Board of Contract Appeals General Services Administration Washington, D.C. 20405 _________________________ May 27, 1998 _________________________ GSBCA 14512-RATE In the Matter of TRI-STATE MOTOR TRANSIT CO. 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. This case concerns a supplemental bill for excess released value declared on a military cargo transported by Tri-State Motor Transit Co. (Tri-State) from New Orleans, Louisiana to Kelly Air Force Base in Texas. The shipment was made in October 1991. Tri-State was initially paid $1108.28 for its transportation services. It later submitted a supplemental charge of $2307 based on the excess released value of the shipment. In block eighteen of the Government bill of lading (GBL) No. D-1,179,580, which covered the shipment, is the notation: "Released value not exceeding $20,000 per lb per article." Based upon a cargo weight of 15,000 pounds, which is also listed on the GBL, the total released value of the cargo would amount to $300,000,000. Tri-State, recognizing that the $20,000 per pound rate listed on the GBL was an obvious error, did not figure its excess released value charge on the $300,000,000 released value but used instead the actual value of the cargo. A requisition and invoice/shipping document (DD Form 1149), which Tri-State states it received with the GBL, listed the actual value of the cargo as $1,575,000. The Office of Transportation Audits (OTA) of the General Services Administration acknowledges that Tri-State's original claim was timely filed but was not processed at that time. In 2 1997, Tri-State inquired concerning the status of its claim. OTA was unable to find the initial submission and requested Tri- State to resubmit it. At the time the resubmission was received, several claims relating to charges for excess released value were pending before the Board. OTA, therefore, deferred ruling on the resubmitted claim until the Board had decided these claims. The claims have since been resolved and generally in Tri-State's favor. See Tri-State Motor Transit Co., GSBCA 14249-RATE, 98-1 BCA 29,516 (and cases cited therein). Nevertheless, OTA still defers ruling on the resubmitted claim. OTA now advises us that, although it is prepared to concede on the general issue regarding excess release value charges, which was posed in the earlier claims, nevertheless, this particular claim poses unique facts which merit special consideration by the Board and distinguish it from the cases which have preceded it. Discussion OTA contends that the Government should not be liable for excess released value charges in cases where the information in the GBL regarding released value is obviously incorrect. The carrier, according to OTA, should first verify the released value figure -- especially because the carrier and not the shipper is ultimately responsible for issuing the bill of lading. If the carrier fails to verify a mistake of this nature, any right to claim excess value charges at a later date is lost. It is well established that a carrier executes at its own risk any bill of lading prepared by the shipper which, on its face, contains conflicting terms or terms with which the carrier cannot lawfully comply. See C.I. Whitten Transfer Co., GSBCA 13893-RATE, 97-2 BCA 29,060 (and cases cited therein). This, however, does not describe the situation here where the shipper has entered an incredibly high released value factor on the GBL. Although an obvious error, the entry does not present a specific conflict or require of the carrier that it engage in unlawful activity. Rather, it may well indicate that the shipper is not satisfied with the released value as stated in the applicable tender or tariff which would control in the absence of a specific released value factor in block eighteen of the GBL. In cases such as this, the Comptroller General, who formerly exercised the review authority which we now exercise regarding carrier claims for transportation services, took the position that the listing of a specific but obviously incorrect figure for released value on a GBL suggested an intent on the Government s part to ship at actual value rather than at the lesser default released value stated in the tender or tariff. Accordingly, the Comptroller General ruled that, in such cases, absent any evidence that the carrier actually exercised special 3 handling procedures for a denominated value in excess of the actual value, he would not object to payment of a claim for excess released value based on the actual value of the cargo. See Tri-State Motor Transit Co., B-254831 (June 1, 1994) letter decision; American Farm Lines, B-203933 (June 17, 1982). In this case, OTA and Tri-State both agree that the cargo in question had an actual value of $1,575,000. They likewise agree that $37,500 of the released value was already provided for in the basic transportation rate. They, therefore, are in agreement that the excess released value (based upon the actual value of $1,575,000 rather than the incorrect, declared released value of $300,000,000) would amount to $1,537,500. Tri-State s claim for excess released value is based on this figure of $1,537,500. Using the factor of fifteen cents per $100 of excess value[foot #] 1, Tri-State has, therefore, calculated a claim amounting to $2307. In submitting its supplemental voucher to OTA, Tri-State has explained that it has calculated its claim for excess released value using the methodology described in the above mentioned Comptroller General decisions. In commenting on Tri-State s claim, OTA, in addition to the basic objection discussed earlier, also asks whether we consider these decisions applicable to this case. We do. Counsel for MTMC suggests that we follow an approach different from that formerly used by the Comptroller General. Counsel would have us ignore totally the obviously incorrect GBL entry and assume instead that the Government's intent was to ship at the default released value stated in the tender or tariff. We prefer the Comptroller General's approach as being more realistic in that the incorrect entry on the GBL is not simply dismissed as meaningless but rather is accepted as evidence of at least an intent to ship the cargo at something other than the default released value. Nothing in the record suggests that Tri-State exercised special handling procedures which might justify a charge based upon a figure in excess of the actual value of the cargo. Indeed, Tri-State has based its claim on the actual value. The approach previously used by the Comptroller General in cases of this type is a sound one. We, therefore, follow it here. In commenting on Tri-State s claim, OTA points out that, in some cases, if an incorrect released value stated in block ----------- FOOTNOTE BEGINS --------- [foot #] 1 Item 190 of the Freight Traffic Rules Publication No. 1A of the Military Traffic Management Command (MTMC), which deals with released value rates, expressly provides that excess valuation charges are figured using a charge of fifteen cents for each $100 or fraction thereof by which the declared value of the shipment exceeds the value to which the base transportation rate applies. ----------- FOOTNOTE ENDS ----------- 4 eighteen of a GBL is given credence, the potential liability for excess released value charges could be tremendous. Two specific examples are given by way of illustration. In one case, the total release value, based on a factor of $20,000 per pound, would amount to $290,000,000 with excess released value charges of $434,946. In the other example, the released value, also based on a factor of $20,000 per pound, would amount to $267,580,000 with excess released value charges of $401,320.50. We find OTA s concerns tenuous at best. As already explained, an obviously erroneous released value factor would be accepted only as an indication that the Government wanted to ship at a released value equal to the actual value of the cargo. Only if the Government itself were to refuse to divulge information concerning the actual value of a cargo would there be any possibility that it might be held liable for excess released value charges based on a value in excess of the actual value. Furthermore, a carrier bringing such a claim would have to meet the arduous burden of demonstrating that an extraordinarily high released value calculated from an obviously incorrect released value factor appearing on the GBL was nonetheless reasonably assumed to be correct. Given the facts before us, we are persuaded that Tri-State s claim is a valid one. OTA is, therefore, directed to issue a certificate of settlement allowing the claim. ______________________ EDWIN B. NEILL Board Judge