Propriety of Payment

An advance decision was requested regarding the propriety of paying a military serviceman the amount recovered for damages to the service member's household goods by a transportation carrier. The record showed that on July 28, 1978, under a Government bill of lading (GBL) and pursuant to a permanent change of station, the household goods of the service member were picked up by a transportation carrier and weighed for transportation to Pittsburgh, Pennsylvania. At the time, the service member declared a lump-sum valuation of $30,000 on the carrier's commercial bill of lading. Subsequently, the goods were transported to Pittsburgh and placed in storage. However, on or about August 23, 1978, a fire at the warehouse completely destroyed the household goods. On November 29, 1978, the service member filed a claim for $84,110.83, and an assignment to the Government of the rights of recovery was executed. A demand on the carrier for the full amount of $84,110.83 was executed by the service member on May 2, 1979. As a result, the carrier firm sent a check for $7,272 as full and final settlement based on the released valuation of 60 cents per pound per article. Subsequently, the Army forwarded the file for collection by setoff in the full amount of $30,000. GAO has held that the terms of a commercial bill of lading do not form a part of the contract of carriage of a Government shipment under a GBL except to the extent that the terms are incorporated by reference. Therefore, the rate for valuation appears to be 60 cents per pound. Also, the desire of the owner to provide for a higher released valuation was ineffective as a part of the contract of carriage. Accordingly, the amount recovered from the carrier in excess of 60 cents per pound per article should be refunded to the carrier rather than being paid to the owner of the household goods.