Why is this still happening when our U.S. infrastructure is failing?

Pentagon Doles Out Sweetheart Deals for Wartime Supplies
By Nathan Hodge April 29, 2010 | 12:38 pm | Categories: Af/Pak


According to White House budget estimates, it costs roughly $1 million a year to support the deployment of a single soldier to Afghanistan. Ever wonder why it costs so much? Landlocked country, long supply lines, poor infrastructure, yadda yadda. But how about another possible contributing factor: The reliance of the Pentagon’s main supply agency on no-bid contracts?

Newsweek’s stellar Declassified blog got the Defense Logistics Agency (DLA) to fess up to awarding $1.4 billion in no-bid contracts to two shady foreign entities to supply aviation fuel to U.S. military bases in Kyrgyzstan and Afghanistan. In a statement to Declassified, DLA confirmed that it had awarded contracts to two firms, Mina Corp. and Red Star Enterprises, under federal procurement guidelines that allow “contracting without providing for full and open competition.”

That’s problematic for a number of reasons: For starters, allegations of crooked base supply deals helped lead to the violent overthrow of the government of Kyrgyzstan. And leaving aside the question of whether the United States deliberately turned a blind eye to corruption in a strategically located Central Asian state, let’s turn to another point: Why the hell is DLA awarding no-bid contracts on this scale?

It’s not just limited to fuel contracts. DLA, for instance, has also given major sole-source awards to Hesco Bastion, the U.K. firm that manufactures the ubiquitous sand-and-soil-filled perimeter defenses seen at U.S. bases throughout the Middle East and Central Asia. An Illinois company, Infrastructure Defense Technologies, recently submitted a formal protest with the Government Accountability Office in a bid to overturn DLA’s most recent award to Hesco, claiming that the agency had unfairly given a monopoly on defensive barriers to Hesco.


It’s worth pointing out here that Infrastructure Defense Technologies unsuccessfully sued DLA in the Court of Federal Claims over the same issue. The website of the powerhouse law firm Patton Boggs, which successfully represented Hesco in the case, notes that the court ruled Hesco “was properly awarded the sole source contract because only the Hesco product could meet the government’s stated needs for the procurement.”

That’s essentially the same rationale that DLA offered to Declassified for its no-bid award to Red Star, described as ““the only company that had the capability to meet operational needs.”

But saying that doesn’t necessarily make it so. We’ve covered some dubious “sole-source” awards before — the procurement of Russian helicopters, for instance — and it’s easy to detect a pattern: In cases where the government grants someone an exclusive rather than seeking multiple quotes, it usually ends up paying a much higher price. Shortly after taking office, President Barack Obama vowed to limit no-bid contracts, saying that contracting overhaul could save taxpayers billions of dollars a year. One wonders if anything at all has changed.

[PHOTO: U.S. Department of Defense]



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