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FAR and DFARS › DFARS Part 252: Solicitation Provisions and Contract Clauses › Subpart 252.2

DFARS 252.247-7016 Contractor liability for loss or damage.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause makes the contractor responsible for loss or damage to a service member's household goods while in the contractor's possession during certain moves. It sets different liability limits depending on whether the loss was caused by negligence and which schedule applies, and requires prompt payment to the owner.

Applies to: Contractors performing shipments under Schedules I, II, or III

What it requires

  • Indemnify the Government for loss or damage to property while in the Contractor's possession if notified within the required time.
  • Make prompt payment to the owner for any loss or damage for which the Contractor is liable.

Key terms: Article · Schedule · Non-negligent damage · Negligent damage · Salvage rights

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As prescribed in 247.271-3(d), use the following clause:

Contractor Liability for Loss or Damage (DEC 1991)

(a) Definitions. As used in this clause—

Article means any shipping piece or package and its contents.

Schedule means the level of service for which specific types of traffic apply as described in DoD 4500.34-R, Personal Property Traffic Management Regulation.

(b) For shipments picked up under Schedule I, Outbound Services, or delivered under Schedule II, Inbound Services—

(1) If notified within one year after delivery that the owner has discovered loss or damage to the owner's property, the Contractor agrees to indemnify the Government for loss or damage to the property which arises from any cause while it is in the Contractor's possession. The Contractor's liability is—

(i) Non-negligent damage. For any cause, other than the Contractor's negligence, indemnification shall be at a rate not to exceed sixty cents per pound per article.

(ii) Negligent damage. When loss or damage is caused by the negligence of the Contractor, the liability is for the full cost of satisfactory repair or for the current replacement value of the article.

(2) The Contractor shall make prompt payment to the owner of the property for any loss or damage for which the Contractor is liable.

(3) In the absence of evidence or supporting documentation which places liability on a carrier or another contractor, the destination contractor shall be presumed to be liable for the loss or damage, if timely notified.

(c) For shipments picked up or delivered under Schedule III, Intra-City and Intra-Area—

(1) If notified of loss or damage within 75 days following delivery, the Contractor agrees to indemnify the Government for loss or damage to the owner's property.

(2) The Contractor's liability shall be for the full cost of satisfactory repair, or for the current replacement value of the article less depreciation, up to a maximum liability of $1.25 per pound times the net weight of the shipment.

(3) The Contractor has full salvage rights to damaged items which are not repairable and for which the Government has received compensation at replacement value.

(End of clause)

Sections it refers to

  • 247.271-3 Solicitation provisions, schedule formats, and contract clauses.

Sections that refer to it

  • 247.271-3 Solicitation provisions, schedule formats, and contract clauses.

← 252.247-7015 [Reserved] · 252.247-7017—252.247-7021 [Reserved] →

Rule changes for DFARS Part 252

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 252.247-7016 Contractor liability for loss or damage · SpendQuery