NCPA - National Center for Policy Analysis

Overspending At The Pentagon

March 19, 1998

The Defense Department's Inspector General has accused the agency's purchasing officials with failing to demand price data, using sole-source suppliers when competitors are available and failing to use its considerable clout to drive a hard bargain.

Inspector General Eleanor Hill presented a lengthy list of cost absurdities to Congress.

  • Pentagon purchasing officials paid $76 for a set of screws that should have cost 57 cents, and $714 for an electrical bell worth $47.
  • On one contract the Pentagon bought $6.1 million worth of commercial spare parts for nearly three times the estimated "fair and reasonable price."
  • In another contract, it bought $3.2 million worth of spare parts for an average markup of 172 percent over fair and reasonable prices.
  • Most of the purchases involved aircraft-related spare parts, and the investigations stemmed from calls to a Pentagon hotline in 1996.

While the Pentagon's acquisitions chief claimed the overcharges were only "isolated instances," Hill said the lax practices were probably widespread.

Source: Associated Press, "Pentagon Still Pays Too Much for Parts," Washington Times, March 19, 1998.


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