RECEIVING DISCREPANCY POLICIES AND PROCEDURES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-05054A000100100046-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: July 14, 2000
• Sequence Number: 46
• Publication Date: September 12, 1975
• Content Type: REGULATION

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C-O-N-F-I-D-E-N-T-I-A-L
INSTRUCTION NO. LI 45-6
LI 45-6
LOGISTICS
Revised 12 September 1975
SUBJECT: Receiving Discrepancy Policies and Procedures
a. This instruction establishes the Office of Logistics (OL) concept of
consequential and inconsequential discrepancies arising from over-
ages, shortages, damages, technical rejections, unacceptable substi-
tutions, losses in transit, and the disclosure of latent defects in
connection with material received from commercial and U.S. Government
sources. It prescribes the procedures and responsibilities relative
to reporting and resolving such discrepancies.
b. Discrepancy standards set forth herein are established to provide
mechanisms which will allow for:
(1) The acceptance of overages;
(2) The cancellation of any portion of a requisition left open due
to a minor receiving discrepancy;
(3) The reordering of short, erroneous, or damaged materiel when
required; and
(4) Compliance with the requirements of Office of Finance (OF)
Headquarters Handbook subparagraphs 30 d and e.
2. SCOPE
a. This instruction applies to all OL-designated receiving points (e.g.
), Printing and Photography 25X1A
ivlsion, OL, Logistics Services Division, OL, National Photographic
Interpretation Center, Office of Elint, etc.), hereinafter identified
as "receiving activities", where materiel is received as the result
of procurement actions initiated by OL.
C-O-N-F-I-D-E-N-T-I-A-L
E2 IMPDET
CL BY 032277
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
b. This instruction applies only to materiel discrepancies and does not
concern itself with billing discrepancies.
3. POLICY
Policies with respect to materiel discrepancies from commercial and U.S.
Government sources differ significantly in several respects:
a. Policy Regarding Commercial Procurements (including those made
through the General Services .Administration (GSA).
(1) All discrepancies resulting from orders placed on commercial
sources of supply shall be considered consequential. However,
in the interest of economy and to facilitate prompt and correct
payment, the term "Acceptable Discrepancy" shall be noted on
Receiving Reports (R/R's) when:
(a) An overshipment is valued at less than $50 per line item
and is received before the final shipment (or delivery)
to the consignee;
(b) The requisitioning office (hereinafter referred to as the
RO) accepts an overage valued in excess of $50 per line
item, or one of less than $50 arriving after final ship-
ment received;
(c) The RO approves the cancellation of any portion of a req-
uisition where there is a shortage in the delivery of
materiel ordered; or
(d) The RO accepts materiel substituted by the vendor for
items originally ordered.
(2) When discrepancies occur, vendors will be paid for materiel
actually received and accepted, whether an overage or shortage.
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(3) Discrepancies attributable to a vendor will be resolved at the
expense of the vendor and at the convenience of the Government.
Unacceptable materiel returned at the request of the vendor will
be at his expense; however, parcel post charges may be borne by
the Government if return via this channel is to Government ad-
vantage. Discrepancies caused by misunderstandings between a
vendor and the Government must be negotiated by the procurement
activity. Return shipping costs or other costs might, in this
case, be borne by the Government.
(4) Amended purchase instruments shall be provided to OF when ac-
ceptable discrepancies are not covered within the terms of the
original purchase instrument, except that amended purchase
instruments will not be provided when an acceptable overage is
$50 or less per line item.
b. Policy Regarding Procurement from U.S. Government Sources.
(1) Discrepancies arising in connection with the initial receipt
of materiel pursuant to orders placed with other U.S. Govern-
ment agencies shall be considered inconsequential if the line
item dollar value is less than $50 and consequential if more
than $50 for overages and erroneous materiel, or $100 per line
item for materiel technically rejected, short, damaged, defec-
tive, or lost in transit. Discrepancies involving shortages
etc.), will be considered consequential regardless of value.
(2)
Inconsequential discrepancies will be accepted, and no
action
will be taken
to
obtain adjustments from suppliers or
carriers.
Billings will
be
paid in full by OF, whether items not
received
are included
in
the billing or not. If the RO desires
missing,
defective, or erroneous items to be replaced, Supply Division
(SD), OL, will submit a new requisition for the required mate-
riel, citing the Materiel Procurement Account (MPA) used for
the original requisition, and the RO's Property Requisitioning
Authority (PRA). (Note that, since items not received or items
rejected are not costed to the RO's PRA, the use of his PRA for
reordering does not constitute a double payment. Any loss is
borne by OL's MPA.)
C-O-N-F-I-D-E-N-T-I-A-L
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(3) Although no attempt will be made to obtain adjustments from
suppliers for inconsequential discrepancies caused by errone-
ous or defective materiel, per the above subparagraphs, the
supplying agency will be advised as a matter or record to
help it improve its supply system by identifying deficiencies.
(4) Consequential discrepancies will require adjustment with the
supplier. Credit billings will be requested for materiel not
received or rejected and returned. OF will be advised of any
credit billings due.
(5) At the discretion of the Chief, SD/OL, a supplier's refusal
to honor a request for a credit billing may be challenged and
appealed to the Comptroller of the supplying activity through
the Director of Finance when the amounts are significant
($1,000 or more).
4. RESPONSIBILITIES AND PROCEDURES
a. Receiving Activities:
(1) Container count and inspection. Upon arrival of a shipment at
a receiving activity, it is essential that the number of con-
tainers received conform to those listed on the delivery ticket.
Each container must be examined for exterior damage. Any evi-
dence of pilferage, damages, or losses will be noted on the
delivery ticket and the carrier's representative be given the
opportunity to count and/or inspect the cargo prior to his
departure from the receiving dock. The carrier's representative
should be asked to acknowledge obvious discrepancies by signing
and dating a notation to that effect on the delivery ticket.
Containers, dunnage, and materiel will be held intact until the
matter is resolved.
(2) Item count and inspection. Prior to preparation of an R/R,
items will be inspected for compliance with the procurement
instrument. Discrepancies will be noted by the receiving
activity -- or the technical inspector as the case may be --
when the materiel differs from that specified in the procurement
instrument, except that, in determining whether an apparent
shortage is actually a discrepancy, the following should be
considered:
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(a) Shipment may be a partial with more to follow. If this
cannot be determined from documentation on hand, the
receiving activity should query the procurement activity
or the supplier (if this is permitted per subparagraphs
(3), (4), and (5) immediately below).
(b) Shipment may be considered complete by the supplier, by
reason of standard pack (i.e., to even box count) or the
existence of a "variation in quantity" clause in a com-
mercial contract that authorizes a certain percentage
over or under the requested quantity.
Neither of the above situations constitutes a discrepancy.
Billings should agree with materiel received. However, if the
total materiel is not forthcoming, as in (b) above, the RO
must be advised. If the RO requires the balance, he must pro-
vide a new requisition (bearing in mind standard pack or what-
ever caused the original shortage).
(3) Direct contact with suppliers by receiving activity. Receiving
activities are authorized to contact carriers or vendors direct-
ly concerning unclassified (SC-O) commercial procurements and
GSA FEDSTRIP procurements in an effort to resolve discrepancies
on an informal basis. Telephone communications are permitted
in this effort, but written correspondence is not permitted.
Any discrepancy that cannot readily and amicably be resolved
will be referred to the procurement activity for resolution.
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(6) Contacting RO regarding discrepancies. In addition to, or in
lieu of, informal attempts to resolve discrepancies with the
carrier or the vendor, the receiving activity should contact
the RO to determine whether items lost in transit, received
short, damaged, or having latent defects are to be replaced
or cancelled, or whether an overshipment or erroneous materiel
is acceptable. Whether the RO is contacted before or after
attempts are made to resolve the discrepancies with the carrier
or vendor is at the discretion of the receiving activity. The
RO will be asked to provide a new requisition if he requires
the balance of a requisition involving a shortage due to "stand-
ard pack" (see subparagraph 4a(2)) or any time the wrong item
is received because of an error attributable to him. In any
other instance when reordering is necessary, OL/SD will initiate
the action. Receiving activities removed from the Headquarters
area which cannot contact the RO directly will address queries
regarding the acceptability of a discrepancy to OL/SD.
(7) Preparing R/R's. After the receiving activity has attempted
to resolve a discrepancy with the carrier or vendor and/or has
contacted the RO regarding the acceptability of the shipment,
the R/R can now be prepared (or amended if previously prepared),
noting on the R/R the nature of any unresolved discrepancies by
item number and classifying each as an acceptable or a conse-
quential discrepancy if from a commercial source, or inconse-
quential or consequential discrepancy if from a Government source.
(8) Filing discrepancy reports. Acceptable and inconsequential dis-
crepancies require no further action (except to advise the RO
and/or the procurement activity of an inconsequential shortage
for possible reordering). Unresolved consequential discrepancies
require the filing of a formal discrepancy report which is for-
warded to the appropriate procurement activity. Receiving activ-
ities removed from the Headquarters area can report discrepancies
by speed letter or cable.
-6-
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(9) Latent discrepancies. When latent discrepancies are disclosed
after receiving has been accomplished, the Chief, SD/OL, -- in
coordination with the Chief, PD/OL, if commercial procurement --
will determine whether a formal claim against a carrier or sup-
plier will be filed or whether an internal adjustment will be
made.
(10) Consequential discrepancies on GSA commercial procurements.
Consequential discrepancies on a GSA commercial procurement must
be resolved before the receiving activity (CD or MD only) sub-
mits its receiving information to GSA (on GSA Form 300). GSA
then pays the vendor for the exact materiel received, based on
the Form 300, from an advance account established with them by
OF (account 291.09). Per subparagraph 4a(5), only OL/SD/IDSB
is permitted to contact GSA commercial vendors regarding any
matter.
(11) Discovery of discrepancy by second consignee. When a receiving
activity performs initial receiving for shipments destined to a
second consignee, and for any number of reasons the containers
are not opened for inspection, any discrepancies discovered by
the ultimate consignee will be reported to the initial receiving
activity. This activity will then amend its original R/R and
file any necessary discrepancy reports.
(12) Discrepancies on materiel procured through Red River Army Depot
(RRAD) by MD. Discrepancies on procurements initiated by MD
through RRAD will be resolved in accordance with this instruc-
tion except if there is a conflict with RRAD regulations, in which
case the latter will prevail.
b. Procurement Activities (OL/PD and OL/SD/IDSB)
(1) Upon receipt of a discrepancy report from a receiving activity,
take prompt action to resolve the discrepancy. Provide both OL/SD
(for the accountable file) and OF with a copy of any correspond-
ence sent to suppliers in this effort. Keep receiving activities
advised of action being taken or to be taken to resolve the dis-
crepancy.
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INSTRUCTION NO. LI 45-6
LI 45-6 LOGISTICS
Revised 12 September 1975
(2) Provide OF copies of formal claims for losses and damages
regarding commercial procurements for the purpose of estab-
lishing accounts receivable.
(3) Provide OF with an amended purchase instrument for commercial
procurements when required per subparagraph 3a(4) above.
(4) Request adjustment to billings from U.S. Government suppliers
for consequential discrepancies for materiel not received or
for retrograde materiel (returned to supplier), providing OF
with a copy of such correspondence. No requests will be made
for billing adjustments for inconsequential discrepancies.
(5) Reorder or cancel discrepant materiel as desired by the RO.
(6) Advise supplying agencies of erroneous or defective shipments
even when no action is requested for replacement, as in the
case of an inconsequential discrepancy, per subparagraph 3b(3).
5. ADDITIONAL GUIDANCE
OL/SD will be responsible for preparing and disseminating to all re-
ceiving activities additional procedural guidance regarding the filing
of discrepancy reports to transfer the responsibility of resolving a
discrepancy to the procurement activity; regarding the disposition of
overages or erroneous materiel; and providing an unclassified working
guide depicting the specific action to be taken for every type of
discrepancy.
e)MICHAEL J. MALANICK
erector of Logistics
Director of Finance
Thomas B. Yale/
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