(1) Pentagon plugs leaks in budget

The Pentagon says it is saving billions of dollars in a crackdown on fraud, waste, and inefficient management. Deputy Defense Secretary Frank C. Carlucci says defense auditors probed $12 billion worth of contracts this year and refused to pay contractors about $3.5 billion they demanded. Fifty-three percent of the saving stemmed from audits con- ducted since April 1, 1981, and 47 percent stemmed from earlier investigations.

Mr. Carlucci was commenting Dec. 8 on the release of the semiannual report to Congress detailing the efforts of the Defense Contract Audit Agency (DCAA) to eliminate fraud, waste, and inefficiency from the Pentagon during the six-month period ending Sept. 30, 1981.

Some of the 33,600 audits carried out by the DCAA turned up potentially fraudulent activities by contractors. One subcontractor allegedly charged the government $275,000 for material ordered but never delivered. It also notes that a roofing contractor claimed $500,000 for work that was not performed. Both cases are under investigation.

The Pentagon report reveals that 27 cases of potential fraud ferreted out by investigators were referred to the Justice Department. Another 11 were referred to military commanders for further action. Altogether these 38 cases involved losses of $11.8 million, say defense officials, adding that the Pentagon succeeded in recovering some $750,000.

According to Carlucci, there has been a ''dramatic increase'' in the use of the Pentagon hot line set up to permit the anonymous reporting of cases of fraud and waste. ''Six hundred sixty calls and letters were received, and 554 of the most substantive ones were referred . . . for appropriate action,'' the report observes.

Carlucci says auditors identified procedures that if cor- rected could save more than $1.2 billion. For example, the Defense Department report says a US Army brigade in Eu- rope was not ''effectively using programs designed to iden- tify excess repair parts.'' The brigade accumulated about $2 million worth of unneeded repair parts -- at the same time it had an additional $650,000 worth of parts on order.

Carlucci says the Pentagon, which will be requesting some $244 billion for its fiscal 1983 budget, aims to chalk up $31 billion in savings over the next six years.

In an effort to increase economy and management effi- ciency, the Air Force has set its own program, supervised by Under Secretary of the Air Force Edward C. Aldridge.

When the Air Force Weapons Laboratory at Kirtland Air Force Base in New Mexico wanted large pressure tanks for a chemical laser experiment it found two surplus tanks at Patrick Air Force Base in Florida. ''These were transported to Kirtland, refurbished and installed at a cost of $5,000,'' says an Air Force spokesman. ''The original manufacturer esti- mated the cost of new tanks as $1.6 million, with delivery in 38-40 weeks. By using the surplus tanks, the Air Force obtained a cost avoidance of almost $1.6 million.''

In his now-famous interview in The Atlantic, Office of Management and Budget Director David A. Stockman was quoted as saying that the Pentagon suffered from ''blatant inefficiency, poor deployment of manpower, (and) contracting idiocy.'' He estimated that there is a ''swamp of $10 to $20 to $30 billion worth of waste in the Pentagon that can be ferreted out if you really push hard.''

Defense Secretary Caspar W. Weinberger later retorted that the Pentagon is ''very dry land,'' adding that ''there is not that degree of waste or inefficiency or ineffectiveness in what we're doing.''

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