[Request for Review of Air Force and Marine Corps Setoff Actions]

A firm filed four claims in connection with damages to mobile homes it transported for military members under Government bills of lading and requested a review of subsequent setoff actions by the Air Force and the Marine Corps. In each case, the member had filed a claim with his service; the services paid the claims and subsequently offset the amounts paid against moneys otherwise due the carrier. The carrier contended that it was not liable for damages and that the services did not have setoff authority. Because each mobile home arrived at its destination with more damage than was noted at origin and because causes of the damage did not fall outside the responsibility of the carrier, GAO found that the carrier's liability was established. The carrier further contended that prior damage to the homes was concealed; however, GAO noted that the components in question had been visible upon prior inspection. The carrier claimed that some damages were the result of inherent vice or defects in the tires. GAO held that a tire blowout does not establish an inherent vice or defect. Finally, the carrier maintained that its disclaimer from damages of normal wear and tear and road hazards absolved it from liability. GAO disagreed with this interpretation of the disclaimer and noted that the Interstate Commerce Commission has been barred from legalizing tariffs limiting the common-law liability of carriers. In response to the contention that the services lacked authority to satisfy their claims against the carrier by administrative offset, GAO has held that the Government may set off the estimated amounts of its claims even in the absence of final resolution of the underlying dispute. However, GAO did agreed with the Air Force that a certain amount under one claim may be refunded to the carrier because this damage was not caused by the carrier.