UTi, United States, LLC
ASBCA No. 60188
| A.S.B.C.A. | Dec 12, 2017Background
- USTRANSCOM awarded a FAR-based prime contract to World Airways to provide door-to-door transportation under CRAF/VISA programs; UTi was not a party to that contract but was identified as a subcontractor in World Airways’ proposal.
- USTRANSCOM issued task orders under the World Airways contract for shipments from Afghanistan to the U.S.; World Airways was paid in full but did not fully pay UTi (World later bankrupt).
- UTi operated as an NVOCC and for 35 of 44 shipments issued multimodal commercial bills of lading that it says covered door-to-door transportation; UTi asserts those bills established direct contractual privity with the government.
- Government paid under the World Airways task orders; UTi filed a certified claim asserting the bills of lading created separate contracts with the government and sought payment; contracting officer deemed the claim denied and UTi appealed to the ASBCA.
- Government moved to dismiss for lack of jurisdiction, arguing the acquisitions were governed by the Interstate Commerce Act/Transportation Act (ICA/Transportation Act) because they were procured via bills of lading, placing disputes outside CDA/ASBCA jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ASBCA has jurisdiction under the CDA over UTi’s claim | UTi: bills of lading created direct, standalone contracts with the government (or implied-in-fact contract), so CDA/ASBCA jurisdiction exists | Government: the acquisitions were by bill of lading and thus governed by the ICA/Transportation Act, not the FAR/CDA; ASBCA lacks jurisdiction | Held: ASBCA lacks jurisdiction because the shipments were acquired via bills of lading and are governed by the ICA/Transportation Act, not the FAR/CDA |
| Whether UTi can rely on the World Airways FAR contract to establish privity | UTi: alternatively relied on World Airways contract connection to justify jurisdiction | Government: UTi was not a party to the World Airways contract and cannot bootstrap privity; UTi repeatedly asserted bills of lading were the contractual basis | Held: UTi cannot rely on World Airways contract for privity because it was not a party and has insisted the bills of lading are the operative contracts |
| Whether intrastate-only land segments would remove ICA coverage | UTi: land carriers were intrastate so ICA/freight-forwarder rules do not apply | Government: issue is contract method (bill of lading) not interstate carriage; evidence shows many land segments were interstate | Held: Rejected UTi’s intrastate argument; the governing test is acquisition method (bill of lading), and evidence showed interstate movement for many shipments |
| Whether UTi’s NVOCC status precludes ICA coverage | UTi: NVOCC status might alter applicable law | Government: NVOCC can still be a freight forwarder/covered under ICA; status does not avoid ICA coverage | Held: UTi’s NVOCC status does not preclude ICA/Transportation Act coverage |
Key Cases Cited
- Dalton v. Sherwood Van Lines, Inc., 50 F.3d 1014 (Fed. Cir. 1995) (Transportation Act provides exclusive dispute procedure for bill-of-lading acquisitions)
- Inter-Coastal Xpress, Inc. v. United States, 296 F.3d 1357 (Fed. Cir. 2002) (affirming Transportation Act governs bill-of-lading disputes, limiting CDA reach)
- Estes Express Lines v. United States, 739 F.3d 689 (Fed. Cir. 2014) (discussing when bills of lading can create privity with the government)
- DHX, Inc. v. Surface Transportation Board, 501 F.3d 1080 (9th Cir. 2007) (addressing STB jurisdiction over noncontiguous domestic trade; not determinative of ASBCA jurisdiction here)