February 21, 1997 GSBCA 13911-RATE In the Matter of C. I. WHITTEN TRANSFER CO. Barbara J. Stob of Bagileo, Silverberg & Goldman, L.L.P., Washington, DC, appearing for Claimant. Jeffrey J. Thurston, Director, Office of Transportation Audits, Washington, DC, appearing for General Services Administration. Colonel David A. Shull, Staff Judge Advocate, Headquarters, Military Traffic Management Command, Department of the Army, Falls Church, VA, appearing for Department of Defense. DANIELS, Board Judge (Chairman). This is the first opinion issued by this Board under a jurisdiction which came to us in 1996. The authority is set out at section 3726(g)(1) of title 31, United States Code, which permits a carrier or freight forwarder to request the Administrator of General Services to review an action taken by that official concerning a bill for transporting an individual or property for the United States Government. The Administrator has delegated the review power to this Board. A bit of history may help to put this function in perspective. For many years, the General Accounting Office (GAO) audited bills for transporting Government property which were submitted to Government agencies by common carriers. See Pub. L. No. 785,  322, 76th Cong., 3d Sess., 54 Stat. 898, 955 (1940); Pub. L. No. 92-550, 86 Stat. 1163 (1972) (and accompanying H. Rep. No. 1472, 92d Cong., 2d Sess., reprinted in 1972 U.S.C.C.A.N. 4482, 4483); H. Rep. No. 932, 99th Cong., 2d Sess., at 4 (1986), reprinted in 1986 U.S.C.C.A.N. 5937, 5939. At the same time, GAO also performed what Congress has referred to as the "appellate function" of reviewing executive agency action on claims submitted by carriers. S. Rep. No. 1514, 93d Cong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 7147, 7149. In 1974, Congress determined that the audit of these payments was a "purely 'executive function'" and consequently transferred it to an agency in the executive branch of Government, the General Services Administration (GSA). The legislature kept the "appellate function" in GAO, however. Pub. L. No. 93-604, tit. II, 88 Stat. 1959, 1960 (1975); S. Rep. No. 1514, 93d Cong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 7147, 7149. Twenty-two years later, another Congress decided that the review function was executive in nature, as well. It first transferred this function to the Director of the Office of Management and Budget (OMB), and authorized him to delegate it to any other agency or agencies. Pub. L. No. 104-53,  211, 109 Stat. 514, 535 (1996). The Acting Director of OMB delegated it to GSA (Delegation, June 28, 1996), and the Acting GSA Administrator redelegated it to this Board (Delegation, July 17, 1996). Later, Congress made permanent the assignment of this duty to the Administrator. Pub. L. No. 104-316,  202(o)(2), 110 Stat. 3826, 3844 (1996). In exercising our authority to review determinations of the auditors, we are mindful that GAO performed this function for more than half a century. GAO developed considerable expertise, as well as an abundant case law, in the area. We will consequently look to decisions by GAO for guidance in interpreting and applying the law, and we will follow those decisions wherever we find them persuasive. Cf. Lanier Business Products, Inc., GSBCA 7702-P, 85-2 BCA  18,033, at 90,496, 1985 BPD  12, at 3-4 (similar considerations regarding cases involving vendor protests against the conduct of Government procurements). As explained later in this opinion, however, we also look for guidance to the decisions of the courts, and we follow the decisions of the Court of Appeals for the Federal Circuit, which are authoritative in this area. The case before us now involves the shipment of machine guns from the Naval Surface Warfare Center installation in Crane, Indiana, to a United States Coast Guard armory in Belle Chase, Louisiana. C. I. Whitten Transfer Co. (Whitten) was the carrier of this shipment. The Government bill of lading (GBL) under which the shipment was made cites as "tariff/special rate authority" Whitten's tender number 410. The GBL states that charges should be billed to the Coast Guard Finance Center in Chesapeake, Virginia. The shipment was made on June 3, 1993. Through vouchers dated June 22 and August 13, 1993, Whitten asked to be paid in accordance with the terms of its tender 410. Whitten's first voucher was paid on or about July 30, 1993; the second was apparently paid as well. By voucher dated June 6, 1996, Whitten asked to be paid an additional $300. This voucher was received by GSA's Office of Transportation Audits on June 19, 1996. Whitten maintained in filing the voucher that tender 410 does not apply to shipments for agencies other than the Department of Defense, and that Tariff ICC WITT 403, instead, governs payment. GSA rejected the June 1996 voucher, which it viewed as a claim, on August 29, 1996. Whitten asked us on October 21, 1996, to review this action. Three issues are raised with regard to this claim: (1) Was the claim timely made? If so, should it be rejected for other reasons relating to the time it was submitted? (2) What authority governs the rate under which charges for the shipment should be made? (3) Should the bill for shipping these machine guns be based on a distance of 736 miles or 748 miles? Timeliness GSA first rejected the June 1996 voucher as untimely filed. After the claim was sent to us for review, however, GSA properly recognized that this determination was incorrect. Statutory limitations Section 3726 of title 31, United States Code, imposes one time limitation on the filing of carrier claims with GSA, and another on the filing of requests for administrative review of GSA's decisions on those claims. As to the claims themselves, subsection (a) of the statute provides: A claim under this section shall be allowed only if it is received by the Administrator [of General Services] not later than 3 years (excluding time of war) after the later [latest] of the following dates: (1) accrual of the claim; (2) payment for the transportation is made; (3) refund for an overpayment for the transportation is made; or (4) a deduction under subsection (b) of this section is made. See also 41 CFR 101-41.602 (1996) (GSA regulations implementing this statute). In 1975, the statute was amended to include a limitation on the time within which administrative review of a GSA audit action or determination on a claim may be made. Pub. L. No. 93-604,  201(3), 88 Stat. 1959, 1960 (1975). This provision survives, in modified form, as 31 U.S.C.  3726(g)(1). It permits a review to be made "if the request [for such review] is received not later than 6 months (excluding time of war) after the Administrator acts or within the time stated in subsection (a) of this section, whichever is later." We will not consider a claim unless it meets both of these time requirements -- presentation to GSA within three years of the latest of the four events described in subsection (a) and filing with us within six months of the later of the two events described in subsection (g)(1). Whitten's claim was timely filed with GSA within three years of the date that payment was made. The request for review was timely made within six months of the date that GSA rejected the claim. Thus, Whitten has complied with the statute of limitations insofar as this claim is concerned. Laches The Military Traffic Management Command (MTMC), which is representing the Department of Defense in this case, maintains that even if the claim and case were filed within the times permitted by the statutes of limitations, the case should be dismissed on account of laches because Whitten waited nearly three years to present its claim. The Court of Appeals for the Federal Circuit has explained that laches -- may be defined generally as "slackness or carelessness toward duty or opportunity." In a legal context, laches may be defined as the neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party and operates as an equitable bar. A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020, 1028-29 (1992) (en banc) (citations omitted). The Court has explained further: The doctrine of laches is based upon considerations of public policy, which require, for the peace of society, the discouragement of stale demands. It recognizes the need for speedy vindication or enforcement of rights, so that courts may arrive at safe conclusions as to the truth. S.E.R., Jobs for Progress, Inc. v. United States, 759 F.2d 1, 5 (Fed. Cir. 1985) (quoting Brundage v. United States, 504 F.2d 1382, 1384 (Ct. Cl. 1974), cert. denied, 421 U.S. 998 (1975)). Whitten directs us to a statement by the Court of Appeals for the Ninth Circuit that "laches is an equitable defense unavailable in actions at law governed by a statute of limitations." UA Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1474 n.3 (9th Cir.), cert. denied, 116 S. Ct. 297 (1995). This statement is flatly contradicted by the Federal Circuit, which held, in an en banc opinion, "that, where an express statute of limitations applies against a claim, laches [can] apply within the limitation period." Aukerman, 960 F.2d at 1030. Claims against the United States generally may be adjudicated by United States district courts and by the Court of Federal Claims. 28 U.S.C.  1346(a)(2), 1491 (1994). The Court of Appeals for the Federal Circuit is the appellate tribunal for claims decisions of these courts. Id.  1295(a)(2), (3). In the interest of ensuring that the jurisprudence regarding claims by common carriers and freight forwarders against the United States is consistent, no matter whether cases are heard in the courts or in this administrative tribunal, we will follow the decisions of the Court of Appeals for the Federal Circuit with regard to transportation rate cases. See Dalton v. Sherwood Van Lines, Inc., 50 F.3d 1014, 1017 (Fed. Cir. 1995) (alternative avenues for review of agency determinations); Alaska Airlines v. Austin, 801 F.Supp. 760, 770 (D.D.C. 1992) ("Although the government protests that it is not bound by the Comptroller General's [GAO's] decision, there is no doubt that it is bound by a decision of [a] Court."), aff'd in part, rev'd in part on other grounds sub nom. Alaska Airlines, Inc. v. Johnson, 8 F.3d 791 (Fed. Cir. 1993). Consequently, we will entertain affirmative defenses involving laches in these cases. As the Federal Circuit has explained, however, there are significant constraints on the application of this doctrine. We consider that these constraints are especially pertinent in the transportation rate case arena. A party in one of these cases should not assert laches merely because a carrier or the Government seeks money near the end of the statutory period. A case may not be dismissed on account of laches unless the party raising this doctrine proves both (a) unreasonable and unexcused delay by the claimant in bringing the claim and (b) prejudice to the respondent because of that delay. Costello v. United States, 365 U.S. 265, 282 (1961); Cornetta v. United States, 851 F.2d 1372, 1377-78 (Fed. Cir. 1988) (en banc); P.A.L. Systems Co., GSBCA 10858, 91-3 BCA  24,259, at 121,287. Prejudice encompasses both the inability to mount a defense (which may be caused by loss of records, destruction of evidence, fading memories, or unavailability of witnesses) and economic prejudice. Cornetta, 851 F.2d at 1378. The burden of proof is on the party which advances this defense. Id. at 1378-80. The Federal Circuit has -- emphasized that the establishment of the factors of undue delay and prejudice . . . does not mandate recognition of a laches defense in every case. Laches remains an equitable judgment of the trial court in light of all the circumstances. Laches is not established by undue delay and prejudice. Those factors merely lay the foundation for the trial court's exercise of discretion. Where there is evidence of other factors which would make it inequitable to recognize the defense despite undue delay and prejudice, the defense may be denied. Aukerman, 960 F.2d at 1036. We add this caveat with regard to one of the factors: Because the Congress has established statutory limitations within which claims and requests for review of determinations on them may be made, we will exercise caution in intruding on this legislative judgment as to when a claim is too stale to pursue against the Government. Cornetta, 851 F.2d at 1380 n.2, 1381; see also id. at 1384 (Michel, J., concurring: "Generally, an action brought within the time period for the applicable statute of limitations . . . will not be considered unreasonably delayed, except upon a showing of special facts making the delay culpable."); Advanced Cardiovascular Systems, Inc. v. Scimed Life Systems, Inc., 988 F.2d 1157, 1161 (Fed. Cir. 1993). The Court of Appeals' general instructions have special validity with regard to the subject matter of this case. Under authority of first the Transportation Act of 1940 and more recently the Prompt Payment Act, 31 U.S.C. ch. 39, Government agencies have been directed to make payments soon after receiving bills from common carriers for transporting Government property; audits may be made later to determine whether payments were appropriate and to serve as a basis for setting accounts straight. Pub. L. No. 785,  322, 76th Cong., 3d Sess., 54 Stat. 898, 955 (1940); Pub. L. No. 99-627, 100 Stat. 3508 (1986); H. Rep. No. 932, 99th Cong., 2d Sess., at 2, reprinted in 1986 U.S.C.C.A.N. 5937, 5938. Uncertainty about the finality of billings led Congress in 1958 to specify that each bill would not become final until three years after specified events had occurred. The limitation applied similarly to Government audits and carrier claims. Pub. L. No. 85-762, 72 Stat. 859 (1958). Congress determined that clear and equal time limits were necessary to be fair to all concerned. S. Rep. No. 334, 85th Cong., 2d Sess. (1958), reprinted in 1958 U.S.C.C.A.N. 3923; Iran National Airlines Corp. v. United States, 360 F.2d 640, 642 (Ct. Cl. 1966). In effect, the legislature advised carriers and agencies alike that for a set period of years, either side could assert that a position as to a bill was incorrect and both should keep evidence to support their contentions in the event such an assertion was made. The affirmative defense of laches made by MTMC in this case fails. Even if we were to accept the contention that the passage of nearly three years, by itself, constitutes unreasonable and unexcused delay, MTMC has not proved (or even attempted to prove) the other essential element of the defense -- that the Government was prejudiced by the delay. Consequently, we will proceed to consider the merits of Whitten's claim. Nuss v. Office of Personnel Management, 974 F.2d 1316, 1318 (Fed. Cir. 1992); Hoover v. Department of Navy, 957 F.2d 861, 864 (Fed. Cir. 1992); P.A.L. Systems. Authority governing rates The shipment involved in this case went from a Department of the Navy facility to a Coast Guard facility, and the carriage was paid for by the Coast Guard. The Department of the Navy is part of the Department of Defense (DoD); the Coast Guard is a part of the Department of Transportation. Whitten's tender number 410, which is shown as "tariff/special rate authority" on the GBL, contains this statement, which is part of the tender entitled "carrier's offer and instructions": I am authorized to and offer on a continuing basis to the U.S. Department of Defense (meaning any Service or Agency which is part of the Department of Defense) . . . the transportation services described in this tender, subject to the terms and conditions stated in this tender. At the time this shipment occurred, statute generally required a carrier to charge a shipper, including the United States Government, the filed commercial tariff rate for transportation services. 49 U.S.C.  10721(a)(1) (1988). A transportation company could, however, carry goods for the Government without charge or at reduced rates. Id.  10721(b)(1). The carrier was to file its quoted or tendered rate with the "department, agency, or instrumentality of the United States Government for which the quotation or tender was made or for which the proposed transportation is to be provided." Id.  10721(b)(2). The question here is whether the reduced rates contained in Whitten's tender 410, which was filed with DoD, were applicable to the shipment concerned. GSA and MTMC answer the question in the affirmative, with reference to two decisions of the GAO, Administrator, National Aeronautics & Space Administration, 45 Comp. Gen. 118 (1965), and Tri-State Motor Transit Co., B-256165 (July 29, 1994). In the first of these decisions, GAO explained that carriers may extend tender offers to individual agencies, and that only the agency or agencies named in a particular offer may accept that offer. With specific reference to the circumstances of the instant case, however, GAO held that where a tender is extended only to DoD; a GBL is issued, citing that tender, by a military installation; and the charges are billed to and paid by an agency which is not part of DoD, the tender applies to the shipment. Support for this conclusion, GAO said, rests on two factors: DoD is the agency which issues the GBL, and it is the consignor which is liable for the freight charges if the consignee defaults. In the second decision, GAO applied its earlier ruling, reasoning that the shipment is a "DoD shipment" and that DoD is responsible for it until it is received by the non-DoD agency. Whitten urges us to reject GAO's conclusions for two separate reasons. First, the carrier contends, the underpinnings of the decisions are faulty. Permitting DoD to secure special rates for shipments by making arrangements for non-DoD agencies would vitiate the terms of the tender, which is offered only to DoD and not to those other agencies. The carrier's recourse in the event of non- payment is against the United States Government, rather than any particular agency, and the tender rates are not offered to the entire Government. Second and more importantly, Whitten refers us to a decision of the Court of Claims, Baggett Transportation Co. v. United States, 670 F.2d 1011 (Ct. Cl. 1982), which concerns an analogous situation. There, the Government shipped on GBLs, from one domestic location to another, explosives sold by the Government to other countries under foreign military sales contracts. The Government paid for these shipments and was to be reimbursed for the charges by the foreign countries. The Government maintained that the applicable shipping rates were those which had been offered specially to the Government. The Court noted that the special rates were "applicable only when a direct and substantial, pecuniary benefit flows to the government." Id. at 1013. In deciding who receives the benefits from the transportation, "[t]he determining factor is who pays the cost," and the arrangement for reimbursement demonstrated that the foreign countries received the benefit of the carriage. Id. The special rates were therefore inapplicable. Judge Nichols, in a concurring opinion, noted that the Comptroller General, who heads GAO, had come to the opposite conclusion, a position he called "perfectly tenable . . . , though I consider it wrong." Id. at 1014. As stated earlier, to maintain consistency in the way in which carrier claims are treated, we will follow the rulings of the Court of Appeals for the Federal Circuit with regard to cases involving requests by carriers for review of GSA's audit and claims determinations. The Court of Claims was a predecessor of the Court of Appeals for the Federal Circuit, and its decisions are binding precedent in that Circuit. South Corp. v. United States, 690 F.2d 1368, 1369 (Fed. Cir. 1982) (en banc). Baggett is still good law there. See Munitions Carriers Conference, Inc. v. United States, 932 F. Supp. 334, 341 n.5 (D.D.C. 1996). We consider that decision to be dispositive of this case. The two situations differ in the entities to which the tenders were extended (the Government generally versus DoD alone) and the entities which claimed the right to apply them (foreign countries versus a non-DoD agency). The basic principle is identical, however: a tender may be applied only if the entity to which it is offered actually receives a direct and substantial pecuniary benefit from the shipment. The Coast Guard paid for the shipment here. It received the direct and substantial pecuniary benefit of the shipment. The tender in question was offered to DoD alone. Because the Coast Guard is not part of DoD, it may not pay the rates which were offered only to DoD. We recognize, as pointed out by MTMC, that statute permits DoD to provide support, including equipment, to civilian agencies for law enforcement purposes. 10 U.S.C. ch. 18 (1994). We also understand, as MTMC notes, that the Economy Act authorizes agencies of the Government to place orders with other agencies for goods and services. 31 U.S.C.  1535 (1994). These laws do not compel a conclusion that any non-DoD agency, even a law enforcement agency, may take advantage of tenders which were offered only to DoD, however. Orders placed pursuant to the Economy Act obligate an appropriation of the ordering agency. Id.  1535(d). A civilian agency which receives support from DoD under 10 U.S.C. ch. 18 must reimburse DoD for the assistance unless the support "results in a benefit to the element of the Department of Defense providing the support that is substantially equivalent to that which would otherwise be obtained from military operations or training." 10 U.S.C.  377 (1994). MTMC has not contended that the shipment at issue here provided any benefit to the Naval Surface Warfare Center installation in Crane, Indiana. Thus, under the rule in Baggett that "[t]he determining factor is who pays the cost," these laws reinforce the conclusion that the shipment is for the benefit of the Coast Guard, a non-DoD agency, and the tender which is for the benefit of DoD does not apply to it. We believe additionally that the policy reasons cited by Whitten for rejecting GAO's position have merit. Further, it is instructive that in the context of sales between private entities -- Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, . . . and . . . if the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment. U.C.C.  2-401(2) (1989). The Navy and the Coast Guard are of course not commercial establishments, and within the Government, there is no "title" to pass between agencies. However, to the extent that general commercial law may be analogized to the context of transfers between Government agencies, the fact that the GBL (nor any other document in the record) does not say when the Coast Guard is to take title to the machine guns would indicate that when the carrier took possession, the guns were Coast Guard property. The analogy suggests another reason why GAO's analysis (in Tri- State) is not correct. MTMC also intimates that Whitten's acceptance of the GBL, with its notation that tender 410 was the "tariff/special rate authority," precludes the carrier from maintaining now that another document established the rate at which the guns should be shipped. Whitten persuasively cites several GAO decisions for the proposition that insertion of a tender number on a bill of lading is not conclusive as to the Government's obligations. Airgroup Express, B-256204, et al. (July 15, 1994); Goulart Trucking, Inc., B-251140, et al. (Sept. 28, 1993); Sammons Trucking, B-241866 (June 17, 1991); Double M Transport, Inc., B-236336 (July 13, 1990). The cases cited by MTMC, Chicago, Burlington & Quincy Railroad Co., 439 F.2d 1224 (Ct. Cl. 1971), and Jetco, Inc. v. United States, 11 Cl. Ct. 837 (1987), are not inconsistent. They stand for the proposition that where an applicable tender exists, its terms may be varied by explicit, affirmative action of the carrier (Chicago) and must be interpreted in light of the actions of the carrier and the Government (Jetco). A conclusion that a carrier's acceptance of a GBL which named a particular tender is binding would be inconsistent with the entire statutory scheme regarding transportation rate claims -- pay promptly, then take time to confirm the correctness of the billings. See also American Farm Lines, Inc., B-200939 (May 29, 1981) (carrier's failure initially to bill higher tariff rates does not bind it to the originally billed rates; statute and regulation give carriers the right to file claims later for amounts not included in original billings). The acceptance of a GBL does not rise to the sort of explicit, affirmative action by management of the carrier which has been found to bind the company. Whitten's acceptance of the GBL no more binds the carrier than the Government's payment of a bill precludes GSA from determining later, through an audit, that the Government should have paid less for particular carriage. Baggett is but one example of cases in which a carrier determined later that its first billings were improper and was able later to claim that additional moneys were due on a shipment. Whitten's Tariff ICC WITT 403 was in effect on the date of this shipment. Under this tariff, the line haul charges for this shipment were $1,341.50, regardless of whether the appropriate distance for the trip was 748 miles (as contended by Whitten) or 736 miles (as contended by MTMC). Under Whitten tender 410, and as originally billed by the carrier, the line haul charges were $1,041.50, regardless of which distance is correct. The tender did not apply to the shipment; the tariff consequently did. Whitten is therefore entitled to the difference between the original line haul billing and what it now claims, $300. Distance The GBL shows the distance involved in this shipment -- between Crane, Indiana, and Belle Chase, Louisiana -- as being 748 miles. MTMC contends that the correct distance is only 736 miles; Whitten insists that 748 is correct. MTMC and Whitten agree that the mileage should be governed by the Household Goods Carriers Bureau Mileage Guide, which applies both to DoD tenders and Whitten's Tariff ICC WITT 403. According to MTMC, the computerized system it uses, which implements this guide, shows the distance between Crane and Belle Chase as 736 miles. Whitten has demonstrated that MTMC's contention is incorrect because it is based on an erroneous entry of the code for New Orleans, Louisiana, rather than Belle Chase. The distance used by Whitten is the correct one between the two points of shipment. We note that MTMC also questioned Whitten's billing for tolls on this shipment. In response, Whitten withdrew this element of its claim. Summary Whitten's claim and request for review were both timely filed. Consideration of them is not barred by the doctrine of laches. Tariff ICC WITT 403 governs this shipment; Whitten should consequently be paid the $300 it claims as the difference between the amount of original billing and the amount to which the carrier is entitled under its tariff. No adjustment as to mileage is appropriate. Payment of the claim should be reduced by the amount of tolls previously paid, which the carrier no longer seeks. _________________________ STEPHEN M. DANIELS Board Judge