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B-176139 1 (1972-06-19)

handle is hein.gao/gaobaagjk0001 and id is 1 raw text is: 

N                    UNITED STATES GENERAL AC I

                            WASHINGTON,    20 8

  LOGISTICS AND COMMUNICATIONS
         DIVISION

      B- 176139
                                                   LM096524
      Dear Mr. Secretary:

           We have completed our survey of the worldwide         e iti'n
         i stributior system of the Department of Defense (DOD).
      found that the system had been responsive to military require-
      ments and that ammunition had moved with relatively few delays
      en route. We believe, however, that this responsiveness was
      achieved at unnecessarily high costs in certain circumstances.

           Details of our findings and observations on the domestic
      segment of our study were included in a draft of a proposed
      report in December 1970. Observations on the overseas phase
      of our study were furnished to you on February 25, 1972.

           The close working relationship which our staff enjoyed
      with DOD on this survey--jointly discussing problem areas as
      they were identified--resulted in significant improvements
      in the ammunition distribution system.

           A brief summary of several such improvements follows.

      OBTAINING LOWER RATES FROM WESTERN RAILROADS

           Most ammunition was produced in the Eastern and Central
      United States at locations from which it was more economical
      to ship overseas from east coast ports rather than from west
      coast ports. A principal reason for the east coast being
      rate favorable was the higher rail rates charged by carriers
      serving the west coast ports.
           We found that DOD had not made greater use of east
      coast potrts nor negotiated lower rates with western rail-
      rgads, which would have made the overall cost by the west
      coast more competitive with the cost by the eastern ports.
      Despite the economic advantages of shipping ammunition from
      east coast terminals, approximately i'-ha.lf of the ammuni-
      tion being shipped overseas at the time of our survey in
      1968-69 was being moved through west coast ports.

           We briefed DOD officials on this matter in February 1969
      and, in August of that year, they took action to obtain lower,
      more competitive rates from western railroads. This action
      resulted in savings of over $16 million in the approximate
      10-month period ended June 30, 1970.

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