Improvements Needed in Pricing Overhaul and Repair Services Performed for Foreign Countries

Gao ID: AFMD-84-12 December 12, 1983

GAO reviewed the adequacy of billings by the military services to foreign countries for material, labor, and other costs incurred in overhauling and repairing foreign military equipment.

GAO found several instances in which the military had significantly underbilled foreign customers for services during fiscal year 1982, including: (1) not billing for all required costs of materials used in overhaul and repair work, an estimated $3.1 million undercharge; (2) the Air Force's underbilling of West Germany an estimated $456,000 for engine overhauls because one of its commands did not follow Department of Defense pricing policies; and (3) the Air Force's not billing foreign customers and estimated $1 million in civilian labor costs incurred in performing repair and overhaul work.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John F. Simonette Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-9486


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