More Spare Parts Overbilling, Pentagon Watchdog Finds
Posted at 9:15 a.m. on July 8, 2014
Each instance is just nickels and dimes in a Defense Department budget of around half a trillion dollars, but it happens plenty: overcharges for spare parts. The latest example is potentially worth $9 million, per the Pentagon’s inspector general, and could be worth another $2.6 million over the next year.
This time it comes via Bell Helicopter Textron for aircraft parts procured by the Defense Logistics Agency.
“This occurred because the contracting officer did not perform an adequate analysis when procuring sole-source commercial parts,” according to a summary of the IG report posted online Monday. “Specifically, the contracting officer used the previous DoD purchase price without performing historical price analysis and accepted Bell’s market-based pricing strategy in a noncompetitive environment without performing a sufficient sales analysis.”
The agency addressed most of the IG’s recommendations, which included establishing a process for checking whether the prices are fair and reasonable, and recovering the overcharged amounts from Bell. The agency did recover overcharges discovered last year from Boeing, DLA chief Navy Vice Adm. Mark Harnitchek told reporters last month, and implemented new policies to avoid future overcharges.
Besides the spare parts report, the IG on Monday also released a summary of a report concluding that the department isn’t doing a good enough job of keeping track of needed rare-earth elements like scandium, yttrium and lanthanum that are necessary to manufacture components for wind turbines, cell phones and missiles.
“As a result, DoD may not have identified all REEs with expected shortfalls, increasing the risk that those shortfalls will adversely affect critical weapons systems production,” the report’s summary stated about the critical minerals.