Pentagon not spotting overpayments to contractors, IG finds

The Defense Department is not adequately uncovering large overpayments to contractors, according to the Pentagon's internal watchdog.

A recent department search for such overpayments was both "inaccurate and incomplete," the Defense inspector general reported Wednesday.

Less than half the department's $303.7 billion in first quarter expenditures last year were reviewed for overpayments, the IG report found. Unless senior officials improve their review methodology and oversight, Defense "will continue to understate the department's high-dollar overpayments and error rate," the report warned.

"This is clearly unacceptable," said Sen. Tom Carper, D-Del., chairman of the Senate Subcommittee on Federal Financial Management. "The Pentagon has to do a much better job in identifying and eliminating improper payments. We need to look in every nook and cranny of federal spending -- domestic and defense -- to find ways to cut waste and fraud. "

The report comes as scrutiny of Defense's budget has increased among lawmakers. Last June, a bipartisan group of legislators urged the Obama-appointed deficit commission to consider nearly $1 trillion in Defense savings during the next decade. During debate last month over fiscal 2011 spending, the House passed an amendment to cut funding for the F-35 Joint Strike Fighter alternate engine, though the measure was not included in the final bill.

Charles Knight, co-director of the Project on Defense Alternatives, warned that accounting problems at Defense had contributed to the growth of the department's spending during the past decade. "The finding in this report . . . reveal another small piece of the longtime failure of [Defense] to meet basic auditing standards," Knight said.

The IG report was based on the results of the Pentagon's first attempt to screen and report high-value overpayments, which are defined as payments 50 percent larger than the correct amount for contracts of more than $5,000 to individuals and $25,000 to organizations.

The agency conducted that review in response to a November 2009 executive order that requires agency chiefs to publicly submit quarterly reports on significant overpayments found and recovered.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.