House Bills to Crack Down on Pentagon Waste, Government Payment Errors

A House bill, H.R. 5013, intended to improve Department of Defense procurement and contracting practices and save taxpayers billions of dollars by reducing waste, fraud, and abuse sailed through on a 417-3 vote on Wednesday.

The Pentagon has long been rife with waste. As an Associated Press article on the bill noted,

The Pentagon has long been infamous for its $600 hammers and $300 toilet seats, and Rep. Rob Andrews, D-N.J., who for the past year has headed a panel with Rep. Mike Conaway, R-Texas, working on recommendations for the acquisition bill, said such abuses are still common.

He cited one example of the Air Force paying $13,000 for a refrigeration unit on a plane, and then paying $32,000 for the same unit two years later. He recounted that the Pentagon paid $201 million to truck petroleum products from Kuwait to Iraq even before a contract was signed, and that it can take nearly seven years to go from a proposal to buy information technology to actual use of the technology, by which time it is often obsolete.

“For many years, we’ve witnessed waste in the Department of Defense’s acquisition system spiral out of control, placing a heavy burden on both American taxpayers and on our men and women in uniform,” said House Armed Services Committee Chairman Ike Skelton, D-Mo.

The bill would require the Pentagon to establish performance measures to improve efficiency and accountability, require audits of the Pentagon’s financial management system, take steps to ensure that units get what they need when equipment is purchased, and improve procurement practices through additional procurement staff, enhanced training, and performance bonuses.

Sponsors of the bill estimated that efficiency improvements and the elimination of waste, fraud, and abuse as a result of the measure would generate savings of $135 billion over five years.

In addition, the House passed another bill, H.R. 3933, yesterday that would enhance the oversight and recovery of payment errors, such as double payment errors or payments made for services that were never received. Rep. Patrick Murphy, D-Pa., a chief sponsor of the legislation, estimated that such errors resulted in $98 billion in improper payments during fiscal year 2009, an amount approximately twice that of the budget of the Department of Homeland Security.

Related Reason research on performance measurement and procurement reforms:

The Next California Budget: Buying Results Citizens Want at a Price They Are Willing to Pay

Streamlining San Diego: Achieving Taxpayer Savings and Government Reforms Through Managed Competition (see especially pages 48-50)

Designing a Performance-Based Competitive Sourcing Process for the Federal Government: 37 Proposed Changes to Regulations and Approaches to Competing and Outsourcing Commercial Activities in Government

“Streamlining Louisiana: Driving Government Reform in an Era of Fiscal Crisis,” interview with Angele Davis, Louisiana Commissioner of Administration (from Innovators in Action 2009)

Citizens’ Budget 2003-05: A 10-Point Plan to Balance the California Budget and Protect Quality-of-Life Priorities (see pages 63-64, 69-84).

Citizens’ Budget Reports: Improving Performance and Accountability in Government