32 C.F.R. Subpart O—Nonappropriated Fund Claims
Title 32 - National Defense
This subpart describes how to settle claims for and against the United States for property damage, personal injury, or death arising out of the operation of Nonappropriated Fund Instrumentalities (NAFIs). (a) Army and Air Force Exchange Service (AAFES). The Army and Air Force Exchange Service is a joint command of the Army and Air Force, under the jurisdiction of the Chiefs of Staff of the Army and Air Force, which provides exchange and motion picture services to authorized patrons. (b) Morale, welfare, and recreation (MWR) activities. Air Force MWR activities are activities operated directly or by contract which provide programs to promote morale and well-being of the Air Force's military and civilian personnel and their dependents. They may be funded wholly with appropriated funds, primarily with nonappropriated funds (NAF), or with a combination of appropriated funds and NAFs. (c) Nonappropriated funds. Nonappropriated funds are funds generated by Department of Defense military and civilian personnel and their dependents and used to augment funds appropriated by the Congress to provide a comprehensive morale-building, welfare, religious, educational, and recreational program, designed to improve the well-being of military and civilian personnel and their dependents. (d) Nonappropriated funds instrumentality. A nonappropriated fund instrumentality is a Federal government instrumentality established to generate and administer nonappropriated funds for programs and services contributing to the mental and physical well-being of personnel. (a) Settlement authority: (1) Each individual has the same delegated authority to settle a claim for which NAFs may be liable as that specified for a similar type claim in each subpart of this part. The decision of the settlement authority is binding upon the NAFI. (2) The Judge Advocate General, in addition, has delegated authority to settle subparts F, G, and J type claims in any amount without referral to the Secretary of the Air Force or the General Accounting Office. (3) The Chief, Deputy Chief, and Branch Chiefs, Claims and Tort Litigation Staff, in addition, have delegated authority to settle subparts F, G, and J type claims for $100,000 or less without referral to the Secretary of the Air Force or the General Accounting Office. (b) Redelegation of authority. A settlement authority may redelegate settlement authority to a subordinate judge advocate or civilian attorney, in writing. (c) Appellate authority. Upon appeal, a settlement authority has the same authority specified in §842.128(a). The Judge Advocate General is the final appellate authority on subpart F type claims without right of further appeal to the Secretary of the Air Force. However, no appellate authority below The Judge Advocate General may deny an appeal of a claim it had previously denied. (d) Authority to reduce, withdraw, and restore settlement authority. Any superior settlement authority may reduce, withdraw, or restore delegated authority. (e) Settlement negotiations. A settlement authority may settle a claim filed in any amount for a sum within its delegated authority. Send unsettled claims in excess of the delegated authority to the level with settlement authority. Unsuccessful negotiations at one level do not bind higher authority. (a) This subpart does not establish legal theories for adjudication of claims. Refer to the appropriate subpart to decide whether a claim is payable (e.g., subpart D for personnel claims; subpart K for tort claims), then use the rules in this subpart to decide the appropriate funds for payment of any approved claim. (b) Claims arising from property damage to or loss from vehicles or loss of personal items stored in base MWR facilities will be evaluated under the normal rules applied by the appropriate subpart of this part, and paid using the rules in those subparts. Examples include recreational vehicles stored in authorized lots and used cars parked in onbase sales lots. One exception to this rule is the exclusion of personal items stolen from onbase gym lockers (discussed below). (1) If a NAF fee has been charged in connection with the use of the storage location, a determination must be made on the nature of the fee charged. If the fee does no more than reimburse NAF costs in administering or maintaining the storage location, subpart O of this part applies in addition to other appropriate subparts. If the fee is set to generate a profit for the NAFI involved or if it is collected in accordance with the terms of an agreement, express or implied, under which the NAFI represents that it will provide some degree of security or safeguarding of the property, the claim will be paid with NAF funds. (2) Normally, theft of items from gym lockers will be paid out of appropriated funds providing there is affirmative evidence of theft. Mysterious loss of property will not be paid and, in no case, will a claim be paid in excess of $250. Substantiated claims against NAFIs must not be paid solely from appropriated funds. Claims are sent for payment as set out in this subpart. Do not delay paying a claimant because doubt exists whether to use appropriated funds or NAFs. Pay the claim initially from appropriated funds and decide the correct funding source later. (a) Claims within the scope of this subpart. Claims which are within the scope of this subpart are those arising out of the operation of an MWR activity and are caused by: (1) Civilian employees paid by a NAFI acting in the scope of their employment. (2) Military personnel or appropriated fund civilian employees performing part-time duties for a NAFI for which a NAFI is paying. (3) Negligent operation or condition of premises for which a NAFI is responsible. (4) Members or authorized users of NAFI property. Such claims are subject to this subpart if the individual is a member of an MWR membership association or an authorized user of NAFI property and the use is in accord with applicable rules. (b) Claims not within the scope of this subpart. Claims are not payable within the scope of this subpart if they arise out of the operation of an MWR activity supported by a NAFI and are caused by: (1) Military personnel or appropriated fund civilian employees performing assigned Air Force duties, even though they benefit a NAFI. (2) Negligent operation or condition of premises for which a NAFI is not responsible. Claims made by NAFI employees should be settled within the guidelines of this paragraph. (a) Personal injury in performance of duty and workers' compensation claims. Claims for injuries arising out of performance of duty and workers' compensation claims are not within the scope of this subpart because the exclusive remedy is one of the following. (1) Longshore and Harbor Workers' Compensation Act. This Act applies to NAFI civilian employees in the United States, its territories and possessions, and US citizen and resident NAFI civilian employees abroad. (2) Local benefits for foreign national employees abroad. (3) Military benefits because the injury is incident to service for offduty military personnel. (b) Property loss or damage incident to NAFI employment. Claims for loss or damage to property incident to NAFI employment are settled under subpart D. Where appropriate, liability is computed, and initial demand is made upon the carrier, warehouse, or insurer, directing them to send further correspondence to the NAFI paying the claim. (a) Customer complaints. Do not automatically adjudicate customer complaint claims until a determination is made that a valid claim exists. Complaints and personal property losses suffered by customers of MWR sales or service operations are normally not within the scope of this subpart. Customer complaints may not be claims at all. They may be no more than expressions of customer dissatisfactions. The activity manager is responsible for adjudicating and satisfying or otherwise disposing of a customer's complaint according to applicable NAFI regulations. Where possible, the activity manager resolves them by reimbursement, repair, or replacement in kind. However, if a complaint involving a claim cannot be satisfactorily settled under those procedures or includes a demand for consequential damage (such as for personal injury or property damage to other than the article purchased or serviced), process it as a tort claim. (b) Claims generated by concessionaires. Most concessionaires must have commercial insurance. Any unresolved claims or complaints against concessionaires or their insurers are sent to the appropriate contracting officers. (a) Tort claims. Use the procedures set forth in subpart J or L, as appropriate. (b) Contract claims. See AFR 176–9 or AFR 147–14, as appropriate. (c) Claims involving dishonored checks and debts to NAFIs. See AFR 176–2 and 176–10 or AFR 147–14, as appropriate. (d) Third Party Workers' Compensation Claims. NAF employees are provided workers' compensation benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA) (33 U.S.C. 901, et seq.) as extended by the Nonappropriated Fund Instrumentalities Act (5 U.S.C. 8171–8173). For injuries suffered by NAFI employees in the course and scope of their employment where third parties are responsible for the injuries, the employing NAFIs are entitled to recover from the responsible third parties for the compensation and medical benefits paid to the injured employees (33 U.S.C. 933). Third party claims are pursued on behalf of employing NAFIs by the servicing staff judge advocate. A NAFI also has the right of offset against an employee's pay amounts recovered directly by the employee from third parties as provided in the LHWCA. The procedures set out in subpart Q should be used for advance payments. Do not delay paying a claimant because doubt exists whether to use appropriated funds or NAFIs. Pay the claim initially from appropriated claim funds and decide the correct funding source later. Unless otherwise specified in this subpart, claims for payment (in two copies), collected funds for deposit, and international agreement bills for reimbursement should be sent as follows: (a) AAFES: (1) Claims payable for more than $2500: HQ AAFES, Comptroller, Insurance Branch, P.O. Box 660202, Dallas, TX 75266–0202. (2) Claims payable for $2500 or less: AAFES Operations Center (OSC-AC), 2727 LBJ Highway, Dallas TX 75266–0320. (b) Civilian base restaurants and civilian welfare NAFIs: (1) For more than $100: Army and Air Force Civilian Welfare Fund, Washington, DC 20310. (2) For $100 or less: The local NAFI giving rise to the claim. (c) All other NAFIs: (1) For more than $50: HQ AFMPC/DPMSCI, Randolph AFB TX 78150–6001. (2) For $50 or less: The local NAFI giving rise to the claim. (d) International agreement claims, all NAFIs. When a receiving state pays a claim under an international agreement, the NAFI involved, upon receipt of an extract copy of the itemized bill, will forward payment of its pro rata share to the sending State office. [55 FR 2809, Jan. 29, 1990, as amended at 56 FR 1574, Jan. 16, 1991]
Title 32: National Defense
PART 842—ADMINISTRATIVE CLAIMS
Subpart O—Nonappropriated Fund Claims
§ 842.126 Scope of this subpart.
§ 842.127 Definitions.
§ 842.128 Delegations of authority.
§ 842.129 Settlement of claims against NAFIs.
§ 842.130 Payment of claims against NAFIs.
§ 842.131 Tort and tort type claims.
§ 842.132 Claims by NAFI employees.
§ 842.133 Claims by customers, members, participants, or authorized users.
§ 842.134 Claims in favor of NAFIs.
§ 842.135 Advance payments.
§ 842.136 Claim payments and deposits.
