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LCD-79-213 1 (1979-06-01)

handle is hein.gao/gaobaazkr0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE t0o9145 WASHINGTON, D.C. 20548 LOGISTICS AND COMMUNICATIONS DIVISION 11 11 111 1 B-144874 109745 JUNE 1, 1979 The Honorable Harold Brown Y j'i7O The Secretary of Defense Dear Mr. Secretary: During our survey of the Department of Defense's (DOD's) postal operations in the Pacific, we observed that military exchange activities at several locations are using military post offices to transport foreign-made goods to other exchange locations for resale. As a result, foreign-manufactured goods move under postal rates which generally are less than commer- cial cargo fees. By not having to bear the full cost of com- mercial transportation, foreign products could be receiving a competitive advantage. Giving foreign products this advantage is inconsistent with the policy of achieving a more favorable balance of pay- ments by promoting the sale of U.S. goods. We plan to issue a detailed report on the results of our overall survey. However, we are calling this matter to your attention so that corrective action can be taken without further delay. DOD'S POLICY IS TO MINIMIZE ADVANTAGES GIVEN FOREIGN PRODUCTS DOD Directive 4525.5, Postal Operations and Related Service, March 20, 1978, gives DOD nonappropriated fund activities permission to use the Military Postal System to ship goods to other exchange locations for resale to author- ized exchange customers. However, DOD Directive 7060.3, International Balance of Payments Program--Nonappropriated Fund Activities, April 12, 1971, restricts these activities from trans-shipping foreign-made goods between nonappropriated fund activities in different market areas at appropriated- fund expense. The purpose of the restriction is to minimize LCD-79-213 (943459)

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