BUSING IN ABUJA

UNCLAS ABUJA 000965

SIPDIS


A/OPR/ALS FOR THURMAN, WARD/WHITE
A/OPR/CR FOR ANNIE DICKSON


E.O. 12958: N/A
TAGS: ALOW AMGT APER NI
SUBJECT: BUSING IN ABUJA

Refs: State 42908



1. In response to reftel, Post presents its cost-breakdown
for the school bus service offered by the American
Employees' Association of Abuja (AEAA). Section 273 states
that school transportation costs may be granted based on an
acceptable documentation of the actual costs. Reftel also
states that the "primary criterion to determine if a fee or
charge is allowable or not is to ask whether the service is
normally provided free of charge in the Unites States
public school system."



2. Any reasonable fee charged by a private entity (school
bus company) to a public entity (school district) reflects
overhead costs, either explicitly or implicitly. Post
confirms that AEAA's overhead costs are legitimate. The
Department enters into contracts frequently that include
specific provisions for payment of overhead. Since
submitting its last cost breakdown, AEAA's position has
changed materially in that the Embassy has agreed to
provide a small office at a nominal fee. Accordingly, the
cost associated with office expenses has been deleted.



3. The greatest round-trip mileage on the route is eight
miles. Please find below an updated annualized cost
breakdown for Abuja's bus service which reflects these
changes:


Vehicle Costs 4,800
Base Radio 400
Insurance 4,200
Fuel 2,000
Maintenance 2,000
FSN Driver: 3,500
U.S. Manager: 2,000
Service Charge: 1,900


Total annual costs: $20,800



4. The Association has been providing transportation
services to nine eligible dependents of direct-hire
Americans since January, 2001. This works out to a $2200
annual charge for bus transportation. Invoices totaling
$1,100 per child have been delivered to parents of school
children using the bus for the Spring semester, 2001.
JETER