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'Waste And Inefficiency Still Plague' Pentagon

Thursday, June 9, 2005

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A non-partisan, nonprofit organization dedicated to eliminating wasteful spending, fraud and mismanagement in the federal government cited a recent government audit in making its claims that Pentagon spending continues to be mired in “waste and inefficiency.”

The organization Citizens Against Government Waste highlighted a May 2005 Government Accountability Office report that reveals how the Department of Defense wastes billions of dollars by disposing of excess property in good condition while continuing to buy many of the same items.

“Twenty years ago, taxpayers were shocked by revelations from the Grace Commission that the DoD had spent $436 on a hammer and $640 on a toilet seat,” CAGW President Tom Schatz said. “Unfortunately, waste and inefficiency still plague significant portions of defense spending.”

DoD Excess Property: Management Control Breakdowns Result in Substantial Waste and Inefficiency (GAO-05-277) reveals that “Of $18.6 billion in excess commodity disposals in fiscal years 2002 and 2003, $2.5 billion were reported to be in new, unused, and excellent condition. DOD units reutilized only $295 million (12 percent) of these items. The remaining $2.2 billion (88 percent) includes significant waste and inefficiency because new, unused, and excellent condition items were transferred and donated outside of DOD, sold for pennies on the dollar, or destroyed. GAO identified at least $400 million of commodity purchases when identical, new, unused, and excellent condition items were available for reutilization.”

“In many cases it is simply a case of the left hand not talking to the right hand,” Schatz continued. “The Pentagon is buying brand new property while comparable property is left in the rain to rot.”

In one case, an Army Battalion in Japan turned in 172 pairs of new, unused extreme cold weather boots, which were subsequently sold for 40 cents per pair. Over the next three months, eight military units purchased 214 pairs of identical boots. Reutilization of the 172 pairs would have saved taxpayers $27,678.

GAO also identifies hundreds of millions of dollars in reported lost, damaged, or stolen excess property, including sensitive military technology. Furthermore, excess property stored outdoors for several months was damaged by the elements. The GAO report points to inventory problems as the main culprit, including inadequate oversight and nonintegrated systems. The report makes 13 recommendations to the Pentagon to better reutilize excess property, many of which ring familiar to items in CAGW’s annual publication Prime Cuts. Inventory management reform was also a key feature of the Grace Commission’s final report.

“The Pentagon has saved taxpayers billions of dollars by implementing recommendations such as the Base Realignment and Closure (BRAC) process, championed by the Grace Commission and CAGW,” Schatz concluded. “The Pentagon should implement these latest recommendations from the GAO with all deliberate speed, for the benefit of taxpayers and the troops.”

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