Thursday, October 24, 2013
$500 Per Gallon for Gasoline
Remember the procurement horror tales of the early 1980s? We do because we're that old and also because we were unwillingly and unwitting participants in trying to unravel and somehow justify why the Government paid $435 for claw hammers, $640 for toilet seats and $7,600 for coffee makers. Casper Weinberger had us scouring contracts to find purchases with excessive line item prices. It wasn't fun and it certainly wasn't productive.
The Special Inspector General for Afghanistan Reconstruction (SIGAR) was looking into a hospital construction project in a remote Afghan province. The project was hopelessly behind schedule and over budget. Construction is being funded by USAID (Agency for International Development) or by us, the U.S. Taxpayer. The SIGAR found a number of alarming issues and cautioned that they were probably indicative of a much larger problem. SIGAR's report on their findings is available on the internet at SIGAR 14-6-IR/Gardez Hospital.
Among the findings were two examples of excessive payments to the Afghan contractor. In one case, the Inspector General found the contractor paid $300 thousand for 600 gallons of gasoline. That's $500 per gallon (I think our driving habits might change at that rate). In another case, the contractor paid $220 thousand for a temperature control devise that should have cost $2 thousand (or possibly up to $10 thousand for a real fancy unit). To make matters worse, the U.S. Government then reimbursed the contractor for these excessive costs. Where was the Government oversight in this matter?
We probably haven't heard the end of this story.