Summary

Pursuant to a congressional request, GAO examined Agency for International Development (AID) and U.S. Department of Agriculture (USDA) procedures for managing the shipping and freight-forwarding functions for the Public Law 480, Title II food donation program.

GAO found that the procedures followed by private-sector freight forwarders in behalf of private voluntary organizations (PVO's) and AID and those used by USDA for booking and forwarding ocean freight are similar and generally adequate to protect the interests of the Federal Government. Further, GAO tests of transactions and information obtained indicated that their performances are not sufficiently different enough to substantially favor one group over another in carrying out the freight-forwarding function. GAO found that private freight forwarders and USDA often obtain more favorable ocean freight rates than those determined by USDA guidelines and that both groups encourage a high level of competition among ocean carriers to obtain economical rates. The examination of claims, collections, and loss data on food shipped by USDA and the most active PVO's showed that they settled claims within similar timeframes and that there were no significant differences in cargo losses.