BNUMBER:  B-271364
DATE:  July 1, 1996
TITLE:  [Letter]

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B-271364

July 1, 1996

AFLSA/JACC
172 Luke Avenue, Suite 343
Bolling Air Force Base
Washington, DC  20332-5113

Dear Sirs:

This is in regard to an appeal by Resource Protection on behalf of 
American Vanpac Van Lines from our Claim Settlement No. Z-2862806, 
dated October 22, 1992, regarding the household goods shipment of 
Martin Siebrocki which moved under GBL # TP 003 480.  Resource filed 
its appeal by letter of October 31, 1992 (copy enclosed), but the 
appeal was never received in our Office.  The matter was refiled on 
January 2, 1996.

Following the shipment of the household goods your office setoff 
$1,920 against American Vanpac Van Lines on behalf of United States 
Automobile Association (USAA), which had settled the claim directly 
with the member.  In our October 22, 1992 settlement, we found the 
carrier remained liable for the full amount.

In its appeal, Resource Protection argues that the $1,920 was based on 
replacement value of the lost or damaged items and no depreciation was 
taken.  Resource Protection contends that, notwithstanding the private 
insurer's settlement terms with the member, the carrier is only liable 
for the depreciated value of a lost or damaged item under the Joint 
Military-Industry Memorandum of Understanding (MOU).

We agree.  Under both the MOU and the Air Forces' regulations, the 
carrier is liable for the depreciated replacement cost, repair cost or 
its contractual liability, whichever is less.  (Air Force Regulation 
112-1, paragraph 6-60)  Also see Fogarty Van Lines, B-248982, Aug. 16, 
1993.

Therefore, we find that the claim of the member should be adjudicated 
using the depreciation rates found in the MOU and the amount setoff 
against the carrier adjusted accordingly.

Sincerely yours,

Lowell Dodge
Associate General Counsel

Enclosure
B-271364

July 1, 1996

DIGEST

When Air Force set off against carrier amount paid by private insurer 
to member for loss or damage to household goods, items should have 
been depreciated in accordance with Joint Military-Industry Memorandum 
of Understanding, notwithstanding that private insurer reimbursed 
member underpreciated replacement cost.