BNUMBER: B-261266; B-261266.2
DATE: February 29, 1996
TITLE: Allstates Air Cargo, Inc.
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Matter of:Allstates Air Cargo, Inc.
File: B-261266; B-261266.2
Date:February 29, 1996
DIGEST
A Department of Defense guaranteed traffic tender provided that
payment of the full amount of the charges required the carrier to
deliver by the desired delivery date. It also provided that normal
delivery service was Monday through Saturday no later than 5 p.m., and
included a reduced payment for late deliveries. However, some
destination installations stopped receiving shipments prior to 5 p.m.,
and the carrier documented instances in which a receiving installation
closed prior to 5 p.m. Because the tender specifically stated that
delivery by 5 p.m. was timely, the carrier's delay in delivery is
excusable, and the full amount of charges are payable, if the carrier
can clearly demonstrate that it would have delivered a particular
shipment by 5 p.m. on a given day, but it was prevented from doing so
solely because of the receiving office's closure prior to that time.
The carrier's proof should adhere to the requirements contained in the
records procedure.
DECISION
Allstates Air Cargo, Inc. (Allstates), an air freight forwarder,
requests review of the General Services Administration's (GSA)
disallowance of its claims for reimbursement for amounts set off by
GSA for overcharges on various government bill of lading
transactions.[1] GSA asserted overcharges on these shipments,
concluding that the tender's low rate applied when Allstates failed to
meet the tender's requirement of timely delivery. Allstates contends
that it attempted delivery of each shipment on the desired delivery
date (DDD), but it was unable to accomplish delivery because, in each
instance, the destination installation had closed prior to 5 p.m. We
reverse GSA's settlements and remand this matter to GSA to await
further proof from Allstates to support its claims.
In 1992, the Military Traffic Management Command (MTMC) awarded
Allstates Freight All Kinds[2] guaranteed traffic[3] from the Defense
Depot in Columbus, Ohio, to various points in the continental United
States. The terms and conditions of the agreement between Allstates
and the Department of Defense (DOD) were drafted and controlled by
MTMC, and were contained in tender 600,005. Item 32 of tender 600,005
provided, among other things, that Allstates agreed to charges at a
rate of 50 percent of the rate offered by it if "a shipment is not
delivered to the consignee's address consistent with the desired
delivery date shown on the bill of lading and/or shipping manifest."
Additionally, item 26d provided that normal delivery service was
Monday through Saturday "no later than 5 p.m."
GSA contends that Allstates made regular deliveries to the
destinations involved, and it was well aware of the shipping and
receiving hours. GSA does not believe that item 26d required a
receiving installation to remain open until 5 p.m. to receive
shipments, and it says that "it merely establishes reasonable
guidelines for service requirements."
Allstates points out that it could have been removed from the contract
if on-time deliveries fell short of 95 percent of the covered
shipments. It notes that the Defense Depot in Columbus, the shipper,
did not consider its service unsatisfactory with respect to the
transactions in dispute. The record does not contain any evidence, as
required by item 33d, that the shipper notified Allstates of a service
failure or notify it that it intended to remove Allstates due to such
a failure.
Allstates also directs our attention to item 29d which states that if
the consignee is unable to accept a shipment through no fault of the
carrier, the carrier will annotate the delivery receipt with the
time/date consignee was notified that the shipment was available and
the person and telephone number of the person who declined delivery.
Allstates prepared documents noting the date of each attempted
delivery, depot personnel with whom it made contact, and the actual
dates of delivery.
After reviewing the matter, MTMC agreed with Allstates saying that the
carrier submitted the necessary documentation to support its claim
with respect to the GBLs in question. MTMC acknowledges that the
different depot destinations had different receiving times, and
concludes that the carrier should not be penalized for the irregular
and sporadic receiving times involved.
We reviewed the sample of six transactions that Allstates submitted to
us with its May 23, 1995, request for review. They involve shipment
dates from March 1993 to August 1993. In each instance, Allstates
provided, on a computer printout sheet entitled "Weekly Suspended
Proof of Deliveries,"[4] the name and telephone number of the DOD
employee it contacted and, it recorded, among other things, the day it
offered the shipment and the time it was informed that the receiving
office would close.[5]
We reverse GSA's settlements and remand this matter to GSA. We agree
with Allstates' and MTMC's interpretation that Allstates should not be
penalized for deliveries it can show it attempted prior to 5 p.m. on
specified dates of delivery. We also conclude, however, that the
carrier should support its claims with further documentation.
By its terms, tender 600,005, which was drafted by MTMC, clearly
indicated that delivery by 5 p.m. was timely. MTMC could have
required Allstates to deliver prior to the close of each destination
installation's time for receipt of shipments, but it did not do so.
Given the tender's substantial reduction in payment for untimely
delivery, weight must be given to the conduct of the parties in
adhering to the arrangement to which they each agreed: "In any kind
of contract, if the right of one party to compensation is conditional
upon the rendition of some service . . . by him . . . it is nearly
always a breach of contract for the other party to act so as to
prevent or to hinder and delay or make more expensive the performance
of the condition." 3 CORBIN ON CONTRACTS 571 (1960). Compare Brand S
Roofing, ASBCA 24688, 82-1 BCA para. 15,513, at 5067 (1981).
Accordingly, if Allstates can demonstrate that it would have delivered
a particular shipment by 5 p.m. on a given day, but was prevented from
doing so solely because of the receiving office's closure prior to
that time, the delay is excusable.
We agree with GSA, however, that Allstates may not have met its burden
to offer proof in each instance that the untimely delivery was not the
carrier's fault. Tender 600,005 is specific about the records the
carrier must maintain to justify an excusable delay. As stated above,
when the consignee was unable to accept the shipment through no fault
of the carrier, item 29d required the carrier to provide a delivery
receipt with the time/date consignee was notified that the shipment
was available and the person and telephone number of the individual
who declined delivery. While the item 29a weekly printouts contained
the name and telephone number of the person who declined the shipment,
and the date on which it was declined, they do not indicate the time
of the declination. The remark "closes 1500" does not reasonably
suggest that Allstates notified the consignee at 1500 (3 p.m.); it
suggests that receipt of shipments stopped at 3 p.m. Time of
notification is a material issue of fact.
Furthermore, Allstates' item 29a printouts are not delivery receipts.
The reason for the drafter's choice of the term "delivery receipt" is
not clear, but it suggests that he or she contemplated a device that
would have rapidly alerted the agency that the carrier had attempted
delivery on a prior day but that a specific person had refused it.
Allstates contends that the shipper did not object to its on-time
delivery record with respect to these shipments, and it suggests that
this is evidence that each delay was excusable. While we agree that
this is some evidence that the delays were excusable, we believe that
Allstates should comply with the requirements of item 29d before it
can shift the burden of proof to the government. GSA, as the auditor,
should be able to review the records required by item 29d, and
Allstates must provide it proof about the time of notification, before
GSA can determine whether the delay was excusable.
We remand this matter to GSA for further consideration.
/s/Seymour Efros
for Robert P. Murphy
General Counsel
1. The carrier provided detailed documentation on six sample
transactions: C-4,183,652, C-4,191,791, C-4,195,746, C-4,197,507,
C-4,200,637, and C-4,200,960.
2. Freight All Kinds under this tender generally included all types of
commodities except Class A and B Explosives.
3. Under the Guaranteed Traffic program MTMC issues a request for rate
tenders which provides for award to the responsive, responsible
carrier whose offer is most advantageous to the government, cost and
other factors considered, for all the traffic for a particular route
for a specific period of time. MTMC awards what is in effect a
requirements contract to the successful carrier. See Federal
Transport, Inc.-Request for Reconsideration, 68 Comp. Gen. 451 (1989).
4. Under item 29a of tender 600,005, the carrier is required to
complete and return weekly proof of delivery reports to determine
performance.
5. In GBL transaction C-4,183,652, for example, the printout includes
the date shipped (075), the DDD (076), the date delivered (077), the
date offered (076), the person contacted ("closes 1500 Miram") and the
phone number (919-466-8309). The date delivered, the offered date,
the person contacted and the phone number, are handwritten entries.