[Congressional Record (Bound Edition), Volume 154 (2008), Part 13]
[Senate]
[Pages 18328-18330]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       DEFENSE AUTHORIZATION BILL

  Mr. SANDERS. Mr. President, the legislation we are dealing with today 
authorizes more than $500 billion, and even in Washington that is a 
heck of a lot of money. That expenditure comes at a time when we have 
massive amounts of unmet needs in our country, when there is a 
crumbling infrastructure, a need to invest in sustainable energy, a 
need to address education, and many other needs. On top of all of that, 
we are looking at a $9.5 trillion national debt and a record-breaking 
deficit.
  I hear many of my colleagues come to the floor and speak about waste 
and fraud in all kinds of agencies and, frankly, that is appropriate. 
Our job as Members of Congress is to make sure we do our best to see 
that not one nickel--not one nickel--is spent in waste or in fraud or 
unwisely. But just as we should do that with the Department of 
Agriculture or with Human Services, we should also do it with the 
Defense Department; in fact, even more so with the Defense Department, 
because their budget is so huge--$500 billion at a time of massive 
amounts of unmet needs in this country. It appears that not a week goes 
by when one doesn't open a newspaper or see a television program which 
deals with another example of horrendous waste, fraud, or abuse which 
takes place within the Department of Defense.
  I know my colleagues on the Defense Committee, Senator Levin and 
Senator Warner, are aware of these things and they are trying, but this 
is tough stuff. I think we have to raise our profile in addressing this 
waste, fraud, and abuse.
  Just some examples: In March of this year, we learned that a 22-year-
old Defense contractor peddled as much as $300 million in old 
ammunition, much of it defective, to the Afghan Army and to their 
police forces. That is right. AEY, a fly-by-night company, landed the 
huge contract, despite its record of botched dealings with the State 
Department and Defense Department. In fact, the State Department had 
placed this company on a watch list of companies suspected of illegal 
arms transactions.
  Further, the Pentagon inspector general revealed that $321 million 
was paid out to cover salaries of 1,000 anonymous employees in the 
Iraqi Ministry of Finance. That amounts to $320,000 per employee--not 
bad in Iraq where people do very well if they make $50 or $60 a week, 
but we are not even sure that the employees saw any of this money.
  We also learned not terribly long ago that the Army ousted the 
contracting officer overseeing Kellogg, Brown & Root's huge Iraq 
support contract when this distinguished public servant refused to 
approve paying the company more than $1 billion in questionable 
charges. In other words, he did his job. He took a hard look at where 
this money was going. There were red flags popping up all over the 
place. He said:

[[Page 18329]]

Wait a minute. We are not going to pay this money. His reward was not a 
commendation but his firing.
  And on and on it goes. The Air Force paid a private U.S. contractor 
$32 million to construct a Ramadi, Iraq airbase. That is OK, except the 
only problem is the contractor cashed a check and the facility was 
never built--$32 million for a project never undertaken.
  Another contractor was paid $142 million to construct Iraqi prisons, 
fire stations, and police facilities that were either never started or 
never completed--$142 million.
  It is absolutely essential for us to provide the Pentagon with the 
budgetary means they need within that huge budget to root out waste, 
fraud, and abuse by contractors in war zones overseas. We also must 
take a close look at how money is misspent here at home--not just in 
Iraq or Afghanistan. The Air Force--the Air Force, needless to say--has 
a few airplanes, but apparently cannot ship a package directly from a 
depot in Corpus Christi, TX, to a National Guard unit in Oklahoma. 
Because of outdated freight forwarding rules, investigators discovered 
that one package took a 2,243-mile detour through Houston, TX, to Fort 
Wayne, IN, and then on to Dallas before it arrived at its destination 
in Oklahoma. The GAO is investigating the ridiculous shipping 
regulations that cost taxpayers millions of dollars.
  Now, are all of these examples simply so-called bad apples or do they 
more likely represent a broken system with inadequate oversight? In my 
view, unfortunately, it is the latter. I think we have a broken system. 
I think we have billions and billions of taxpayers' dollars being 
wasted and not going where they need to go, which is to defend our 
country. The Pentagon's leaders have not done enough to ensure that a 
dollar spent means a dollar gained in national security.
  Frankly, this is not a new problem. In 1940, Senator Harry Truman 
investigated waste and fraud by the U.S. military. During World War II 
he proposed the creation of a Senate special committee to investigate 
the national defense program. The Truman committee identified way back 
then in the 1940s more than $15 billion in unnecessary and fraudulent 
defense spending. That is a huge amount of money. As Senator Truman put 
it at the time:

       We intend to see that no man or corporate group of men 
     shall profit inordinately on the blood of the boys in the fox 
     holes.

  I think what Truman said in the 1940s is absolutely true today.
  Was Harry Truman unpatriotic for demanding increased congressional 
oversight on the War Department and defense contractors at a moment of 
national crisis during World War II? The answer is, of course, no, he 
was not. He simply demanded that, in his words:

       Each dollar expended for war purposes would produce a 
     dollar's worth of the necessary war supplies.

  I think that is certainly a reasonable request supported by every 
taxpayer in this country.
  That is why last year I and the Presiding Officer joined with other 
freshmen colleagues to introduce legislation calling for the creation 
of a commission on war contracting modeled on the Truman committee. We 
need such a bipartisan effort more now than ever. Today, government 
auditors have compiled lists of countless examples of risky and 
inadequate practices by the Defense Department in overseeing contracts.
  The problem is not just private contractors. The Department needs to 
adopt better practices to stop blatant examples of wasteful and 
overpriced purchases.
  Some examples:
  The GAO--the Government Accountability Office--recently assessed 72 
major weapons acquisition programs and reported a colossal $295 billion 
in cost overruns on a $1.6 trillion contract portfolio--$295 billion in 
cost overruns. That is not a bad apple, that is not an aberration, that 
speaks to a system that is significantly broken. What is more, on 
average, these systems are delivered 21 months late. So these 
contractors end up getting far more than they were originally supposed 
to get and, to boot, they are almost 2 years late on delivering the 
product.
  It gets even worse than that. The Defense Department has shelled out 
billions of dollars in bonuses to contractors who don't deserve them. 
According to one study, award and incentive fees totaling $8 billion 
were granted even when the contractors did not deserve the bonuses 
under the Pentagon's own rules. What a bonus is supposed to be about is 
you get a reward when you do your job well, when you come in perhaps 
under contract, when you come in earlier than you had agreed to. That 
is what a bonus is. But unfortunately, these guys are getting these 
bonuses even when they perform poorly, and that is clearly 
unacceptable.
  I wish to commend my colleagues, Senator Levin and Senator Warner, 
for their initiative to establish a director of independent cost 
assessment. It is time for this Congress to impose effective 
acquisition controls and require the Pentagon to put its financial 
house in order. Even the Pentagon's own inspector general has admitted 
that:

       The rapid growth of the DOD budget since fiscal year 2000 
     leaves the department increasingly more vulnerable to the 
     fraud, waste, and abuse that undermines the department's 
     mission.

  That is the Pentagon's own inspector general.
  So it is time to engage in a serious debate over this Bush defense 
budget that elevates gold-plated technologies and huge contractor 
payouts over cogent and sensible strategy.
  A little historical perspective is instructive. President Dwight 
David Eisenhower, a five-star general and the military commander of 
Europe during World War II, deplored excessive military spending and 
its diversion of resources away from pressing public needs--Dwight D. 
Eisenhower. A few days before he left office in 1961, President 
Eisenhower gave one of the most prophetic speeches ever given in the 
White House. Here is what Eisenhower--a Republican, I should add--what 
Eisenhower said:

       In the councils of government, we must guard against the 
     acquisition of unwarranted influence, whether sought or 
     unsought, by the military industrial complex. The potential 
     for the disastrous rise of misplaced power exists and will 
     persist.--Dwight David Eisenhower.

  Fast forward 48 years to the last months of George W. Bush's 
Presidency. It is remarkable how prescient Eisenhower's concerns were.
  Today the budget of President Bush calls for a $515 billion Pentagon 
budget. This is in addition--this is in addition--to the $200 billion a 
year being spent on the wars in Iraq and Afghanistan, and it also does 
not include $16 billion spent on nuclear weapons. That is why I 
proposed an amendment--a very modest amendment, I might say--to address 
one of the more egregious examples of wasteful spending in the Federal 
Government. The incredible amount of unneeded spare parts--what we are 
talking about is unneeded spare parts and other items--in the Army, 
Navy, Air Force, and other Department of Defense agency warehouses is 
measured in the billions of dollars. What we are talking about is 
unneeded spare parts. They don't need it, billions of dollars of 
unneeded spare parts.
  Fixing the military inventory systems is the reason behind the 
amendment I have authored, along with Senator Feingold and Senator 
Whitehouse.
  The Government Accountability Office--the GAO--has placed the 
Department of Defense inventory system on ``high risk'' lists year in 
and year out. In other words, there is a red flag attached to this line 
item.
  The unneeded spare parts inventory and the inefficient inventory 
management systems are literally costing the taxpayers millions and 
millions of dollars each year. Worse, these unnecessary spare parts are 
clogging up the supply system, costing millions for storage, and are 
not providing the support needed for our service men and women for 
defending our country. More than half of the Air Force's secondary 
inventory--an average of $31.4 billion--was not needed to support 
service requirements. That is right. More than $18 billion of its on-
hand spare parts are beyond the needs of the Air Force.

[[Page 18330]]

Imagine that: $18 billion in unneeded spare parts. We have Air Force 
warehouses full of parts that are simply not needed.
  It gets even worse than that. The Air Force has on order $235 million 
in inventory already identified as ready for disposal. In case you 
didn't catch that: $235 million in inventory already identified as 
ready for disposal. So $235 million worth of parts not even delivered 
to the Air Force's warehouses will be ready for disposal by the time 
they arrive. Now, that may make sense to somebody--maybe the people who 
make money producing the stuff. It certainly does not make sense to me 
or, I expect, anybody else in this country. By the way, this is almost 
20 percent of its total on-order inventory. It is a huge amount of 
inventory.
  The Air Force has redefined terms and created new categories such as 
``Additional Applications Anticipated,'' ``Uneconomical to Terminate,'' 
``Management Decision,'' and ``Data Error.'' What they mean by data 
error is a series of computer entry mistakes amounting to $96.5 million 
during one recent 3-month period alone. To my way of thinking, this is 
further evidence of the Air Force's inability to manage its inventory 
program. If data errors are rampant in the system, fix them. If the 
inventory problems can't be corrected without costing even more money, 
then something is wrong with the system.
  This is not just an Air Force problem; it is Pentagon-wide. The 
numbers for the Navy and Army are also extremely troubling. The Army's 
numbers are incomplete because the Army could not provide data from two 
major agencies, including the communications and electronics commands, 
because their inventory computer systems were not compatible with other 
Army computer systems. This is with a budget of $500 billion and we 
can't get computers to talk to each other. Ironically, the 
communications and electronics command is one of the commands 
responsible for Army hardware and software acquisition.
  This underscores the serious problem of the inability of the Defense 
Department computer systems to interface with each other. My staff was 
actually told by an Air Force material command manager that Air Force 
inventory officers are still actually relying on computer systems that 
are based on decades-old designs.
  Year after year, the nonpartisan research arm of Congress has 
exhorted the Pentagon to, 1, provide incentives to reduce purchases of 
unneeded on-order inventory; 2, conduct a comprehensive assessment of 
unneeded inventory items on hand; and, 3, take measures to address 
fluctuations in demand that produce these huge inventories.
  Clearly, something must be done to set things right. It is time to 
get the Pentagon inventory system up to modern practices.
  What does our amendment do? It does a few things. First, the 
amendment, offered by Senators Feingold, Whitehouse, and myself, will 
require the Secretary of Defense to develop a comprehensive plan for 
improving the inventory system, including each service's plan to 
improve audit systems for reducing the gap between projected 
requirements and actual requirements, improvements to information 
technology systems, personnel and training needs, contract reviews, and 
other relevant policy changes.
  Second, this amendment will require a certification to Congress that 
the Army, Navy, Air Force, and Defense Logistics Agency have reduced 
their secondary inventory.
  Third, this amendment strengthens the certification process by 
fencing off $100 million in inventory purchases until the Secretary of 
Defense makes the required certifications.
  This is a small but critical step toward fixing the DOD's inventory 
system. It is time for this Congress to impose long-needed improvement 
and require the Pentagon to put its house in order.
  Frankly, this is just a small step forward. We have a lot more to do. 
This country faces enormous problems. We need money spent in many 
areas. We don't need to be wasting tens of billions of dollars. I look 
forward to working with my fellow Senators to see that this amendment 
becomes law.

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