge billed by
the claimants under codes for war risk (WAR), port/terminal security (COF), or port
congestion (CON) under International Personal Property Rate Solicitations (IPPRSs) I-13,
I-14, I-15, and I-16, is not payable because none of the codes permits a service provider to
be reimbursed for waiting time incurred by a port agent. In support, the Government
references the written guidance and definitions dated April 11, 2006, Finding 14.
Government’s Motion at 1-2. Further, the Government contends that an appropriate billing
mechanism exists within each agreement under item 503, waiting time. The Government
relies upon the SDDC issuance, Finding 17, that the Government describes as the only
written guidance that SDDC has issued concerning billing for increased waiting time. The
Government asserts that, because no claimant submitted a request for payment under item
503, and because each of the requests under WAR, COF, or CON is inappropriate, the
notices of overcharge must be upheld. Government’s Motion at 2-3.
The April 11, 2006, issuance, containing guidance and definitions, is not dispositive
regarding actions prior to its issuance. While the document may represent the views of the
issuing body at the time of its issuance, the record does not make those views dispositive for
interpretation purposes for any time prior to its issuance. The Government has not
established, at this stage, that each disputed surcharge arose after the date of issuance of the
guidance or that any surcharge may not be reimbursable under the applicable agreement,
either on the basis of entitlement or amount.
Regarding waiting time, the Government has not demonstrated that the issuance of
2004 is dispositive for interpretation purposes for any time prior to its issuance. From the
issuance of the document and thereafter, the facts have not been developed at this stage to
demonstrate that the reimbursement of any submitted surcharge would be impacted by the
waiting time item. Through the lack of facts and particulars in the record for summary relief,
the Board cannot conclude that the alleged delays reflect a waiting time at the gate of a
facility, or that item code 503 precludes reimbursement under item codes 432 or 433 for a
CON surcharge.
Because the Government has not demonstrated that any requested surcharge is not
reimbursable, the Board denies the Government’s motion for summary relief.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
20
Further analysis
Under the agreements, the claimants shipped household goods and unaccompanied
baggage. Compensation was based upon single factor rates as supplemented by surcharges
only for specified items. With the rate arrangement, the contracts placed risks upon the
claimants for surcharges they incurred that were not compensable under the contracts.
Following September 11, 2001, security measures at intermediate ports caused delays.
The scope, extent, and duration of any particular delay or delays in general, are not
established in the existing record. The claimants were billed by their agents for what the
claimants contend were costs that the agents incurred as a result of delays at intermediate
ports. The existing record establishes neither the costs incurred by the agents nor the method
of billing any such cost (e.g., initially item 432 required the support of prorated agent
invoices, Finding 9).
Upon receiving bills from their agents for delay-related costs, the claimants (directly
and through the association president) engaged in discussions with the Government,
particularly Mr. S., regarding compensation for their additional costs. The Government
modified the agreements, effective October 1, 2001. At this stage, the claimants have posited
an interpretation of the modified language that permits the reimbursement of substantiated
(no surcharge has yet been substantiated upon this record) surcharges relating to delays;
however, the interpretation does not give meaning to the “regularly filed tariff” limitation of
the provision. The Government’s position, which seems to limit reimbursement of
congestion related surcharges to those reflecting wait times in excess of three hours, renders
superfluous the language of the various amendments to the agreements. The Government’s
interpretation is consistent with the language in the agreement prior to any amendments and
without regard to any of the discussions and negotiations.
With the burden of proof upon the claimants, the notices of overcharge deserve
specific comment. The claimants correctly conclude that each Government notice of
overcharge, Findings 20 and 21, that relies upon the issuance of February 24, 2006, Finding
12, as a basis to disallow a surcharge is not supported given the subsequent, superceding
issuances of March and April, Findings 13, 14.
The April 2006 issuance, with an effective date of March 1, 2006, contains note 2.
The parties have not focused upon the note. Two aspects of the note merit comment. First,
the note states that surcharges, other than those identified, “will be considered on a case-by
case basis with reimbursement decision resting at the sole discretion of the Surface
Deployment and Distribution Command.” Finding 14. If, as the Government contends, the
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
21
surcharges here in dispute fall outside of those identified in the issuance, then one would
expect the record to include a statement by the appropriate official at SDDC exercising the
sole discretion identified. A similar grant of sole discretion is found in the definition of
“surcharge” in agreement I-17, Finding 15. The parties have yet to address whether the
provision is relevant and any particulars.
Second, note 2 states that surcharges are meant to be temporary in nature until the
service provider “has been provided official notification to incorporate such additional fees
into their single factor rates.” Finding 14. The summary relief record does not indicate if
and when the referenced official notification was provided, and lacks an explanation
regarding the applicability or inapplicability of the language.
Apart from note 2, the guidance in the issuance of April 11, 2006, establishes (and
puts the claimants on notice of) the SDDC’s position as of March 1, 2006. The guidance
suggests that analysis must be broken into the two periods, one prior to that date and one on
and after that date. To the extent applicable, the issuance regarding waiting times and item
503, Finding 17, suggests a further division of the analysis with two periods, that prior to and
with the guidance. Details are required to resolve these disputes.
At this stage, few conclusions can be reached upon the existing record. As of
March 1, 2006, definitions became effective in the application of the agreement. Of
relevance here is the issuance of April 11, 2006, which superceded earlier issuances. Finding
14. Each claimant maintains that it is entitled to be reimbursed for surcharges submitted with
one of three codes, WAR, CON, and COF, said to reflect costs (without mark-up) incurred
by the claimant from agents who were delayed during the shipment of household goods or
unaccompanied baggage.
For the period on and after March 1, 2006, when and if incurred, no claimant has
established a factual predicate to be paid for any surcharge submitted with a WAR or COF
code. By definition, the WAR code reflects a surcharge for insurance coverage within a war
risk area. By definition, the COF code reflects a charge for the security of cargo while at the
port of embarkation/debarkation. No claimant has established that any disputed surcharge
potentially could be reimbursed under either the WAR or COF code. Accordingly, the
Government should not have reimbursed any surcharge coded as WAR or COF within this
period; to be reimbursed now a claimant would have to demonstrate that it is entitled to
payment on a basis different from the defined codes. What remains for the parties to address
are surcharges submitted under the CON code.
CBCA 888-RATE, 902-RATE, 903-RATE, 904-RATE, 905-RATE, 906-RATE,
907-RATE, 908-RATE, 909-RATE, 912-RATE, 913-RATE, 914-RATE, 915-RATE
22
No claimant has established that it is entitled to reimbursement for any given
surcharge under the terms and conditions of the applicable agreement. Similarly, the
Government has not established that a claimant is precluded from receiving payment for any
particular surcharge.
Decision
The Board DENIES each motion for summary relief.
____________________________
JOSEPH A. VERGILIO
Board Judge
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.