The Nation - News from Aug. 10, 1988

Defense contractors routinely overcharge the government for spare parts, and the excess charges, although small in percentage terms, total hundreds of millions of dollars, the Pentagon said. In the majority of instances, auditors reported, the overcharges resulted from a military contractor’s failure to abide by a law requiring the company to share with the government the latest information it has on labor and material costs. The audit, conducted by the Pentagon’s inspector general, took more than three years to complete and was one of the largest ever conducted. “Of the 774 pricing actions audited, 365 (47.2%) were overpriced by $788.9 million,” the report said.