Evaluation of Constituent's Rebuttal to GAO Report on DOD's Carrier Evaluation and Reporting System

LCD-78-216: Published: Aug 9, 1978. Publicly Released: Aug 9, 1978.

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Clarification was offered in response to a constituent's rebuttal to a GAO report on the Department of Defense's (DOD) Carrier Evaluation and Reporting System. The constituent's main concern was that GAO erred in stating that the financial information for determining whether or not rates are compensatory is not available at the Interstate Commerce Commission (ICC). Officials at the ICC Cost and Valuation Branch confirmed that there is no way at present to make such determinations. A formula is being established to accomplish this. Other concerns and arguments expressed by the constituent were that: (1) GAO had spent more time with the military than with him in studying the household goods industry; (2) agents, not carriers, should be rated; and (3) the GAO suggestion that economic conditions may have triggered rates to drop below a compensatory level was questionable. In response to each of these points, GAO had given the industry ample opportunity to offer its views; the DOD contractual relationship is with the carrier, not the agent; and factors other than economic were cited in the GAO report.

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