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.

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

(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.

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.)