_________________________ JUNE 27, 1997 __________________________ GSBCA 13763-RATE In the Matter of TRI-STATE MOTOR TRANSIT CO. John R. Bagileo of Bagileo, Silverberg & Goldman, L.L.P., Washington, DC; and Robert D. Norcom, Auditor, Tri-State Motor Transit Co., Joplin, MO, appearing for Claimant. Jeffrey J. Thurston, Director, Office of Transportation Audits, General Services Administration, Washington, DC, appearing for General Services Administration. Col. James F. Quinn, Staff Judge Advocate, Headquarters, Military Traffic Management Command, Department of the Army, Falls Church, VA, appearing for Department of Defense. NEILL, Board Judge. At issue in this proceeding is the shipment of a guided missile control system transported by claimant, Tri-State Motor Transit Co. (Tri-State) for the Department of Defense. The shipment was transported pursuant to government bill of lading (GBL) no. D-0611329 (the GBL). The GBL contains the following description of the shipment: (2.2 NMFC 162812 Sub 2) PROJECTILE OR ROCKET PARTS NOI NSN: 1325-01-257-9428/EO58 NOM: GUIDANCE AND CONTROL UNIT GBU 24A/B The nomenclature used in the first two lines of this entry is that of a National Motor Freight Classification (NMFC). It is not the DOD unique commodity (DODUC) code for the item although GSA is now prepared to concede that the item being shipped in this case was indeed a commodity covered by DODUC code no. 014255. Board Conference Memorandum (Sept. 19, 1996) at 2. The complete DODUC description of this commodity reads as follows: Missiles or Rockets, without warheads; or missile guidance control systems or electronic guidance control apparatus; or missile or rocket frame assemblies containing electronic apparatus; or mobile missile or rocket guidance control systems, released value not exceeding $5.00 pound. This DODUC classification does not appear on the GBL. The shipment in question was made on November 19, 1991. Tri- State originally billed the Government for the shipment at the freight-all-kinds (FAK) rate set forth in its tender no. 528. This is the tender actually listed in the GBL. Tri-State was paid a total of $2118.42 for the shipment. Upon post-payment audit, Tri-State concluded that tender no. 528 was not applicable to this shipment. That tender, according to Tri-State, was not applicable to shipments of guided missile control systems identified by the DODUC code no. 014255. The tender, by its terms, applies to several commodities to which DODUC codes are assigned, such as ammunition, explosives, fireworks and chemical ammunition, classes A, B, and C (DODUC code nos. 64300- 01,-02, and -03); missiles or rockets, guided with warheads (DODUC code nos. 64300-04); and freight category FAK (DODUC code no. 999913). Tri-State s tender no. 528, however, makes no mention of Missiles or Rockets, without warheads; or missile guidance control systems or electronic guidance control apparatus, to which the DODUC code no. 014255 has been assigned. In the absence of an applicable tender rate, Tri-State contends that the Government should not have been billed under the FAK rate of tender no. 528 but rather under a tariff of Tri-State, tariff no. T4001, which would apply in the absence of an applicable tender. Under that tariff, the Government would have been billed for an additional $1300.72. Tri-State has, in fact, submitted a claim for this amount. The claim was denied. Tri-State appealed the denial to the Office of Transportation Audits (OTA) of the General Services Administration (GSA). In April 1996, GSA issued a settlement certificate denying the claim on the ground that investigation with the shipping depot reveals this commodity to be [a] projectile part. Tri-State then sought review of GSA s decision by the Comptroller General. Before a decision was rendered by the Comptroller General, the responsibility for reviewing decisions of the OTA was transferred by statute from the Comptroller General to the Administrator of General Services. Pub. L. No. 104-316,  202(o)(2), 110 Stat. 3826, 3844 (1996). By delegation, this Board now exercises this review function on behalf of the Administrator in transportation rate cases. The case is, therefore, now before us. Discussion On October 19, 1992, the Military Traffic Management Command (MTMC) issued an amendment to its Freight Traffic Rules Publication 1A (MFTRP 1A). This amendment, among other provisions, also stated that a FAK rate is not applicable to any commodities for which a DODUC code has been assigned by MTMC headquarters. The question presented in this case is whether this provision merely confirmed an already existing policy or, instead, represented a change in official MTMC policy. Tri-State contends that the change in MFTRP 1A was nothing more than the recognition of a policy already well supported by provisions contained in tender instructions published several years before by MTMC. These instructions provided guidance for carriers on the use and application of DOD s Standard Tender of Freight Services, MT Form 364-R. According to Tri-State, the instructions absolutely prohibited carriers from issuing tenders for the shipment of commodities that were assigned DOD Unique Commodity Codes, unless the tender showed the specific code. In other words, argues Tri-State, carriers were forbidden from classifying such commodities other than by their codes--they could not move at FAK rates. Tri-State s Comments on the Submissions of GSA and MTMC at 3. MTMC disagrees with Tri-State on this issue. It explains that the FAK rate constitutes a permissible classification alternative to tendered rates targeted at specifically described commodities and that, prior to the amendment of MFTRP 1A in October 1992, the rules were purposefully silent on the exclusion of DODUCs from the FAK classification. The language of the tender instruction on which Tri-State and MTMC focus in briefing their respective positions is found in the general instruction regarding commodity descriptions listed in a carrier s tender. It reads as follows: Because of the unusual transportation needs of Department of Defense (DOD) material, the DOD unique codes shown below must be used in the Standard Tender of Freight Service to describe the commodities listed. The released values shown for these commodities have also been assigned by DOD and apply to movements by both rail and other than rail. MTMC explains that this language was intended to standardize the nomenclature for specific commodity tenders and to provide unique codes for military commodities that were not generally classified under the National Motor Freight Classifications. According to MTMC, therefore, this language should be read to say that carriers must use DODUCs to describe commodities listed in their tenders for freight service if those commodities are actually listed in the tender. On the other hand, if the commodities are not specifically described in the tender, MTMC is of the opinion that there is no need to use the DODUCs and the FAK classification is suitable and inclusive. See MTMC Comments (November 19, 1996) at 2. Tri-State s reading of the above-quoted language in the tender instructions is considerably more restrictive. As already noted, Tri-State believes that this language forbids carriers from classifying commodities having a DODUC code in any fashion other than by using their actual codes. In short, this dispute is ultimately reduced to the single question of whether FAK is, in fact, a permissible classification alternative for a specific DODUC item. To answer that question, we turn again to the tender instructions. The instructions in effect at the time of Tri-State s shipment on November 19, 1991, provide the following definition: FREIGHT ALL KINDS (FAK) consists of those commodities which carriers offer to transport at one inclusive rate or charge regardless of their classification rating in the NMFC [National Motor Freight Classification] or UFC [Uniform Freight Classification], or their differing transportation characteristics. These commodities are described in the applicable MTMC Freight Traffic Rules Publication. Carriers filing FAK rates may not restrict the application of such rates by imposing any further commodity, density, or classification exclusions. Conspicuous by its absence from this definition is any mention of DODUC classification. FAK classification, by definition, applies only to items having an NMFC or UFC classification. MTMC would apparently have us read no significance into the fact that the definition makes no mention of DODUC classification. This we are unwilling to do. The DODUC classifications are obviously a matter of key importance in MTMC's tender instructions. Carriers are told that they must use them. MTMC has explained to us that insistence on use of DODUC codes stemmed from a need to standardize nomenclature and to provide unique codes for military commodities not generally classified under the National Motor Freight Classifications. The DODUC classifications are not, therefore, equivalent, in all respects, to NMFC or UFC classifications. For them to be included in the "FAK" definition, they must be mentioned. Yet the plain, indisputable fact is that they are not. We agree with Tri-State that under MTMC s tender instructions in effect at the time of the shipment in question, and well in advance of the amendment of MFTRP 1A in October 1992, FAK was not a permissible alternative classification for a specific DODUC item. Consequently, notwithstanding MTMC s claim to the contrary, we conclude that this formal amendment did nothing more than confirm already existing regulatory guidance. Before concluding that Tri-State is entitled to be paid for the shipment in question in accordance with the applicable tariff rate, there is the remaining issue of whether Tri-State, as the carrier in this case, should have objected at the time of shipment to inclusion of its tender no. 528 in the GBL. It is well established that, although a shipper may prepare a bill of lading, the carrier is ultimately responsible for issuing the bill and should not execute the bill if it is obvious that the bill contains conflicting terms or terms with which the carrier cannot lawfully comply. Where the carrier fails to seek clarification and proceeds to execute the bill, it cannot later benefit from any subsequent related clarification or correction. In a recent Board decision, we discussed in some detail the law on this point. We noted that it is unquestionably applicable in situations where the carrier, upon reviewing the bill of lading, should have realized that there was a problem with it. C.I. Whitten Transfer Co., GSBCA 13893-RATE (June 20, 1997). In the instant case, Tri-State contends that, at the time of shipment, there was nothing on the GBL which would have led the carrier to conclude a problem existed. The item classification listed on the GBL by the transportation officer at the installation was not the DODUC code classification for missile guidance control system. Rather it was an NMFC classification, namely, (2.2 NMFC 162812 Sub 2) projectile or rocket parts NOI. As an item bearing NMFC classification, the item would, of course, be eligible for alternative classification under "FAK." Although a carrier is assumed to know the terms of its tenders, nothing in the GBL in this case put Tri-State on notice that the commodity being shipped fell within a specific DODUC classification. We agree, therefore, with Tri-State that the problem which later surfaced in post- payment audit was not apparent at the time of shipment. Finally, we note that, in briefing this case, GSA and MTMC have relied heavily upon a decision of the General Accounting Office (GAO) which addressed the issue of whether DODUC code items were exempt from FAK classification prior to the MTMC s amendment of MFTRP 1A in October 1992. Tri-State Motor Transit Co., B-255630, et al. (Aug. 18, 1994). In that decision the GAO concluded that prior to the amendment of MTMC s Rules in 1992, FAK classification of DODUC code items was permissible. The decision is a brief one and, unfortunately, does not discuss the specific provisions in MTMC s tender instructions on which the parties and the Board have focused with intensity in this case. We are not bound by this decision and, in view of the analysis set out above, we choose not to follow it here. Decision GSA's settlement decision is reversed. Tri-State s claim to be paid in accordance with its applicable tariff rate is granted. ____________________ EDWIN B. NEILL Board Judge