One day after the Defense Department completed an internal review of its $7 billion "prime vendor" program and found it "sound," the Defense Logistics Agency (responsible for procurements at DoD) quietly mentioned to Congress that it wasn't planning on renewing contracts over $800 million worth of purchases in June, after deciding they had overpaid for items.
Meanwhile, over at the Counterintelligence Field Activity agency, the Pentagon's newest intelligence agency, another $6.3 million worth of spending earkmarked by Randy "Duke" Cunningham is under internal inquiry. A procurement official at the Air Force was discovered to have manipulated Pentagon rules to benefit Lockheed Martin to the tune of $41.6 million.
It's been a tough week for contractors. Halliburton, the largest single private contractor operating in Iraq, was the subject of a Democratic Congressional report for its $1.2 billion oil contract: The report found "profound systemic problems," "misleading" and "distorted" cost reports and "exorbitant indirect costs" leading to an "overwhelmingly negative" evaluation.
Earlier this month, the first contractor legally penalized for fraud related to Iraq, Custer Battles LLC., was found guilty of $3 million worth of contracting fraud—small potatoes, sure, but one of dozens of cases reportedly pending against Defense contractors.
Watchdog group Transparency International warned last year that Iraqi reconstruction could become "the biggest corruption scandal in history." The Special Inspector General for Iraq Reconstruction is expected to issue a harshly critical report in May concluding that the CPA did not have disciplined contracting procedures in place.
All of these trails, big and small, whether dealing with kitchen equipment, private intelligence contractors, Iraqi reconstruction or oil, ultimately end at the DoD's door. As Frida Berrigan noted yesterday, the Pentagon is requesting $439.3 billion for FY07, and actual spending in '06 is expected to be 40 percent higher than '05.
There is clearly an endemic problem the Defense Department. Every program that has come to light suffers from a lack of oversight. After all, neither party wants to look like it is questioning defense as a spending priority. More money is thrown down the hole.
Wasn't government waste supposed to be something the Republicans were going to cut down on?
| Friday, March 31, 2006 1:03 PM