Pentagon in contract scandal

2004-09-30 11:03

Washington - The Pentagon has awarded more than 40% of contracts since 1998 without bidding, said a study released on Wednesday by the Centre for Public Integrity (CPI).

"Over the past six years, the Pentagon has awarded some $362bn to companies without competitive bidding," said the report.

"In fact, of the top 10 contractors, only one, SAIC, won more than half its dollars through full and open competition.

"All the others won a majority of their dollars through sole-source and other no-bid contracts," the investigative Washington think-tank said.

Several companies have recently been called to account for large no-bid contracts, notably vice-president Dick Cheney's former employer, Halliburton, which was awarded large contracts in Iraq, and which is the target of investigations in the United States and abroad.

Another is Boeing, being investigated by the US justice department over its huge contract for mid-air refueling tankers.

The CPI report also looks critically at the Pentagon's increasing practice of outsourcing operations to the private sector, noting that in the period studied each Pentagon budget increase corresponded to an equivalent increase in external contracts.

"Fully half the defense department budget - some $900bn since 1998 - has gone out the door to contractors rather than paying for direct costs, such as payrolls for the uniformed armed services," said the report.

- AFP