Vehicle Warranties:

Greater Efficiency for Government by Using Commercial Practices

PSAD-78-53: Published: Dec 15, 1977. Publicly Released: Dec 15, 1977.

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The government owns about 425,000 commercial cars and trucks and spends about $664.5 million to operate and maintain this fleet. The General Services Administration (GSA) is responsible for purchasing most of the commercial vehicles used by civil agencies. In March 1975, GAO reported that improvements were needed in the government's use of warranties and billback agreements.

GSA and the Tank-Automotive Materiel Readiness Command (TARCOM) have taken action on some recommendations contained in the 1975 report. TARCOM adopted a new standards warranty provision to be included in all its commercial vehicle contracts but failed to disseminate this information to user activities. As a result, none of the activities which were visited were aware of the full extent of the improved warranty coverage for commercial vehicles or the procedures to be followed when billback agreements could have been used. GSA has not included billback agreements in any contracts except those for Postal Service vehicles. GSA agreed to consider including billbacks in future contracts for commercial vehicles upon learning that two of the government's largest suppliers had stated that they would accept billback agreements. Additional savings are possible if the government simplifies warranty procedures so they more closely conform to commercial practices. One vehicle manufacturer developed a limited warranty registration card for use by government activities receiving new vehicles. A simplification of this procedure could provide a method for maintaining required information to vehicle users on a governmentwide basis.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of Defense and the Administrator of General Services should develop an effective communication system that will provide complete, accurate, and timely warranty information to user activities and publicize the advantages of billback agreements.

    Agency Affected:


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