Ever since he came to the Senate, Senator Levin has been fighting to
ensure that every dollar spent on national defense is spent wisely. That
is why he led the effort to enact the Competition in Contracting Act in
1984. It is why he led the effort to eliminate billions of dollars of
unneeded inventory from the Pentagon's warehouses in the early 1990s. It
is why he led the effort to overhaul the Pentagon's bureaucratic
purchasing systems in the mid-1990s. And it is why he continues to fight
for another round of base closures today.
The struggle to reduce Pentagon waste is an unending one. In the
mid-1980s, for example, Senator Levin learned that the Department of
Defense (DOD) was buying specially designed microchips at three to 10
times the market price of similar commercial products. He insisted that
the Defense Department reduce paperwork requirements and rely more on
commercially available microchips -- resulting in taxpayer savings
estimated at $500 million per year. It wasn't until 10 years later,
however, that Congress was able to enact the Federal Acquisition
Streamlining Act and the Federal Acquisition Reform Act,
institutionalizing the common-sense practice of purchasing commercially
available products where they meet our defense needs.
Similarly, Senator Levin chaired a series of hearings in the early
1990s in which he learned about purchasing practices that had filled
Pentagon warehouses with a million bottles of nasal spray, 50-year-old
bathrobes, a 33-year supply of one size of women's dress blouse, and a
35-year supply of a common, commercially available 10-cent washer.
Congress was able to save roughly $5 billion in planned inventory
purchases of non-essential items by prohibiting purchases that would
result in stocking more than two years' worth of supplies; canceling
procurements for "excess on order" items that are no longer required;
adopting more advanced ordering practices (such as direct vendor delivery)
for commercially available items; and requiring excess inventory held in
units to be returned to the central supply system. Senator Levin continued
this effort as recently as last year with a provision requiring the DOD to
institute these types of "best commercial practices" for managing its
inventory on an across-the-board basis.
The struggle to eliminate wasteful management practices continues in
other areas as well. In the area of financial management, for example, a
series of audit reports by the General Accounting Office (GAO) and the DOD
Inspector General have raised serious questions about the Department's
ability to manage an estimated $250 billion budget and $1 trillion in
assets. In particular, these reports show that:
Over the last several years, Senator Levin has led efforts to ensure
that DOD installs the financial management systems that it needs to
address these problems and ensure that it can accurately account for
assets and expenditures, and pay the right people the right amounts for
products and services received. In the Fiscal Year 2000 National Defense
Authorization Act, Senator Levin helped write a provision that will
require DOD to develop a comprehensive plan to: (1) consolidate or
eliminate unneeded financial management systems; and (2) institute needed
internal controls to ensure the integrity and reliability of financial
data supplied to Pentagon managers.
In Senator Levin's view, we can never devote too much effort to
instituting sound management practices and ensuring that our defense
dollars are well-spent. The taxpayers who send their hard-earned money to
Washington deserve no less.
- DOD has not properly accounted for and reported billions of dollars
of property, equipment, inventory and supplies. As a result, recorded
information on several military equipment items -- including F-4 engines
and service craft -- has been unreliable.
- DOD has not properly accounted for billions of dollars of basic
transactions. For example, DOD is unable to reconcile at least $4
billion in differences between checks issued by DOD and reported to the
Treasury. In addition, DOD has reported an estimated $22 billion in
disbursements that it has been unable to match with corresponding
- DOD itself has cited the lack of a widespread, robust cost
accounting system as the single largest impediment to controlling and
managing weapon system life-cycle costs.
- DOD remains vulnerable to fraudulent and improper vendor payments.
In one recent case, weak financial controls led to nearly $1 million in
embezzled Air Force vendor payments.