Railroad companies have overcharged the Army millions of dollars for shipping trainloads of tanks and equipment to its California desert training center, and sloppy Army auditing procedures failed to spot the overcharges for years, according to documents obtained by The Washington Post.
The overcharge problems became so extensive that at one point senior Army officials were concerned that some troop units would be forced to reduce training schedules at the National Training Center (NTC) at Fort Irwin, Calif., to compensate for the financial losses, according to federal officials investigating the problems.
The Army has found $5 million in railroad fee overcharges for moving military equipment to the NTC in random audits of bills paid over the past five years, according to Barry Morris, spokesman for U.S. Forces Command at Fort McPherson, Ga. He said military officials are continuing their 2 1/2-year investigation.
"We're looking at every government bill of lading from 1982 onward," said Morris, adding, "We're still finding overcharges . . . . That's not the railroads' money -- it's the taxpayers'."
Government auditors involved in the case said overcharges are pervasive throughout the transportation industry. The General Services Administration, which is responsible for reviewing all transportation bills paid to commercial carriers by government agencies, collected approximately $70 million last year in overcharges by railroads, airlines and truckers, according to William Marshall, deputy assistant commissioner for transportation audits.
Officials representing the two railroad companies involved in the Fort Irwin cases -- the Union Pacific Railroad and the Atchison, Topeka and Santa Fe Railway Co. -- confirmed that the Army had been overcharged in many of the cases, but blamed accounting mistakes by both the railroads and the Army.
"We're not contesting the overcharges," said a spokesman for Union Pacific. "There were errors on both sides of the fence."
Fort Irwin auditors reported that railroad companies were charging the Army round-trip rates for one-way service in some cases, and routinely charged the military for dozens more rail cars than were ordered for the exercises.
The largest percentage of overcharges occurred when the railroads billed the Army for more rail cars than it ordered. Under most of the military's contracts, the railway can substitute different-sized rail cars than those ordered if the rail carrier doesn't have the proper number of the requested cars available. The railway, however, is supposed to charge the Army only for the cars it ordered.
Army documents also blame some of the overcharges on sloppy recordkeeping by Army officials responsible for drafting and monitoring bills for the railroad shipments, which can involve 400 to 500 rail cars on some of the larger training exercises. Army transportation officers frequently signed the bills for the higher amounts without comparing them to requested orders, according to Forces Command's Morris.
"Yes, we were part of the problem," said Morris. He said Forces Command officials have issued orders for improving accounting procedures and training for the military's transportation officers.
The GSA's Marshall said the Army has "cleaned up" many of its problems, but said the Army is still so concerned about overcharges that it has asked the GSA to examine every railway bill for the NTC before it is paid. The GSA usually audits transportation bills only after they are cleared and paid by a federal agency.
Although both the railroads and the Army are scrutinizing the bills more closely, Army and GSA officials say they continue to find overcharges.
Army officials said the overcharges involving rail shipments to the training center have ranged from a few thousand dollars per trip to $405,458 in one case. Officials said the huge amount of equipment shipped to Fort Irwin for the exercises multiplied even the smallest overcharges into large sums of money.
Frequently Army units move their own weapons and equipment -- everything from trucks to tanks -- to the high-technology "battlefield" where they compete against simulated Soviet troops. For some units the movement of the heavy equipment is part of their training.
The NTC is considered to be one of the most advanced military training fields in the world. Budget and time constraints strictly limit the number of units that can train at the facility. The Army last year spent $46 million to transport equipment to and from Fort Irwin, officials said.
Although Morris said the auditors at Fort Irwin who uncovered the problems should be praised, the first auditor to reveal the overcharges said he was harassed out of his job after he reported the magnitude of the problem and revealed the Army was partially to blame because of its poor recordkeeping.
The auditor, who asked not to be identified, said he has been unable to find new employment since he resigned from Fort Irwin Aug. 18, 1986.
National Training Center spokesman Paul Stone said, "We can't find anything here that would justify" the auditor's allegations that he was harassed out of his job.
The Merit Systems Protection Board, however, has determined that his allegations "warrant further investigation." Officials said that an investigation is now under way. A spokesman for Rep. Jerry Lewis (R-Calif.), who asked the General Accounting Office to investigate the overcharges, said the auditor's alleged poor treatment indicates "the system has gone amok somehow."
The auditor, a civilian hired at the base in 1984, said he first began investigating the overcharges in May 1985, examining bills chosen at random from training exercises over several years. He reported finding overcharges on every bill he examined. He cited:
A unit from Fort Hood, Tex., that was overcharged $394,988 for its shipments to the NTC's 1984 "Phantom Sidewinder" exercise -- about 39 percent more than the $1 million the transportation should have cost.
Troops from Fort Sill, Okla. participating in "Desert Sting" exercises that were billed $109,568 more than they should have because the railroad improperly charged them for the caboose carrying railroad employees, tariffs on military guards accompanying the equipment and for cars the Army did not request.
Another Fort Hood unit that was overcharged $329,456 for its trip to Fort Irwin for "Operation Mojave" in 1985.