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GAO report: Lack of data causing delays in military spare parts contracts

A lack of cost information from contractors on spare parts -- a load of spares is pictured during delivery to the USS Cowpens -- has led to delays in their acquisition by the military, according to a Government Accountability Office report. Photo by MCS1 N. Ross Taylor/U.,S. Navy
A lack of cost information from contractors on spare parts -- a load of spares is pictured during delivery to the USS Cowpens -- has led to delays in their acquisition by the military, according to a Government Accountability Office report. Photo by MCS1 N. Ross Taylor/U.,S. Navy

May 26 (UPI) -- A lack of pricing data is slowing Defense Department contract awards, a Government Accountability Office report released on Wednesday indicates.

The 31-page report focuses on sole-source spare parts used on military vehicles, ships, aircraft and systems, and notes that the Pentagon relies on cost information provided by contractors to determine prices.

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In one case, the report cites a contract reviewed by the GAO that was delayed by over three years because adequate cost information was not provided.

Although contractors must certify that cost information is current and accurate, the report said that the Defense Logistics Agency needed to find non-certified data in the award of 77 of 136 spare parts contracts from 2015 to 2019.

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The agency added that a 2019 memorandum, requiring defense agencies to report when contractors are declining to provide cost or pricing data, has been unheeded, resulting in delays.

The GAO recommended that the Defense Department should "identify options for collecting information on the extent and nature of delays that contracting officers experience in obtaining cost or pricing data on sole-source contracts."

The report follows a GAO audit, released on Tuesday, indicating that the Pentagon returned nearly $128 billion in unspent "canceled funds" to the U.S. Treasury from 2008 to 2019.

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Under rules of congressional appropriation, military branches have up to three years to spend apportioned funds, followed by up to five years to spend the funding on related programs.

If the funding is unspent, it is regarded as "canceled" and returned to the Treasury Department.

The money returned by the Defense Department is nearly half of the $263 billion billion returned by all government agencies, and is a focus of President Joe Biden's plan to increase spending on domestic issues while leaving the defense budget without growth, according to Bloomberg News.

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Critics note that unspent funding is a symptom of a bloated military budget.

"Congress has appropriated so much money for the Defense Department that the Pentagon does not know what to do with it," commented Senate Budget Committee Chairman Bernie Sanders, D-Vt., earlier this month.

The GAO's Tuesday report cited the departments of Defense, Agriculture, Health and Human Services and the Treasury as largely responsible for requesting funds, then not using them.

It cited program needs being less than estimated, agencies not having authority to redirect funds and unpredictable program costs as the cause.

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