Transportation handbook: Freight, household goods, and small parcel

Invoice payment and audit reference guide

Ensuring accuracy, compliance, and fiscal responsibility.

Table of contents

Background
It’s the law
Applicable authorities
Types of audits
Benefits of an audit
How to audit
Establish procedures and fund the audit process
Mandatory federal requirements for processing transportation invoices
Agency requirements
Verifying an audit
Documentation and certification
Terms and conditions
Deadline for filing claims
Supplemental billings
Reconsignment and diversion
Discrepancy in delivery
Transportation service provider
TSP billing procedures and public voucher instructions
Supplemental bills
TSP receipt of shipment and certification of delivery procedures
Appeals
Definitions

Background

We issue regulations related to Federal Transportation Management and Transportation Payment and Audit, as outlined in the Code of Federal Regulations, specifically 41 CFR parts 102-117 and 102-118. This handbook serves as a supplemental guidance document to support Federal agency personnel in carrying out the full lifecycle of transportation invoice management including the receipt, processing, and settlement of transportation bills. It provides practical instructions and best practices to help agencies comply with applicable laws and regulations, identify and remedy or recover billing overcharges, and improve the efficiency and accountability of their transportation programs.

In addition, the handbook offers transportation service providers essential information about participating in Federal transportation programs, including how to properly submit invoices to Federal agencies and the procedures for resolving invoice disputes.

It’s the law

Agencies must comply with 41 CFR Part 102-118. These regulations are prescribed by 31 U.S.C. 3726 and require “Each agency that receives a bill from a carrier or freight forwarder for transporting an individual or property for the United States Government shall verify its correctness (to include transportation rates, freight classifications, or proper combinations thereof), using prepayment audit, prior to payment in accordance with the requirements of this section and regulations prescribed by the Administrator of General Services.”

To properly audit a transportation invoice, agencies must retain a copy of, or reference to, each quotation, tender, or contract that outlines special rates, fares, charges, or concessions with transportation service providers, including those authorized under 49 U.S.C. §§ 10721, 15504, and 13712.

Applicable authorities

The following authorities apply to Federal transportation, payment, and audit:

• 31 U.S.C. 3726 Payment for transportation.
• 31 U.S.C. Chapter 39 Prompt Payment.
• 31 U.S.C. 3351 Improper Payments-Definitions.
• 49 U.S.C. 40118 Government-financed air transportation.
• 46 U.S.C. 55305 Cargoes procured, furnished, or financed by the United States Government.
• 41 CFR 102-118 Transportation Payment and Audit.
• 41 CFR 102-117 Transportation Management.
• Delegation of authority ADM 5450.39D CHGE 183, 7/2/2025.

As authorized in 31 U.S.Code § 3726(g), the Administrator of General Services has issued a delegation of authority (DOA) (ADM 5450.39D CHGE 183, dated 7/2/2025) to agencies permitting them to act in place of the Administrator to perform the duties described in 31 U. S. Code § 3726. This DOA confers upon agencies the authority to audit transportation bills, make deductions from those bills, and adjudicate related claims.

Therefore, agencies are permitted to conduct a:

• Prepayment audit of a transportation invoice prior to payment;
• Post payment audit of a paid transportation invoice; or
• Both a prepayment audit of a transportation invoice prior to payment and a post payment audit after the invoice has been paid.

An audit must be conducted on freight, household goods/relocation, small package delivery services, and travel invoices. This includes invoices from any TSP regardless of mode, single mode, multimodal, or intermodal.

Types of audits

• Prepayment audit — Is a review of transportation billing documents, and all related transportation documents before payment, to determine their validity, propriety, and conformity of rates with tariffs, quotations, agreements, contracts, or tenders. A prepayment audit will detect overcharges prior to the invoice being paid.
• Post payment audit — Is a review of transportation billing documents, and all related transportation documents after payment, to decide their validity, propriety, and conformity of rates with tariffs, quotations, agreements, contracts, or tenders. The audit process may also include subsequent adjustments and collection actions taken against a TSP by the Government. A post payment audit can be used in place of the prepayment audit or in addition to the prepayment. Performing a post payment audit in addition to a prepayment audit can improve the recovery of overcharges. A post payment audit can detect overcharges or added services that are improper. Generally, a post payment audit is awarded as a contract (SIN 541211) in which the auditor charges a percentage of the recovered amount. See 31 U.S.C. 3726(e) for more details. Advantages to conducting a prepayment and a post payment audit include maximizing the recovery of funds.

Benefits of an audit

Prepayment audits occur before payment is made. The goal is to catch errors and prevent improper payments. Post-payment audits occur after payment has been made. The goal is to identify errors, recover overpayments, and improve future invoice processing. The combined use of these audits provides a holistic approach to improve visibility and control over agency transportation spend, minimizing improper payments, and optimizing logistics costs.

How to audit

• Create an internal prepayment audit program.
• Contract directly with a prepayment audit service provider.
• Secure a prepayment audit contractor from GSA’s Multiple Awards Schedule—
  • Use SIN 541211 Professional Services - Financial Services - Auditing Services.
  • A transportation audit ensures completion of an administrative review and conducts rate examinations on prepayment and post payment transportation bills.
  • Vendors must verify accuracy, completeness, and compliance with established rates, tariffs, quotations, agreements, tenders or other applicable rate authority.
• Secure a Multiple Awards Schedule SIN 531 Employee Relocation Solution for household goods shipments (Move Management).¹
• Use a third-party payment system or charge card company that includes prepayment audit functions.

Establish procedures and fund the audit process

Agencies must establish procedures to ensure all transportation invoices are audited. Agencies must pay for the prepayment audit program from those funds appropriated for transportation services. Third party payment providers generally provide the auditing service at no charge to the agency.

Expenses of transportation audit post payment contracts and contract administration, and the expenses of all other transportation audit and audit-related functions conferred upon the Administrator of General Services, shall be financed from overpayments collected from carriers on transportation bills paid by the Government and other similar type refunds, not to exceed collections. Payment to any contractor for audit services shall not exceed 50 percent of the overpayment identified by contract audit.

Mandatory federal requirements for processing transportation invoices

• Agencies are required to properly pay invoices including transportation invoices. (31 U.S.C. 3351).
• Each agency that receives a bill from a carrier or freight forwarder for transporting an individual or property for the United States Government is required to verify its correctness (to include transportation rates, freight classifications, or proper combinations thereof) by conducting an audit of the invoice. (31 U.S.C. 3726).
• Agencies must comply with the Prompt Payment Act and notify a TSP within 7 days of receipt of the invoice to:
  • Provide a Statement of Differences (electronic or paper) to the TSP; or
  • Reject the invoice(s) in its entirety. (31 U.S.C. Chapter 39).
• The Administrator has issued a DOA to Federal agencies, authorizing them to assume the duties prescribed to the Administrator in 31 U.S.C. 3726.
• Agencies are permitted to conduct a prepayment audit of transportation invoices, a post payment audit, or both. (41 CFR 102-118).

Agency requirements

Agencies must:

• Comply with the Prompt Payment Act.
• Assure that each TSP bill or employee travel voucher contains appropriate information for the audit to determine which contract or rate tender is used and that the type and quantity of any additional services are clearly delineated.
• Verify all transportation bills against filed rates and charges.
• Establish procedures in which transportation bills not subject to prepayment audit (i.e., bills for unused tickets and charge card billings) are handled separately and if required, a post payment audit is conducted.
• Maintain a statement in cost reimbursable contracts, or in the transportation contract or rate tenders, that the contractor shall submit, to the address and in the electronic format identified for the prepayment audit, transportation documents which show that the Government will assume freight charges that were paid by the contractor. Bills under $100 shall be maintained by the contractor and made available for on-site government audits.
• When necessary, require the agency’s paying office to offset debts from amounts owed to the TSP within the three years.
• Implement a process to ensure complete and accurate audits of all transportation bills and notifications to the TSP of any adjustment within seven calendar days of receipt of the bill.
• Implement an appeals process for the TSP to appeal any reduction in the amount billed. It is recommended the agency establish an electronic appeal process that will direct TSP-filed appeals to an agency official for determination of the claim.
• Your agency must complete the review of the appeal and inform the TSP of the agency determination within 30 calendar days of the receipt of the appeal, either electronically or in writing.
• Follow Comptroller General decisions, Civilian Board of Contract Appeals decisions, the Federal Management Regulation and GSA instructions or precedents about substantive and procedural matters.
• Follow the appeals and debt collection requirements established in 41 CFR 102-118 including Subpart E—Claims and Appeal Procedures.
• Create accurate notices to the TSP’s that describe and detail the reasons for any full or partial rejection of the stated charges on the invoice.
• Implement a unique agency numbering system to manage and track BOLs. This numbering system must detect and prevent duplicate payments.

Verifying an audit

It’s a best practice to audit your auditor. Periodically check your auditor’s preciseness by verifying the audit is accurate and that the shipment has not been previously paid.

Verify:

• Origin and destination.
• Freight class (generally class 50).
• Mileage.
• Fuel surcharge.
• Rate- check the mileage rate and the one-time-only, contract, or tender rate.
• Accessorials charged.
• Accurate weight used.
• Total billed vs. total charged.

Validate documentation:

• Signed delivery receipt(s).
• Bill of lading.
• Weight tickets provided.
• Verify Fly America Act or Maritime Administration requirements were followed.
  • Shipments must comply with all relevant laws including laws requiring the use of U.S. flag carriers and vessels for international air and ocean shipments.
  • Violations may result in a rejection of the payment to the carrier.
• The contractual terms and conditions between the TSP and the Government are incorporated in the BOL with the following statement, “U.S. Government shipment is subject to the terms and conditions of 41 CFR Parts 102-117 and 102-118.”

Documentation and certification

A completed and certified BOL is required for a TSP to receive payment. If the agency uses or mandates a third-party or electronic payment system, the TSP is not required to submit a completed SF 1113², Public Voucher for Transportation Charges, unless the agency specifically requires it. However, when a TSP submits a manual payment request, such as paper invoices sent by mail or email to the agency or its designated auditor, a completed and certified SF 1113 must accompany the certified BOL. In all cases, the BOL must include all information required by the agency, 41 CFR 102-118, and this handbook to properly process the payment, including any contract or fiscal authorization details needed by government shipping and accounting officers.

Shipments for express courier or small parcel shipments do not require an additional BOL to be issued and do not need to be billed using an SF 1113. However, agencies are required to audit small parcel transportation invoices.

At the time of pick up, the TSP or the TSP’s agent must sign and date the original BOL, thereby certifying that it has taken possession of the shipment. After delivery, a TSP must certify the delivery by annotating the BOL with the date and place of delivery. At the time of delivery, any loss, damage or shortage must be noted, signed by the consignee, and acknowledged by the signature of the TSP’s agent. If the TSP or its agent fails to provide a signature it does not negate the claim or prevent the claimant from filing a claim against the TSP.

Terms and conditions

• The contractual terms and conditions between the TSP and the Government are incorporated in the BOL with the following statement, “U.S. Government shipment is subject to the terms and conditions of 41 CFR Parts 102-117 and 102-118.”
• In no case shall prepayment of charges be demanded by the TSP nor collection be made from the consignee. The BOL properly certified and attached to an SF 1113, if required, shall be presented to the paying office for payment to the TSP in privity with the contract of carriage as evidenced by the BOL.
• The shipment must be made at the restricted or limited valuation specified in the tender, tariff or classification or equivalent contract, arrangement, or exemption from regulation at or under which the lowest rate is available, unless otherwise indicated on the BOL ( under “Alternation of Rates”).
• Interest shall accrue from the voucher payment date on the overcharges made and shall be paid at the same rate in effect on that date as published by the Secretary of the Treasury pursuant to the Debt Collection Act of 1982, 31 U.S.C. 3717.
• Establish procedures in which transportation bills not subject to prepayment audit (i.e., bills for unused tickets and charge card billings) are handled separately.
• Agencies must establish minimum dollar thresholds for transportation bills subject to audit.
• Require your agency’s paying office to offset debts from amounts owed to the TSP within the three years.
• Implement a process to ensure complete and accurate audits of all transportation bills and notifications to the TSP of any adjustment within seven calendar days of receipt of the bill.
• Implement an appeals process as part of the approved prepayment audit program for TSP to appeal any reduction in the amount billed.
• Create accurate notices to the TSP’s that describe and detail the reasons for any full or partial rejection of the stated charges on the invoice.
• Implement a unique agency numbering system to handle commercial paper and practices.

Deadline for filing claims

Agencies may file a claim against the TSP not later than 3 years (excluding time of war) after the later of the following dates:

• The date of accrual of the claim.
• The date payment for the transportation is made.
• The date a refund for an overpayment for the transportation is made.
• The date of deduction is in accordance with 31 U.S.C. 3726 (d) is made.

Supplemental billings

Agencies must process, review, and verify supplemental billings using the same procedures as on an original billing. Supplemental billings can be invoiced on SF 1113 or as an electronic bill if the agency uses a third party payment system.

Follow instructions of the third party payment system to submit an electronic supplemental bill. Paper supplemental bills (claim) must be tracked using the procedures (such as a unique numbering system) the agency has established to prevent and detect duplicate payments and to properly account for expenditures and discrepancy notices.

Disputes are managed in accordance with agency policy and Federal regulations. See 41 CFR 102-118 for additional information.

Reconsignment and diversion

• Reconsignment and diversion are TSP terms used interchangeably to denote the following changes concerning a shipment after it has been tendered to the origin TSP and before it has been released from the custody of the delivering TSP:
  • A change in the name of the consignor (shipper). A change in the name of the consignee (receiver). A change in the destination.
  • A change in the route when requested by the consignor, consignee, or owner of the shipment.
  • Other instructions to the TSP that require additional movement of the conveyance.
• A shipment may be reconsigned or diverted if permitted in the TSP’s tariff or tender:
  • While the shipment is in transit.
  • After the shipment has arrived at the destination but is still in the possession of the TSP.
• Initial instructions directing the reconsignment or diversion may be provided to the representative of the TSP by telephone, email and/or written confirmation and proper documentation. While initial instructions may be provided verbally, the reconsignment or diversion is not valid unless WRITTEN instructions are provided to the TSP.
• The original and one copy of such written reconsignment or diversion notice properly signed by the person ordering the service and bearing a cross-reference to the BOL, shall be surrendered to the TSP from which the services were ordered. That TSP will transmit the original of the notice to the last line-haul TSP where it will be combined with the original BOL for presentation in connection with the bill for line-haul transportation charges.

Discrepancy in delivery

In the event of discrepancies, the consignee must have the TSP or its representative sign the delivery documents noting the discrepancy. If the TSP does not sign or the damage was concealed the consignee or consignor should still file the claim with the TSP.

Visible loss or damage must be noted on those documents at the time of delivery. Regarding concealed damage; the consignee should note the damage on the BOL or delivery documents and file the claim with the TSP.

Shortage, loss, or damage reports should not be made on the BOLs, including GBLs, but on shipment discrepancy forms. The BOL, including a GBL, does not constitute a damage claim report but is evidence of the shipment. Regulations of a particular agency, department or bureau concerned with the shipment should be consulted for specific reporting requirements involving discrepant shipments.

Agencies are responsible for filing claims and collecting funds owed for damages, shortages, or lost shipments. See the Damage Claims and Indemnification Handbook for additional information on filing damage or loss claims.

Transportation service provider

TSPs have a three year time limit to file a transportation claim.

Duplicating BOLs, including GBLs, after a shipment has been completed is prohibited.

The consignee’s signature on the TSP’s delivery documents constitutes the final receipt of the shipment in its delivered condition.

TSP billing procedures and public voucher instructions

See the “Documentation and Certification” section above for additional information regarding the use of the SF 1113. This section discusses the required use of the SF 1113. If the agency requires the TSP to invoice via a third-party payment system, that system usually allows the TSP to submit an e-bill for supplemental billing.

• TSPs should use Public Voucher for Transportation Charges, SF 1113 and Memorandum Copy, SF 1113-A for billing charges for freight, household goods shipments, express, or passenger transportation furnished to the U.S. Government in accordance with official shipping requests and the agency’s policy. The SF 1113 and one SF 1113-A must be submitted to the billing office specified on the BOL, including a GBL. TSPs may download and copy these forms from the GSA Forms Library or print these forms commercially. When printing these forms commercially, TSPs must ensure they accurately reflect the layout, size, and wording of the form.
• TSPs should include as many sub vouchers (BOLs) as possible, not to exceed 25, with each voucher, SF 1113, covering charges to be billed to the same office, except for shipments accorded transit privileges and household goods shipments (other than domestic- crated household goods), which should be billed one per voucher. The serial number and amount of each BOL must be shown on the SF 1113 but not descriptive details of the services rendered.
• The TSP shall complete the “PAYEE’S CERTIFICATE” section of the voucher. TSPs may use a machine-typed name of the TSP’s certifying official, provided the machine-typed official’s name is initialed by a duly authorized person; or TSP may use a facsimile signature of the TSP’s certifying official, as authorized by that official.
• The TSP shall not be required to furnish more than one memorandum copy to the agency billed unless otherwise specifically authorized in advance.
• Do not combine BOLs on the same SF 1113.
• Payment of transportation charges must be made to the TSP in privity with the contract of carriage as evidenced by transportation documents.
• Small shipments moving on commercial forms (generally not exceeding $100.00 in transportation charges) will not be invoiced to the government on SF 1113. These shipments will be billed to the Government using the normal commercial invoicing documents.

Supplemental bills

When submitting paper supplemental bills, TSPs should use the same number as appears in the “CARRIER’S BILL NUMBER” space of the original bill (SF 1113) and include an alphabetical suffix. Each supplemental bill (claim) for freight or household goods transportation services shall be accompanied by a copy of the BOL ordering the service and a copy of the original voucher (SF 1113) submitted by the origin TSP. Generally only one supplemental bill shall be presented for all supplemental charges relating to the items paid on the original bill. Include enough information to explain the supplemental charges such as:

• The tariff or quotation authority for the charges.
• A statement of services ordered and furnished, signed by or for the person who ordered the accessorial services.
• A statement signed by the property owner or authorized agent, certifying receipt of the property at his residence and listing any loss or damage.

TSP receipt of shipment and certification of delivery procedures

The origin and participating TSPs should transmit the original BOL to the last line-haul TSP authorized to bill for the transportation charges. The billing TSP will be responsible for properly completing the documentation in the third party payment system and, if required, the SF 1113.

• The origin and participating TSPs should transmit the original BOL to the last line-haul TSP authorized to bill for the transportation charges. The billing TSP will be responsible for properly completing the documentation in the third party payment system and, if required, the SF 1113.
• If a shipment is not made as a Through-BOL, then the pick-up carrier must be issued all BOLs. Each BOL must address the corresponding contract, tariff, or tender number.
• Whenever the BOL, including a GBL, is used by a contractor as the shipper, one memorandum copy, certified by the TSP, will be retained by the contractor. Certified memorandum copies must be promptly forwarded by the contractor to the issuing office.
• The TSP must annotate on the BOL, including on a GBL, when an accessorial or special service was requested but not furnished. The TSP must also endorse the BOL, including a GBL, to certify any special services provided but not accounted for in the original transportation request.
• The TSP must ensure proper signatures are captured on the completed BOL.

Appeals

A carrier or freight forwarder may request the head of the corresponding agency to review the agency’s actions related to invoice payment if the request is received not later than 6 months (excluding time of war) after the action or within the time stated in 31 U.S.Code § 3726(c).

A TSP that disputes the decision of the agency’s head may request a review by the Civilian Board of Contract Appeals (CBCA) or file a claim with the United States Court of Federal Claims (28 U.S.C. 1491 [PDF]). Additional information is available in subpart F of 41 CFR 102-118. The TSP’s request for review must be received by the CBCA in writing within 6 months (not including times of war) from the date the settlement action was taken or within the periods of limitation specified in 31 U.S.C. 3726 [PDF], as amended, whichever is later. Filing instructions including where and how to file are available.

A ruling by the CBCA is the final administrative remedy and the TSP has no statutory right of appeal however the TSP may still pursue a legal remedy through the courts.

See guidance document titled Form Examples for information and instructions.

Definitions

Bill of lading or BOL, sometimes referred to as a commercial bill of lading, but includes a Government bill of lading (also called a GBL), is a transportation document that can be issued by either the agency or the TSP. It serves multiple purposes as a receipt of goods, contract of carriage, and evidence of title. It also specifies contract terms and conditions, and is mandatory for all shipments. The TSP must comply with applicable federal regulations, including 41 CFR Parts 102-117 and 102-118.

Claim means:

1. Any demand by an agency upon a TSP for the payment of overcharges, ordinary debts, fines, penalties, administrative fees, special charges, and interest; or
2. Any demand by the TSP for amounts not included in the original bill that the TSP believes an agency owes them. This includes amounts deducted or offset by an agency; amounts previously refunded by the TSP, which is believed to be owed; and any subsequent bills from the TSP resulting from a transaction that was audited by the agency.

Improper payment means any payment that should not have been made or that was made in an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement; and includes any:

• Payment to an ineligible recipient;
• Payment for an ineligible good or service;
• Duplicate payment;
• Payment for a good or service not received, except for those payments where authorized by law; and
• Payment that does not account for credit for applicable discounts.

Offset means withholding money from a payment. In this part, money withheld refers to the funds owed a TSP that are not released by the agency but instead used to repay the Government for a debt incurred by the TSP.

Ordinary debt means an amount that a TSP owes an agency other than for the repayment of an overcharge. Ordinary debts include, but are not limited to, payments for transportation services ordered and not provided (including unused transportation tickets), duplicate payments, and amounts for which a TSP is liable because of loss and/or damage to property it transported.

Tender of Service (abbreviated as TOS) is the formal set of rules and terms under which a transportation service provider agrees to move cargo for a shipper and generally includes agreed upon rates, conditions, and service standards.

Transportation audit is a thorough review and validation of transportation related documents and bills. The audit must examine the validity, propriety, and conformity of the charges or rates with tariffs, quotations, contracts, agreements, or tenders, as appropriate.

Transportation payment is a payment made by an agency to a TSP for the movement of goods, people or transportation related services.

Transportation service provider, or TSP, means any party, person, agent, or carrier that provides freight, small parcel, household goods, or passenger transportation or related services to an agency.

For additional definitions, see 41 CFR 102-117 and 41 CFR 102-118.

Footnotes

¹The prepayment audit cannot be conducted by the same firm providing the transportation services for the agency. If a move manager is being utilized, the move manager may not have any affiliation with or financial interest in the transportation company providing the transportation services for which the prepayment audit is being conducted.

²View forms and instructions on how to fill out the forms.