Pentagon Wasted Supplies, GAO Finds
Wednesday, June 8, 2005
The Defense Department spent at least $400 million in recent years buying boots, tents, bandages and other goods at the same time it was getting rid of identical items it had paid for but never used, government investigators told House members yesterday.
That finding came as part of a broader inquiry by the Government Accountability Office that uncovered deep flaws in the Pentagon's system for determining when it needs to buy new supplies and how it disposes of supposedly excess inventory.
Investigators discovered that out of $33 billion of goods the Defense Department marked as excess from 2002 through 2004, $4 billion was in excellent condition. Only about 12 percent of that was reused by the department. The other $3.5 billion "includes significant waste and inefficiency," the GAO said, because new or good-as-new items were "transferred and donated outside of DOD, sold for pennies on the dollar, or destroyed."
Investigators brought some of that equipment with them to the hearing of a House Government Reform Committee subcommittee yesterday. Among the items on display were unused military uniforms and medals that GAO had purchased off of a publicly available Web site intended for disposing of unwanted government property. The GAO also obtained the power-supply system for a component of a nuclear submarine that was on the Pentagon's "critical shortage" list at the time.
"We're not sure why DOD would be letting GAO have that. We don't have any nuclear submarines at GAO," said Gregory D. Kutz, the GAO's managing director for special investigations.
Subcommittee members reacted angrily to the findings.
"Waste on this scale affects our ability to meet the immediate needs of men and women in uniform," said Rep. Christopher Shays (R-Conn.), who chaired the hearing. "The $400 million spent on unneeded equipment could have bought body armor, medical supplies or more than 1,700 fully armed Humvees to protect coalition forces against deadly improvised explosive devices."
Rep. Henry A. Waxman (D-Calif.) said the only beneficiaries of the Pentagon's mismanagement are the companies that sell equipment to the government. "Federal contractors are reaping a bonanza while taxpayers are being gouged," Waxman said.
Rep. John J. Duncan Jr. (R-Tenn.) said the GAO's findings involved the waste of "an unbelievably staggering amount of money."
"Anybody who's not horrified by this does not deserve to be called a conservative," he said.
Pentagon officials testified that they generally agreed with the GAO's findings, saying new items had been accidentally labeled in some cases as excess inventory. The officials said they have made improvements, however, and plan to have a computer system up and running by January that would prevent Pentagon officials from buying new equipment that is already available internally.
"We do have a fix on the horizon," said Maj. Gen. Daniel G. Mongeon, director of logistics operations at the Defense Logistics Agency.
Yesterday's report followed GAO inquiries that uncovered evidence the Defense Department was selling unused biological- and chemical-weapons-resistant suits for $3 each. At the same time it was buying hundreds of thousands more for $200 apiece.
Investigators found that example typified a broader problem. For instance, they paid $2,898 for $79,649 worth of tires, badges, circuit cards and medical supplies. In some cases, the goods had been marked as junk but were delivered in their original packaging. At the same time, the Pentagon continued to order more of the same items from its suppliers.
The GAO concluded that the Pentagon could have saved $400 million in fiscal 2002 and 2003 had it used what it already owned, rather than buying more.
GAO investigators also found that at contractor-operated facilities where excess equipment was supposed to be liquidated, items were left exposed to rain and wind. Much of it ended up damaged beyond repair.
In addition, the Defense Department said that between 2002 and 2004, $466 million of equipment marked as excess -- including sensitive equipment such as missile warheads -- had been lost, stolen or damaged. Kutz, who said he believes the total of unaccounted-for equipment could be far higher, said the GAO will continue to investigate where those items ended up.