DOD Procurement: Millions in Overpayments Returned by DOD Contractors
(Letter Report, 03/14/94, GAO/NSIAD-94-106).

During the six months ending in April 1993, the Defense Finance and
Accounting Service in Cleveland, Ohio, processed $751 million in checks
from defense contractors.  GAO researched checks totaling $392 million
and found that $305 million were returned contract overpayments.  Most
of these payments resulted because the Columbus Center either (1) paid
contractors' invoices without recovering progress payments or (2) made
duplicate payments.  Overpayments also occurred for a variety of other
reasons, including government contractual errors and contractor errors.
Virtually all the overpayments GAO examined were detected by the
contractors rather than by the government.  For $240 million of the $340
million in overpayments, government records were adequate to pinpoint
when the overpayments occurred.  GAO determined that these overpayments
remained outstanding an average of 108 days from the date of overpayment
to the date of refund, with about 40 percent of the overpayments
outstanding for more than 90 days.  Using a 6.5-percent interest rate,
GAO estimated the interest cost on the $240 million at $2.3 million.  In
some cases, contractors planned to return overpayments but were told to
hold the money until the contract could be reconciled and a demand
letter issued.  The Defense Department (DOD) is trying to bolster
internal controls designed to prevent overpayments and more rapidly
detect such payments when they occur.  DOD officials also said that DOD
is attempting to streamline complex regulatory policies and procedures
and that a high-level council has been established to oversee major
financial management changes.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-106
     TITLE:  DOD Procurement: Millions in Overpayments Returned by DOD 
             Contractors
      DATE:  03/14/94
   SUBJECT:  Internal controls
             Erroneous payments
             Overpayments
             Financial management
             Federal agency accounting systems
             Department of Defense contractors
             Defense procurement
             Military cost control
             Accounting procedures
             Refunds to government
IDENTIFIER:  DFAS Mechanization of Contract Administration Services 
             System
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Governmental Affairs, U.S. 
Senate

March 1994

DOD PROCUREMENT - MILLIONS IN
OVERPAYMENTS RETURNED BY DOD
CONTRACTORS

GAO/NSIAD-94-106

DOD Procurement


Abbreviations
=============================================================== ABBREV

  DCMC - Defense Contract Management Command
  DFAS - Defense Finance and Accounting Service
  DOD - Department of Defense
  MOCAS - Mechanization of Contract Administration Services

Letter
=============================================================== LETTER


B-256249

March 14, 1994

The Honorable John Glenn
Chairman, Committee on
 Governmental Affairs
United States Senate

Dear Mr.  Chairman: 

In July 1993, we testified before your Committee\1 that the Defense
Finance and Accounting Service (DFAS), Columbus, Ohio, had received
$751 million in payments from defense contractors during a recent
6-month period.  You subsequently requested that we review (1) the
nature of the contractors' payments, (2) the length of time
government funds were outstanding, (3) the Department of Defense's
(DOD) efforts to detect and recover contract overpayments, and (4)
the actions being taken by DOD to strengthen its contract payment
system.  As agreed, we are continuing to review DOD's policies and
procedures for detecting and recovering overpayments. 


--------------------
\1 Financial Management:  DOD Has Not Responded Effectively to
Serious, Long-standing Problems (GAO/T-AIMD-93-1, July 1, 1993). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

During a 6-month period ending April 8, 1993, DFAS processed $751
million in checks from defense contractors.  We researched checks
totaling $392 million (52 percent of the total dollar amount) and
found that $305 million were returned contract overpayments.  Most of
these overpayments resulted because DFAS Columbus Center either (1)
paid contractors' invoices without recovering progress payments or
(2) made duplicate payments.  Overpayments also occurred for a
variety of other reasons, including government contractual errors and
contractor errors. 

Virtually all the overpayments we examined were detected by the
contractors rather than the government.  DFAS' process for detecting
payment errors primarily relies on reconciliations, a process for
identifying needed corrections in a contract payment record after
errors or potential problems are identified.  When DFAS reconciles
contracts, it identifies millions of dollars in overpayments, but it
has not reconciled most contracts.  As of December 1993, the Columbus
Center had identified about 6,600 problem contracts that required
reconciliation. 

For $240 million of the $305 million in overpayments, government
records contained adequate data to determine when the overpayments
occurred.  Using this data, we determined that these overpayments
remained outstanding an average of 108 days from the date of
overpayment to the date of refund, with about 40 percent of the
overpayments outstanding over 90 days.  Using a 6.5-percent interest
rate, we calculated that the $240 million in overpayments resulted in
an interest cost of $2.3 million.  The DFAS Columbus collection
process did not ensure prompt return of overpayments identified and
reported by contractors.  In some cases, contractors planned to
return overpayments but were told to hold the monies until the
contract could be reconciled and a demand letter issued. 

After we testified about the $751 million in contractor payments
before your Committee, DOD attempted to determine the causes of
overpayments and to identify corrective actions.  DOD is currently
pursuing a number of ways to strengthen existing internal control
procedures designed to prevent overpayments and more rapidly detect
such payments when they occur.  Also, DOD officials said that a
number of initiatives are underway to reform and streamline complex
regulatory policies and procedures and that a high-level council has
been established to oversee major financial management changes. 
Because of DOD's on-going actions and our continuing review, we are
not making any recommendations at this time. 


   BACKGROUND
------------------------------------------------------------ Letter :2

In August 1988, the Defense Logistics Agency established a finance
center in Columbus, Ohio, to consolidate contract payments and other
functions previously performed at 20 agency sites.  In January 1991,
the agency's finance operations at Columbus became part of DFAS, a
consolidated DOD finance and accounting function under the DOD
Comptroller.  The Defense Logistics Agency continues to provide
contract administration services to DOD and other agencies through
five geographically dispersed Defense Contract Management Command
(DCMC) districts. 

A computer-based system, Mechanization of Contract Administration
Services (MOCAS), is used in the DFAS Columbus Center to manage and
pay contracts administered by DCMC.  The MOCAS system, in use since
1968, is designed to allow contract administrators and finance
personnel to monitor the status of funds, deliveries, and other
contract actions required through contract closeout.  As of September
30, 1993, MOCAS had about 373,000 active contracts with payments
totaling about $64 billion in fiscal year 1993. 

The MOCAS financial management subsystem provides the accounting data
used to control obligations and payments on contracts.  Data on
contract payment terms and prices are also entered into the MOCAS
system.  Fixed-price contracts with a value of $1 million or more and
a delivery period of 6 months or longer usually include provisions
for progress payments.  Progress payments permit the contractors to
receive payments for costs incurred and work performed prior to
delivery.  When the contractor delivers contract items, the
contractor submits an invoice to DFAS requesting payment for the
delivered items.  Progress payments received prior to items being
delivered are to be deducted from the invoiced amounts.  This process
of recovering progress payments upon delivery is called "liquidation"
or "recoupment" of progress payments. 

Contract payment terms and conditions depend upon such factors as the
type of contract awarded by the buying activity and contract
modifications, if any, issued after contract award.  Accurate and
timely contract payments are influenced by the activity awarding the
contract, the activity administering the contract, the payment
office, and the contractor. 


   MOST RETURNED CHECKS RESULTED
   FROM GOVERNMENT OVERPAYMENTS
------------------------------------------------------------ Letter :3

DFAS processed about 4,000 checks from contractors totaling $751
million for the 6-month period we examined.  The checks, written by
hundreds of contractors located throughout the country, ranged from a
few dollars to several million dollars.  Our analysis of the 190
largest checks received by three of the five DFAS payment
directorates disclosed that 136 checks valued at about $305 million
were returns of contract overpayments.  The remaining checks, with a
value of $87 million, included other collections such as refunds
because of contractor accounting adjustments and other contract
administrative actions not directly related to recovering erroneous
overpayments. 

The 136 checks accounted for 228 erroneous contract overpayments. 
Table 1 shows the distribution of these overpayments by type of
error. 



                           Table 1
           
           Distribution of Overpayments by Type of
                            Error

                    (Dollars in millions)

                                                    Percenta
                                Percentage             ge of
                     Number of    of total  Amount     total
                    overpaymen  overpaymen  return    amount
Type of error               ts          ts      ed  returned
------------------  ----------  ----------  ------  --------
Progress payments          115          50    $176        58
 not recovered
Duplicate payments          58          26      37        12
Other errors                55          24      92        30
============================================================
Total                      228         100    $305       100
------------------------------------------------------------

      PROGRESS PAYMENTS NOT
      RECOVERED
---------------------------------------------------------- Letter :3.1

We identified 115 overpayments that occurred because DFAS did not
recover progress payments as required.  The DFAS Columbus Center
analysis of refunds identified a number of employee errors in
processing progress payments.  Also, if the MOCAS system does not
contain correct contract terms and complete and accurate records of
progress payments, progress payments may not be correctly liquidated
against delivery invoices, and overpayments can occur. 

For example, in January 1993, DFAS paid $27 million to a contractor
for two delivery invoices.  Upon receipt, the contractor discovered
an overpayment of $19.2 million because DFAS did not reduce the
invoice amounts by the total amount of previous progress payments. 
The overpayment occurred, according to DFAS Columbus Center
officials, because of confusion over funding sources when an
appropriation account used to pay this contract was no longer
available.  This ultimately led to paying the invoices without fully
recovering progress payments.  The contractor returned both
overpayments in one check for $19.2 million.  Using a 6.5-percent
rate, the interest cost while these overpayments were outstanding 15
and 18 days was about $59,000. 

In another case, a contractor refunded over $24 million on one
contract that had been transferred to the Columbus Center for payment
in May 1992.  When the contractor submitted delivery invoices, DFAS
paid the invoiced amounts with no deductions for previous progress
payments because the records transferred to the Columbus Center
omitted the payment history.  In August 1992, DOD contract
administrators requested that DFAS reconcile the contract payments,
but were told that a reconciliation could not be completed because of
missing records and lack of resources.  In October 1992, the
contractor returned the overpayments in four separate checks, even
though a demand letter had not been issued by DFAS and the contract
had not been reconciled.  As of December 1993, this contract was
still scheduled for reconciliation.  Because of missing data, we
could not readily determine the total interest cost on these
overpayments, but at 6.5 percent, the interest cost on $24 million is
about $4,300 per day. 

In another instance, a contractor refunded about $4 million in
contract overpayments in March 1993, more than 3 months after
identifying the overpayment.  Shortly after receipt of the
overpayment in late November 1992, the contractor notified DFAS that
progress payments had not been recovered when the delivery invoice
was paid.  A DFAS official advised the contractor to hold the
overpayment until the Columbus Center could reconcile the contract. 
In late February 1993, about 3 months after the overpayment, DFAS
issued a demand letter to the contractor asking that the monies be
returned within 30 days.  A contractor official told us that after
the March refund, the contractor received a $5.9-million overpayment
on the same contract and advised DFAS about the overpayment in
September 1993.  DFAS did not issue a demand letter until November
1993, and the contractor refunded the overpayment later that month. 
The official believed the second overpayment resulted from progress
payment records not being corrected after the previous overpayment. 


      DUPLICATE PAYMENTS
---------------------------------------------------------- Letter :3.2

We identified 58 overpayments that occurred because DFAS paid an
invoice or progress payment request twice.  Furthermore, these
duplicate payments resulted from DFAS errors, not DCMC or contractor
actions.  Our examination and DFAS' analysis of duplicate payments
indicated that incomplete records or incorrect manual intervention
with system processing generally caused the duplicate payments.  A
payment processed within the system requires a match of all necessary
payment documents, such as invoices and receiving reports, with the
contract payment provisions before a payment is made.  Payments
processed outside the system should meet similar standards, if not,
payment errors can occur. 

For example, in March 1993, a contractor refunded about $521,000,
with most of the overpayment resulting from 14 duplicate invoice
payments on a contract.  For 12 invoices, duplicate payments occurred
when DFAS issued initial payments based on contractor invoices and
then erroneously issued second payments based on shipping documents
for each of the previously paid invoices.  For two invoices,
duplicate payments occurred when DFAS initially paid the invoices by
offsetting a prior government overpayment and later erroneously paid
the same invoices again.  The contractor notified DFAS about the
errors.  The interest cost on these overpayments, which were
outstanding from 57 to 233 days, is about $13,400. 

A finance official for the contractor told us that because of
frequent payment errors, the contractor had set up a special account
for government overpayments that once had a balance of about $1.9
million, but was about $290,000 at the end of December 1993. 
According to the contractor official, both DFAS and the government
contracting officer have been informed about the account.  The
official also said that the company had received only one demand
letter, for $110,000, pertaining to funds in this account since July
1990.  We were told that rather than refunding overpayments, the
company decided the most efficient way of handling overpayments was
to offset them against future billings.  In the past, the company
returned the overpayments with a written explanation, but the
explanations were sometimes lost at DFAS, which made the company have
to re-explain refunds.  Offsetting the overpayments eliminated the
refunds and overpayment explanations.  Contractor personnel told us
that they informally advised DFAS personnel about the overpayments
and offsets. 

In another case, DFAS made a progress payment in May 1992 of about
$700,000 to a contractor.  Six days later, DFAS issued a second check
for the same progress payment request.  DFAS Columbus Center
officials believe this duplicate payment occurred because the voucher
examiner did not adequately research the records prior to the second
payment.  The contractor notified a government contracting officer of
the duplicate payment about 4 months after the second payment was
issued and offered to return the overpayment.  Because DFAS could not
document that an overpayment had been made, the government
contracting officer asked the contractor to document the duplicate
payment.  After reviewing the documentation, DFAS issued a demand
letter for a refund in October 1992, and the contractor returned the
overpayment.  Interest cost while this overpayment was outstanding
for 170 days is about $21,000. 


      OTHER OVERPAYMENT ERRORS
---------------------------------------------------------- Letter :3.3

The 55 payment errors we classified as "other" included 30 errors
considered atypical because they stemmed from a variety of
circumstances.  For example, a contractor was overpaid $9,999,999.99
because a DFAS Columbus Center employee made a data input error that
was not detected.  Another contractor was overpaid about $1 million
because a center employee paid from the first page of the
contractor's progress payment request rather than the second page,
which contained the contracting officer's reduction to the
contractor's requested amount. 

The remaining 25 errors in this group occurred because of government
contractual or contractor errors.  Overpayments can occur from errors
during contract award or contract administration throughout the life
of a contract.  Overpayments also can occur if the contractor does
not follow correct procedures when submitting invoices and progress
payment requests. 

For example, five overpayments resulted because contract
modifications changed prices already paid under prior contract terms. 
When a contract modification affects contract prices or progress
payment provisions, the modified terms and conditions must be entered
in MOCAS before payments can be made in accordance with the new
provisions.  In total, we examined $8.4 million in overpayments that
were primarily attributable to contract modifications affecting
payments already made by DFAS. 

In one case, a delayed modification resulted in a contractor
returning $552,000 in March 1993 as the net overpayment due the
government.  In a November 1989 letter, the government contracting
officer had directed the contractor to eliminate certain packaging
requirements.  The contractor eliminated the requirement, but
continued to be paid at prices that included the packaging services
because the contract price was not modified.  According to a
contractor employee, the company was instructed to bill at the
original contract price because the contract modification had not
been finalized.  The contract modification was not finalized until
May 1992.  At that time, the contractor had been overpaid about
$922,000.  The contract modification also included other price
adjustments resulting in the $552,000 net overpayment.  Although the
modification was entered into MOCAS in May 1992, a demand letter for
a refund was not issued until February 1993, about 9 months later. 
When the contractor apparently did not receive the first demand, a
second demand letter was issued and the refund check was issued in
March 1993. 

In another instance, a contractor refunded about $1 million in
December 1992.  The refund resulted from a September 1992 contract
modification that established final prices for items ordered based on
estimated prices
2-1/2 years earlier.  In total, the modification reduced the
estimated prices by $1.6 million and the contracting officer issued a
demand letter in November 1992 for that amount.  The contractor
disagreed with the amount and refunded about $1 million.  The
contracting officer accepted the amount as a refund of the
overpayment. 

The overpayments we examined also included 11 instances totaling $9.9
million that were primarily attributable to contractors submitting
incorrect payment requests.  For example, a contractor submitted four
requests for excess progress payments totaling $5.8 million in
December 1992.  We were told that the errors occurred when the
contractor submitted requests that incorrectly doubled part of the
contractor's costs.  The contractor's internal controls detected the
erroneous amounts.  The overpayments were outstanding from 1 to
29 days. 


   DETECTING AND COLLECTING
   OVERPAYMENTS
------------------------------------------------------------ Letter :4

Contractors detected and advised the government about 219 of the 228
overpayments we examined.  In most cases, contractors refunded the
overpayments without the government issuing a demand letter.  When
demand letters were issued, the contractors, in accordance with
current policy, were allowed 30 days to make the refund without
incurring interest charges. 


      CONTRACTORS DETECTED
      OVERPAYMENTS
---------------------------------------------------------- Letter :4.1

Contractors detected most of the overpayments that we analyzed.  The
overpayments remained outstanding for an average of about 108 days
after the payment.  About 40 percent of the overpayments were
outstanding more than 90 days.  The government's primary method of
identifying and correcting contract payment errors is by auditing or
reconciling contracts with known or suspected problems.  DFAS's
Director of Contractor Entitlement told us that the Columbus Center
does not systematically reconcile contracts.  As of December 1993,
the Center had 6,603 problem contracts that required reconciliation. 

Past reconciliations have identified millions of dollars in
overpayments.  The Director of Contractor Entitlement at Columbus
said that reconciliations are typically performed on an ad hoc basis,
typically doing the oldest ones first.  In fiscal year 1993, the
Columbus Center had about 130 personnel assigned to contract
reconciliations, and it had reconciled 6,619 contracts.  DFAS did not
tabulate the dollar amount of contract adjustments that resulted from
its effort. 

In addition to its own reconciliations, a public accounting firm was
engaged by DFAS to reconcile selected problem contracts.  Monthly
reports of the firm's activities from October 1990 through November
1993 show the following: 

  About 4,300 contracts at the Center had been reconciled by the
     firm. 

  About $38 billion in accounting adjustments were needed to correct
     payments that had been made from the wrong accounts. 

  About $208 million had been identified by the firm as being owed to
     the government and an additional $52 million in possible debts
     were being reviewed. 

  About $61 million had been identified as being owed by the
     government to contractors. 

  Demand letters had been issued to contractors for $175 million
     based on the firm's reconciliations, with about $73 million
     collected. 

  About $17 million might not be collectable for one or more reasons,
     including $8 million from contractors involved in bankruptcy. 


      DEMAND LETTERS PROVIDE
      INTEREST-FREE GRACE PERIOD
---------------------------------------------------------- Letter :4.2

Demand letters were issued to recover contract overpayments on 22 of
the checks we reviewed.  The demand letters we examined provided the
contractors a 30-day grace period to return a contract overpayment
before being assessed interest charges.  This 30-day period was
provided regardless of how long the overpayment has been outstanding
or the contractor's willingness to return the monies.  Contractors,
if they request it in writing, are given the option of an offset
action in lieu of mailing a check.  Contractors were not encouraged
to immediately refund overpayments or to accept immediate offsets
against subsequent payments. 

In accordance with terms of the demand letter, DFAS did not assess
interest charges if refunds or offsets were made within the 30-day
period.  Also, in several cases we reviewed, DFAS instructed
contractors to retain overpayments until the contract was reconciled
and the amount of overpayments confirmed, which can take months.  For
example, a contractor who had returned overpayments during our
6-month examination period received another overpayment of $15.7
million in June 1993 because DFAS had not appropriately deducted
prior progress payments in paying production invoices.  Although the
contractor planned to repay the overpayment immediately, DFAS
instructed the contractor to withhold payment pending completion of a
contract reconciliation.  The government contracting officer at the
plant, recognizing the significant interest cost to the government of
such a large overpayment, issued a demand letter in July 1993 and the
contractor mailed a refund to DFAS
6 days after the demand letter was issued. 


   ACTIONS TO REDUCE OVERPAYMENTS
   AND IMPROVE COLLECTIONS
------------------------------------------------------------ Letter :5

DOD officials attribute some of the payment problems discussed in
this report to the accelerated consolidation of contract payment
functions at the DFAS Columbus Center.  During 1992, the planned
consolidation was accelerated because the quality of payment efforts
at closing sites deteriorated to an unacceptable level as experienced
employees resigned.  Officials said that the accelerated transfer of
contract payments to the Columbus Center overloaded the Center's
computer system and created an environment where normal controls were
not available.  They also said that the available staff were
relatively new and lacked experience in some of the more complex and
specialized contract payments being transferred. 

DFAS Columbus Center officials have analyzed the causes for the
payment errors discussed and have initiated a number of actions to
correct persistent errors.  These actions include the following: 

  stricter adherence to operating procedures that previously had not
     been followed in order to facilitate payments and changes to
     other procedures;

  improved maintenance of the progress payment master files;

  increased management and supervisor attention to errors and their
     causes, including training on how to address specific payment
     problems; and

  computer system changes such as rejecting large dollar payments if
     progress payments are not liquidated. 

DFAS Columbus Center officials acknowledged that delaying the return
of erroneous overpayments is costly and have taken action to
encourage quicker return of overpayments.  A November 5, 1993, letter
instructs personnel to have contractors immediately refund
overpayments when contractors advise them that an overpayment has
occurred. 

DOD officials said that a number of other actions are being taken to
clarify and strengthen payment practices, reinforce prompt debt
collection procedures, and issue clearly stated and complete contract
documents to deal with contractor overpayments.  For example, DCMC
has issued policy letters to field activities highlighting payment
issues and developed a handbook outlining key contract administration
functions influencing the payment process.  DOD officials expect
these efforts to contribute to improved payment practices. 

DOD officials said that DOD is committed to developing solutions to
major financial management problems and that a Senior Financial
Management Oversight Council was established in July 1993 to provide
sustained high-level attention across functional areas.  Officials
said that a broad range of initiatives are underway to reform the
acquisition system and streamline complex regulatory policies and
procedures.  Changes being considered include projects to redesign
the progress payment process; improve the quality of contract
preparation; revise a number of contract, payment, and debt
collection regulations; and increase the use of electronic data
interchange for delivery, acceptance, payment, and review. 

The actions being taken by DOD have recently been implemented or
require additional review before being implemented.  As we continue
our review of DOD's detection and recovery of overpayments, we will
further analyze these actions and their potential effects. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :6

In order to examine checks representing about half of the funds
returned to DFAS, we examined checks that exceeded $500,000 in two of
five DFAS directorates and $200,000 from a third directorate.  We
researched 190 checks totaling $392 million, or about 52 percent of
the $751 million returned during the 6-month period ending April 8,
1993.\2 In researching each of the 190 checks, we obtained data from

  DFAS, including payment documents and their analysis of the reasons
     for the contractor payment and

  administrative contracting officers, the responsible DCMC regional
     offices, and selected contractors. 

In addition, we reviewed laws and regulations pertaining to the
administration and management of contracts and contract payments,
including those related to collection of contractor debts.  We also
interviewed Defense Logistics Agency, DCMC, and DFAS officials about
the reasons for the overpayments, and we discussed actions taken or
planned to preclude future overpayments. 

As agreed with your office, we did not obtain formal DOD comments on
a draft of this report; however, we discussed the results of our
review with officials from the DOD Comptroller Office, DCMC, and
DFAS.  We considered their comments in preparing this report.  In
general, they concurred with our report. 

We conducted our review between March 1993 and January 1994 in
accordance with generally accepted government auditing standards. 


--------------------
\2 The period we examined included a $252-million refund check that
we excluded because its large amount and unusual nature would have
distorted our results.  The refund concluded an unusual transaction
that involved the transfer of work and funds between two contracts. 
DFAS officials requested the return of all progress payments on the
first contract ($252 million) and paid an amount equal to the
progress payments earned on the materials transferred to the second
contract ($250 million).  The contractor received the $250 million in
September 1992 and returned the $252 million in October 1992.  The
DOD Inspector General and others have examined this transaction. 


---------------------------------------------------------- Letter :6.1

Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days from its issue date.  At
that time, we will send copies to the Secretary of Defense; the
Director, Office of Management and Budget; and other interested
congressional committees.  Copies will also be made available to
others upon request. 

Please contact me at (202) 512-4587 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix I. 

Sincerely yours,




David E.  Cooper
Director, Acquisition Policy, Technology,
 and Competitiveness Issues


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
--------------------------------------------------------- Appendix I:1

David Childress, Assistant Director
Charles W.  Thompson, Assistant Director


   DALLAS REGIONAL OFFICE
--------------------------------------------------------- Appendix I:2

Joe D.  Quicksall, Issue Area Manager
Seth D.  Taylor, Evaluator-in-Charge
James L.  Rose, Evaluator
David W.  Frost, Evaluator


   ATLANTA REGIONAL OFFICE
--------------------------------------------------------- Appendix I:3

George C.  Burdette, Regional Assignment Manager
Arthur W.  Sager, Evaluator


   BOSTON REGIONAL OFFICE
--------------------------------------------------------- Appendix I:4

Paul M.  Greeley, Regional Assignment Manager
Joanne Barter, Information Processing Specialist
