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GSA Audit Issue

*TIA Whitepaper on GSA Audits


GSA & SDDC Transportation Service Provider (TSP) Audits

Background:

Recently, our members who contract with the Federal Government on the facilitation of goods along the supply chain brought to our attention a major issue they are having regarding notice of overcharges (NOC) they are receiving from the General Services Administration (GSA) audits division. All of the “overcharges” being questioned have been moves between a transportation service provider (TSP) and the Surface Deployment and Distribution Command (SDDC) of the Department of Defense.

The GSA under the Transportation Act of 1946 has statutory authority to audit the payments of moves that various TSPs conducted to ensure that correct payment was billed, processed, and received. Some of the moves in question date back to over five years ago, even though the GSA statutory authority grants them authority to audit the previous three years only (31 USC § 3726). An alarming fact, is that the GSA hired an outside audit firm to conduct there audits, and they are paid on a percentage of overpayments collected. The BOLs are carefully reviewed under a magnifying glass by at least two different auditors.

This is quickly becoming an insurmountable amount of paperwork burden to go through for TIA members, and a massive financial burden, especially for Small Businesses who do not have the accounting backbone to support peeling through hundreds of archived files.  Even after the TSPs sourced the appropriate BOL for a specific move, the signed BOL produced by a Government Employee was not ample enough evidence that the move was successfully conducted and that the payment transaction was correct.  Instead, GSA has reverted to the Global Freight Management (GFM) System to find further payment discrepancy and has begun to take money out of carriers’ and brokers’ accounts to collect the funds that they have deemed as “overpayments”.

The “overage charges” have been triggered by a variety of issues including: a fuel adjustment between the date the BOL was created to the actual date the move actually took place, inclusion of accessorial services (such as exclusive use and tarping) later deemed to be in violation of SDDC policy, and changes in the dimensions and cargo configurations after the truck was already loaded. Spot bids, emergency deployments and expedited rates are other action items where the baseline tender in GFM differed from the actual Bill of Lading that was produced from the Installation Transportation Officer (ITO).

Our opinion is that if the ITO has the authority to generate a bill of lading (BOL) telling a carrier that they are being paid a certain rate and it is put into writing and an actual BOL is cut, this rate should be honored by the Government. The problem is that the broker does not actually see the BOL until after a carrier is contractually hired and usually the freight has been moved.

 

TIA Advocacy:

TIA staff and members have met with senior officials of the GSA audit division, who have indicated the problem lies with the SDDC policies surrounding rate qualifiers and issuance of a bill of lading. We are currently working with GSA to facilitate a meeting with SDDC to address concerns over their policies.

We will advocate for the following policy changes:

  • That the BOL be issued directly to the broker and the carrier, not just the carrier or remove the broker as the listed “carrier” for the particular move;
  • That SDDC further explain and clarify the guidance documents that the GSA auditors are using to interpret to determine a potential notice of overcharges;
  • That the GSA work with our membership on receiving money back for legitimate  “undercharges” of payment, that seem to be ignored when brought to their attention;
  • That the GSA restructure their audit process, to include a pre-payment audit, that is not 30 days after the move is conducted, which will hopefully  eliminate some of these frivolous audits; and
  • TIA will seek to educate GSA and SDDC on the role of the broker plays in the supply chain and explain to them how fast freight actually moves along the supply chain and the standards for determining rates.