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.
“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.
“We are a nation at war, and the Department does not expect the defense budget to decline,” Carter wrote. “At the same time, we will not enjoy the large rate of growth we experienced during the years after September 11, 2001. We must therefore abandon inefficient practices accumulated in a period of budget growth and learn to manage defense dollars in a manner that is, to quote Secretary Gates at his May 8, 2010 speech at the Eisenhower Library, ‘respectful of the American taxpayer at a time of economic and fiscal distress.’”
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.
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