About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

GAO-16-78R 1 (2015-11-19)

handle is hein.gao/gaobaajli0001 and id is 1 raw text is: GAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 November 19, 2015 The Honorable Ashton Carter The Secretary of Defense Bulk Fuel Pricing: DOD Needs to Take Additional Actions to Establish a More Reliable Methodology Dear Secretary Carter: Each fiscal year, the Office of the Under Secretary of Defense (Comptroller), in coordination with the Defense Logistics Agency, sets a standard price per barrel that the Department of Defense (DOD) will charge for fuel, which the military services and other fuel customers use in developing their annual budget requests. In setting this standard price, DOD endeavors to closely approximate the actual price it will pay for the fuel during the year of budget execution. However, due to the timing of DOD's budget process, the department establishes the standard price almost a year in advance of when it begins to actually purchase the fuel at the current market rate.1 Historically, DOD has used economic assumptions data provided by the Office of Management and Budget (OMB) to establish the standard price. In July 2015, we notified you that, in response to a provision in the Senate committee report accompanying its version of the National Defense Authorization Act for Fiscal Year 2016, we would be reviewing DOD's and the military services' approaches to estimating fuel consumption and related costs in annual budget requests.2 Based on information we collected as part of that ongoing review, we understand that the department is currently considering methodologies for setting the standard fuel price for fiscal year 2017. Because an official with the Office of the Under Secretary of Defense (Comptroller) who oversees DOD's bulk fuel program told us that the department expects to finalize its methodology and determine the standard price by December 2015 for inclusion in the department's fiscal year 2017 budget request, we are sending this report to share timely observations based on our ongoing review, specifically regarding the extent to which DOD adjusted its methodology for determining the standard price used in developing the fiscal year 2016 budget request. Meanwhile, we are continuing our review of DOD's fuel consumption estimates and will include the issues raised in this report and any actions you take to resolve them, along with any additional findings, in our final report that we expect to complete in early 2016. To evaluate the extent to which DOD adjusted its methodology for determining the standard price used in developing the fiscal year 2016 budget request, we reviewed documentation on DOD's analysis of various methodologies it examined, as well as its justification for the one it 'DOD has the option of raising or lowering the standard price during the budget year of execution to account for actual prices for fuel on the world market. According to DOD officials, this is not their preferred approach. 2S. Rep. No. 114-176, at 116-49 (2015), which accompanied S. 1376, a proposed bill for the National Defense Authorization Act for Fiscal Year 2016. GAO-16-78R Bulk Fuel Pricing Page 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most