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B-175530 1 (1973-11-05)

handle is hein.gao/gaobaafvf0001 and id is 1 raw text is: A COMPTROLLER GENERAL OF THE UNITD STATES WASHINGTON, D.C. 268 B- 175 530 INOV 5 1973 The Honorable Charles H. Percy cl United States Senate -LM096032 Dear Senator Percy: Your letter of May 17, 1973, requested our views about a claim by your constituent that the Fedetal Government is pay- ing excessive prices for coffee and is restricting competition b!segaqJuits specifications are, too stringent. In discussions with your office we agreed to inquire into (1) the feasibility of developing less restrictive blend requirements for coffee used by the military services, (2) the possible savings to the Government by using alternative.blends, (3) the ability of businesses to compete under present specifications, and (4) the types of volume discounts currently available on Brazilian and Colombian coffee beans and their probable effect on smaller coffee roasting companies. We reviewed pertinent p~r ennt records and had dis- cussions with officials of various organizations, including the Defense Supply Agency and several coffee roasting companies. We believe that the Department of Defense should consider 5 relaxing its coffee blend requirements by developing accept- able alternatives to the present blend of 70 percent Brazilian •coffee--30 percent Colombian coffee. The results of our review, including an estimate of possible savings by using alternative blends and a conclusion that the acceptance of alternative blends may strengthen com- petition, were brought to the attention of the Deputy Assist- ant Secretary of Defense for Supply, Maintenance and Services, by our letter of August 28, 1973. (See enc. I.) The Depart- ment advised us in an interim reply dated October 1, 1973, that it is considering changing its blend requirements. (See enc. II.) Although roasters were reluctant to reveal the specific terms of discounts available to them and apparently the ex- tent of such discounts varies from time to time, our inquiries indicate that at present discounts generally are available __jo m tr-0 0_ ?6______

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