Pentagon Caught in Contract Shuffle
Posted on Dec 26, 2006
According to internal audit documents obtained by The Washington Post, the Defense Department wasted millions of dollars by farming out contracting to the Interior Department in an effort to “expedite” the process. Through the program, Interior routinely awarded overpriced and under-monitored no-bid contracts in exchange for a fee from the Pentagon.
Defense turned to Interior, which manages federal lands and resources, in an effort to speed up its contracting. Interior is one of several government agencies allowed to manage contracts for other agencies in exchange for a fee.
But the arrangement between Interior and Defense “routinely violated rules designed to protect U.S. government interests,” according to draft audit documents obtained by the Washington Post.
More than half of the contracts examined were awarded without competition or without checks to determine that the prices were reasonable, according to the audits by the inspectors general for Defense and Interior. Ninety-two percent of the work reviewed was awarded without verifying that the contractors’ cost estimates were accurate; 96 percent was inadequately monitored.
In one instance, Interior officials bought armor to reinforce Army vehicles from a software maker. In another, Interior bought furniture for Defense from a company that apparently had not previously been in the furniture business. One contract worth $100 million, to lease office space for a top-secret intelligence unit in northern Virginia, was awarded without competition. Defense auditors said that deal cost taxpayers millions more than necessary, and they have referred the matter for possible criminal investigation.