Defense Industrial Scam

Since 9/11, nearly half of all Pentagon contracts awarded without competition

By Kase Wickman, Raw Story, August 29th, 2011

Nearly half of the approximately $300 billion of taxpayer money the Department of Defense spent on projects in 2010 was awarded for no-bid contracts — some of which weren’t necessary, the Center for Public Integrity’s iWatch News reported on Monday.

The cost of the non-competitive contracts the U.S. military has tripled in the last 10 years, now tallying up to $140 billion of taxpayer money per year on quick solution defense spending.

Though competition amongst companies saves taxpayer money, the stated urgent nature of the military’s needs pushed aside fiscal concerns. In 2001, the Pentagon’s non-competitive contracts cost around $50 billion. In 2010, nearly a decade after the war on terror began, that spending has risen to around $140 billion. Only 55 percent of contracts awarded in the first two quarters of 2011 were competitive.

Through more than a dozen government reports and investigations, as well as interviews with government officials, iWatch concluded that the rules for no-bid contracts have been severely bent and abused in the past decade. Evidence shows that the Department of Defense used large umbrella contracts to justify purchasing several individual items from a single supplier that could have been bought at lower cost from several suppliers; citing “urgent and compelling need” for items the GAO pointed out they had already anticipated needing; and extending large contracts instead of seeking out cheaper options.

In a 2009 memo, President Barack Obama pushed for more competitive contracts to cut military spending.

“The federal government has an overriding obligation to American taxpayers,” the opening of the memo read. “It should perform its functions efficiently and effectively while ensuring that its actions result in the best value for the taxpayers.”

Undersecretary Ashton Carter, head of procurement for the Pentagon, reinforced the president’s message in his own 2010 memo.

Charles Tiefer, a member of the congressionally-mandated Commission on Wartime Contracting in Iraq and Afghanistan, said that that respect had not been shown.

“The lack of competition in the Defense Department is a scandal,” Tiefer told iWatch.

iWatch’s Windfalls of War series continues throughout the week, exposing questionable spending in the military.

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