Missing: $102 Billion

The Pentagon's waste, fraud and abuse has gone too far.

How does a department lose $102 billion in one year? The Pentagon is the only department that has never passed an audit, so it's easier than you'd think. And with a total budget of over $700 billion per year, the Pentagon's excesses come at the country's expense. Take action now to cut waste, fraud and abuse in the Pentagon.

Losing track of inventory and leases

Ineffective ordering practices lead to overstocking of spare parts -- more than the military needs or will use.¹ So while $5 billion in unneeded spare parts sit in military warehouses, about $1 billion in additional parts are on order at any given time.

When the Pentagon doesn't return shipping containers on time, it racks up late fees. Because it spends millions on leases, those late fees cost taxpayers millions more. Between 2001 and 2011, late fees on shipping containers totaled an outrageous $720 million.²

Paying for Contractor Profits

The Government Accountability Office reports that 80 percent of the weapons programs are paying higher prices per weapon than in the original bid. Contractors regularly increase prices, and the Pentagon pays out the difference.³

At the same time, Pentagon contractors regularly report billions in profits.⁴ Some of those profits come from markups that allow contractors to charge many many times the value of an item -- including charging $284 for an $8 helicopter door part!⁵

Missing Money

The Commission on Wartime Contracting reported last fall that there was an estimated $31 to $60 billion in Pentagon waste and fraud related to the Iraq and Afghanistan wars. Those losses were described as largely avoidable.⁶

Poor record keeping means that contractors owe the Pentagon $200 million in uncollected debt, but the Pentagon only has contractor identification information for half of that -- keeping the debt from being processed and collected.⁷

Learn more about wasteful Pentagon spending.

Sources

1. Defense Logistics Agency Needs to Expand on Efforts to More Effectively Manage Spare Parts
2. Late fees for military shipping containers soar
3. Defense Acquisitions Assesments of Selected Weapon Programs
4. Rein in Profits of Major Pentagon Contractors
5. Changes Are Needed to the Army Contract With Sikorsky
6. Management Improvements Needed in Commander's Emergency Response Program in Afghanistan
7. DFAS Needs More Effective Controls Over Managing DoD Contractor Debt