The Pentagon’s dollars and cents

The Pentagon’s dollars and cents

Defense advocates and Pentagon officials keep telling us that if DoD gets one less cent as part of austerity budgets, America would be left defenseless against terrorists and communist would-be invaders who seek to destroy us. But their case might be a lot more compelling if they could show that DoD was wiser about spending the money it gets now. Your latest example comes from USA Today, where Tom Vanden Brook reports that the Pentagon has spent about $720 million since 2001 on late fees for shipping containers — those ubiquitous metal boxes that haul just about everything to and from the war zone.

That kind of money would buy the Navy a littoral combat ship with change left over, or the Army about 42 Ground Combat Vehicles (at CAPE’s $17 million per vehicle projection.) But instead of spending it on things it now says are priorities, the Defense Department paid it to shippers because it kept their containers past the agreed-upon limits. With an unlimited cashflow, why not, right? It makes you wonder how much more of this kind of thing takes place across the board.

Is defense spending just inherently, inevitably wasteful? Neither the services nor OSD seem to be able to take any real action to prevent stories like Vanden Brook’s from happening again. Members of Congress stay oblivious until headlines like this appear, and then thunder on about how it’s ‘unacceptable,’ and then a blue-ribbon panel convenes to take a hard look and get input from all the key stakeholders. Its result is something such as the Army Acquisition Report, which then disappears down the memory hole. The public shrugs — stories about Pentagon waste are so common they don’t even register.


Could budget cuts break this cycle — force defense officials to actually get serious about being efficient by denying them the spending cushion they’ve been able to count on? What do you think could work?

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How much longer will Americans put up with reports of Obama’s daily treachery and incompetence?
How much longer will Americans put up with rich, eco-fascists using the EPA to raise the cost of energy and food?
How much longer will Americans allow a SCOAMF like Obama to remain in office before demanding his impeachment?

So many questions. Stories about left-wing treason and incompetence are so common they barely even register.

Sen. Everett Dirkson (yes you have to be old to remember him!), once said that “A million here, a million there, and pretty soon you’re talking about real money!” If DoD cavalierly dismisses a little “chump change here, and a little chump change there, eventually someone is going to add it all up and its a headline not chump change. There may well have been good reasons for many of the “late charges”, but the perception is that it was all waste. In the public eye, perception is often far more damaging than the facts, but totally undeniable.

As for what might work.…. ACCOUNTABILITY! If its more important to careers to turn surplus funds back to the treasure than to make sure the full budget is spent, these little tiny details (like late charges for C-vans) will take care of themselves, along with perhaps some of the bigger budgetary issues!

“how much longer.. obama…” atleast until Jan 2013. how much longer for the Pentagon?? many of us, even many in uniform, have not been putting up with this for a long time. difference is changing the Pentagon seems to be more difficult than changing politicians. why is that?

Good article Phillip. One reason why the Pentagon wastes money on shipping containers is that $720M is chump change and off the radar screen of the Pentagon’s priorities. The woeful lack of discipline and integrity in the Pentagon’s priority program, F-35, spreads like cancer throughout the entire institution.

“demanding his impeachment?” FOR WHAT EXACTLY ??????
Impeachment is a formal process in which an official is accused of unlawful activity. “The President, Vice President, and all civil officers of the United States” who may only be impeached and removed for “treason, bribery, or other high crimes and misdemeanors”. What unlawful activity are we talking about, or are you just spouting bullshite you heard from fox news?

Rumsfeld Sept 10, 2001: The Pentagon cannot account for $2.3 TRILLION
“According to some estimates we cannot track $2.3 trillion in transactions,” Rumsfeld admitted.

Lousy contract writing. Why would we agree to late fees at all? Just write the contract to say, ‘hey, we are at war and we are gonna keep your box till we don’t need it, we’ll pay you, but no late fees on top’. Pretty sure there are plenty of container companies that would say ok, since the DoD is a guaranteed pay check.

Ha! Not guaranteed anymore!

I agree, except you’ve got it upside down. I used to talk to my Grand Dad about his time doing construction on the missile silos in the Dakotas, among many other gov’t projects he was involved with. I’d be telling him (ranting) about the latest stupidity in some defense program, but he never seemed too surprised. He saw plenty of this same kind of incompetence and mismanagement on the DoD side, and too many cheating, double-dealing contractors taking advantage. Ain’t nothing new here, except the scale of the thing.

This is an institutional problem.

$720M in late fees on how much total in leasing fees? It also makes things look more impressive if you report over a 10 year period.

Some would actually say its good journalism to make the story more dramatic.…. on the other hand, even if it is just a piddling little $72M per year, or $6+M per month, or ????/millisecond, its taxpayer dollars thats at least apparently being wasted. (It remains to be seen if all, or even ANY actually was wasted, but. ..… it does not look good!).

Right now there is very little incentive not to let “little dollars” just fritter away, what if we made it very incentivized to save EVEN the little dollars? Find enough of those “little dollar” items and pile them up and there might actually be REAL DOLLARS there to be had for far more worthy purposes than just paying “late fees”.

In order to detect and deter fraud, you have to inspect and audit throughout the acquisition process. That requires a well trained, robust acquisition workforce — something that until now was thought to be wasteful spending.

How much more of Bush’s wars do we have to endure???

I agree Maybe if the DoD gets cuts the pentagon will get $5 hammer instead of $40 ones and Work on good stuff like the F-22 and F-35 and get ride of dumb projects like the carbine competition. I hope for BIGGER cuts. Time the federal government tightens its belts like we the people do.

“How much longer will Congress and the public put up with regular reports of Pentagon waste?”

How much longer will Congress continue to waste far more than the Pentagon could ever hope to? If they want some credibility when pointing fingers at the DoD they ought to stop wasting countless billions themselves.

Obama has gone wacko since in office. spending outrageous figures. Billions in bailouts with no stipulations or accountability. Blank check. Now catching up to him (or should I say US). How is it no one mentioned the re-construction of Afghanistan. The wasted billions there. We bomb it — we rebuild it. Make sense? Little people end up on the s___y end of the stick again. This conflict [never declared a war] is another Vietnam. Should have never been there in the beginning, will never come out victorious, waste of lives, money & resources. They are too stupid to figure that out. Obama has no common sense.

Making it a patisan issue always makes everything better, right? Too bad there aren’t more Americans in this country and fewer Democrats and Republicans. Then maybe people would vote on issues instead of always voting for “their team”. You vote for parties, you get lots of party politics. You vote on issues, your issues get addressed. Don’t look for smart thinking in Washington DC if the stupidity starts with each one of us.

Lance, you want “bigger” cuts, but you also want to keep the F-35 but stop us from getting a new rifle. One program will cost hundreds of billions of dollars while the other will cost an accounting error by comparison. Guess which of the two systems will see more use in their lifetimes.

Waste always needs to avoided where ever possible. But waste is wide spread about the width and breadth of the federal government. There a several prominent members of the media that are anti-military that like to focus on waste in the military while turning a blind eye to all the waste in other departments.

This story is not about lefty journos or the whole big bad federal gov’t. You apparently would have us turn a blind eye to this issue instead. Why? Is “defending the nation” a legitimate excuse for burning money we haven’t got?

The transactions Secy Rumsfeld was referring to consisted mainly of massive numbers of intra-DOD transactions between and among DOD’s revolving-fund activities and their “customers” within the DOD itself — which means the transactions imply nothing useful for meaningful about spending by DOD in terms of taxpayer dollars actually leaving the Treasury.
For example, under the revolving-fund mechanisms, every time a mechanic needs a spare part to fix a weapon system, his unit must obligate O&M dollars to a supply system that is revolving-fund (working capital fund)-financed. Also, every time a reparable-type spare part moves from the supply system into maintenance, or back again, an “intra-fund” financial transaction is recorded, because supply and maintenance have traditionally been financed by separate revolving funds. (The Air Force, at least, but not the Army or Navy, has recently taken steps to at eliminate the latter kind of inter-fund financial transactions by combining central supply and maintenance into a single “business activity” fiannced by the same revolving fund.)
Nevertheless, there were (and still are) so many millions of such intra-DOD transactions each year that it becomes possible to generate “trillions” of dollars worth of transactions — because of all the multiple counting of the same dollars that goes on.

Secy Rumsfeld made his comment in response to accusations by Senator Robert Byrd that the DOD couldn’t “keep its books straight.” The irony is that the “books” Senator Byrd was so exercised about were the private-sector-style financial statements that the Congress insisted the DOD begin producing by passing the CFO Act of 1990. A conservative estimate would be that, since the CFO Act was passed,the DOD has spent more than $20 billion dollars attempting to produce such statements, even though it has been recognized for some time that such statements will be of no use to anybody, either inside or outside the DOD, for management purposes. The DOD is not a profit-seeking business — it is an executive-branch agency that runs on budgets — so private-sector-style financial-statements (i.e., balance sheets and income statements) designed to show profit and loss are meaningless.

The fines the DOD has to pay because it keeps shipping containers too long are at least partly a result of the fact that DOD managers do not have good COST ACCOUNTING systems in place. And why is that? Well, at least in part it’s because most DOD accountants are still focused on doing financial accounting rather than cost accounting. The villain here is the Congress and the CFO Act — not the DOD.

If the Obama administration wants to talk about FWA, tell them to look at the Social Programs there is more FWA in those probrams than in the military programs

Funny that they would get all an uproar about a Tom Vanden Brook story esp when his USA Today “Alive ! Miners beat the odds” Headline story was some of the worst media misinformation of all time. Reporting that 12 out of the 13 miners where alive when actually it was the other way around.. Be careful when digesting all that “News” out there. http://​www​.media​-watchdog​.com

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