Cost overruns bring call
for freeze on renewal
of Marines’ food contract
Sep 20, 2010 10:44 AM
A congressional briefing that focused on rooting out waste from military service contracts has honed in on the US Marines’ Regional Garrison Food Service arrangement that, instead of saving taxpayers the promised 20% cost savings when it was signed eight years ago, has led to hundreds of millions of dollars in overruns.
A briefing held recently by Defense Secretary Robert Gates and Undersecretary of Defense Ashton Carter called for reining in the Defense budget and focused on weapons systems. A September 16 briefing highlighted the importance of service contracts—that now make up more than half of the Department of Defense budget—to keep costs down.
The performance on the Marines contract “raises serious questions,” said Rep Robert Andrews (D-NJ), chairman of the House Armed Services Acquisition Reform Panel.
“When the vendor increases costs and passes them on to the taxpayer, it can avoid close scrutiny,” Andrews said, calling on the Defense Department to delay renewing the expiring contract until it answers questions that he and others raised. “Any taxpayer dollar that is spent on something worth only 80 cents is not a taxpayer dollar well-spent. And I think that is what we are finding on this contract,” he said.
The Marine Corps contracted with Sodexo USA, an affiliate of the French-owned global hospitality conglomerate, for $881 million in 2002 to provide foodservice at domestic bases. But costs on that contract jumped by 36% to at least $1.2 billion.
“These foodservice contracts expire at the end of this month,” said John Kang, an expert on contracting policies for the Service Employees International Union. “Currently the Marine Corps is reviewing bids, but that solicitation does not incorporate key lessons learned. Without closing the existing loopholes, how can we protect taxpayers from more unplanned spending?”
“There is a lack of transparency when it comes to federal contracting,” said Scott Amey, the general counsel for the watchdog group Project on Government Oversight. “Modifications (to the contract) mean government changing on the fly. We need to get away from the mindset that ignores cost overruns.”
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