Board of Contract Appeals General Services Administration Washington, D.C. 20405 __________________ May 11, 1999 __________________ GSBCA 14908-RATE In the Matter of ASSOCIATED AIR FREIGHT, INC. Walter Jurkiewicz, Customer Service Manager, Associated Air Freight, Inc., Essington, PA, 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. According to Government Bill of Lading (GBL) WP-055,838, Associated Air Freight, Inc. was supposed to pick up a shipment of unaccompanied baggage in Escondido, California in late December 1996, and deliver it to Gulfport, Mississippi in early 1997, for the Department of Defense (DoD). The GBL listed "MTMC ICC: 8701 SUP 6" as the tariff or special rate authority applicable to the shipment.[foot #] 1 Associated Air Freight arranged for Yellow Freight System, Inc. to move the shipment from California to Mississippi by truck. The shipment was delivered and Associated Air Freight billed DoD $4,457.02, according to the rates set out in Associated Air Freight tender number 8701. The General Services Administration (GSA) reviewed the bill and approved payment in the amount of $3,367.80. GSA explained that it was paying Associated Air Freight the amount that would have been charged by a motor carrier for transporting the shipment, and that it was taking this action because Associated Air Freight did not have a ----------- FOOTNOTE BEGINS --------- [foot #] 1 Although the rate authority listed on the GBL is supplement number 6 to Associated Air Freight tender number 8701, supplement number 7 was in effect when this shipmentwas moved. ----------- FOOTNOTE ENDS ----------- published tender for the movement of goods entirely by motor carrier and had no authority to operate as a motor carrier. Associated Air Freight contends that it should be paid according to the rates set out in tender number 8701 because the tender permitted it to determine the mode of transportation that would be used, and because an air freight forwarder with registration permits from the Federal Highway Administration authorizing surface freight forwarding activities could lawfully engage in arranging point to point motor carrier transportation so long as the forwarder used a properly registered and licensed motor carrier, such as Yellow Freight System. Associated Air Freight did not submit any documentation to establish that it held such a permit from the Federal Highway Administration. DoD and GSA contend that Associated Air Freight should be paid for its services, but not according to the rates set out in tender number 8701. Even though the tender permitted Associated Air Freight to determine the mode of transportation that would be used, DoD and GSA point out that Associated Air Freight represented in the tender that it would perform services in accordance with applicable laws, and also represented that it held the required operating authority to transport the shipment. According to DoD, Associated Air Freight's operating authority was that of an air freight forwarder. DoD submitted a copy of an operating authorization granted to Associated Air Freight by the Civil Aeronautics Board, which permitted Associated Air Freight to engage in business as an air freight forwarder in interstate air transportation. DoD also says that Associated Air Freight did not have a permit from the Federal Highway Administration authorizing surface freight forwarding activities. According to DoD and GSA, the rates set out in tender number 8701 were the rates of an air freight forwarder, and could not have lawfully applied to motor carrier shipments. Associated Air Freight has not contested the facts set out by DoD. Associated Air Freight has not established that at the time the shipment that is the subject of this claim was moved, it was authorized to provide motor carrier service or to act as a motor freight forwarder. For quite some time, motor carriers and air carriers have been governed by different statutory schemes. See Universal Transportation & Services, GSBCA 14491-RATE, 98-1 BCA 29,732. In late 1996 and early 1997, air carriers were subject to the authority and certification requirements of the Department of Transportation. 49 U.S.C.A. subtit. VII (1997). Motor carriers and motor freight forwarders were subject to the jurisdiction and registration requirements of the Surface Transportation Board. 49 U.S.C.A. subtit. IV, part B. The Surface Transportation Board lacked jurisdiction over transportation by motor carrier if the transportation was part of a continuous movement by air carrier, or was in lieu of air transportation because of adverse weather or mechanical failure or other circumstances beyond the control of the carrier or the shipper. 49 U.S.C.A. 13506(a)(8)(B), (C). Neither of these exceptions from the Surface Transportation Board's jurisdiction applies to Associated Air Freight's claim. Nothing in our record establishes that, when this shipment was moved, Associated Air Freight was authorized to operate as a motor carrier or motor freight forwarder. Because Associated Air Freight was not authorized to operate as a motor carrier or motor freight forwarder, the rates set out in tender number 8701 are not those of a motor carrier or motor freight forwarder. Associated Air Freight could not, therefore, use those rates to bill for motor carrier services. DoD and GSA are correct that Associated Air Freight should be paid for its services, but not according to the rates set out in tender number 8701. Associated Air Freight is entitled to be paid for its services on a quantum meruit basis. This means that DoD owes Associated Air Freight a reasonable amount for the benefit that DoD derived from the services that Associated Air Freight provided. Universal Transportation & Services. Associated Air Freight seems to be under the impression that if DoD does not pay according to the rates set out in tender number 8701, then DoD is obligated to pay according to some other Associated Air Freight tender. This is not an accurate impression. DoD can pay according to the rates set out in a contract, a tariff, or a tender in effect when this shipment was moved and applicable to a shipment of unaccompanied baggage between Escondido, California and Gulfport, Mississippi, regardless of whether the contract, tariff, or tender belonged to Associated Air Freight. We are not sure whether the amount that GSA determined to pay Associated Air Freight is based upon a contract, tariff, or tender that would have applied to the shipment at issue here. If so, then DoD owes Associated Air Freight nothing more. If not, then GSA should recalculate the amount due. The claim is denied. __________________________________ MARTHA H. DeGRAFF Board Judge