Conversion Means Cleanup Of Defense Procurement System
Conversion Means Cleanup of Procurement System
by E. Scott Adler and Eddie Pont of Michigan Alliance for Disarmament
The Michigan Alliance for Disarmament believes that one of the first steps in the process of economic conversion is correcting the current system of defense procurement.
There is a symbiotic relationship between the Pentagon, contractors, consultants, and legislators. Corruption and fraud are rampant in the defense procurement system. The list of scandals and fraud runs the gamut from "insider information" contractors receive from consultants to the advocacy of unneeded weapons by legislatators.
Military contractors commonly defraud the govemment by any number of methods. Usually a favored contractor tums in the lowest bid. They are subsequently awarded the contracL Later, they submit sharply higher, revised estimates that are routinely approved by the Pentagon (Christian Science Monitor, 9/19/87).
To the casual observer, the process looks legitimate. The deceit becomes obvious only to someone familiar with the defense procurement system. The contractors often spend beyond even these revised estimates.
Even when it is publicly disclosed that these companies are cheating the government, military contractors do not face very stiff penalties. General Dynamics was charged by the General Accounting Office with $100 million dollars in illegal practices. It was only after Congressional and public exposure that the administration conducted its own "investigation," resulting in the suspension of General Dynamics contracts. A few months later, the contracts were reinstated. No criminal action was taken (Christian Science Monitor, 91 787). A Pentagon study revealed that over a four year period the Pentagon was overcharged almost $800 million in inflated labor costs.
As Rep. Denny Smith (R-Oregon) has said, "The problem is not that there is fraud in defense procurement. The problem is that defense procurement has itself become a fraud."