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Every wasted tax-dollar is one less dollar for real needs. Congress budgets big money for departments and programs, but the executive branch often oversees spending details -- deciding whether to outsource, with whom, and how to manage the contracts.
Several factors can lead to wasted tax dollars: 1) on the contractors part -- shoddy work, waste, or fraud; and 2) on the government's part -- failure to properly negotiate contracts or to oversee contractors' performance. Below are just thirteen of the hundreds of available examples.
1. Mega-contractor Booz Allen Hamilton reportedly charged us taxpayers twice
as much for contract employees ($42 - $383 per hour) than government
employees typically earn. Apparently, government staff negotiated the
contracts to allow this. Might it be cheaper to hire staff?
2. Abbot Labs settled lawsuits for $382 million after it allegedly offered illegal kickbacks to federal undercover agents to buy the company’s products, then “advised them how to fraudulently bill the government for those items.”
4. PacifiCare Health Systems agreed to pay $87 million to settle allegations that it (and predecessor companies) had inflated insurance claims while contracted to provide government-employee benefits.
5. Department of Energy: a nuclear waste treatment plant was supposed to cost $4.3 billion and be finished in 2011; due to cost overruns and other problems, it will cost about $12 billion and won't be finished until 2019.
6. Hybrid Submarine: despite 13 years and $885 million committed, we still don't have one working sub. We can't sue the contractor (Northrup Grumman) for refunds, because Navy officials accepted the flawed product "as is."
7. Retail pharmacies Wal-Mart (2004) Rite Aid (2004), Eckerd (2002), and Walgreen (1999) settled unrelated lawsuits for a combined $23.4 million after allegedly charging federal healthcare programs full price for partially filled prescriptions.
8. Expensive middleman: Halliburton subsidiary KBR hired a subcontractor to provide meals for troops in Kuwait: Army auditors found that dealing directly with the subcontractor could save the taxpayers $31 million a year.
9. U.S. Embassy in Iraq: $592 million committed, yet wiring was dangerously faulty, appliances didn't work, and staff trailers emitted toxic fumes.
10. General Electric (and 2 subcontractors) paid $11.5 million to settle a government suit alleging that GE had sold defective blades for the engines of U.S. military planes and helicopters.
11. Northrup Grumman settled for $80 million government fraud suits alleging: 1) that a subsidiary overcharged the government for research and design work, and 2) that Northrop knowingly sold the Navy unmanned aerial vehicles that had defective parts.
12. Tenet Healthcare (America's second largest for-profit hospital chain) settled lawsuits for $900 million after allegedly falsely billing Medicare and other federal programs.
13. Hurricane Katrina: after two years and billions spent, New Orleans is still not ready to face a big hurricane.
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