Defense Department Reverses Course and Sides with Contractors: Wasteful Contract Spending Will Continue

The Department of Defense announced that it is terminating a proposed rule that would have prevented the waste of billions of taxpayer dollars. The rule was proposed in August, but was fiercely opposed by defense contractors and some in Congress.

“DoD’s backing away from the proposal is tragic,” said the Project On Government Oversight’s general counsel, Scott Amey, who authored a public comment supporting the proposal. “This rule would have standardized commercial-item buying and enabled the DoD to obtain cost or pricing data that would ensure taxpayers do not get ripped off. We have seen too many audits exposing outrageous pricing because DoD bought items without being able to compare prices.”

Since the mid-1990s, the government has been buying “commercial” goods and services that are not actually sold in the commercial market. Making matters worse, these purchases are often made without competition and without any government review of the cost data that supports the final price the contractors are proposing. Audits by the DoD Inspector General have uncovered innumerable instances of misspending by DoD such as millions of dollars wasted on spare parts and exposed improper efforts by the Air Force to purchase refueling tankers and C-130J cargo planes as “commercial” items.

“DoD bowed to industry pressure, and the taxpayers will just have to accept more bad deals with defense contractors,” Amey concluded.

Follow the link to read the proposed rule for the Defense Acquisition Regulations System.

Follow the link to read POGO’s public comment.