Review of Pricing of Silver Sold under the Foreign Military Sales Program.

摘要

This report focuses on Defense's pricing practices for Government-furnished silver used in manufacturing batteries. Specifically, the report discusses Defense's failure to charge enough to cover the full cost of the silver used in the batteries that are sold to foreign customers. In order to comply with the provisions of the Arms Export Control Act of 1976 and implementing Defense directives, the military services must begin to charge the market value for Government-owned silver included in items sold to foreign governments. We recommend that the Secretary of Defense--establish policies and procedures to identify items with Government-furnished silver sold to foreign countries, --require that the market value of silver be used in pricing such items, and --direct responsible organizations to make a reasonable effort to recover undercharges on foreign sales resulting from nonrecovery of the replacement cost or market value of silver. We also recommend that the Secretary of Defense seek authority from the Congress and the Office of Management and Budget to exempt foreign military sales administrative positions from personnel ceilings. In seeking the exemption the Secretary should provide data on validated administrative staffing needs, the cost of which would be reimbursed by foreign governments.