_____________________ June 20, 1997 _____________________ GSBCA 13893-RATE In the Matter of C. I. WHITTEN TRANSFER CO. Robert D. Norcom, Auditor, C. I. Whitten Transfer 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. DeGRAFF, Board Judge. On January 4, 1993, the AAI Corporation (AAI) in Cockeysville, Maryland prepared a government bill of lading (GBL) for the shipment of freight to Robins Air Force Base, Georgia. The GBL identifies AAI as the shipper. AAI tendered the freight to C. I. Whitten Transfer Company (Whitten). In the GBL, AAI identified the tariff/special rate authority as tender WITT 000279. The GBL contained three transportation control numbers that, provided one knows the meaning of the code used in the control numbers, identified the freight being shipped as a Foreign Military Sales (FMS) Act shipment. The GBL did not state plainly that this was an FMS shipment. The GBL provided that Whitten was to bill the Defense Finance and Accounting Service (DFAS) for the shipping charges. Whitten hauled the shipment and billed DFAS for $493.62, and DFAS paid this amount. In 1996, Whitten submitted a voucher to DFAS, asking to be paid an additional $381.13 for this shipment. Whitten claimed that it was due this additional amount because the rates contained in tender WITT 000279 were not applicable to FMS shipments. Instead, Whitten said, the rates contained in tariff ICC WITT 403 applied and those rates entitled Whitten to an additional $381.13. Whitten's representative says that it did not know that the transportation control numbers identified the freight as an FMS shipment. The General Services Administration (GSA) reviewed Whitten's claim and decided that the claim was filed beyond the applicable statute of limitations. Whitten asked us to review GSA's decision. The timeliness of the claim is no longer at issue. GSA recognizes that the claim was timely. Discussion Whitten argues that the decision in Baggett Transportation Co. v. United States, 670 F.2d 1011 (Ct. Cl. 1982), dictates that it must be paid at its tariff rate for the FMS shipment at issue in this claim. In Baggett, the GBLs plainly identified the shipments as FMS shipments and stated that tariff rates would apply. Baggett understood and agreed with those terms. Baggett sued when the Government decided to pay Baggett at its tender rates, instead of at the tariff rates specified in the GBLs. The Court of Claims decided that Baggett's tender rates were not applicable to FMS shipments. The court did not have to consider what result it would have reached if the GBLs had directed the carrier to move an FMS shipment at a tender rate that was not applicable to FMS shipments and if the carrier had executed the GBLs, which is the situation presented by Whitten s claim. GSA argues that Whitten's claim is barred by laches. Because GSA has not established that it was prejudiced by the amount of time Whitten took to claim the additional $381.13, the doctrine of laches cannot bar Whitten's claim. Cornetta v. United States, 851 F.2d 1372 (Fed. Cir. 1988) (en banc). GSA also argues that if the rates contained in tender WITT 000279 were not applicable to FMS shipments, Whitten should have realized that the GBL was inaccurate because the GBL's transportation control numbers identify the shipment as an FMS shipment and the GBL also identifies tender WITT 000279 as the applicable rate authority. According to GSA, Whitten should have rejected the shipment and permitted AAI to contract with another carrier which was willing to abide by the rates contained in tender WITT 000279. Because Whitten did not notify AAI of the conflicting provisions contained in the GBL, GSA says that Whitten's claim should be denied. GSA's argument requires us to review a bit of transportation history. Beginning in 1906, railroads were required by statute to issue bills of lading when they received property for transportation. Act of June 29, 1906, ch. 3591,  7, 34 Stat. 595 (1906). Congress extended this requirement to motor carriers in 1935. Act of Aug. 9, 1935, ch. 498, 49 Stat. 563 (1935). The requirement that motor carriers issue bills of lading continues in force today. 49 U.S.C.A.  14706 (1997). By statute, issuing a bill of lading confers some benefits and imposes some burdens upon carriers. For example, because carriers issue bills of lading, they can claim liens on the property that they transport. 49 U.S.C.A.  80109. After a carrier issues a bill of lading, only the carrier can authorize an alteration to the bill. 49 U.S.C.A.  80108. Because carriers are responsible for issuing bills of lading, they are liable for damages if they issue a bill in parts, sets, or duplicates not in accord with statute, and they are liable for damages if the goods are not received or if the goods do not conform to the description contained in the bill. 49 U.S.C.A.  80112, 80113. In addition, Congress has imposed criminal penalties for knowingly issuing a falsely made, altered, or copied bill of lading. 49 U.S.C.A.  80116. As the Interstate Commerce Commission (ICC) explained in a series of decisions, a carrier is obligated not only to issue bills of lading, but also to issue bills which are accurate and which can be complied with lawfully. The ICC decided that if a shipper prepared a bill of lading which contained either conflicting terms or terms with which a carrier could not lawfully comply, the carrier had a duty to ask the shipper for clarification before executing the bill. If the carrier executed the bill without asking for clarification, the carrier was liable to the shipper for whatever damages resulted. Southgate Brokerage Co. v. Lehigh Valley Railroad Co., 274 I.C.C. 245 (1949); Exposition Cotton Mills v. Southern Railway Co., 234 I.C.C. 441 (1939); St. Louis Cooperage Co. v. Baltimore & Ohio Railroad Co., 161 I.C.C. 258 (1930); Republic of France v. Missouri, Kansas & Texas Railway Co., 77 I.C.C. 383 (1923); Union Saw Mill Co. v. St. Louis, Iron Mountain & Southern Railway Co., 40 I.C.C. 661 (1916). In Exposition Cotton Mills, the ICC summarized its reasoning in these decisions as follows: The duty of issuing appropriate bills of lading rests on the carriers . . . . The fact that it is not uncommon for shippers to prepare bills of lading for execution by the carriers' agents does not relieve them of those duties. We have repeatedly found that the obligation lawfully rests on the carriers' agents to refrain from executing bills of lading that cannot lawfully be complied with or which contain conflicting provisions. 234 I.C.C. at 442. When a carrier executed a bill of lading which contained conflicting terms or which could not lawfully be executed, the ICC's solution was to exercise its power to award damages in order to put the shipper in the position it would have occupied if the carrier had fulfilled its duty to inquire before it executed the bill of lading. The General Accounting Office (GAO), acting pursuant to its authority to review settlement decisions of GSA, adopted the ICC's reasoning and decided that although a shipper may prepare a bill of lading, the carrier is responsible for issuing the bill and should not execute a bill if it cannot lawfully comply with its terms. In Miller Motor Express, Inc., B-142679 (July 1, 1960), the applicable tariff provided that the bill of lading had to contain certain language if a shipper requested the exclusive use of a vehicle. If exclusive use was requested and provided, the carrier was entitled to impose an additional charge. Although the shipper asked for exclusive use, it prepared the bill of lading without using the language required by the tariff. GAO decided that Miller should not be paid an added charge for exclusive use because it was not possible for Miller to execute the bill of lading lawfully by providing and charging for exclusive use when the bill did not comply with the tariff's terms for requesting exclusive use. GAO reached the same conclusion, given essentially the same facts as in Miller, in Hennis Freight Lines, Inc., B-111284 (Aug. 19, 1960); and Gregory M. Rebman, B-141926 (Nov. 7, 1960). The GAO applied this same principle in Carolina Freight Carriers Corp., B-135992 (Feb. 3, 1961) (bill prepared by shipper does not contain language required by tariff allowing use of two trailers, so carrier cannot lawfully execute bill by providing two trailers). Also like the ICC, GAO decided that although a shipper may prepare a bill of lading, the carrier is responsible for issuing the bill and the carrier should not execute a bill if it contains conflicting or erroneous entries. In Trans Country Van Lines, Inc., B-177326 (May 22, 1973), the bill of lading contained two conflicting released values. GAO decided that, even though the shipper prepared the bill of lading, the carrier was responsible for issuing the bill and should not have executed the bill because it contained conflicting provisions. GAO denied the carrier's request for an additional payment based upon the higher released value. GAO reached similar conclusions in C. I. Whitten Transfer Co., 52 Comp. Gen. 211 (1972) (bill's statement that shipment consists of five boxes is obvious error because the shipment consisted of fifteen boxes, so carrier does not get paid for moving five boxes and paid again for later moving ten more boxes); and Lee Way Motor Freight, Inc., B-144409 (Mar. 22, 1961) (bill's request for exclusive use of vehicle is obvious error because the shipment filled the entire vehicle, so carrier does not get paid for exclusive use). Thus, for more than ninety years, statute has placed the burden on carriers, including motor carriers, to issue bills of lading. By issuing a bill of lading, a carrier acquires certain rights and accepts certain responsibilities. Based upon the requirement of the statute, the ICC and GAO consistently decided that if a shipper prepared a bill of lading which obviously contained conflicting terms or terms with which a carrier could not lawfully comply, the carrier had a duty to ask the shipper for clarification before executing the bill. If the carrier executed the bill without obtaining clarification from the shipper, the ICC and GAO did not permit the carrier to benefit. The same two-part premise underlies both the ICC and the GAO decisions. First, the decisions are based upon the fact that the carrier was responsible for knowing the terms of its tenders and tariffs, and when it looked at the bill of lading, the carrier should have realized there was a problem. The carrier should have seen either that the bill contained conflicting or erroneous provisions or that it could not perform the service that it was being asked to perform and lawfully comply with the terms of the bill of lading. Second, the decisions are based upon the assumption that, if the carrier had asked the shipper to resolve the problem, the shipper could have taken some action in order to avoid paying the amount sought by the carrier. The premise that forms the basis for the ICC and GAO decisions is not present here. First, Whitten did not realize when it looked at the GBL that there was a problem that it needed to ask AAI to resolve. In fact, there was a problem because the GBL said that the rates contained in tender WITT 000279 applied to the shipment, and those rates did not apply because the shipment was an FMS shipment. The GBL did not, however, make it plain that this was an FMS shipment and the record does not establish that Whitten could have deciphered the transportation control numbers. Whitten had no reason to ask AAI to clarify the terms of the GBL. Second, if Whitten had realized that the shipment was an FMS shipment and if it had asked AAI to clarify the terms of the GBL, there is no evidence to establish that AAI could have done anything to avoid paying the rate contained in tariff ICC WITT 403, which is the tariff rate that applied to FMS shipments hauled by Whitten. Decision GSA's settlement decision is reversed. Whitten's claim should be paid. _______________________________ MARTHA H. DeGRAFF Board Judge