The Government Accountability Office on Monday faulted the Pentagon for not doing enough to root out fraud in defense contracts that are vulnerable to ripoffs and accounted for $420 billion of federal spending in 2020.
The report cited gaps in oversight, an understaffed fraud reduction task force and insufficient reporting mechanisms to identify contractors who are ripping off taxpayers.
The report also provided ammunition to President Biden’s bid to reduce military spending.
“They don’t seem to want to get serious about spending taxpayer dollars wisely and effectively,” said Senate Budget Committee Chairman Bernard Sanders, who with Oversight Committee Chairwoman Carolyn B. Maloney commissioned the GAO study.
The Pentagon allocates two-thirds of all federal contract dollars, making it the largest contracting agency in the federal government. The military contends with a variety of fraud schemes associated with procurement, including bid-rigging, price inflation, counterfeit parts, and over-billing.
Procurement fraud plagues the Defense Department, which struggles with implementing fraud and acquisitions reforms to mitigate the risk. In 2020, according to Monday’s report, just under 25% of all ongoing Office of Inspector General investigations were related to procurement fraud.
The Pentagon did not immediately respond to The Washington Times’ request for comment.
The GAO study focused on the Pentagon’s fraud-risk management activities for 2020. The analysis found that, while the Defense Department has taken initial steps to combat fraud, it has “not finalized an implemented a comprehensive approach.”
Namely, 20% of the positions on the Pentagon’s Fraud Reduction Task Force, a team created to identify solutions to address fraud risks, remain unfilled. The report also found that the Pentagon does not require fraud risk assessments to be completed as part of its risk management program, potentially leaving fraud risks unidentified.
“This independent report shows that the Trump administration utterly failed to address the Pentagon’s longstanding problems with financial management, including procurement fraud,” said Mrs. Maloney, New York Democrat.“This failure to safeguard taxpayer dollars is completely unacceptable, and I urge the Biden Administration to quickly and fully implement GAO’s recommendations.”
The wars in the Middle East gave way to an explosion of Pentagon spending on contracts and raised questions about the Defense Department’s reliance on the private sector.
A recent study by the Watson Institute for International and Public Affairs at Brown University found that at least one-third of the $14 trillion spent by the Pentagon since the U.S. invasion in Afghanistan has gone to contractors.
The GAO report arrived during a fight in Congress over the Pentagon budget.
Mr. Biden has faced a backlash from lawmakers for his proposed Defense budget that trialed inflation. Republicans and some Democrats raised alarms over the essentially flat top line despite growing threats from Russian and China.
The House and Senate Armed Services Committees both voted to raise the Pentagon’s budget by close to $25 billion over the summer through the National Defense Authorization Act (NDAA), a defense policy bill.
Lawmakers on the left, such as Mr. Sanders, have pushed back against increasing defense spending. The House Appropriations Committee passed their version of the Defense spending bill, which is closely aligned with the President’s proposal.
On Monday, Rep. Barbara Lee, a California Democrat and senior member of the House Appropriations Committee proposed an amendment to the NDAA which would walk back the $25 billion increase and reduce overall defense spending by 10%, excluding certain personnel and health-related programs.
The Pentagon’s track record with fraud represents a key tenant underpinning Ms. Lee’s argument to make cuts to the defense budget.
“We know that there are billions in waste fraud and abuse as it relates to, specifically the most current situation as it relates to Afghanistan,” Ms. Lee said Monday. “We know that trillions of taxpayer dollars were literally stolen. Yet we keep putting more taxpayer dollars into defense spending.”
Those sentiments were echoed by Mr. Sanders, a socialist from Vermont who caucuses with Democrats. He called for increased accountability.
“Currently, the U.S. spends more on our nation’s military than the next thirteen countries combined,” he said. “Meanwhile, half of our people are living paycheck to paycheck, just under 40 million Americans are living in poverty, and over 600,000 Americans are homeless including roughly 40,000 veterans. The time is long overdue for the Defense Department to be held to the same level of accountability as the rest of the government.”