B-210897, MAY 20, 1983

B-210897: May 20, 1983

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WE BELIEVE THAT THE DEPARTMENT OF DEFENSE SHOULD CONSIDER DISCONTINUING ITS POLICY OF ISSUING DUTY-FREE ENTRY CERTIFICATES SINCE THEIR ISSUANCE PROBABLY IS NOT COST EFFECTIVE FROM A TOTAL-COST-TO-THE GOVERNMENT STANDPOINT. WE HAVE RECOMMENDED A SIMILAR TOTAL-COST-TO-THE-GOVERNMENT APPROACH IN EVALUATING THE NAVY'S LONG-TERM LEASING ARRANGEMENTS. WE HAVE NO FURTHER COMMENTS.

B-210897, MAY 20, 1983

PRECIS-UNAVAILABLE

MR. JAMES T. BRANNAN, DIRECTOR DEFENSE ACQUISITION REGULATORY COUNCIL OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR RESEARCH AND ENGINEERING:

BY LETTER DATED FEBRUARY 21, 1983, YOU REQUESTED OUR COMMENTS ON PROPOSED REVISIONS TO THE DEFENSE ACQUISITION REGULATION, MOST NOTABLY TO SECTION 6 -600, CONCERNING THE ISSUANCE OF DUTY-FREE ENTRY CERTIFICATES. WE SUBMIT THE FOLLOWING COMMENT.

WE BELIEVE THAT THE DEPARTMENT OF DEFENSE SHOULD CONSIDER DISCONTINUING ITS POLICY OF ISSUING DUTY-FREE ENTRY CERTIFICATES SINCE THEIR ISSUANCE PROBABLY IS NOT COST EFFECTIVE FROM A TOTAL-COST-TO-THE GOVERNMENT STANDPOINT. IT APPEARS THAT FOR EACH DOLLAR OF DUTY THAT THE MILITARY AVOIDS IT DOES SO AT THE EXPENSE OF THE TREASURY. FURTHER, THE MILITARY MUST ALSO INCUR CERTIFICATE PROCESSING AND OTHER ADMINISTRATIVE COSTS.

WE HAVE RECOMMENDED A SIMILAR TOTAL-COST-TO-THE-GOVERNMENT APPROACH IN EVALUATING THE NAVY'S LONG-TERM LEASING ARRANGEMENTS, THROUGH RECENT TESTIMONY BY THIS OFFICE'S DEPUTY DIRECTOR OF THE PROCUREMENT, LOGISTICS AND READINESS DIVISION BEFORE THE HOUSE SUBCOMMITTEE ON OVERSIGHT, COMMITTEE ON WAYS AND MEANS, AND IN AN EARLIER REPORT, "BUILD AND CHARTER PROGRAM FOR NINE TANKER SHIPS," B-174839, AUGUST 15, 1973.

WE HAVE NO FURTHER COMMENTS.

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