Casey Calls for Accounting of DoD Research Expenditures

WASHINGTON, DC— U.S. Senator Bob Casey (D-PA) today called on the Department of Defense to establish an accurate accounting and auditing system for Research, Development, Test and Evaluation (RDT&E) contracts.  In a letter to Chairman of the Joint Chiefs of Staff Admiral Michael Mullen and Chief of Staff of the Air Force, General Norton Schwartz, Senator Casey also called for reforms to increase internal accounting and oversight of contracts and to build on the work already underway by the Department of Defense to reduce inefficiencies in contracting.

“The Department of Defense’s research and development programs have long been an engine for innovation in our nation,” wrote Senator Casey.  “However, it has become apparent that in some cases, contractors are failing to deliver what they promised or have based bids on unrealistic budgets and schedules.  This has led to unnecessary waste and unreasonable cost overruns.”

The Defense Department recently outlined $78 billion in cuts that were then included in President Obama’s proposed budget.  The Pentagon has also taken additional steps to address expansive contractor spending.  The Department of Defense is, however, the only agency that does not conduct agency-wide audits.

Senator Casey continued: “We must know how many of our RDT&E projects are moving from the basic science into the advance stages and onto production.  These questions can only be answered by an accurate accounting and auditing system.”

The Pentagon submits an inventory of service contracts to Congress each year.  The inventory submitted in June 2010 listed 766,000 contracts with a total cost of $154 billion.  However, this list excluded the contractors associated with research, development, test and evaluation contracts.   

In eight years as Pennsylvania Auditor General and two years as State Treasurer, Bob Casey compiled a record that focused on making government more accountable and responsive to the needs of Pennsylvanians. He has been a fiscal watchdog who made nursing homes safer, child care more affordable and government more accountable.

Full text of Senator Casey’s letter is below.


Dear Admiral Mullen and General Schwartz:

I write to request information regarding the Pentagon’s management of research, development, test and evaluation (RDT&E) contracts.  I appreciate your recent statements about the shortfalls with open-ended nature of some defense contracts, and agree that neither the Pentagon nor Congress can afford to stand by while platforms and projects run over budget and off schedule.  I firmly believe that we must use this moment to ensure that all agencies, including the Pentagon, are able to accurately account for their expenditures.

The Department of Defense’s research and development programs have long been an engine for innovation in our nation.   However, it has become apparent that in some cases, contractors are failing to deliver what they promised or have based bids on unrealistic budgets and schedules.  This has led to unnecessary waste and unreasonable cost overruns.  With dollars becoming scarcer, it is essential that defense contracts produce innovative platforms that will improve the safety and health of our troops and bolster future capabilities.  To that end, we must establish reforms that will make the research, development, test and evaluation process more accountable and transparent. 

It is my understanding that when the Pentagon submitted its annual inventory of service contracts to Congress that RDT&E contracts were not included.  With an increase in the RDT&E budget by 1.3% from FY’2009 to FY’2010, it is essential that we understand how well contractors are fulfilling their obligations.  We must know if timelines are being met, and, if not, why.  We must know how many of our RDT&E projects are moving from the basic science into the advance stages and onto production.  These questions can only be answered by an accurate accounting and auditing system. Therefore, I respectfully ask that you provide my office with a copy of the Department of Defense’s annual inventory of RDT&E contracts.  In the event that this information is unavailable or otherwise cannot be provided, please explain why.

I am committed to working with you to reduce waste, fraud and abuse at the Department of Defense.  Thank you again for highlighting the need to end the practice of open ended contracting.  I look forward to working with you on reforming this essential system. 

Sincerely,

U.S. Senator Bob Casey

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