Return of the $400 Toaster: SubPrime Vendor Program

Time to cut the pork from the Prime Vendor program.

Called the prime vendor program, it was the object of a Knight Ridder investigation that found that the Pentagon had paid prime vendors higher prices for 102 of 122 pieces of food equipment than the government did to contractors outside the system. For example, Knight Ridder found that the Pentagon had paid $20 apiece for ice cube trays that retail for less than a dollar.

Last year, the Pentagon's waste and fraud hot line received four tips complaining about the prime vendor program. One was from Fellencer, who documented Defense Department purchases in a spreadsheet complete with stock numbers and purchase orders. It showed that the Pentagon had spent 39 percent more using prime vendors, compared with buying the items through the civilian General Services Administration.

Pentagon investigators never called Fellencer. They spent a total of eight hours investigating his tip, talked to the officials responsible for the program and dismissed the tip as "unsubstantiated," the documents show.

That's wasteful spending that could otherwise go towards necessary and crucial equipment, additional benefits and pay for servicemembers, or cut from the budget altogether.

This situation is reminiscent of a similar problem in the 1980s when prices on toilet seats and hammers were inflated to extreme levels. Some reforms were enacted after that point, but there's still problems to be addressed.

UPDATE:
Actually, it was time to look into this program months ago, but it's still relevant today. It's somewhat surprising that more people aren't blogging this story. Yowling from the Fencepost wonders whether we're giving enough scrutiny to the Pentagon after going tooth and nail over school budgets. Short answer is that we probably haven't. But if we're looking for fraud and waste, how about the low lying fruit that is Medicaid fraud - which sources estimate may yield billions in savings in New York alone. It may not be pretty, but fraud has to be addressed in all corners of the budget, not just the ones that you think are worth spending on.

And it should be noted that this is a bipartisan issue - both sides sign off on budget deals, and both sides have the authority to oversee programs, but neither Democrats or Republicans think that cost control is worth their time. Well, they'd both be wrong. Others blogging: Stone Soup Musings, The Whispering Campaign.

Technorati: porkbusters; waste; and fraud.