Request for Reconsideration of Claim for Payment of Compulsory Insurance Premiums

The Air Force requested reconsideration of a denial by the Claims Group of a German Government claim for payment of compulsory insurance premiums. The claim is based on a series of North Atlantic Treaty Organization Agreements. The Air Force asked if the claim was barred by a statute of limitations. Because determining the amount and value of U.S. Government holdings which were subject to compulsory fire insurance was a lengthy process, final invoices were submitted in many cases more than 6 years after the year for which the insurance coverage was provided. For the purposes of a statute of limitations, a claim first accrues on the date when all events have occurred which fix the liability of the United States and entitles the claimant to sue or file a claim. Where a claim is based on a contractual obligation of the U.S. Government to pay money, the claim first accrues on the date when the payment becomes due and is wrongfully withheld in breach of contract. In rejecting this claim, the Claims Group erroneously assumed that the claims for insurance premiums must have accrued in the years of their coverage. However, the debt for the compulsory insurance costs could not have accrued prior to the completion of all of the agreements which fixed the liability. A statute of limitations begins to run only at the point when a claim is determined. Since this claim first accrued at the conclusion of the negotiations, the claim fell within the 6-year period of the GAO statute of limitations and was not barred from consideration. Accordingly, the Claims Group's decision was reversed and the claim could be paid if otherwise correct.