E6-21732. Implementation of a mileage based Fuel Cost Price Adjustment (Surcharge) for Household Goods

AGENCY:

Federal Acquisition Service, GSA

ACTION:

Notice for Comments

SUMMARY:

GSA is proposing a change to the Centralized Household Goods Traffic Management Program (CHAMP) and the Household Goods Standard Tender of Service (HTOS) to implement a mileage based Fuel Cost Price Adjustment on the shipment of household goods effective May 1, 2007.

DATES:

Interested parties should submit written comments before January 10, 2007.

ADDRESSES:

Mail comments to General Services Administration, Federal Acquisition Service, Travel and Transportation Management Division (6FBDX), 1500 East Bannister Road, Building 6, Kansas City, Missouri 64131. Comments may be sent via email to [e-mail].

FOR FURTHER INFORMATION CONTACT:

Brian Kellhofer, Transportation Programs Branch, by telephone at 816-823-3646 or via email at [e-mail].

SUPPLEMENTARY INFORMATION:

A. Background

GSA’s CHAMP uses the Domestic Household Goods Government Rate Tender (415-G) published by the American Moving and Storage Association (AMSA) through its Household Goods Carriers” Bureau Committee. The tender contains a Fuel Cost Price Adjustment (Surcharge) provision identified in Item 16, which GSA has utilized since May 2000. The current Fuel Cost Price Adjustment calculation is based on the net transportation charges of the line haul and the delivery in and delivery out of storage in transit (SIT). The Fuel Cost Price Adjustment is designed to compensate the Transportation Service Provider (TSP) when the cost of diesel fuel exceeds $1.399. When applicable, a percentage as identified in Item 16 is taken against the net line haul charges.

GSA is proposing changing the Fuel Cost Price Adjustment methodology from a percentage based to a mileage based calculation. The mileage based Fuel Cost Price Adjustment will be calculated on the distance between the shipment’s origin and destination, and if applicable, the distance for delivery in or delivery out of storage in transit (SIT), using the billable mileage as currently identified by ALK Technologies. When the cost of diesel fuel exceeds $1.399, as identified by the Department of Energy (DOE) on the first Monday of every month, with an effective date of the 15th day of the same month, the TSP may calculate a fuel surcharge based on the difference between the DOE price and the trigger price of $1.40. Effective May 1, 2007, this will be accomplished by first taking the number of billable miles and dividing it by 4.5 to identify the number of gallons of fuel used. The total will then be multiplied by the cost difference between the DOE price and $1.399. Beginning May 1, 2008, the number of billable miles will be divided by five (5) to identify the number of gallons of fuel used.

B. Substantive Changes

The implementation of the mileage based Fuel Cost Price Adjustment reflects a more accurate view of additional cost incurred by TSPs for the increases in the fuel costs. It eliminates weight pricing and aligns the fuel cost with the distance the shipment travels and the fuel usage. As a result of this change, agencies should realize transportation cost savings.

Dated: December 14, 2006.

Tauna T. Delmonico

Director, Travel and Transportation Management Division (FBL), GSA