DOD acquisition still open to fraud and abuse: GAO

Large and more numerous contract awards continue to keep the Pentagon vulnerable to fraud, waste and abuse, according to a Government Accountability Office review of contract management at the Defense Department recently forwarded to Congress.

"As the last several years have shown, those vulnerabilities have resulted in numerous cases in which taxpayer dollars were misused or wasted," said the letter signed by Katherine Schinasi, GAO's managing director for acquisition and sourcing management.

Defense Department officials have responded to the vulnerabilities, but it's unclear whether those measures have been effective.

"Ongoing monitoring of results will be the prudent course of action," the review stated. But this may be a challenge, because no one Defense Department office is responsible for monitoring detection and prevention of fraud, waste and abuse across the agency, the review concluded.

The vulnerabilities stem from weaknesses in five areas: sustained senior leadership, capable acquisition workforce, adequate pricing, appropriate contracting techniques, and sufficient contract surveillance, the review said.

An emphasis on making awards quickly sometimes comes at the expense of sound contracting techniques, the review found. And increased demands on the acquisition workforce have led to vulnerabilities in contract pricing and competition and in the selection of contracting techniques.

The review noted the creation of a Defense Science Board in November 2004 as an effort by to reduce vulnerabilities. It mentioned the Air Force scandal surrounding favorable treatment of a large contractor, apparently referring to Darlene Druyun, the retired deputy acquisition secretary who admitted she acted against the government's interest by favoring Boeing Co. in contracts worth billions of dollars.

"In March 2005, the Defense Science Board concluded that nothing in the department's general acquisition structure or policies would prevent contracting malfeasance, such as that carried out by the senior Air Force official, from happening again," the review said.

Two of the military services established the Procurement Fraud Working Group, a Pentagonwide grassroots forum for acquisition personnel to discuss ways to better address vulnerabilities to contracting fraud. The working group recently developed a Web-based community of practice to allow the immediate dissemination of information.

In addition, the military services have each launched initiatives, ranging from new offices to focus audit and investigative efforts to promoting general awareness about fraud through training and newsletters. It is too soon to determine the impact of those initiatives, the review said.