An Air Force general has responded to revelations that the Pentagon bought two pairs of pliers and 66 other tools and equipment from the Boeing Aircraft Company for $557,500. Maj. Gen. Bernard Weiss acknowledged that the Pentagon made a mistake in buying the tools through Boeing. No one would argue with that. But, he insisted, contracting officers involved in this purchase should be praised, not blamed. After all, Boeing had originally wanted $884,579 for the items. Pentagon hard-bargainers drove the price down to a mere $557,500 and the cost of the two pliers from $5,096 to only $1,496. A real steal.
Nor should it be thought that the Air Force was trying to pull the wool over anyone's eyes when, in response to complaints from Sen. Charles Grassley, it adjusted Boeing's contract so that the price of the pliers appeared to drop first to $90 and then to a rock-bottom $80 a pair. Simultaneously, it added the "saved" money from these and other items back into a fat item labeled "support equipment and mangement" -- so that the total payout to Boeing remained unaltered. According to the general, the switch was only made to help the Air Force analyze components of overhead cost and "to gain credibility with the American people." Don't you feel better already?
Of course, half a million dollars won't even show up in the roundoff column in the Pentagon's $300 billion annual budget. Add in the overpriced coffeepots, the $500 beds for contractor executives and a bit of outright fraud and you're still not into enough money to dampen Wall Street's enthusiasm for the stocks of the defense contractors involved in these scams.
But these revelations point to a larger problem. The same seemingly undisciplined procurement system that accounts for these small-potato items is also primarily responsible for the choice, characteristics and testing of the Pentagon's multibillion dollar weaponry and support equipment. That's why, as President Reagan discovered firsthand from students at St. John's University the other day, many people have grown skeptical of the military's ability to spend its budget wisely.
The Pentagon has now suspended from new contracts General Electric, which has been indicted on false billing charges. It admits that increasingly unfavorable "public perceptions" led it to react more forcefully than it has when similar charges were brought against other major contractors. But the Pentagon has to do more than crack down on a few egregious cases. It needs to impose a new discipline on itself and on the whole defense industry.