### §2636. Deductions from amounts due carriers

(a) Amounts for Loss or Damage.—An amount deducted from an amount due a carrier shall be credited as follows:

(1) If deducted because of loss of or damage to material in transit for a military department, the amount shall be credited to the proper appropriation, account, or fund from which the same or similar material may be replaced.

(2) If deducted as an administrative offset for an overpayment previously made to the carrier under any Department of Defense contract for transportation services or as liquidated damages due under any such contract, the amount shall be credited to the appropriation or account from which payments for the transportation services were made.

(b) Simplified Offset for Collection of Claims Not in Excess of the Simplified Acquisition Threshold.—(1) In any case in which the total amount of a claim for the recovery of overpayments or liquidated damages under a contract described in subsection (a)(2) does not exceed the simplified acquisition threshold, the Secretary of Defense or the Secretary concerned, in exercising the authority to collect the claim by administrative offset under section 3716 of title 31, may apply paragraphs (2) and (3) of subsection (a) of that section with respect to that collection after (rather than before) the claim is so collected.

(2) Regulations prescribed by the Secretary of Defense under subsection (b) of section 3716 of title 31—

(A) shall include provisions to carry out paragraph (1); and

(B) shall provide the carrier for a claim subject to paragraph (1) with an opportunity to offer an alternative method of repaying the claim (rather than by administrative offset) if the collection of the claim by administrative offset has not already been made.

(3) In this subsection, the term "simplified acquisition threshold" has the meaning given that term in section 134 of title 41.

(Added Pub. L. 97–258, §2(b)(5)(B), Sept. 13, 1982, 96 Stat. 1053; amended Pub. L. 106–398, §1 [[div. A], title X, §1009(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–250; Pub. L. 111–350, §5(b)(43), Jan. 4, 2011, 124 Stat. 3846.)

| Revised section | Source (U.S. Code) | Source (Statutes at Large) |
| --- | --- | --- |
| 2636 | 31:489a. | June 25, 1956, ch. 442, §1, 70 Stat. 336. |

The words "An amount deducted from an amount due" are substituted for "Moneys arising from deductions made from" for clarity. The words "military or naval" and "account of" are omitted as surplus. The words "a military department" are substituted for "the Departments of the Army, Navy, or Air Force" because of 10:101(7). The Department of War was designated the Department of the Army by section 205(a) of the Act of July 26, 1947 (ch. 343, 61 Stat. 501), and by sections 1 and 53 of the Act of August 10, 1956 (ch. 1041, 70A Stat. 157, 676). The Department of the Air Force is included because of sections 205(a) and 207(a) and (f) of the Act of July 26, 1947 (ch. 343, 61 Stat. 501, 502), and section 1 of the Act of August 10, 1956 (ch. 1041, 70A Stat. 488).

#### **Editorial Notes**

#### Amendments

2011—Subsec. (b)(3). Pub. L. 111–350 substituted "section 134 of title 41" for "section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11))".

2000—Pub. L. 106–398 amended section catchline and text generally. Prior to amendment, text read as follows: "An amount deducted from an amount due a carrier because of loss of or damage to material in transit for a military department shall be credited to the proper appropriation, account, or fund from which the same or similar material may be replaced."

#### **Statutory Notes and Related Subsidiaries**

#### Effective Date of 2000 Amendment

Pub. L. 106–398, §1 [[div. A], title X, §1009(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–251, provided that: "Subsections (a)(2) and (b) of section 2636 of title 10, United States Code, as added by subsection (a)(1), shall apply with respect to contracts entered into after the date of the enactment of this Act [Oct. 30, 2000]."