BNUMBER:  B-266292; B-266293; B-270862
DATE:  June 25, 1996
TITLE:  Tri-State Motor Transit Company

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Matter of:Tri-State Motor Transit Company

File:     B-266292; B-266293; B-270862

Date:June 25, 1996

DIGEST

A carrier's claim for excess valuation charges for potential liability 
above the default released value is denied where the government bill 
of lading notes "FULL CARRIER LIABILITY" but the carrier fails to 
determine what that value is prior to movement and the carrier billed 
as if the default valuation applied.

DECISION

Tri-State Motor Transit Company, a motor carrier, requests review of 
the General Services Administrations's (GSA) disallowance of its 
claims on government bill of lading (GBL) transactions C-9,186,742, 
D-1,265,218, D-1,265,219 and C-9,215,773, covering shipments of 
military commodities[1] it transported for the Department of the Army 
during 1991.  The common issue for each of these GBLs is whether the 
carrier is entitled to additional charges because of the statement 
"FULL CARRIER LIABILITY" that appears on each GBL.  We affirm the 
disallowances.

Background

Under the contractual arrangement between the Department of Defense 
and its motor carriers, a shipment is made at the reduced or released 
value specified in the governing tariff or rate tender, unless a 
higher value is stated by the shipper on the GBL.[2]  To the extent 
that the released value of a shipment is less than its actual value, 
the government becomes a co-insurer with the carrier for loss or 
damage to the shipment.  Strickland Transportation Co. v. United 
States, 334 F.2d 172, 175 (5th Cir. 1964).

For the shipments in question, the contract of carriage provided that 
the released value was $2.50 per pound unless the shipper chose to 
declare a higher value on a shipment.  In that event, the carrier was 
entitled to an additional charge of 15 cents for each $100 or fraction 
thereof by which the declared value exceeded the released value.  For 
the shipment transported under GBL D-1,265,218, for example, the 
default released value was $77,500, calculated at $2.50 per pound for 
a 31,000 pound shipment.  Tri-State originally billed the Army for 
this shipment without any additional charge for increased valuation.  
A few years later it submitted a supplemental bill for an excess value 
charge based on a value of $500,000 that Tri-State has estimated for 
the shipment.[3]

Tri-State's claim was denied by GSA, the agency responsible for 
auditing government transportation vouchers.  See 31 U.S.C.  sec.  3726.  
Tri-State then appealed to our Office pursuant to 31 U.S.C.  sec.  
3726(g)(1).  A similar pattern has been followed with respect to the 
other three GBL's.

The dispute between Tri-State and the Army concerns the meaning of the 
phrase "Full Carrier Liability" as it appears on these GBL's.  
According to the carrier, the phrase means that the government elected 
to declare these shipments at full value, thereby increasing the 
carrier's potential liability in the event of damage or loss to the 
articles shipped.

The Army argues that if it had wanted to declare a value higher than 
the standard released value, it would have stated a specific dollar 
figure on the GBL.  In this regard, the Army points out that 
Tri-State's own Tariff 100-A, item 856, provides that a released 
valuation in excess of $2.50 per pound must be specifically and 
prominently shown on the shipping document by a total release value in 
dollars and cents.

Discussion

Generally, there is not an exact form for releasing a shipment to a 
certain value, such as a value "not exceeding $2.50 per pound;" the 
carrier only needs to be reasonably apprised of the shipper's 
intentions.  See B-147576, June 1, 1962.  Thus, a notation on a GBL 
stating that the released value of each article in a shipment of 
vehicles not exceed "$2.50 (or $1.75) per pound per article" was held 
to be sufficient to increase the released value of each vehicle from 
the default released value of $20,000.00, to $2.50 per pound 
multiplied by the weight of each vehicle.  Tri-State Motor Transit 
Company, B-254378.2, et al., July 5, 1995.

Although the Army insists that it never intended to request excess 
values on the shipments involved here, the notation "Full Carrier 
Liability" on a GBL does indicate a contrary intention.  However, this 
notation by itself is not sufficient to invoke the excess value 
provisions in this instance.  Construing the GBL together with the 
other parts of the contract of carriage, the shipper was required to 
state a specific value on the GBL, as it did in B-254378.2, et al., if 
it wished to declare a value higher than the released value.  Without 
such a statement of value on the GBL, the carrier lacked the 
information needed to determine its potential liability for the 
shipment or to assess a proper excess value charge.

Instead of seeking clarification from the Army as to the value it 
wished to declare on each of these shipments, Tri-State accepted the 
shipments and billed the Army at its base rate.  Much later, after the 
shipment had been safely delivered without loss or damage, Tri-State 
sought additional charges on the theory that if loss or damage had 
occurred it would have been liable for the full value without regard 
to the default limitation.  Since Tri-State had an obligation to 
determine any specific excess value that Army placed on these 
shipments before accepting them (Starflight Inc., B-213773, July 23, 
1984, 84-2 CPD  para.  150), it must bear the consequences of the ambiguity 
caused by the Army's failure to do so.  Accordingly, Tri-State is 
obligated to honor the charges it billed for its services.

GSA's disallowances are sustained.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. The shipments contained Class A Explosives or inert missiles 
shipped as Freight All Kinds.

2. See 41 C.F.R.  sec.  101-41.302-3 and Item 190 of the Military Traffic 
Management Command's Freight Traffic Rules, Publication 1A.

3. With regard to this GBL and GBL D-1,265,219, Tri-State also claimed 
additional amounts based on its contention that the commodities 
shipped under these 1991 shipments had been assigned unique commodity 
codes.  An October 1992 amendment to MFTRP 1A discontinued the 
practice of shipping unique commodity code shipments as Freight All 
Kinds like these two shipments were.  The amendment was retroactive to 
1990.  In Tri-State Motor Transit Company, B-255630, et al., Aug. 18, 
1994, we held that the amendment cannot be applied retroactively to 
allow a carrier higher rates for shipments initiated prior to the 
amendment.  We see no reason to alter our position.