Pentagon Wastes Millions On Spare Parts

The Pentagon wasted tens of millions of dollars of taypayer dollars purchasing spare parts for its fleet of H-60 helicopters flying, according to its own auditors.

A redacted report from the Defense Department’s inspector general analyzed a year’s worth of spending on spare parts for the H-60 helicopter, versions of which are flown by the Air Force (Pave Hawk), Army (Black Hawk), Navy (Seahawk), and Special Operations (MH-60) for troop transport and recovery operations.

In a memorandum accompanying the report, assistant inspector general Jacqueline Wicecarver said the Defense Department spent "at least $394.9 million" on parts during the period, but could have paid much less if the military service branches had consolidated their purchases.

Auditors said the services were buying “the same H-60 spare parts on different contracts, often at different prices, which occurred or potentially occurred in 1,319 instances.”

In one case, auditors said one contract for 29 landing wheels and a second, with a different supplier, for 1,150 of the same wheels resulted in a 127 percent price difference. In another, three separate contracts with three different suppliers for coiled springs showed a 414 percent price difference.

Pentagon auditors faulted the department’ undersecretary for acquisition, technology, and logistics for not fully implementing a 2005 recommendation from the Base Realignment and Closure Commission that would have put almost all spare parts purchases into a single entity: the Defense Logistics Agency.

The BRAC Commission estimated the move would save the Pentagon more than $156 million per year, or nearly $1.8 billion over a 20-year period.

In 2011, the Defense Logistics Agency certified it had complied with the BRAC recommendation. But as auditors discovered that wasn’t true.

Auditors said an Army contracting official told them the recommendations had been adopted “in stages, and the last stage did not start until 2015 or 2016.”

“The Army official stated that the Army plans to transfer the procurement of all aviation and missile spare parts, to include H-60 spare parts, to DLA when the existing spare-part contracts end by Dec. 31, 2020, which is over nine years after DLA certified the completion of BRAC Recommendation,” auditors said.

The Army told investigators part of the delay was “because some spare parts were already on long-term contracts and those spare parts could not transfer to DLA until the contracts expired.”

But in their report, investigators said “the Army awarded 147 contracts for H-60 spare parts after September 2011,” when the DLA certified it had complied with BRAC’s recommendation.

Auditors said an official in the office of the undersecretary of defense for acquisition, technology, and logistics told them that reworking existing contracts with suppliers to comply with BRAC “would extend delivery times and potentially cause readiness problems.”

The report said Defense Department regulations allow the service branches to buy parts on their own “as long as the spare part is unique to the weapon system.”

Auditors said this created a conflict, and recommended the Defense Department “perform a cost-benefit analysis to determine whether the procurement responsibility for all H-60 spare parts…should be transferred to DLA as originally required by BRAC Recommendation.”

Kristin French, the acting undersecretary of defense for acquisition, technology and logistics, disagreed with the recommendation.

In a letter to the inspector general, French said such an analysis doesn’t apply to certain Defense Department contracts, and would interfere with parts suppliers’ ability to “affordably satisfy the war fighters’ requirements.”

The inspector general’s office pushed back, saying that “a cost-benefit analysis for a limited number of H-60 contracts would be practical and helpful in ensuring DoD is purchasing spare parts in the most economical way possible.”

“Therefore, we request the Acting Assistant Secretary reconsider her position,” they said.