September 30, 1997 GSBCA 14169-RATE, 14170-RATE, 14171-RATE, 14172-RATE In the Matters of TRI-STATE MOTOR TRANSIT CO. John D. Bagileo of Bagileo, Silverberg and Goldman, L.L.P., Washington, DC, appearing for Claimant. Jeffrey J. Thurston, Director, Office of Transportation Audits, General Services Administration, Washington, DC, appearing for General Services Administration. Colonel James F. Quinn, Staff Judge Advocate, Headquarters, Military Traffic Management Command, Department of the Army, Falls Church, VA, appearing for Department of Defense. DANIELS, Board Judge (Chairman). In each of these four cases, Tri-State Motor Transit Co. claims that it is entitled to payments additional to those already made for transporting explosives for agencies of the United States Government. Tri-State maintains that the amounts due for its services should be governed by its tariff rates, rather than rates it tendered to the Department of Defense (DoD) alone, where a civilian agency of the Government is responsible for the payments. Each of the cases was initially filed with the General Accounting Office (GAO). In mid-1996, the authority to review the General Services Administrator's actions stemming from audits of bills presented by carriers or freight forwarders to Government agencies for transporting individuals or property for the Government was transferred from GAO to this Board. C. I. Whitten Transfer Co., GSBCA 13911-RATE, 97-1 BCA  28,860, at 143,986. At that time, GAO had suspended proceedings in the cases, pending the outcome of litigation in the Court of Federal Claims regarding the issue presented here. On April 22, 1997, Tri-State asked us to reopen the cases and render decisions in them. Tri-State reported that it had determined that the issue had not been properly raised in the litigation pending in the Court of Federal Claims, since DoD had paid for all the shipments involved in that lawsuit. Tri-State and the Military Traffic Management Command (MTMC), the Defense Department agency which sets rules governing the movement of that department's freight traffic by motor carrier, agree that the issue has been dismissed from the suit. Because GAO never closed its files in these matters, and there is no reason to suspend proceedings further, we will address the claims on their merits. The issue presented in these cases is identical to the one we considered in Whitten. Our decision there may be summarized as follows. Under statute existing at the time, a common carrier could offer to the United States Government transportation at rates lower than those contained in the carrier's tariffs which had been approved by the Interstate Commerce Commission. The carrier had to file the "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." 10 U.S.C.  10721 (1988). In Baggett Transportation Co. v. United States. 670 F.2d 1011 (Ct. Cl. 1982), the Court of Claims held that rates tendered to the Government could not be applied to shipments of goods which the Government had sold to other countries and was moving for those countries. The court's rationale was that the special rates were "applicable only when a direct and substantial, pecuniary benefit flows to" the Government, and that in deciding who receives the benefit from the transportation, "[t]he determining factor is who pays the cost." We decided that this holding was dispositive of the issue before us: a tender which was offered only to one "department, agency, or instrumentality" of the Government may be applied to a particular shipment only if that entity actually receives a direct and substantial pecuniary benefit from the shipment. Thus, the rates contained in a tender which was offered only to DoD may not govern a shipment for which another agency derives the benefit and pays for the carriage. This holding is readily applicable to the GBLs which are involved in the instant cases. All but two of the GBLs involved in these cases state that shipping charges are to be billed to agencies which are not part of DoD. Charges for the shipments made under these GBLs were not properly made under the terms of the tender that Tri-State offered to DoD alone; the charges should be recalculated under the terms of the carrier's filed tariff. Two of the GBLs state that the charges were to be paid by entities within DOD -- the Department of the Navy and the Department of the Army. As to one of them, the only assertion that Tri-State makes as to a non-DoD agency's deriving a direct and substantial pecuniary benefit is counsel's statement that the Navy, rather than paying the charges, gave the carrier instructions to bill the Coast Guard instead. Our rules of procedure state that "[t]he burden is on the claimant to establish . . . the liability of the agency, and the claimant's right to payment." Rule 301(b) (62 Fed. Reg. 25,867 (1997) (to be codified at 48 CFR 6103.1)); Tri-State Motor Transit Co., GSBCA 13743-RATE, 97-2 BCA  29,068. The lawyer's assertion is insufficient to meet this burden; we require concrete proof (in this instance, a copy of the Navy's letter would do). As to the GBL which provides that charges were to be paid by the Army, Tri- State offers no proof that any other agency derived benefit from the shipment; the GBL's statement that the ammunition was to be delivered to a federal prison camp does not suffice. The rates contained in Tri-State's tender to DoD must therefore govern these shipments. Consequently, GSBCA 14169-RATE, which involves only the GBL with Navy payment specified, is denied; GSBCA 14172-RATE, one of whose three GBLs says that payment is to be made by the Army, is granted in part; and GSBCA 14170-RATE and 14171-RATE, all of whose GBLs require payment by non-DoD agencies, are granted. MTMC filed very lengthy comments on these claims, in an effort to convince us to abandon our holding in Whitten. We discourage the making of this sort of argument; we issue decisions with the expectation that they will have precedential value -- that the principles expressed in them will be applied in future actions to which they might pertain. Nevertheless, MTMC's comments are thoughtful, and in an effort to explain our reasoning in Whitten further, we will discuss them briefly here. In each of the paragraphs below, the first sentence encapsulates MTMC's comment and the remainder is our view on it. (1) [MTMC comment: The Court of Claims' holding in Baggett is inapplicable to these cases, since statute prohibited foreign governments from receiving low rates offered to the United States Government, whereas it permitted the carrier to grant such rates to all U.S. agencies.] The distinction MTMC draws is correct, but it is of no importance here. Although Tri-State could have offered low rates to all United States Government agencies, it chose not to do so; it offered those rates to DoD alone. (2) [MTMC comment: "[E]ach shipment involved is a 'DOD shipment' in that it was arranged by DOD, contracted for by DOD and controlled by DOD."] Nevertheless, the shipment was also a "non-DoD shipment" in that it was paid for by a non-DoD agency and was for the benefit of that agency, and under the reasoning of Baggett, that is what matters. (3) [MTMC comment: DoD had a direct and substantial pecuniary benefit in the shipments, in that DoD derives considerable economies from having the Army operate as DoD's single manager for conventional ammunition.] As Tri-State says in response, this contention really is that non-DoD agencies may be able to save money by purchasing ammunition through an efficient DoD procurement and distribution system; it has nothing to do with benefits to DoD itself. (4) [MTMC comment: The agencies understood at the time of these shipments, consistent with GAO decisions which the Board rejected in Whitten, that if a DoD entity sent materials to a non-DoD agency, the carrier's tender of rates to DoD would govern the shipment.] While this statement is probably true, it does not prevent the Board from determining, as it did in Whitten, that the GAO decisions were incorrect. (5) [MTMC comment: When Tri-State accepted the shipments, with the DoD tender shown as the governing rate authority, it demonstrated an intent to accept the shipments at those rates, so the rates must apply.] As we explained in Whitten, this is not the law; if it were, the Government would be precluded from ever demanding that carriers refund moneys improperly paid for transportation services. Tri-State has provided an affidavit in which its Director of DoD Sales and Marketing explains that the carrier did not have the intent attributed to it by MTMC when it accepted the shipments that are involved in these cases. (6) [MTMC comment: Alternatively, the Government detrimentally relied on Tri-State's acceptance of the shipments at the tender rates, so the carrier must be estopped from claiming additional payments now.] In C. I. Whitten Transfer Co., GSBCA 13893-RATE, 97-2 BCA  29,060, we noted that when a carrier executed a bill of lading which contained conflicting terms or which could not lawfully be executed, the Interstate Commerce Commission (ICC) and the GAO had awarded 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. MTMC has not shown any detrimental reliance. It has not demonstrated that any agency actually suffered damages by virtue of having shipped goods under the GBLs which are involved in these cases and which improperly implicated Tri-State's tender to DoD. Thus, we need not decide whether to apply the ICC/GAO practice in these cases. (7) [MTMC comment: The Board's decision in Whitten, 97-1 BCA at 143,990, improperly looked to the Uniform Commercial Code's section 2-401, rather than the Code's section 2-509, in considering ownership of the goods at the time of shipment.] Section 2-401 states that in the context of sales between private entities, title passes to the buyer at the place of shipment, unless the contrary is explicitly stated in the contract. Section 2-509 provides that in the same context, where the seller permissibly ships goods by carrier, and the contract requires him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are tendered there. In response, Tri-State notes that none of the GBLs involved in the cases now before us cites the destination location as the "FOB [free on board] point," and maintains that if the GBLs are to be viewed similarly to contracts, they must therefore be presumed to be "normal" "shipment" contracts and not "variant" "destination" contracts. See U.C.C.  2-503 cmt. 5 (1989). We think that our initial rationale, as confirmed by Tri-State's comment, is more apt than MTMC's. More important are these two caveats, however. First, as we said in Whitten, the concepts contained in the Uniform Commercial Code may only loosely apply to transactions between Government agencies, since agencies are not commercial establishments and there is no "title" to pass between them. Second, transportation rate law has its own logic, and trying to analogize commercial law to it may not always be appropriate. As another tribunal said in another rate case, "Whether this makes sense is beside the point. It all depends on what kind of sense is being made -- abstract, contractual interpretation sense, or transportation-railroading sense." Strickland Transportation Co. v. United States, 334 F.2d 172, 178 (5th Cir. 1964). _________________________ STEPHEN M. DANIELS Board Judge