OCTOBER 26, 2009
Keeping with its well-documented history of waste and mismanagement, the Department of Defense has awarded tens of millions of dollars in federal stimulus contracts to half a dozen companies under criminal investigation for defrauding the government.
The deals mark the latest of many scandals associated with how the Pentagon misspends billions of tax dollars by regularly awarding lucrative no-bid contracts to politically-connected firms and severely mismanaging Middle East military operations rife with waste, fraud and abuse.
A new database of federal contracting reveals that the Department of Defense has awarded nearly $30 million in stimulus contracts to six companies while they were under federal criminal investigation for cheating the government. The information was disclosed in a report published this week by an independent investigative journalism group that links the database to its story.
The companies defrauded U.S. taxpayers by falsely claiming to be small, minority-owned businesses that are granted special preferences when bidding on coveted government contracts. Instead, they are part of a larger enterprise that makes them ineligible for the federal deals and have been suspended from receiving new contracts. Never the less, the Pentagon still awarded the companies 112 stimulus-funded projects at U.S. military bases.
This sort of contempt for public funds is par for the course at the massive agency with an annual budget that exceeds $530 billion. Just last month the Department of Defense reported spending more than one-fourth (around $242 million) of its stimulus funds on hundreds of no-bid contracts that will end up costing tens of millions more than if the work was competitively bid.
Additionally, several government reports have detailed how the Pentagon has blown tens of billions of tax dollars by miserably failing to address the seemingly endless corruption in contracts for military operations in the Middle East. A few months ago a bipartisan legislative commission established to study wartime contracting in Iraq and Afghanistan determined that much of the $830 billion the U.S. has pumped into the wars is susceptible to waste, fraud and abuse.
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