Board of Contract Appeals General Services Administration Washington, D.C. 20405 _________________________ DENIED: March 19, 1999 _________________________ GSBCA 14576-RATE In the Matter of INTER-COASTAL XPRESS, INC. Randall Schmidt of Kirkley Schmidt & Cotten, L.L.P., Fort Worth, TX, appearing for Claimant. James F. Fitzgerald, Director, Transportation Audits Division, 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. If the Government drafts a tender containing language that is susceptible of two different interpretations, both of which are reasonable and consistent with the remainder of the tender, we will construe latently ambiguous language against the Government, so long as the carrier can establish that it relied upon its interpretation of the tender's language when it constructed and submitted its freight rates. When a tender requires that a Government bill of lading (GBL) contain a written annotation in order for a shipper to request a service, the GBL must contain an annotation that substantially complies with the tender's requirement in order for the carrier to be paid for providing the service. Background On April 1, 1994, the Defense Personnel Support Center (DPSC), a component of the Department of Defense (DoD), invited carriers to submit rates for transporting perishable freight from warehouses located at three pick-up points: Fort Worth, Texas; San Antonio, Texas; and New Orleans, Louisiana. If a carrier was interested in providing services to DoD, it was supposed to complete and return DPSC's perishable subsistence carrier rate tender, which set out the terms for moving shipments of perishable freight. Inter-Coastal Xpress, Inc. (ICX) submitted a total of three tenders for the three pick-up points. The tenders are identical except for Items 28 and 29, discussed below. Item 3 of the tenders is titled "Detention Time." Here, the carrier agreed to arrive at the loading locks ready for loading at the time set out in the loading and delivery schedule contained in Item 29. Item 3 explained that the carrier s rates included a certain amount of time, called free time, for "placement of material" and for waiting. If the carrier was delayed at either the pick-up point or the delivery point, and if the delay was not caused by the carrier, DoD would pay the carrier a charge, set out in Item 12c, for detention in excess of the free time set out in Item 3. In each of its tenders, ICX inserted in Item 12c a charge for detention of $38 per hour, with a maximum charge of $150. Item 12 concerned accessorial charges. Item 12d states: When the Government requires and requests pick-up and/or delivery on Saturdays, Sundays or Holidays, the following charges will apply in addition to all other charges assessed against the shipper . . . . The GBL will be annotated by the [Defense Subsistence Office (DSO)] Saturday (Sunday or Holiday) delivery (pick-up) authorized on xx (date(s)). Item 12d lists the days that constitute holidays. The charge set out in Item 12d was stated as a charge per truck. In each of its tenders, ICX inserted a charge of $250 per truck. Item 28 showed that the carrier would pick-up perishable commodities at the stated pick-up point and deliver them to listed delivery points. For each delivery point, Item 28 set out more than one truckload minimum weight. For each delivery point and for each truckload minimum weight, the carrier was supposed to insert its freight rate per hundred pounds. For example, the tender with a pick-up point of Fort Worth asked carriers to submit freight rates for moving minimum truckload weights of 10,000, 20,000, 30,000, and 40,000 pounds to Fort Bliss in El Paso, Texas. Item 29 set out delivery schedules.[foot #] 1 For each delivery point, the schedules set out pick-up days and times, and delivery days and times. For example, for the tender with a pick-up point of San Antonio, the schedules showed that only fresh fruits and vegetables would be shipped under the tender, and that all deliveries were to be made either the same day as the pick-up day or the next day. For the tender with a pick-up point of New Orleans, the schedules showed that fresh fruits and vegetables, frozen items, and chilled items would be shipped under the tender. All deliveries were to be made either the same day as the pick-up day or the next day. For the tender with a pick-up point of Fort Worth, the schedules showed that fresh fruits and vegetables, frozen items, and chilled items would be shipped under the tender to sixty-one delivery points. Deliveries to fifty of the delivery points were to be made either the same day as the pick-up day or the next day. For six of the delivery points listed in the Fort Worth schedules, the schedules showed pick-up days and times, and said that deliveries would be made quarterly, monthly, or as needed. For the remaining five delivery points listed in the Fort Worth schedules, the schedules said that pick-ups and deliveries would be made only as required or only as requested. Item 29.1 is titled Holdover Charges (Weekend) and reads: Friday pick-ups may be held for Monday morning deliveries. Holdover charges (2 days) will be $ (per truck) with total maximum charge of $ per weekend. GBL will be annotated, by the DSO Office, Holdover authorized Saturday x (date) and Sunday x (date). Item 29.2 is titled Holdover Charges (Overnight Holiday) and reads: Trucks heldover [sic] on holidays (as specified in Item 12d) in accordance with instructions from the DSO, will be charge[d] at $ per truck. GBL will be annotated, by the DSO Office, Holdover authorized on Holiday x (date). ----------- FOOTNOTE BEGINS --------- [foot #] 1 The tender does not contain an item numbered 29. Between Item 28 and Item 29.1, however, there are delivery schedules that set out the days and times that carriers were to pick-up shipments, the delivery points, and the delivery days and times. The item index at the beginning of the tender refers to the schedules of loading and delivery times as Item 29. Item 3 of the tender refers to loading and delivery schedules as Item 29. Item 17e of the tender provides that the carrier shall pick- up and deliver in accordance with the schedule in Item 29. We conclude that the loading and delivery schedules located between Item 28 and Item 29.1 constitute Item 29. ----------- FOOTNOTE ENDS ----------- Item 29.3 is titled Holdover Charges (Weekdays) and reads: Trucks heldover [sic] night (Monday Night, Tuesday Night, Wednesday Night, Thursday Night excluding holidays, (see Item 29.2)) during the week for delivery the next day will be charged at $ per truck. GBL will be annotated by the DSO Office, Holdover Authorized for x night x (date). In each of its tenders, ICX inserted a charge of $400 per truck for weekend holdover charges, and $250 per truck for overnight holiday and weekday holdover charges. DoD selected ICX to carry perishable freight from Fort Worth, New Orleans, and San Antonio, and ICX began transporting freight for DoD in October 1994. None of the GBLs issued for ICX s shipments contained a notation concerning holdover charges. The DSO in New Orleans paid holdover charges in addition to the applicable freight rate whenever ICX picked up a shipment on one day and delivered the shipment the next day. The DSOs in Fort Worth and San Antonio did not pay holdover charges in the same circumstances. On May 19, 1995, ICX asked the DSOs in Fort Worth and San Antonio to begin paying holdover charges, as ICX believed was required by the tenders. On July 26, 1995, DoD responded to ICX s inquiries concerning holdover charges. DoD explained that it would not pay holdover charges when a tender s delivery schedule showed a next- day delivery because the next day delivery was part of the service required by the tender, and should have been accounted for in ICX s freight rate. DoD agreed that it owed ICX for holdover charges for twenty-nine shipments because the delivery schedule showed that pick-up and delivery were supposed to occur on the same day, and DoD held the shipments for delivery on a later day. On September 19, 1995, DoD told ICX that it should not have been paid holdover charges for shipments picked up in New Orleans if the holdover was part of the service required by the tender. On March 5, 1996, DoD wrote another letter to ICX concerning its request for payment of holdover charges. The letter confirmed that ICX was due an additional amount, which the letter referred to as detention charges, for the twenty-nine shipments mentioned in the July 26, 1995 letter. The March 5, 1996 letter said that when a tender s delivery schedule showed that goods would be loaded one day and delivered the next day, ICX was not entitled to holdover charges. The letter stated that because ICX was aware when it constructed its freight rates that detention at origin was involved, ICX should have included charges for that detention in its freight rates. The letter also said that the tenders specified that when the DSO authorized a holdover, the GBL would be annotated accordingly. The letter stated that the holdovers for which ICX asked to be reimbursed were scheduled in DPSC s original invitation to carriers to submit freight rates, and were not authorized by the DSO. Between November 29, 1996, and November 7, 1997, ICX submitted 2416 claims for holdover charges to the General Services Administration s (GSA's) Office of Transportation Audits (OTA).[foot #] 2 OTA denied two of ICX s claims, one on September 29, 1997, and another on November 20, 1997, because neither of the GBLs underlying those claims contained an annotation requesting ICX to provide holdover services. The first of these two GBLs (G-5,823,371) directed ICX to pick-up a shipment at Fort Worth on March 19, 1997 (a Wednesday), and to deliver it to Kirtland Air Force Base, Texas. The GBL does not say when ICX was required to deliver the shipment, but it notes that the shipment was delivered on March 20, 1997. The GBL states that the estimated shipping cost was $954, and ICX invoiced for that amount on March 21, 1997. On April 15, 1997, ICX invoiced for an added $250 for holdover charges. The second of the two GBLs (G-5,823,139) directed ICX to pick-up a shipment at Fort Worth on February 26, 1997 (also a Wednesday) and to deliver it to Kirtland Air Force Base. The GBL does not say when ICX was required to deliver the shipment, but it notes that the shipment was delivered on February 27, 1997. The GBL states that the estimated shipping cost was $954, and ICX invoiced for that amount on February 27, 1997. On April 15, 1997, ICX invoiced for an added $250 for holdover charges. Both GBLs listed the Fort Worth tender as the special rate authority, and this tender provided that shipments from Fort Worth to Kirtland would be picked up one day and delivered the next day. ICX asks us to review OTA s decision. In its submissions to the Board, ICX said that when it calculated its freight rates, it thought that DoD would pay holdover charges in addition to freight rates, and so did not include in its rates any amounts for holdover charges. We asked ICX to provide evidence to establish that at the time ICX constructed its freight rates and submitted its tenders, it interpreted the tender language to mean that DoD would pay holdover charges in addition to freight rates for shipments that were listed on the delivery schedules as being picked up one day and delivered the next day. In response to our question, ICX said that it was familiar with one of the sixty-one routes covered by the Fort Worth tender. ICX thought that this route (not the route from Fort Worth to Kirtland Air Force Base) would be profitable at $1450, so ICX bid a freight rate that would result in a charge of $1200 plus a holdover charge of $250 for most loads. ICX said that it has no "independent record of its bid calculations." ----------- FOOTNOTE BEGINS --------- [foot #] 2 Although we refer to OTA in this decision, GSA now performs its transportation audit functions through its Transportation Audits Division, which is a part of the Office of Transportation and Property Management. ----------- FOOTNOTE ENDS ----------- Discussion We have the authority to review only OTA s decision concerning the two ICX claims that OTA denied. According to the regulations governing claims for transportation services, claimants may ask us to review final administrative actions taken by OTA. 41 CFR 101-41.701 (1997).[foot #] 3 Because OTA has not taken any final action upon the remaining 2414 of ICX's claims, we must dismiss them as having been prematurely filed. Tri-State Motor Transit Co., GSBCA 13896-RATE, 97-1 BCA 28,873. ICX asks that, instead of dismissing the 2414 claims, we hold a hearing in order to determine their status. We cannot grant ICX's request because it would require us to review something other than a final administrative action taken by OTA, which would exceed the bounds of our authority. ICX also asks that we deem its 2414 claims to have been constructively denied by OTA. ICX had not cited us to any statute or regulation, and we know of none, that would allow us to consider these claims to have been constructively denied. Tri-State Motor Transit Co., GSBCA 14352-RATE, 98-1 BCA 29,521. ICX has the burden of establishing that it is entitled to be paid holdover charges. Rule 301(b). ICX asks that we interpret the tender as we would any government contract. According to ICX, either the plain language of the tender clearly provides that ICX is entitled to be paid holdover charges whenever an ICX truck was in use overnight, or else the tender language is latently ambiguous and should be construed against DoD as the drafter of the tender. We deny ICX's claims. Although we agree with ICX that the tender is ambiguous, we do not construe the tender against DoD because ICX has not established that it relied upon its present interpretation of the tender at the time it constructed its freight rates and submitted its tender. In addition, ICX has not established that there was substantial compliance with the tender's requirement for a GBL annotation, as required by Item 29.3 of the tender. Plain language ICX points to several provisions of the tender in support of its contention that the tender s plain language requires DoD to pay a holdover charge whenever one of ICX s trucks was in use overnight. ICX notes that the tender states that ICX was to quote one freight rate per hundred pounds and to state another amount for a holdover charge, and does not say that ICX was ----------- FOOTNOTE BEGINS --------- [foot #] 3 Although this regulation refers to the Comptroller General, and not the Board, we perform this review function. General Accounting Office Act of 1996, Pub. L. No. 104-316, 202(o), 110 Stat. 3826, 3844 (1996); Delegation by Acting GSA Administrator (July 17, 1996). ----------- FOOTNOTE ENDS ----------- supposed to include an amount for holdover in its freight rate. Although this tender language establishes that holdover charges were to be paid in addition to the freight rate, it does not clearly establish what a holdover is or when holdover charges would be paid. ICX says that Items 28, 29.1, 29.2, and 29.3 do not incorporate any delivery schedules, presumably implying that the delivery schedules do not have any bearing upon when holdover charges are to be paid. The lack of a reference to a delivery schedule in these items does not clarify the circumstances in which a holdover charge is due. In addition, even though these items do not refer to a delivery schedule, the delivery schedule set out in Item 29 is a part of the tender and we cannot ignore it when reading the tender. Looking to other tender provisions in support of its plain language argument, ICX notes that some pick-up and delivery schedules were subject to change and some pick-ups and deliveries would be made only as required, only as requested, quarterly, monthly, or as needed. This uncertainty, says ICX, meant that it had no basis upon which it could anticipate when DoD would ask to use an ICX truck overnight. ICX's implication is that, due to this uncertainty, ICX could not have included an amount for holdover in its freight rate. ICX's point is not relevant to the two GBLs that are at issue here, because the pick-up and delivery schedule contained in the applicable tender clearly showed that pick-ups would be made at Fort Worth and deliveries made to Kirtland the following day. Putting aside whether ICX's point is relevant, the fact that ICX could not always anticipate when DoD would ask to use a truck overnight does not make the tender any more clear concerning when holdover charges are due. The plain language of the tender does not provide that ICX is entitled to be paid holdover charges whenever an ICX truck was in use overnight. The tender, which uses the term "holdover" in Items 29.1, 29.2, and 29.3, provides that DoD will pay a holdover charge whenever a holdover occurs. Thus, in order to determine when DoD will pay a holdover charge, we must ascertain what constitutes a holdover. The tender does not define the term holdover, and the word has no ordinary and commonly accepted meaning. "Holdover" is not a "clear, unremarkable, everyday, short, common English word[] . . . ." Gustafson Partnership, GSBCA 6701-COM, 84-1 BCA 17,086, at 85,065. There is no dictionary definition of the word upon which we can rely in order to conclude that the language of the tender is plain. In addition, the term "holdover" is not one that appears to have any special meaning in the trucking industry. The concept of "holdover" is apparently a creation of DoD, which says that it first used the term in a rate tender that it issued on October 1, 1992. OTA, which for many years has been responsible for auditing transportation charges paid by Government agencies, says that it first heard the term in September 1996, in connection with a DoD rate tender. ICX says that the term is not one of art in the trucking industry, and that it knows of no prior contracts or shipping documents that used the term. Because "holdover" is not defined in the tender and has neither an ordinary, common meaning nor a special or unusual meaning understood by ICX and DoD, we cannot conclude that the plain language of the tender provides that ICX is entitled to be paid holdover charges whenever an ICX truck was in use overnight. Ambiguous language If the use of the word "holdover" in the tender is susceptible of two different interpretations, both of which are reasonable and consistent with the remainder of the tender, then the language is ambiguous. DoD reads the tender as meaning that a holdover occurred only if an ICX truck was in use for a night in addition to a night that was built into the delivery schedule. ICX reads the tender as meaning that a holdover occurred any time that an ICX truck was in use overnight, including a night that was built into the delivery schedule. We find both of these readings to be reasonable. We agree with DoD that the tender can reasonably be read to say that holdover means overnight use that is unscheduled, not contemplated, and not accounted for in the schedule. Item 17e says that the carrier will pick-up and deliver in accordance with the schedule in Item 29, and the schedule contemplates that ICX trucks will be in use overnight on some routes because it shows that shipments will be picked up one day and delivered the next day. Nothing prevented ICX from setting its freight rates to take into account the fact that the delivery schedule required ICX to provide DoD with the use of trucks overnight, just as ICX took into account other factors such as the distance between the pick-up point and the delivery point, the nature of the commodities being shipped, and the weight of a shipment. Items 29.1, 29.2, and 29.3 provide that GBLs must be specially annotated when holdover is authorized; such an annotation would not be needed for overnight use that is part of the schedule in Item 29 and, therefore, already authorized. The annotation would be needed, however, if DoD asked ICX for the use of a truck overnight in addition to a night that was built into the schedule, because when ICX constructed its freight rates, it could not have anticipated providing a truck for more than one night and so could not have built any amount into its rates to compensate for the additional use of its truck. DoD's reading of the tender is reasonable and is not inconsistent with any other provision of the tender. ICX argues that DoD s reading of the tender is not reasonable, and that this is established by the fact that DoD clarified its language concerning holdovers after it invited carriers to submit rates for the tender at issue here. According to ICX, DoD made these clarifications in a November 1995 rate publication and in an April 1997 invitation to submit rate tenders. The rate publication does not apply to ICX s tender, and its language is no more clear than the language contained in ICX s tender. Although the April 1997 invitation to submit rate tenders makes clear that carriers should submit freight rates based upon same day delivery and then quote their holdover charges separately, holdover charges in the April 1997 tender are classified as accessorial charges, and accessorial charges are always paid in addition to freight rate charges. Even if DoD had revised its rate publication and tender language, this would not establish that DoD s reading of the language in ICX s tender is unreasonable. Mason v. United States, 615 F.2d 1343, 1349 (Ct. Cl.), cert. denied, 449 U.S. 830 (1980) ( Subsequent revision or clarification of contract language which has given rise to disagreement is only wise, and does not constitute an admission. ). ICX also argues that DoD s reading of the tender is not reasonable because DoD draws a distinction between scheduled holdover, meaning that a truck was used overnight in accordance with the tender s schedule, and unscheduled holdover, meaning all other nights that an ICX truck was in use. DoD says that the tender required it to pay only for unscheduled holdover. ICX says that DoD s reading of the tender is unreasonable because the tender says that DoD will pay for holdover, and does not refer to scheduled or unscheduled holdover. Although ICX is correct that the tender does not make a distinction between two different types of holdover, DoD s position that the tender requires it to pay holdover charges only if a truck is used for a night that was not built into the schedule is not unreasonable, as explained above. We also agree with ICX that the tender can reasonably be read to say that holdover means any overnight use, including a night that was built into the delivery schedule. First, Item 3 of the tender makes it clear that a carrier was supposed to include an amount to compensate for free time in its freight rates. Although DoD could have stated just as clearly that the carrier was also supposed to include in its rates an amount to compensate for the use of a truck overnight, the tender does not say this. Because the tender states that rates were supposed to include an amount for free time, and does not state that the rates were supposed to include an amount for the use of a truck overnight, a carrier could reasonably conclude that DoD would pay for the use of a truck overnight in addition to paying the freight rates. Second, holdover charges are stated as a charge per truck. This makes holdover charges appear to be similar to accessorial charges, which are also stated as a charge per truck, and detention charges, which are stated as a charge per hour per truck, with a maximum charge per truck. Accessorial charges and detention charges were paid in addition to the freight rates, and so a carrier could reasonably conclude that holdover charges would also be paid in addition to the freight rates. Third, Item 29.3 of the tender says that DoD will pay a holdover charge for trucks "heldover [sic] night . . . during the week for delivery the next day." This could reasonably be read to mean that DoD would pay the charge, even if the tender's schedule contemplated the use of a truck overnight. Finally, ICX s interpretation of the tender was shared by the DSO in New Orleans, which paid holdover charges for any overnight use, including a night that was built into the delivery schedule, until it was directed not to do so. There is no ambiguity that is apparent on the face of the tender, and so we will construe the ambiguous language against DoD as the drafter of the tender and grant ICX s claims, provided that ICX can establish that it actually relied upon its interpretation of the tender s language when it constructed and submitted its freight rates. Fruin-Colnon Corp. v. United States, 912 F.2d 1426, 1430 (Fed. Cir. 1990). Because none of the exhibits that ICX submitted to us establish that it relied upon what it now advances as a reasonable interpretation of the tender, we asked ICX to provide whatever evidence establishes that, at the time it constructed its freight rates and submitted its tenders, it interpreted the tender language to say that DoD would pay holdover charges in addition to freight rates for shipments that were listed on the delivery schedules as being picked up one day and delivered the next day. In response to our question, ICX said that it has no record of how it calculated its freight rates. ICX only outlined how it estimated what to charge for most loads over one route not at issue here. Because ICX has not established that, when it constructed its freight rates and submitted its tenders, it relied upon what it now advances as its interpretation of the tender s language, we must deny ICX s claims. GBL annotation DoD and GSA contend that we should also deny ICX s claims because Item 29.3 of the tender provided that the GBLs would be annotated by the DSO when a holdover was authorized, and the GBLs at issue here do not contain any such annotation.[foot #] 4 ICX's position is that, even though the GBLs were not annotated, DoD did, in fact, ask ICX to pick-up shipments one day and deliver them the next day. If a tariff, as opposed to a tender, provides that a GBL must contain a particular annotation in order for a shipper to request a service, then the GBL must comply with the tariff and must contain an annotation that substantially complies with the tariff s requirement in order for the carrier to be paid for providing the service. Campbell 66" Express, Inc. v. United States, 302 F.2d 270 (Ct. Cl. 1962). The primary basis for the holding in Campbell and similar cases is that a common carrier cannot waive a requirement contained in a published tariff because published tariffs have the force of statute and cannot be varied by waiver. Davis v. Henderson, 266 U.S. 92 (1924); ----------- FOOTNOTE BEGINS --------- [foot #] 4 Items 29.1 and 29.2 also require an annotation, but those items are not relevant to the two GBLs at issue here. ----------- FOOTNOTE ENDS ----------- Terminal Transport Co., 45 Comp. Gen. 384 (1966); United Van Lines, Inc., 41 Comp. Gen. 464 (1962). The General Accounting Office (GAO), which considered transportation claims until that authority was transferred to us in 1996, decided that if a tender provided that a GBL must contain a particular annotation in order for a shipper to request a service, then the GBL must have complied with the tender and must have contained an annotation that substantially complied with the tender s requirement in order for the carrier to be paid for providing the service. In other words, the GAO applied the same rules to tenders as it did to tariffs. In resolving tender claims, however, GAO s analysis was framed more in terms of contract than was its tariff analysis. American Farm Lines, B- 200939, 81-1 CPD 424; T.I.M.E. Freight, Inc., B-151205 (Aug. 1, 1963). GAO's use of a contract analysis in resolving tender claims was appropriate because the relationship between a government shipper and a carrier is "wholly contractual," and when the Government requests that the carrier provide a service provided for in a tender, the request has to be made in accordance with the procedures set out in the contract. Baggett Transportation Co. v. United States, 969 F.2d 1028, 1033 (Fed. Cir. 1992). When a tender requires a written GBL annotation in order to request a particular service, a GBL substantially complies with the tender s requirement if the GBL's language reasonably makes the carrier aware that the shipper is requesting the service. Id. In order to determine whether a GBL's language makes a carrier aware of what a shipper is requesting, it is appropriate to read the GBL's language in the context of the circumstances surrounding the issuance of the GBL. Coast Counties Express, B- 227179 (Mar. 23, 1988). The issue here, then, is whether the two GBLs executed by ICX contain any language that reasonably made ICX aware that DoD was requesting a holdover. The GBLs list the Fort Worth tender as the special rate authority, and this tender provided that shipments from Fort Worth to Kirtland would be picked up one day and delivered the next day. Thus, the GBLs reasonably made ICX aware that DoD wanted the use of an ICX truck overnight. But, the GBLs do not contain any annotation mentioning tender Item 29.3 or the word "holdover." As explained earlier, "holdover" can be reasonably read more than one way, and by the time that ICX received these two GBLs in 1997, ICX was very much aware of DoD's position that a request for overnight use that was contemplated by the tender's schedule did not amount to a holdover. In these circumstances, merely referring in the GBLs to the Fort Worth tender did not substantially comply with the requirement for an annotation set out in Item 29.3. This provides an independent reason for denying ICX's claims. Decision We deny ICX's claims. __________________________________ MARTHA H. DeGRAFF Board Judge