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February 6, 2018 By AMK

Massive Pentagon agency lost track of hundreds of millions of dollars

One of the Pentagon’s largest agencies can’t account for hundreds of millions of dollars’ worth of spending, a leading accounting firm says in an internal audit obtained by POLITICO that arrives just as President Donald Trump is proposing a boost in the military budget.

Ernst & Young found that the Defense Logistics Agency (DLA) failed to properly document more than $800 million in construction projects, just one of a series of examples where it lacks a paper trail for millions of dollars in property and equipment. Across the board, its financial management is so weak that its leaders and oversight bodies have no reliable way to track the huge sums it’s responsible for, the firm warned in its initial audit of the massive Pentagon purchasing agent.

The audit raises new questions about whether the Defense Department can responsibly manage its $700 billion annual budget — let alone the additional billions that Trump plans to propose this month. The department has never undergone a full audit despite a congressional mandate — and to some lawmakers, the messy state of the Defense Logistics Agency’s books indicates one may never even be possible.

Keep reading this article at: https://www.politico.com/story/2018/02/05/pentagon-logistics-agency-review-funds-322860

Filed Under: Government Contracting News Tagged With: accountability, Army Corps of Engineers, audit, construction, DLA, DoD, financial risk, spending controls

November 1, 2016 By AMK

Kendall: The Pentagon’s spending less on weapons, so let me keep my job

A 30-year-low in cost growth is part of the defense acquisition undersecretary’s closing argument for why Congress shouldn’t eliminate his position.

atl-job-oct-2016Some political appointees spend the final months of a presidential administration counting the minutes until the inauguration. Frank Kendall is not one of them.

Rather than slip back into private life, it seems, the Pentagon’s undersecretary for acquisition, technology, and logistics (AT&L) would prefer to keep looking for ways to save money on weapons and military equipment.

“Not much longer,” a reporter said to Kendall during a briefing at the Pentagon on Friday.

“We’ll see,” Kendall said with a smirk.

Keep reading this article at: http://www.defenseone.com/business/2016/10/kendall-pentagons-spending-less-weapons-so-let-me-keep-my-job/132563

Filed Under: Government Contracting News Tagged With: AT&L, budget cuts, cost-cutting, DoD, NDAA, spending, spending controls, weapons systems

October 5, 2016 By AMK

DoD research spending took brunt of sequestration cuts

Defense Department spending on research and development has suffered historic declines during the budget drawdown that’s been in progress since 2009, falling much more sharply than the rest of DoD contracts, and reversing the usual pattern in which the military has tended to guard its R&D funding so it has systems ready-to-procure the next time it goes to war.

research-spending-trends-sept-2016The insights came via one of the deep dives the Center for Strategic and International Studies regularly conducts into federal procurement data. The center found dollars spent on R&D contracts fell by 53 percent between 2009 and 2015 even while overall contract spending declined by only 35 percent.

Put in terms of its share of a shrinking pie, R&D makes up just 8 percent of Defense contracts now, compared to 11 percent five years ago.

Researchers said the spending cuts had created a significant “trough” in funding for future weapons systems, something top Pentagon officials had warned about in 2013, when the sharpest R&D declines started to take place because of the Budget Control Act.

Keep reading this article at: http://federalnewsradio.com/dod-reporters-notebook-jared-serbu/2016/09/dod-research-spending-took-brunt-sequestration-cuts/

Filed Under: Government Contracting News Tagged With: Budget Control Act, DoD, R&D, research, sequestration, spending, spending controls

October 23, 2015 By AMK

President vetoes Defense authorization bill

President Obama exercised his veto power Thursday (Oct. 22, 2015) for just the fifth time in his presidency, rejecting a defense authorization bill because of the way it would sidestep budget limitations for the military and because it would restrict the transfer of detainees being held at Guantanamo Bay.

The White House said that the National Defense Authorization Act (NDAA) would tap an overseas contingency operations account designed for emergencies and war costs and use it as a “slush fund” to avoid budget restrictions. Those restrictions — known as sequestration — would impose offsetting across-the-board cuts if spending passed certain levels.

“The president believes that the men and women who serve in our armed forces deserve adequate and responsible funding, not through a gimmick or not through a slush fund but one that would — could withstand scrutiny,” White House spokesman Eric Schultz said.

Keep reading this article at: http://www.washingtonpost.com/business/economy/president-to-use-veto-for-only-fifth-time-to-reject-defense-authorization-bill/2015/10/22/58a455a6-78d4-11e5-bc80-9091021aeb69_story.html

Filed Under: Government Contracting News Tagged With: budget cuts, DoD, funding, NDAA, spending controls, veto

August 28, 2015 By AMK

Cloud of sequestration looms over DC region

Five weeks before another round of deep Defense Department cuts is set to go into effect absent action from Congress, budget analysts and elected leaders throughout the region are renewing concerns about the Washington area’s reliance on Pentagon spending and the need to advance private sector growth in its place.

20131112_193738No state is more reliant on defense spending than Virginia, where it affects nearly 13 percent of the commonwealth’s economic output, tops nationwide, and provides the basis for 11 percent of jobs, third in the nation.

D.C. and Maryland also rank in the top 10 in Defense Department spending among states, with 6.9 percent and 5.8 percent of their output relying on defense respectively, according to a department report released last year.

In some ways Virginia is still reeling from automatic spending cuts known as sequestration that took place in 2013. The state’s gross domestic product had zero growth in 2014, according to a recent Department of Commerce report, third worst among states.

Keep reading this article at: http://www.washingtonpost.com/news/digger/wp/2015/08/23/cloud-of-sequestration-looms-over-d-c-region/

Filed Under: Government Contracting News Tagged With: budget, Budget Control Act, budget cuts, Commerce Dept., Congress, DoD, industrial base, sequestration, spending, spending controls

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