Navy contractors waste millions of taxpayer dollars every year on excess equipment for shipbuilding and repairs, despite 14 years of auditors highlighting the problem, according to the internal watchdog for the Department of Defense.
"The failure of the contracting officer to act on these reports is unacceptable," wrote Deputy Inspector General Randolph Stone. "The government has likely paid millions of dollars in additional inventory carrying costs, which the government cannot recover."
Contractors for the Navy's shipbuilding facilities have been overcharging on projects for years by ordering and billing the government for millions of dollars in materials they didn't need. Despite more than 14 years of reports by DOD's Defense Contract Audit Agency calling attention to the problem, three different contracting officers failed to correct the problem.
A 2006 report estimated DOD was wasting about $59 million per year on excess inventory. A 2008 report estimate was $27.7 million per year. Both reports recommended DOD withhold a portion of the offending contractor's payments until they corrected their ordering and billing, a recommendation the contracting officer ignored.
In an interview with the IG, the contracting officer blamed a backlog of audit reports and a lack of resources.
"A lack of resources is not an excuse for failing to take action over several years on an audit finding potentially worth millions of dollars in savings to the government," the IG wrote. "There is no reasonable excuse for failing to act on the reports over a 14-year period."
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Michal Conger is a member of The Washington Examiner Watchdog reporting team. She can be reached at firstname.lastname@example.org