2024.07.23 Appendix C (Claims and Liability Rules)_DRAFT.pdf

HTC711-XX-R-R0XX

Appendix C (Claims and Liability)

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CLAIMS AND LIABILITY RULES

C.1. INTRODUCTION. The claims management methodology is such that all claims will be filed with the Global Household Goods (GHC) Contractor and transferred to the Military Claims Office (MCO) when loss, damage, or destruction is caused by the Non- Temporary Storage Contract Contractor (hereinafter referred to as the “Contractor”).

C.2. LIABILITY.

C.2.1. The Full Replacement Value Act (US Code Title 10 §2636a) of 2003, allows the Secretary of Defense to include a clause for Full Replacement Value (FRV). If the customer files a claim with the GHC Contractor within nine (9) months of delivery, and the GHC Contractor is deemed liable, the GHC Contractor shall be responsible for the FRV for all damaged, lost, and destroyed items.

C.2.2. The NTSC Contractor shall be liable to the customer, to the customer’s agent, or to the military service who contracted for the shipment storage, for all loss, damage, and destruction that occurs to the customer’s household goods. Liability on all shipments will be determined in accordance with the Carmack Amendment to the Interstate Commerce Act, (Title 49, United States Code, Section 14706) unless a specific provision herein establishes a different rule or procedure.

C.2.3. Replacement cost, whether depreciated or undepreciated, is based on the replacement cost at destination and includes shipping charges and sales tax.

C.2.4. Payments by the NTSC Contractor to a customer for inconvenience claims and hardship expenses will not be deducted from the NTSC Contractor’s maximum liability for loss or damage. These are a separate liability.

C.2.5. The NTSC Contractor will not be liable for shortages in the case of an unbroken and unopened household goods (HHG) container, nor will the NTSC Contractor be liable for latent and concealed damage.

C.2.6. The NTSC Contractor shall release all HHG items in the same condition as tendered by another contractor.

C.2.7. The NTSC Contractor shall hold the Government harmless of litigation from third parties.

C.2.8. The NTSC Contractor may not unilaterally take any action to restrict service using any forms, waivers, notices, conditions, display signs, tags, stickers, or similar documents or devices in its dealings with customers. The NTSC Contractor shall not introduce any forms, waivers, etc. that attempt to limit the NTSC Contractor’s liability for loss, damage, or otherwise attempt to change any terms of the contract.

C.3. EXCLUSIONS FROM LIABILITY.

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C.3.1. The NTSC Contractor shall be liable for damaged, lost, and destroyed property that occurs while being transported within storage facility or held in storage, except loss, damage, or destruction caused by or resulting from the following:

C.3.1.1. From an act or omission of the customer, C.3.1.2. From manufacture defect, C.3.1.3. From hostile or warlike action in time of peace or war including action in hindering, combating or defending against an actual, impending or expected attack; from weapons of war employing atomic fission or radioactive force whether in peace or war; or from insurrection, rebellion, revolution, civil war, usurped power or action taken by governmental authority in hindering, combating or defending against such occurrence, C.3.1.4. From seizure or destruction under quarantine or customs regulations; confiscation by order of any government or public authority; or risks of contraband or illegal transportation or trade, C.3.1.5. From delay caused by strikes, lockouts, labor disturbances, riots, civil commotions, or the acts of a person or persons taking part in any such occurrence or disorder, C.3.1.6. From Acts of God (also known as Acts of Nature), C.3.1.7. From pre-existing infestations by mollusks, arachnids, crustaceans, parasites or other types of pests; and for fumigation or decontamination when not the fault of the contractor, or

C.3.1.8. Intangible property, securities, sentimental value of an item, or for pre-existing damage.

C.3.2. The exclusions listed above will not apply if the NTSC Contractor’s negligence significantly contributed to the loss.

C.4. TRANSFER OF CUSTODY (LIABILITY) OF SHIPMENTS.

C.4.1. The NTSC Contractor will receive shipments previously handled by the GHC Contractor. This situation may result in shared liability between the NTSC Contractor and the GHC Contractor. If a claim is appealed by either of these Contractors, which subsequently places liability on the other contractor, the NTSC Contractor shall notify the NTSC Contracting Officer (CO) of its appeal within 10 calendar days of receipt of the determination of liability.

C.4.2. In the event the NTSC Contractor is party in a shared liability claim, the NTSC Contractor shall determine the specific claim line items they are responsible for and shall provide said list to the MCO.

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C.5. INSPECTION BY THE NTSC CONTRACTOR. The NTSC Contractor shall still pay claims for which it was determined to be liable even if the customer has repaired an item before the NTSC Contractor’s inspection, as long as the customer provides the repair bill or some other evidence of the damage and repair cost. The NTSC Contractor shall still pay claims for which it was determined to be liable even if the customer has disposed of a damaged item where the customer has given the NTSC Contractor evidence the item was damaged beyond economical repair or was a potential health hazard to the customer or the customer’s family.

C.6. TIME LIMITATIONS ON CONTRACTOR LIABILITY.

C.6.1. Upon transfer to the MCO, the NTSC Contractor shall remain liable for FRV if the following occur:

C.6.1.1. The NTSC Contractor fails to comply with the catastrophic loss provisions as verified by the MCO.

C.6.1.2. The NTSC Contractor fails to comply with essential items provisions below, as verified by the MCO.

C.6.2. The NTSC Contractor shall not be liable for loss, damage, or destruction unless the customer either: files a claim directly with the GHC Contractor within two (2) years of the final delivery of the shipment that included the lost, damaged, or destroyed items or files a timely claim against the United States and submits it to a MCO under the Military Personnel and Civilian Employees Claims Act.

C.6.3. The NTSC Contractor shall not be liable to the Government on a recovery claim if the Government does not dispatch a written demand to the NTSC Contractor within four

(4) years of delivery. This four (4)-year period will be extended by any period granted as above. If the Government does dispatch a written demand to the NTSC Contractor within four (4) years of delivery, the Government will have the normal six (6) years specified in Title 28, United States Code, Section 2415, to resolve the claim or take administrative remedies.

C.7. INCONVENIENCE CLAIMS.

C.7.1. The NTSC Contractor shall reimburse the customer within 30 days of receipt for reasonable out-of-pocket expenses that result from its failure to release on the agreed date as stated on the task order. The NTSC Contractor shall pay the customer a daily amount equal to the applicable pickup or delivery location Government per diem (to exclude lodging) for all individuals on the relocation order in accordance with the Joint Travel Regulation. The NTSC Contractor shall compensate the customer for all days that result from its failure to release shipment(s) on or before the agreed upon release date as stated on the task order, when the customer is available for delivery.

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C.7.2. The NTSC Contractor shall acknowledge an inconvenience claim filed by a customer within five (5) Government Business Days (GBDs) from the date of receipt.

C.7.3. The NTSC Contractor will not be responsible for an inconvenience claim if the delay was solely caused by: Natural disasters, acts of the public enemy, acts of the Government, acts of the public authority, violent strikes, mob interference, or delays of shipments that were caused by the Government; and NTSC Contractor negligence did not contribute to the delay.

C.8. HARDSHIP EXPENSES.

C.8.1. In the event the NTSC Contractor fails to perform in accordance with the timelines set forth in PWS Paragraphs 1.10.2. and 1.12.1, the NTSC Contractor shall reimburse the customer for any out-of-pocket expenses incurred which are determined unavoidable and unrecoverable under any other means by the NTSC Contracting Officer’s Representative (COR). These amounts are in addition to an inconvenience claim.

C.9. FILING NOTICE OF LOSS AND DAMAGE. The NTSC Contractor shall create a loss and damage report, at the time the loss, damage, or destruction is discovered and send said report to the COR in accordance with Appendix E. Loss, damage, or destruction discovered after delivery shall be presumed to have been caused by the NTSC Contractor if notice of loss or damage has been provided within 180 days from date of delivery and a claim is submitted within two (2) years from delivery.

C.10. CLAIMS PROCESSING.

C.10.1. The NTSC Contractor shall ensure a claim has sufficient information upon which the Government can reasonably adjudicate the claim. A claim is sufficient if it identifies the customer, contains facts necessary to identify the shipment or shipments involved, specifies the items lost, damaged, or destroyed, and contains all additional facts necessary for the Government to determine liability.

C.10.2. The NTSC Contractor shall provide an acknowledgement of receipt of the Government’s determination of liability to the Government within 15 calendar days of receipt of said determination. Upon receipt of said determination, the NTSC Contractor can either agree with the Government’s demand in its entirety or appeal the determination to the CO as outlined in PWS Paragraph 1.9.

C.10.3. The NTSC Contractor shall issue payment to the customer or initiate repair of items within 30 calendar days of receipt of the Government’s determination of liability for claims valued at $1,000.00 or less. The NTSC Contractor shall issue payment to the Government or initiate repair of items within 60 calendar days of receipt of the Government’s determination of liability for claims valued over $1,000.00.

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C.10.4. Appeal of the Government’s determination of liability by the NTSC Contractor to the CO does not extinguish contractor liability.

C.10.5. The Government will pursue recovery for Organizational Clothing and Individual Equipment (OCIE) loss or damage from the NTSC Contractor. The NTSC Contractor shall remit payment for OCIE no later than 60 days from receipt of a demand for recovery concerning OCIE. Failure to remit payment no later than 60 days from receipt of a demand for recovery concerning OCIE will result in offset actions by the against the contractor. The failure of the NTSC Contractor to document the OCIE on the inventory shall not be used by the NTSC Contractor as grounds for asserting a lack of tender of items in rebutting a recovery action for OCIE claims.

C.11. MILITARY CLAIMS OFFICE (MCO).

C.11.1. The NTSC Contractor shall transmit any requested documents to the requesting MCO within two (2) GBD.

C.11.2. If the NTSC Contractor has not already obtained estimates for a particular claim, the MCO may provide the NTSC Contractor with an opportunity to obtain an estimate.

C.11.3. When the NTSC Contractor receives a claim which includes OCIE, the NTSC Contractor shall deny that portion of the claim relating to the OCIE. If the NTSC Contractor receives notice that OCIE has been lost or damaged, either through submission of notice by the customer, inspection, or any other means, the NTSC Contractor shall notify the MCO of such loss and damage within 30 days of receiving notice. The NTSC Contractor shall furnish the MCO a list of the OCIE missing or damaged along with shipment information and customer name.

C.12. HIGH VALUE ITEMS AND HIGH-RISK INVENTORIES.

C.12.1. High value and high-risk items include, but are not limited to: currency, coins, jewelry, silverware and silver service sets, crystal, figurines, furs, objects of art, computer software programs, manuscripts, comic books, baseball cards, stamps, and other collectable items or rare documents that have a value in excess of $100 per pound. For the purposes of determining the NTSC Contractor’s liability, all such items shall be deemed to weigh at least one pound. A collection of compact disks (CDs) and digital video disks (DVDs to include computer or video games) will not be considered high value or high-risk items. However, individual CDs or DVDs with a value in excess of $50 will be considered a high value item.

C.12.2. A high risk and high-value inventory, even if it is signed by the customer upon delivery and fails to note shortages at delivery, will be treated as other inventories for purposes of determining whether there was loss, damage, or destruction in transit. Filing within nine (9) months in order to receive FRV, or two (2) years to receive depreciated

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C.12.3. If the high risk and high-value inventory form has a block to denote delivery, the customer must initial each block for each item. A check mark or an “X” is not sufficient.

C.12.4. The high risk and high-value inventory form must contain a warning, in bold font larger than other fonts on the form, that if the customer notes on this inventory that an item was delivered, he or she may never claim the item was missing with either the Contractor or the MCO.

C.12.5. The delivering GHC Contractor must attest in writing that, immediately prior to departure from the residence, the GHC Contractor and the customer opened all containers in which the high risk and high-value items were packed; the GHC Contractor and the customer removed the items from the containers; the GHC Contractor and the customer physically inspected each item; and the GHC Contractor advised the customer of the consequences of signing the high risk and high-value inventory form.

C.13. ESSENTIAL ITEMS.

C.13.1. Essential items are only those items necessary for everyday living, which would reasonably need to be replaced promptly. Items used solely for entertainment purposes are not considered essential. Fungible items that are regularly used up or worn out and must be routinely replaced are not considered essential. Essential items include, but are not limited to:

C.13.1.1. Refrigerators or other appliances necessary for the safe storage and preparation of food;

C.13.1.2. Necessary medical equipment; and

C.13.1.3. Mattresses.

C.13.2. In the event the NTSC Contractor is liable, the NTSC Contractor shall either pay for essential items, provide temporary or permanent replacements for them, or repair them within seven (7) days of notification. If it is later determined that the NTSC Contractor was not liable for the loss, the NTSC Contractor shall contact the MCO. Customers are responsible for notifying the GHC Contractor of such a loss within seven (7) days of the date their goods were delivered. Any item not identified in this way by the customer will not be considered “essential.”

C.14. REPAIR ESTIMATES.

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C.14.1. The NTSC Contractor shall obtain and pay for repair estimates required to process claims when requested by the Government. The NTSC Contractor shall provide the Government copies of any estimate.

C.15. SALVAGE.

C.15.1. To the extent not prohibited by law or agreement, the NTSC Contractor is entitled to salvage a damaged item on which the NTSC Contractor has paid the customer either the depreciated or full replacement cost. If the customer wishes to retain an item, the NTSC Contractor may request the customer waive up to 25% of the depreciated or full cost.

C.15.2. If the NTSC Contractor pays a customer the depreciated or the full replacement cost of a lost item, and the item is subsequently located, the NTSC Contractor shall notify the Government. If the customer elects to receive a found item, the NTSC Contractor shall not be liable for delivering the item or items to the customer’s residence. The NTSC Contractor may require the customer to refund any payment made prior to delivery.

C.15.3. The NTSC Contractor shall not exercise its salvage rights if the depreciated replacement value of all salvageable items totals less than $200.00.

C.15.4. If the NTSC Contractor is unable to exercise its salvage rights due to the disposal of an item by the customer, the NTSC Contractor may reduce its liability by 25% on that item if it has a depreciated replacement value of $50.00 or more.

C.16. CATASTROPHIC LOSS PAYMENTS.

C.16.1. Catastrophic loss occurs when over 60% of the inventory line items in a given shipment are lost, damaged or destroyed. The NTSC Contractor shall contact the Government within two (2) GBD when catastrophic losses occur. The NTSC Contractor shall identify and make partial, advance payments of no less than 10% of their total maximum liability to customers within two (2) GBD of contacting the Government.

The customer is still required to file a claim for their loss directly with the GHC Contractor. Any advance payment made will be deducted from the customer’s eventual payment. Advance payments made do not relieve the NTSC Contractor of its responsibility to process inconvenience claims.

C.16.2. In the event the NTSC Contractor identifies, or is informed of, a catastrophic loss for which it believes it is not liable under Exclusions from Liability, the NTSC Contractor shall inform the Government within 24 hours. In such cases, the Government will handle the advance payment and claim. If it is later determined the NTSC Contractor was, in fact, liable for the loss, the CO will assert a recovery claim against the NTSC Contractor. The NTSC Contractor shall be liable as if the customer had filed a claim with the NTSC Contractor within nine (9) months of their loss.