[Federal Register Volume 72, Number 231 (Monday, December 3, 2007)]
[Notices]
[Pages 67921-67922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23382]


-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

SUMMARY: This cancels the notice previously published in the Federal 
Register on December 15, 2006 (71 FR 75509). 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 Defense 
Authorizations Act for FY 2007, the Military Surface Deployment and 
Distribution Command (SDDC), as the

[[Page 67922]]

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 updates the implementation timeline for 
providing FRV for loss/ damage protection.
    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:
    The international household goods (iHHG) program and unaccompanied 
baggage (UB), shall have FRV coverage for all shipments picked up on or 
after October 1, 2007.
    For the domestic household goods (dHHG) program, all shipments 
picked up on or after November 1, 2007, shall have FRV coverage.
    For the Intra-Theater Tender (ITT) program all rates effective on 
or after March 1, 2008 shall include FRV coverage. The current rate 
cycle will expire February 29, 2008, with the next rate cycle beginning 
on March 1, 2008 and shall be inclusive of 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 modified to require the provision of FRV 
by March 1, 2008. (See Traffic Management Advisory released by 
USTRANSCOM, September 13, 2007).

SUPPLEMENTARY INFORMATION: FRV coverage shall be provided at the 
following limits: If a claim is filed directly with the TSP/contractor 
within nine (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, 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 Sec.  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 roll-out 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 of 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 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 rule making 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.

Daniel J. Bradley,
Lt. Col, USAF, DCS, Passenger and Personal Property.
[FR Doc. E7-23382 Filed 11-30-07; 8:45 am]
BILLING CODE 3710-08-P