Oil Pricing Violations:

Department of Energy's Justification for Not Using a Computer Program

RCED-86-32: Published: Dec 24, 1985. Publicly Released: Jan 23, 1986.

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In response to a congressional request, GAO evaluated the validity of the Economic Regulatory Administration's (ERA) reasons for no longer using a contractor-developed computer program to identify customers overcharged by the major oil refiners.

ERA reasons for not using the program included that: (1) it was not possible to identify overcharged customers because its regulations were not precise; (2) the computer program could not identify individual customers because of a lack of adequate refiner sales data; (3) the computer program might not identify the parties harmed by the overcharges; and (4) the nature of its negotiated settlements with major refiners prevented it from using the transaction-specific detail the contractor-developed program provides. GAO found that: (1) the first reason, imprecise pricing regulations, was not justified; (2) ERA was unable to provide GAO with complete documentation to support its other reasons; and (3) there were significant differences of opinion on whether the computer program could accurately identify overcharged customers. Therefore, GAO was unable to determine whether ERA had adequate justification for discontinuing use of the program. However, GAO found that the cost of maintaining the contract was an important reason for its termination.

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