Senior Republican Slams Pentagon Spending Habits
James Kidd, May 22, 2019 | J, Reading Time: 3 minutes
https://whowhatwhy.org/2019/05/22/senior-republican-slams-pentagons-spending-habits/
In a rare rebuke of the Pentagon by a Republican, Sen. Chuck Grassley (IA) slammed the Department of Defense (DoD) for failing to put an end to price gouging practices that are costing US taxpayers millions of dollars.
(This kind of action is a typical Grassley activity and how he originally got elected. ~ Don Chapin)
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There are several reasons for such overcharges, each one creating major impacts:
- Application of environmental specification requirements exposure that is far beyond reason
- Ignorance of the term “development”
- Ignorance of what common items are available “off the shelf” or of technology similarities
- Arbitrary overdesign without appropriate review
- Change orders during an item development or production that hide many details (contractors typically “get rich” on change orders that requires project or production rescheduling)
- Apathy of government negotiators
There are typically government oversight offices, often called a “system project office,” to watch for such abuses, but the personnel in these offices are typically rotated quite often or new hires that are inexperienced with the appropriate technologies. Even when something is caught,that potential cost savings is easily “done in” by the last bullet.
~ Don Chapin
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Grassley, who chairs the powerful Senate Finance Committee, forcefully complains about the DoD’s spending habits in a handwritten letter sent to Acting Secretary of Defense Patrick Shanahan last week. The senator especially focuses on past contracts with TransDigm, a manufacturer of commercial and military aerospace components.
Referring to a February 2019 report detailing past purchases of parts from TransDigm between 2015 and 2017, Grassley pointed out that the DoD’s inspector general (IG) “determined that TransDigm had overcharged the Department by $16.1 million on a total of $29.7 million in contracts.”
For example, a “drive pin,” no more than half an inch in size, normally costs a mere $46 but was sold to the DoD for a “staggering” $4,361 each — an excess profit of 9,400 percent for TransDigm.
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