Defense Action to Reduce Charges for Foreign Military Training Will Result in Loss of Millions of Dollars

FGMSD-77-17: Published: Feb 23, 1977. Publicly Released: Feb 23, 1977.

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Questions were raised about the Department of Defense's (DOD) action to reduce tuition rates for training foreign military students. The reduction of training charges for foreign military students will cost the United States over $40 million in fiscal year 1977.

Different pricing systems were established by each of the military services concerning the extent to which the costs of training foreign military students should be recovered. If the decision to reduce rates is rescinded, DOD pricing systems are not necessarily adequate to recover the full cost of providing training. Defense military personnel appropriations will finance $13 million of the $40.4 million in reduced training charges; operations and maintenance appropriations will finance $8.4 million; and the remaining $19 million will, in effect, be financed by miscellaneous receipts of the Treasury. The decision to reduce foreign training charges was made by former Deputy Secretary of Defense William P. Clements because the sudden and substantial increase in tuition prices had a drastic impact on foreign countries.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The November 1975 revision to the pricing guidelines should be rescinded. The guidelines should be changed to require the military services to: (1) allocate base operations costs on the basis of missions; (2) include the cost of school overhead personnel; and (3) use factors which will result in the full recovery of civilian and military retirement costs and the cost of civilian health benefits and life insurance.

    Agency Affected:

 

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