Military Claims Adjudication and Recovery

2. Military Claims Adjudication and Recovery Tyler L. Smith Senior Manager Claims and Quality AssuranceGovernment Logistics N.V.

3. Background • 26 Years working for the DOD both in and out of uniform • Chief of Quality Control • Claims Officer • 11 Years in Industry • Responsible for Claims Processing and Quality Assurance for GovLog. • Supervise On-Site Inspection Program of our Agents. • Supervise FRV Insurance Program that TSP’s participate in. Receipt of claim, adjudication and settlement of the claim. • Responsible for assisting TSP’s in claims inspections, obtaining estimates, and settlement of claims outside of the FRV Insurance Program. • IAM Claims Committee member.

4. At the Delivery

5. Work with your Agents • Ensure that the Destination Agent Checks off High Risk/High Value Inventory and has the customer initials off all items received. • Ensure that your Destination Agent checks off the Normal Inventory jointly with the customer in accordance with the TOS.

6. Work with your Agents • All Visible Damage and Loss must be recorded by the Destination Agent jointly with the customer on the 1840/1850. • Many Agents are now listing the Parts Box on the High Risk/High Value Inventory, is the Destination Agent checking for this? • Missing parts are a major issue in our industry.

7. Claims Adjudication

8. Timely Notice • Was Timely Notice given for the Damages? • 75 Days from the Date of Delivery • DD Form 1840/R • DD Form 1850/R • DPS Notice of Loss and/or Damage.

9. Timely Notice • Wavier allowed for Officially Recognized Absence or Hospitalization • In case of recognized official absence, MCO must provide the TSP with proof. • If “official absence” is substantiated, additional days will be granted, but shall not exceed the period of absence. • Was the Claim Timely Filed? • Within 9 Months from the Delivery Date for FRV covered shipments.

10. Substantiation • What is the customer claiming? • Customer must itemize! • - $6000 for a missing box of Misc items is not acceptable • Are the items claimed noted on the 1840/1850? • Has the customer provided pictures of the damages? • Make, model where applicable • Purchase receipts?

11. Research Replacement Costs • Google Product Search • http://www.google.com/prdhp • Replacements.com • China, Silverware, Stoneware, Crystal etc. • WalMart.com • Sears.com • Amazon.com • Overstock.com • Target.com

12. Repairs/Estimates • Speak with your Repair Firms • Tell them what you want • Do you want them to list PED? • Ask them to provide model and brand if not listed on the inventory • Have the repair firm indicate repair costs even if they feel item isn’t economically repairable

13. Pre-Existing Damages (PED) • Look for PED on the inventory • Ask the repair firm if they saw any PED • No set rule how much to deduct for repairs if PED is repaired. • Do not pay for PED!

14. Missing Items • Is it really a Gucci purse that is missing? • Is there proof of tender to the TSP? • MCO’s will generally accept pictures and statements, should the TSP? • Items missing from a box, look at what is claimed. Will 40 pairs of jeans, 30 dress shirts and 5 jackets fit into a lay down wardrobe? (Don’t think so)

15. Water Damages • Were there Water Damages? • Was it raining at Origin? Destination? • Did the Destination Port Agent indicate shipment was received wet at the Port? • Port Agents need to take pictures (hole in Sea/Land Container, wet liftvans etc) and report to TSP so TSP can file against the Shipping Line/Ocean Carrier. Time limits to file a claim • Are the Water Damages, fresh water or salt water damages? • Who is Responsible? DA, OA, Port Agent, Military (Code T/J)? Weather Undergroundwww.wunderground.com

16. Code T/J Water Damages • Work with your Port Agent • AMC (Airlift Mobility Command) will generally not allow Inspections at the Military Terminal. • Port Agent when breaking down the pallets, must note if any shipping containers are wet or were once wet. • Take pictures! • Prepare a report! • Port Agent must send the report and pictures to a POC at the AMC Terminal. • Send Pictures and report to the TSP. • Deny Liability if the Port Agent notes water damages and reports it to AMC.

17. Potential Impasse • You have reached a potential impasse with the customer, what now? If Claim is transferred to the Military, what will the MCO do? Know in Advance what the MCO will do, read their regulations. Read and Know the DOHA (Defense Office of Hearings & Appeals) Rulings

18. Military Regulations • Army • DA PAM 27-162, Chapter 11 • Air Force • Air Force Instructions 51-502 • Navy • JAGINST 5890.1A

19. Military Regulations • Military Regulations are not Standardized across the Services. • Each Military Service Claims Regulation has different positions with regards to Claims. • Know those differences before deciding on an impasse.

20. Military Regulations • Substantiation • Army (DA PAM 27-162 Chp 11) • (Claimants) “should normally be required to provide a purchase receipt or similar evidence to confirm the value of items for which more than $100 is claimed “ • Air Force (51-502) • “While no set rule exists as to how much proof claimants must provide, claims personnel may require them to provide: A purchase receipt or other evidence to confirm the value of items for which more than $250 is claimed.

21. Military Regulations • Navy (JAGINST 5890.1A) • “The claimant is responsible for substantiating ownership or possession of the item claimed as lost or damaged.”“And must substantiate the value of the property with documentation from competent authority.”

22. Customer Service • Keep in touch with the customer during the claims process. • Let them know what is going on. • Be Polite, many military customers still don’t know the procedures. • Claims Processing Firms must remember that how they treat a TSP’s customer will generally reflect on what type of CSS score the TSP receives.

23. Transit Damages • Transit Damages are becoming more and more an issue. • Shipments dropped at Port while offloading from ships. • Shipments broken into during transit. • Rough handling by Port Agents, Linehaul Agents and Destination Agents. • Did the customer indicate that the Destination Agent dropped an item during delivery?

24. Transit Damages • Did the Customer indicate on the Claims Form, or written statement, damages were done specifically at Origin or Destination? • “Crew dropped my dresser while they were offloading it from the container.” • “While packing my crystal, packer dropped my $10,000 crystal goblet on the floor.” • Do any customer’s statements and Destination Agents comments differ on how the damages occurred? Investigate those differences!

25. Container Reports • What Condition did the Port Agent receive the shipment in? • What Condition did the Destination Agent receive the shipment in? • Are the seals intact? • Were the seals tampered with? • Are there holes in the containers?

27. Negligence • If you intend to tell an Agent they were negligent, do be familiar with the TOS. • If glassware is damaged and was packed into a 6.0 dishpack, the Agent was not negligent. If however, the glassware was packed into a 3.0 carton and got damaged, then the Agent was negligent. • Simply because there are damages, does not mean an Agent was “negligent” • Do not use “Gross Negligence” as only a U.S. Court of Law can make that determination.