Wednesday, September 29, 2004

It's Official

Our taxes would be safer with a crackhead.

Pentagon spent at least $362 billion on no-bid contracts since '98
Moreover, the Pentagon awarded $255 billion in controversial "cost-plus" contracts that allow companies to spend as much as they want on a job, tack on an agreed upon profit and pass the bill to taxpayers, concluded the Center for Public Integrity, a nonpartisan investigative nonprofit group in Washington.

The 10 biggest contractors, which earn 38 percent of all defense contracts, got more than half of all the no-bid and cost-plus contracts issued by the defense department.

And thanks to the war in Iraq, Vice President Dick Cheney's former firm, Halliburton, managed to go from an also-ran 37th on the contract list in 2001 and 2002 to No. 7 in 2003, the Pentagon's own procurement statistics show. In 2003, Halliburton received more than $4.3 billion in defense contracts, according to the Center.

Taxpayers just aren't getting their money's worth, experts said.

"The system is not competitive enough," said Angela Styles, who from 2001 to 2003 was head of procurement for the Bush administration's Office of Management and Budget, and did not take part in the Center's report. "There are people who make a lot of money off this ... It does worry me when agencies hire the same contractors over and over, when they're not really competing."

The Center studied $900.8 billion in Defense Department spending, using the Pentagon's own procurement online database, from fiscal years 1998 to 2003 and looked at companies that received more than $100 million in government money.

It found:

-The top 10 defense contractors got $209 billion, for 58 percent of the $362 billion no-bid contracts. The same big contractors got $133 billion in cost-plus contracts, accounting for 52 percent of the Pentagon's cost plus awards.

-The 10 biggest defense contractors spent $414.6 million on lobbying the government and $35.7 million in campaign contributions.

-In the past 20 years the Pentagon has gone from spending two-thirds of its contracts on hardware to spending 56 percent for services, much like those that Halliburton provides in Iraq, such as food, laundry, gasoline and other logistical support.

-100 of the 737 top defense contractors were foreign entities.

-Defense records show the Pentagon doesn't know where billions of taxpayer dollars are going. Records inaccurately identified the firms getting more than $35 billion in spending.

-The Pentagon also doesn't know how many contract employees or contractors are working for it and ended up hiring a consultant to find the answer to that question.

"This is a Keystone Kops situation," said Center executive director Charles Lewis. "No one is watching these people."

That's not true, said Pentagon spokesman Glenn Flood: "We have control of the situation as far as the big picture of everything. With (about 10 million contract items) a year, there's bound to be some that fall through the cracks."

Turning over more jobs that aren't directly related to fighting wars to private contractors is the Pentagon's goal, Flood said. But he said: "There is oversight."

The number of federal workers overseeing Defense contracts was cut about in half in the 1990s, while spending has soared in the past few years, Lewis said.

The problem, said Steve Schooner, co-director of the government procurement law program at George Washington University, is "that the lack of oversight is exacerbated by the increased pace of spending and the nature of what we're buying."

Defense contractors - through political action committees, so-called "soft money" and contributions by individual employees - were big contributors to political candidates and parties, with two-thirds of the money going to Republicans.

President Bush is the No. 1 campaign recipient since 1998, getting about $5.4 million. Sen. John Kerry, was way down on the contribution list but moved to No. 2 after he became the front-runner for the Democratic presidential nomination, with $1.6 million in contributions between January and July. He now has just under $2 million from big defense contractors.

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