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B-168707 1 (1971-07-02)

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B-168707                                      July 2, 1971
                              LM089735/-'

Dear Mr. Howard:                                                         1

     This is in response to your inquiry of June 3, 1971, concerning
our draft report on chare for launch support services furnished by
the Air Force to the ommunications Satellite Corporation (Comsat).

     First, we expect to issue our final report before the end of
August.

     In response to your second question, Comsat has not reimbursed
the Air Force for the undercharged services. Our draft report position
was based on the application of the policy of recovery of full cost
to the Federal Government established by the User Charges Statute
,51 U.S.C. 483(a) and implementing regulations. This policy establishes
the general principle that the Government should be reimbursed for the
full cost of services furnished other than to the public-at-large.

     We are considering comments on the draft report submitted to us by
the Air Force for the Department of Defense, the National Aeronautics
and Space Administration, and Comsat. To the extent we deem appropriate,
our report to the Congress will include recognition of these comments.
We plan to cover in the report the matter of recovery of costs incurred
by the Air Force for prior launches and for the current series of
Intelsat IV launches.

     We will send you a copy of our report to the Congress as soon as
it is issued.

                                         Sincerely yours,



                              Assistant  Comptrollereneal
                                         of the United States


The Honorable James J. Howard
House of Representatives







                    50TH ANNIVERSARY 1921-19718


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