Household Goods

This report reviews the Defense Department's (DOD) efforts to recover from government contractors the money it paid to military and civilian personnel for lost or damaged personal property moved under DOD's Direct Procurement Method of shipment. DOD nearly always tries to recover loss and damage claims from destination contractors, even though others, particularly the origin contractor or one of the freight carriers, may be more responsible for losses and damages and may have greater liability limits than does the destination contractor. Claims officials have recovered less than they could have and have indirectly forced destination contractors to boost rates to offset the claims losses. In addition, origin transportation officers have received only minimal feedback, which could have been helpful in reducing the loss and damage and improving the quality of service on future shipments. This report explains in detail the reasons the claims officials did not attempt recovery from other than the destination contractor.

GAO found that: (1) DOD usually attempts to recover damages from destination DPM contractors who may not be responsible for the damaged property; (2) destination contractors are presumed liable for loss or damages unless they can prove otherwise, but they rarely provide acceptable evidence that others are responsible for property loss or damage; (3) claims officials have followed service claims regulations and instructions, but they have not fully recovered monetary damages and have forced the destination contractors to increase their rates to offset damage claims; (4) origin DPM contractors and freight carriers have not received feedback that could improve their quality of service; (5) claims officials generally do not attempt to recover damages from other than the destination contractors because they do not have access to other parties' contracts; (6) claims regulations do not accurately explain recovery options, liability assessments, or how to establish cases against parties other than destination contractors; and (7) claims officials do not have accurate transportation documentation for determining the cost-effectiveness of pursuing claims against freight carriers who usually have higher liability limits than other contractors.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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