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:

  • 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 obligations.

  • 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.

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.