US probes $1 trillion of 'waste and fraud'

18 July 2007
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19 July 2007 | Paul Snell

More than $1 trillion (£496 billion) of US government procurement spend is affected by waste, fraud and mismanagement, according to a report published last month.

More Dollars, Less Sense, by the US Congress' Committee on Oversight and Government Reform, attacked President Bush's procurement record. It said over the past year, the number of wasteful, fraudulent or mismanaged contracts had risen sharply. In 2006 auditors identified 118 such contracts, worth $745.5 billion (£370.9 billion). This year that figure had risen to $1.1 trillion over 187 contracts.

The committee said there were recurring problems with contract management, the abuse of flexible contract terms and corruption. It also revealed the number of contracts awarded without any competition or bidding process had risen dramatically. Such spending increased from $67.5 billion (£33.6 billion) in 2000 to $206.9 billion (£102.9 billion) in 2006 - $60 billion (£29.8 billion) more than in 2005.

"The rapid growth in no-bid and limited-competition contracts has made full and open competition the exception, not the rule," the report said. More than half of all federal contracts were awarded without any competition. Deals worth nearly $50 billion (£25 billion) only received one bid.

But Larry Allen, CEO of the Coalition for Government Procurement, a group representing suppliers to the administration, said: "My members experience a much higher level of competition than the report suggests. I am concerned the report was assembled with pre-conceived outcomes in mind."

SMjul2007

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