Forbes: Christmas Comes In September, Not December, For Federal Contractors

September 30, 2019 11:09 AM

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Editor's Pick
By Adam Andrzejewski

The largest federal agencies just completed a billion-dollar, year-end spending binge that likely exceeded $100 billion. Much of the excessive spending was waste. And every dime was borrowed, which added to our nation’s $22.6 trillion national debt.

It was the largest extravaganza of taxpayer abuse in U.S. government history. It just ended on September 30th – the feds fiscal year-end.

Agencies worry that spending less than their budget permits might prompt Congress to appropriate less money in the next fiscal year. To avoid this, federal agencies embark on an annual spending spree to avoid the impression they can operate on less. This "use-it-or-lose-it" spending phenomenon happens every year.

Last year, $97 billion was spent in a mad rush. In the final week, our auditors at OpenTheBooks.com found $53 billion in federal contracts went out the door including $12,000 foosball tables and millions spent on lobster tail and snow crab.

 
While the final tally of spending for September 2019 will not be available for 90 days, we found similar spending patterns already emerging this year. Here are some current examples gleaned from a small sample of federal data that is currently available:

  • Wine, beer, and whiskey: $11,000 on 'alcohol' already disclosed | $310,000 last year. Yes, the year-end spending binge is a big party on your dime. The State Department likes to restock the liquor cabinet and take the edge off of international diplomacy by purchasing beer, wine, and whiskey.
  • Loading the gun locker: $17,000 on rounds of .223 ammunition. Veterans Affairs (VA) just purchased more rounds for their "military police long gun program" (AR-15-style weaponry). Last year, more than $800 million loaded the gun locker for fifteen agencies – including the Small Business Administration, Environmental Protection Agency and the Office of Personnel Management.
  • Passenger vehicles: $59 million spent on 'passenger motor vehicles' already disclosed | $300 million last year. This year, already, the State Department purchased $33 million worth of passenger vehicles to update their fleet. That’s literally driving up taxpayer costs. In addition, nearly $1 million has already been spent on 'motorcycles, motor scooters, and bicycles' by the Department of Interior. Last year, $10 million went out the door. This does not include $135,000 on snow mobiles and $650,000 on golf carts.
  • Office furniture: $39 million on 'office furniture' already disclosed | $490 million last year. Homeland Security just placed orders for $8 million in furniture. Justice bought $2 million. Commerce, Health & Human Services, State, and General Services were all over $1 million each.

It’s a big problem when the federal agencies can barely spend all the money that Congress throws at them.

There’s no clearer example of bloat in the Pentagon’s military budget than use-it-or-lose-it year-end spending. Last year, in our OpenTheBooks Oversight Report, Use-It-Or-Lose-It-Spending FY2018, we found the Department of Defense (DOD) spent $61.2 billion on contracting in September. During the entire previous year, DOD only spent $244.8 billion on contracting (FY2017).

That’s no way to run the world’s finest military.

The year-end ‘use-it-or-lose-it’ spending spree has grown sharply in recent years: from $69.6 billion (FY2015) to over $100 billion. There’s so much government spending at stake that it distorts our national economy. Both Bloomberg and ZeroHedge recently warned investors not to react to "surprise" upside economic growth indicators. The culprit? The September federal spending binge.

In the scramble to spend everything, federal agencies often break the rules that are supposed to restrain them and spend millions of taxpayer dollars anyway.
In 2017, a local VA hospital purchased a $2.3 million surgery robot at year-end. The VA Office of Inspector General (OIG) found that it was the 84th surgery robot at the hospital and a duplicate of an existing one. Furthermore, there was no planning, review, or proper approval – which delayed installation and use of the robot for six-months.

Were they building a surgery robot army?

Thankfully, a "Grinch" has emerged on Capitol Hill – U.S. Senator Joni Ernst (R-IA) – to combat the $100 billion in mad-dash federal year-end spending. Ernst recently introduced legislation (S.1238) that cracks down on "Christmas in September." It’s a simple bill that would revolutionize federal procurement by limiting agency spending in the final two months of the year to an average of the previous ten months.

It’s about time that Washington DC got serious about stopping waste, fraud, corruption and taxpayer abuse.

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