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B-165731 1 (1976-10-15)

handle is hein.gao/gaobadvbd0001 and id is 1 raw text is: UITE sTAEsO GENERAL ACNTINU OFFJUZ rNM emorandum ofu %1T To Director, LCD C M MOM~ ?Gn lCounsel - PaulG.Dmln Aecoupsent of Transportation Costs Incurred by the United States Incident to Foreign Military Sales Allen Sumner, Assistant Director, LCD, requested our advice with regard to the recourent of transportation costs incurred by the United States incident to Foreign Military Sales (FMS). In the course of an audit, it was determined that substantial transportation costs are being entirely over looked and not recovered prior to the 'closing' of Foreign Military Sales cases by the Department of Defense (nOD) and Mr. Sumner asked wbether DOD may be directed to reopen *closed' cases and attempt to recover the deficiencies caused by the omissions up to and including actual costs. Moreover, it has been determined that the uniform standard DOD percentage rates applied t the billing price of the mate- rial shipped to recover the costs of the transportation service do not in all cases recover the actual identifiable costs of the transportation service provided. Accordingly, Mr. Sumner asked whether D) may reopen a case to recover actual identi- liable transportation costs not fully recouped by the use of the uniform standard DOD percentage rate. We believe that where the final cost of transportation services incident to a foreign military sale are not accurately reflected in billing because of inadvertent omissions, miscal- culetimi or otherwise, the contract, in providing for the recovery of actual costs, provides a sufficient basis to attempt to recover those costs which were clearly contemplated by both partie for inclusion in the contract, provided the attempt is made within a reasonable time. Also, where the final cost of transportation services incident to a Foreign Military Sale are undercharged due to the use of a standard uniform percentage

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