Summary: Direct Procurement Method (DPM) Claims and Liability Procedures

This document is an attachment to the Defense Transportation Regulation outlining claims and liability procedures for Direct Procurement Method personal property shipments. It establishes comprehensive protocols for member/employee claims filing, contractor liability determination, and dispute resolution processes. Claims must be filed within two years of delivery, with eligible items receiving Full Replacement Value (FRV) if filed within nine months of delivery. The document specifies that contractors are liable for loss and damage occurring while property is in their custody, subject to liability limits determined by shipment weight and filing timeframe. For claims filed within nine months of delivery, maximum liability is the greater of $7,500 per shipment or $6.00 times net weight (HHG) or gross weight (UB), not to exceed $75,000. Claims filed after nine months are limited to depreciated value at 1.25 times net weight. Contractors must pay, deny, or make settlement offers within 60 days of receiving complete, substantiated claims and must complete payment within 30 days of acceptance.

The document details specific procedures including notice of loss requirements using DD Form 1840/1840R within 180 calendar days of delivery, contractor inspection rights, repair estimate responsibilities, and partial/quick settlement provisions. Contractors may establish quick claim procedures for losses under $2,000 settled within five days of delivery. The document addresses catastrophic losses (exceeding 60 percent inventory loss), essential items requiring 2-business-day replacement, and high-value item inventories with liability capped at $100 per pound. Exclusions from liability include member/employee acts, inherent defects, war/hostile action, governmental seizure, labor disturbances, Acts of God, pre-existing infestations, and pre-existing damage. The contractor must mitigate losses where possible. Salvage rights are limited by item condition and value thresholds, with member/employees potentially required to accept located items or refund payments received. Storage-in-Transit (SIT) liability terminates upon warehouse receipt notice, and the Government must enter new contracts if continued storage is needed.