oversight

Investigation of Army Purchasing Procedures for Food for Personnel in Europe

Published by the Government Accountability Office on 1971-09-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                                   COMPTROLLER     GENERAL     OF      THE    UNI
                                                 WASHINGTON.    D.C.     20548




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    ..,        Dear Senator   Holdings:
          \L
                       This is in response to your letter        dated July 19, 1971, requesting
               a full-investigation        of Army purchasing.procedures     for food forperson-                     /
     ,         nel in Europe.1 You reques'G%'?a-T$%.5fic           report on a shipment of peaches
               f%%-South       Carolina to Europe, as well as some assurance that the Army's                             7 2.4
               buying practices        for food are in order.,

                       As you know, the shipment of peaches was a joint promotional          venture
               of the South Carolina Department of Agriculture           and the South Carolina
               Peach Council.       The objective    of this effort   was to expand t.hemark,et
               of the South Carolina pes.$h_Jndustry         by shipping peaches to a private
               importer    in Europe who would sell to the U. S. Army those peaches that
               met its specifications.         !ihe peaches that did not meet the Army's speci-
               fications     were to be sold through commercial channels by the import
               agent.     Although a contract      was not entered into, the promotional     plan
               was well received by Department of Defense officials            prior to the
               shipment of peaches.

                       The shipment originated     on June 24, 1971, at a packing plant in
     1         Sumter, South Carolina.        An inspector  of the U. S. Department of Agri-                         !&,
    Y          culture    (USDA) graded the shipment of 877 3/4 bushel boxes of Coronet                               2_
               variety    peaches as being within     the U. S. Standards established     for
               grade U. S. Extra # 1. The certificate         issued indicated    that the size
               range was "generally      ? to 3 inches, mostly 2 to 2$- inches" and that the
               peaches were "mostly hard, some firm" possessing          80 percent fancy color.

                      The peaches were loaded in a refrigerated        shipping container      and a
               representative       of the South Carolina Department of Agriculture        accom-
               panied the container       to The Netherlands   to monitor the temperature
               controls     and to record the temperature     several times daily.       The sealed
               container     was cooled to a fairly     even and constant temperature      through-
               out.     The refrigeration    unit of the shipping container     was in constant
               operation     during the entire    trip and maintained    the temperature     at the
               desired settings.

                     Upon arrival   at the cold storage facilities   of the importer    in
               Zaltbommel,   The Netherlands,    on July 7, 1971, a preaward survey was
               made by a purchasing     agent for the U, S. Army, Europe.    His report
               recommended that the peaches not be purchased because they were 100
               percent immature, hard, green to light      green in color with sizes ranging
               from 1 3/4 to 3 inches.




                                          50TH ANNIVERSARY                   1921- 1971                  r
L




          On the same day, representatives of the Agricultural   Research
    Service, USDA, Rotterdam, were on hand to evaluate the arrival condi-
    tion and reported that there was very little   damage to the crates or
    peaches, less than 1 percent decay, and that the fruit would require
    2-3 days at 70 degrees before being edible.    A USDArepresentative
    took 3 boxes of the peaches, one each from the front, middle, and back
    of the container, to the USDAlaboratories    at Rotterdam for a ripen-
    ing analysis.
          On July 8, the day after arrival,   the Army made a second survey--
    this time by a member of the Fresh Fruit and Vegetable Inspection
    Section.   The purpose of this survey was "'To see if the whole lot is
    fit to be considered for purchase."     The inspector reported that the
    peaches did not meet the following U. S. Army, Europe, specifications.
                                                     Required by
                            Found                    Specifications
         Size               2-3 inches               2s inches minimum
         Color              light green turning      turning   yellow/yellow
                               yellow
         Fimness            hard                     hard only allowed on
                                                       yellow peaches
         The inspector told us while he had seen very little     decay during
    his survey he wasn't really looking for defects of this     kind since the
    shipment had already failed to meet specificationsP
           After this second survey, the importer resized the entire shipment
    to meet Army specifications    of a 2s inch minimum, On July 12, 1971, a
    representative    of the Army Purchasing Department made a third preaward
    survey and reported that the %+E Fruit was fairly well colored, with
    excellent blush.     Peaches had no indication  of sweetness and very
    little    peach aroma." Based on a sample size of 100 peaches, the in-
    spector reported the following quality and condition defects:
                            Defect       Percent
                            Decay
                            Bruises
                            Worm-holes      3
                            Immature       19
                            Undersize      50




                                                                           -2-
      Meanwhile, at the USDAlaboratory in Rotterdam, the 3 boxes of
peaches were maintained at a temperature of 45' for 2 days, then
half of the peaches were held at a temperature of 70' for 3 days and
the other half was held at 60° for 4 days. The USDArepresentative
reported that the fruit showed good ripening characteristics  and
eating quality and were very comparable with Italian fruit seen on
the local market. However, bruising and decay increased as shown in
the following statistics  recorded by the USDAlaboratory.,
           397 peaches at    191 Peaches at       191 Peaches at
           450 -    2days    6o" -    4 days      700 -    3 days
           Number Percent    Number Percent       Number Percent
Bruising     2       -5          5       2.6        13       6,8

Decay       10     2.5         31       16,2        32      16.7


      The USDAlaboratory report indicated that most of the decay was
on fruit that had been mechanically injured,     It was not possible to
locate the cause of the mechanical injuries   since it could have happened
at any point from the picking process to the point of delivery.      The
report also stated that most of the bruising recorded was slight in
nature and would not detract from salability.
      We discussed this matter with the Regulatory Branch, Fruits and
Vegetables Division, USDA, which has as one of its main functions, the
settlement of disputes between contractual parties in the commercial
wholesale business of perishable fruits and vegetables.     A representa-
tive of this Branch stated that if the case was presented to him, he
would have to say that the Army had no basis for rejecting those peaches
which met its buying requirements of 24 inches because (1) the certif-
icate by the USDAinspector at the shipping point indicated that the
fruit was mature and of good quality and (2) although the 3 boxes may
not be representative   of the entire shiment the laboratory analysis
supported the conclusion in the USRA8sinitial    report that the shipment
arrived in good condition.
      It was the consensus of the USDArepresentatives  that the basic
reason for the Army's rejection probably was the hard condition of the
peaches upon arrival.   The hard to firm condition was stated by them to
be normal for Shipping perishable fruit and it did not harm the ripening
process at the market end as long as the fruit is mature. We were told
that the fruit in this shipment had to be picked hard in contrast to
fruit shipped by European growers whose travel times and distances are
much shorter.

                                                                   -3-
      The United States Standards For Peaches established by the USDA
defines maturity as meaning "that the peach has reached the stage of
growth which will insure a proper completion of the ripening process,"
Immaturity is scored as a grade defect in the inspection process;
however, the USDAinspector at the packing plant in South Carolina
did not indicate any defect for innnaturity in his sample of 600 peaches.
      We contacted an experienced buyer of fresh fruits and vegetables
of the Defense Supply Agency and asked him if he would consider buying
peaches of the Coronet variety if they were "light green and turning
yellow" in color.   He advised us that, based on his experience, he
would buy Coronet peaches of such color and that they would be perfect
for anybody's use. He further stated that he would not buy yellow or
ripe Coronet peaches because they would be overripe by the time they
reached the ultimate consumer, whereas, by buying green peaches they
would ripen in transit and on the ccmtmissary store shelves.
       In its third preaward survey, the Army expressed concern about the
worms and worm damage found in the peaches. USDArepresentatives
indicated that a special effort was made by the Rotterdam laboratory to
locate worms, worm holes or worm damage in the peaches after the lab-
oratory was notified by the Army that a 3 percent defect for worm holes
had been noted. The laboratory reported that each peach of the 3 boxes
was examined and that there was no indication    of worms, damage or holes
in the 397 peaches. Also, the USDAinspector at the packing plant in
South Carolina detected no worm damaged peaches in the sample he exam-
ined. Consequently, representatives     of the USDAquestion whether the
Army, in its inspection, noted actual worm damage.
     On July 23, 1971, after spending more than two weeks in trying to
get the Army to buy the peaches, the importer sold on the local market
the peaches that were still  in salable condition, At that time about
half of the original shipment of the peaches had to be destroyed be-
cause of their deteriorated  condition,
      We were not present at any of the inspections nor did we see the
shipment upon arrival in Europe. It appears, however, from examining
available records and discussions with individuals    who are experienced
in the field of perishable fruits and vegetables, that good quality
fruit was received by the importer in Rurope. As a result> it seems
that a portion of the shipment met Army specifications    and should have
been accepted for use by the military,
      This situation points up inconsistencies   in standards for inspect-
ing food products by representatives    of the Departments of Defense and
Agriculture.    In this regard, last year we completed a review of the
inspection activities   of these and several other agencies and issued a
report to the Congress entitled,    "Need to Reassess Food Inspection
Roles of Federal Organizations"    (B-168966, June 309 lg70)o We are
         enclosing a copy of this report which identifies  a naber of prob-
         lems that have arisen and points out the need for maximtamstand-
         ardization in requirements, procedures, and concepts to enable
         inspections to be made more effectively and econotically~

   Q            21 our report WE recommended that the Office of Management and   27
   ../   Rudget (OMB) make a detailed evaluat-ion of the food inspection
         function to determine the most effective method of improving the
         administration    of this function.  OMl3started to follow-up on our
         recommendation but work was suspended pending implementation of the
         President's Departmental Reorganization Plan. This pPan protides
         for consolidating    some of the food inspection functions,
              We have a review under way of the Army's procedures for purchas-
         ing food in Europe and will furnish you a copy of the report upon
         completion.
               If we can be of further assistance, please let us know, We are
/- *-;   sending a similar report to Senator Strom !!!hurmond.@
 ---
                                                Sincerely   yours,



                                                Comptroiler-Geheral
                                                of the United States
         Rnclosure

         The Honorable Ernest 3'. Rollings
         United States Senate