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Congress targets Pentagon waste, inefficiency

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JIM ABRAMS | April 28, 2010 03:56 PM EST | AP

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WASHINGTON — The House went after Pentagon waste Wednesday, saying improvements in how the Defense Department buys equipment and services can save taxpayers billions of dollars every year.

In legislation passed 417-3, lawmakers demanded that the federal government's biggest buyer do a better job in ensuring that it pays proper prices and gets what it pays for.

"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.

Many of the provisions outlined in the bill are basically requirements for better business practices. But with the Pentagon owning 86 percent of government assets estimated at $4.6 trillion and spending about 50 percent of its procurement dollars on service contracts, those add up. Sponsors of the bill said efficiencies and the elimination of waste, fraud and abuse could save taxpayers up to $135 billion over five years.

The legislation is a follow-up to a measure enacted into law last year to stop massive overruns in the Pentagon's weapons acquisition system. Weapons account for about 29 percent of spending; Wednesday's bill, which Skelton said deals with everything from paper clips to boots to food, represents the rest, about $1 billion in spending every day.

Among the provisions, it requires the Pentagon to set up standards to measure performance and hold everyone accountable, takes steps to make sure units get what they need when equipment is purchased and requires that the Pentagon's financial management system is subject to audits.

It also sets up a system of rewards to motivate good performance by the procurement workforce, improves training for that workforce and increases its size. Efforts would be made to expand the industrial base so that more small businesses can participate and prospective contractors and major subcontractors must show that they do not have serious tax debts.

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.

The House on Wednesday also passed a measure requiring federal agencies to move more aggressively to stop improper payments to contractors – such as when they pay twice for the same service or pay for a service they never receive – and retrieve money that should never have been paid.

Rep. Patrick Murphy, D-Pa., a chief sponsor, cited an estimate that poor federal oversight resulted in $98 billion in improper payments in fiscal year 2009, out of total spending of about $2 trillion. He said that was double the budget of the Department of Homeland Security, and triple the budget of the National Institutes of Health.

President Barack Obama, in a statement, said the bill was "another critical step toward increased fiscal responsibility" and urged quick Senate action. Both bills now go to the Senate.

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The defense acquisition bill is H.R. 5013. The improper payments bill is H.R. 3933.

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Congress: http://thomas.loc.gov