[Federal Register Volume 71, Number 241 (Friday, December 15, 2006)]
[Notices]
[Pages 75509-75511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9729]


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DEPARTMENT OF DEFENSE

Department of the Army


Mandatory Provision of Full Replacement Value Coverage by 
Department of Defense Personal Property Transportation Service 
Providers (TSPs)/Contractors

AGENCY: Department of the Army, DOD.

ACTION: Notice.

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SUMMARY: Pursuant to Chapter 157, Sec.  2636a of Title 10 United States 
Code enacted by Congress on November 26, 2003, as amended by the 
Department of

[[Page 75510]]

Defense Authorizations Act for FY 2007, the Military Surface Deployment 
and Distribution Command (SDDC), as the Traffic Manager for Department 
of Defense (DOD) Personal Property Program, is informing the 
Transportation Service Provider (TSP)/contractor community of the 
mandatory requirement to provide Full Replacement Value (FRV) coverage 
to all customers of the DOD Personal Property Program. The cost of FRV 
shall be included in contracts with movers and FRV shall be made 
available to Service members and civilian employees.
    All shipments that have been picked up or are already in storage 
prior to the effective dates noted below will not be required to be 
covered by FRV. This notice affords TSPs/contractors ample time to 
incorporate the cost of providing FRV for loss/damage protection into 
their rates.

DATES: Effective Dates: There are two scenarios for the implementation 
of Families First and the cost of the new program to include FRV.
    1. The Defense Personal Property System (DPS) has a notional 
implementation timeline that may partially implement the new Families 
First (FF) program to include FRV in May 2007 to some customers moving 
under the DoD Personal Property Program for shipments in the dHHG, iHHG 
and iUB markets (excluding NTS, DPM and ITT). FF/FRV should be fully 
implemented to the remaining customers under this notional timeline by 
November 2007. This schedule is dependent upon successful Software 
Acceptance Testing (SAT). If SAT is successful, rate filing to support 
this timeline will occur during March 2007 for all TSPs. If SAT is not 
successful, and DPS is not implemented under this notional timeline, 
FRV will be implemented to all DOD customers as indicated in the 
``effective dates'' below. It is necessary for all TSPs to file rates 
under the current program in the event DPS is not implemented as 
planned.
    2. Current Program Implementation: The cost for FRV coverage shall 
be included in all rates for the International Household Goods (iHHG) 
program, the Unaccompanied Baggage (UB) program, the Domestic Household 
Goods (dHHG) program, Intra-Theater Tender (ITT) program, Non-Temporary 
Storage (NTS) program, and the Direct Procurement Method (DPM) program 
according to the following schedule:
    For the international household goods (iHHG) program and 
unaccompanied baggage (UB), rates filed for the International Winter 
2007 (IW07) rate cycle shall include the cost of providing FRV coverage 
for all shipments picked up on or after October 1, 2007.
    For the domestic household goods (dHHG) program, all rates filed 
for the Domestic Winter 2007 (DW07) rate cycle shall include the cost 
of providing FRV coverage for all shipments picked up on or after 
November 1, 2007.
    For the Intra-Theater Tender (ITT) program all rates effective on 
or after April 1, 2008 shall include FRV coverage.
    For the Non-Temporary Storage (NTS) program, shipments ordered with 
a date on or after March 1, 2008 shall include FRV coverage. New rates 
that include the cost of providing FRV must be postmarked between 
December 16, 2007 and January 15, 2008.
    All DPM contracts will be amended to require the provision of FRV. 
Contracts having one or more years remaining on March 1, 2008 will be 
modified to include the provision of FRV at the stated limits. 
Contracts which are due to expire within one year of March 1, 2008 will 
not be amended to require FRV. The follow-on contracts will include the 
provision of FRV at the stated limits.

ADDRESSES: Requests for additional information may be sent by e-mail 
to: [email protected]; or by courier to: Military Surface 
Deployment Distribution Command, ATTN: SDDC-PPP, Room 10S67-31, Hoffman 
Building II, 200 Stovall Street, Alexandria, VA 22332-5000.

FOR FURTHER INFORMATION CONTACT: Mr. Charles Helfrich, (703) 428-2996.

SUPPLEMENTARY INFORMATION: FRV coverage shall be provided at the 
following limits: If a claim is filed directly with the TSP/contractor 
within none (9) months of delivery, then the TSP's/contractor's maximum 
liability on each HHG and UB shipment will be the greater of: (1) 
$5,000 per shipment; or (2) $4 times either the net weight of the HHG 
or $4 times the gross weight of the UB, in pounds, not to exceed 
$50,000. Certificate of Cargo Liability Insurance/Certificate of 
Warehousemen's Liability Insurance must also reflect the new FRV 
limits. The TSP/contractor must report settled claims information to 
SDDC within seven calendar days of claims settled.
    Implementing guidelines and procedures covering liability for loss/
damage along with the claims process can be found on SDDC's Web site: 
http://www.sddc.army.mil (HOT ITEMS/Full Replacement Value).

Background

    Chapter 157, Title 10 U.S. Code Sec.  2636a, also known as The Full 
Replacement Value Act of 2003, was passed on November 26, 2003. This 
law amended (in part) chapter 157 of title 10 by inserting after 
section 2636 a new section 2636a entitled, ``Loss or damage to personal 
property transported at Government expense: Full replacement value; 
deduction from amounts due TSPs.'' This law allows the Secretary of 
Defense to include a clause for full replacement value in contracts 
with TSPs. It also allows a deduction of the FRV from the amount due to 
a carrier if the carrier fails to settle.
    The FRV Act allowed for immediate inclusion of FRV into the 
Personal Property Program, but SDDC decided to delay FRV to coincide 
with the rollout of the reengineered future Personal Property Program 
known as Families First. Current uncertainty surrounding the actual 
roll-out date of Families First and the Defense Personal Property 
System (DPS) has caused Congress and SDDC to decide to implement FRV 
into the current Personal Property Program.
    In June 2006 the Senate Arms Services Committee published the 
following recommendation:
    ``Subtitle C--Travel and Transportation Allowances
    Expansion of payment of replacement value of personal property 
damaged during transport at Government expense (sec. 631)
    The committee recommends a provision that would amend section 2636a 
of title 10, United States Code, to require the Secretary of Defense, 
no later than March 1, 2008, to include in contracts for the 
transportation of baggage and household effects for military members 
and civilian employees a clause requiring the carrier to pay the full 
replacement value for loss or damage. The provision would also require 
certain certifications by the Secretary about, and a review and 
assessment by the General Accountability Office on December 1, 2006, 
and June 1, 2007, of the ``Families First'' program.
    The committee believes that the time is past due for implementing 
the contractual authority requested by the Department in 2003 and 
included in section 634 of the National Defense Authorization Act for 
Fiscal Year 2004 (Pub. L. 108-136). Military personnel and their 
families have waited long enough for realization for the Families First 
promise of full replacement value for household goods lost and damaged 
by movers in connection with permanent changes of station.
    The committee has concluded that implementation of the full 
replacement standard for both military members and civilian employees 
by means of

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contractual changes with TSPs must precede implementation of the 
Defense Personal Property System (DPS) under the Families First 
program.''

Regulation Flexibility Act

    This action is not considered rulemaking within the meaning of 
Regulatory Flexibility Act, 5 U.S.C. 601-612.

Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3051 et seq., does not apply 
because no information collection or record keeping requirements are 
imposed on contractors, offerors or members of the public.

Steven L. Amato,
Colonel, U.S. Air Force, DCS, Passenger and Personal Property.
[FR Doc. 06-9729 Filed 12-14-06; 8:45 am]
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