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NSIAD-85-21 1 (1984-10-24)

handle is hein.gao/gaobabnpf0001 and id is 1 raw text is: 7 ... I I o = ..... . UNITED STATES GENERAL ACCOUNTING OFFICE .... .. . ..... WASHINGTON.o D.C. 2054 ... . NATIONAL SECURITV AND INTERtNATIOA.L AP AIRS DVMSIO .. OCT 2 1984 B-199688 Mr. Richard A. Smith, Administrator Foreign Agricultural Service Department of Agriculture Dear Mr. Smith: Subject: Overpayment of Transportation Costs for Public Law 480 Commodities (GAO/NSIAD-85-21) During our current study of costs for transporting ,Public Law 480, Title I commodities, we identified an error by the Foreign Agricultural Service's (FAS) Ocean Transportation Division in computing the ocean freight differential (OFD) in- volved in a shipment of wheat to the Arab Republic of Egypt. As you know, FAS pays the OFD, which is essentially the difference between the transportation rates of U.S. flag vessels transport- ing the commodity and the rates of foreign flag vessels that would have been selected without cargo preference. Division representatives concur that they used a foreign flag bid in the computation that was non-responsive since the bid was received after the deadline. As a result of this error, FAS paid about $144,507 in excess OFD payments for the benefit of Egypt. We recommend that FAS seek to recoup these funds from Egypt. The details of this overpayment are discussed below. FAS issued purchase authorization EG-7055 in 1982 authoriz- ing Egypt to purchase $15 million worth of bulk wheat. After inviting and receiving commodity offers, Egypt awarded contracts to several wheat suppliers. Star Trading and Marine, Inc., Washington, D.C., the transportation agent for Egypt, arranged the ocean transportation. On June 9, 1982, Star issued a trans- portation tender for U.S. and foreign flag vessels to transport about 100,000 metric tons of bulk wheat to Egypt. After evalua- tion of the transportation offers, the U.S. flag vessel Point Vail was selected, and the Ocean Transportation Division ap- proved the selection. Star sent copies of the transportation offers to the Division for its records and for computing the OFD. The Division memorandum explaining the OFO calculation stated that, without cargo preference, Egypt would have selected the foreign flag vessel Argosy Pacific, which offered to trans- port 60,000 metric tons at $17 per ton. Yet, Star had received 126332 (4833701

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