Pentagon Paid $999,798 to Ship Two 19-Cent Washers to Texas

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In summary: But seriously, this kind of thing happens more often than you would think. And not just in the government, but in private companies as well. The key is having proper checks and balances in place to prevent and catch it. And in this case, the flaw in the automated purchasing system was exploited by the company. It's a reminder to always be vigilant and not blindly trust systems and processes. In summary, the Pentagon paid a small South Carolina supplier over $20 million in fraudulent shipping costs, including $999,798 for shipping two 19-cent washers to a Texas base. The company exploited a flaw in the automated Defense Department purchasing system which automatically paid for items labeled "priority" without
  • #1
fourier jr
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Pentagon Paid $999,798 to Ship Two 19-Cent Washers to Texas!

Pentagon Paid $999,798 to Ship Two 19-Cent Washers to Texas

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to a Texas base, U.S. officials said.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina -- twin sisters -- exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled ``priority'' were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

C&D's fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service's chief agent in Raleigh, North Carolina, said in an interview. ``As time went on they got more aggressive in the amounts they put in.''

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.

``The majority, if not all of these parts, were going to high-priority, conflict areas -- that's why they got paid,'' Stroot said. If the item was earmarked ``priority,'' destined for the military in Iraq, Afghanistan or certain other locations, ``there was no oversight.''

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

The Pentagon Defense Logistics Agency orders millions of parts a year. Stroot said the agency and the Defense Finance and Accounting Service, which pays contractors, have made major changes, including thorough evaluations of the priciest shipping charges.

A review of paid shipping invoices showed that fraudulent billing is ``is not a widespread problem,'' she said.

``C&D was a rogue contractor,'' Stroot said. While other questionable billing has been uncovered, nothing came close to C&D's, she said. The next-highest contractor billed $2 million in questionable transport costs, she said.
http://news.yahoo.com/s/bloomberg/20070816/pl_bloomberg/ajkoyhuchw0m_1

How can anyone at the Pentagon not notice something like that? Or maybe everyone actually does, and it's an indication of the level of corruption in the US government. That's more likely.

I've read that was the reason Canada was created, except it was the Welland Canal corporation & the Grand Trunk Railroad (now CN) that shafted the government relentlessly. A united Canada was proposed because there would be a bigger tax base to help the government pay off its huge debts to the British bankers who financed everything.
 
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  • #2
Heck, a million bucks is nothing. But if you start talking about a billion here, and a billion there, pretty soon we're talking about real money!

Besides, they were surely very fine washers.
 
  • #3
fourier jr said:
http://news.yahoo.com/s/bloomberg/20070816/pl_bloomberg/ajkoyhuchw0m_1

How can anyone at the Pentagon not notice something like that? Or maybe everyone actually does, and it's an indication of the level of corruption in the US government. That's more likely.

I've read that was the reason Canada was created, except it was the Welland Canal corporation & the Grand Trunk Railroad (now CN) that shafted the government relentlessly. A united Canada was proposed because there would be a bigger tax base to help the government pay off its huge debts to the British bankers who financed everything.
The article doesn't say anything about repayment. I'm sorry but jail time is not sufficient, this is a crime against every taxpayer in this country. So now our tax dollars will pay for this person to live in a (more than likely) minimum security prison for white collar crimes?
 
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  • #4
The washers were probably shipped instantaneously. It's not cheap to circumvent the laws of physics! In order to do that you have to bribe every major deity the world has known, including Ra, Zeus, Saturn, Buddha, Mickey Mouse, and Jesus in that order. That takes a lot of dough!
 
  • #5
Evo said:
The article doesn't say anything about repayment. I'm sorry but jail time is not sufficient, this is a crime against every taxpayer in this country. So now our tax dollars will pay for this person to live in a (more than likely) minimum security prison for white collar crimes?

You want them beheaded?
 
  • #6
Sick! Some guy with a gun cops a couple of thousand dollars in a hold-up, and he'll spend the next 20 years in prison. These people should be forced to pay full restitution and be locked away for life. We should consider adopting China's approach to punishing corruption and theft. Doing time in a country estate with minimal security is not punishment - it is a slap on the wrist and permission to pretend that you have "done your penance" to society.
 
  • #7
zoobyshoe said:
You want them beheaded?
I was thinking a daily public flogging.
 
  • #8
Evo said:
I was thinking a daily public flogging.
I see.
 
  • #9
zoobyshoe said:
I see.
Not harsh enough? What ever happened to "punishment to fit the crime"?
 
  • #10
What kind of 19¢ washer would need to be shipped from SC to TX? They don't have washers down there?
 
  • #11
Evo said:
Not harsh enough? What ever happened to "punishment to fit the crime"?
"My object all sublime
I will achieve in time:
To let the punishment fit the crime,
The punishment fit the crime.
And make each prisoner pent,
Unwillingly represent,
A source of innocent merriment,
Of innocent merriment."
 
  • #12
Evo said:
I was thinking a daily public flogging.
Or you could give these "ladies" a choice. They could opt for hanging or a daily public flogging. Might have to import some rattan-flogging pros from Singapore to make the choice a fair one.
 
  • #13
Mallignamius said:
What kind of 19¢ washer would need to be shipped from SC to TX? They don't have washers down there?

Good quetion.
 
  • #14
Didn't they check Amazon?
Maybe they could have ordered with FREE Super Saver Shipping... if they ordered $25 or more.
 
  • #15
robphy said:
Didn't they check Amazon?
Maybe they could have ordered with FREE Super Saver Shipping... if they ordered $25 or more.
And therein lies the problem, if the order is only for 38 cents, the shipping is $999,798.00
 
  • #16
Funding for MIB?
 
  • #17
Hypatia is right! I believe the situation was concisely explained in the movie. The new guy asks how all the money needed to funds the secret MiB stuff could possibly have eluded congressional oversight. The old guy replies "you really think the army pays a million dollars per screwdriver?" If this does not prove the presence of extra-terrestrials on Earth...

EDIT: Yeah, or maybe "Independence Day"... Memory, flaky... Whack, not quite in...
 
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  • #18
Unfortunately, this kind of "accounting error" is not a cover for funding for some nice projects. It is "sugar" for some well-connected crooks that want to scam the US government for every penny they can get. The GOP mouthpieces keep shrieking about how they want "smaller government" and wants to get "government off the backs of the taxpayers" and they relentlessly feed these crooks and creeps that suck billions off our tax dollars every year. This is not confined to the Republican party, nor is it uncommon. Our entire government has been sold to the oligarchs running this country.
 
  • #19
fourier jr said:
How can anyone at the Pentagon not notice something like that?
I believe that it was George Carlin who pointed out that the most blatent oxymoron in the English language is 'Military Intelligence'.

fourier jr said:
I've read that was the reason Canada was created

Bite your tongue, you blathering lunatic! We were not 'created'; we evolved.
 
  • #20
Mallignamius said:
What kind of 19¢ washer would need to be shipped from SC to TX? They don't have washers down there?
Sometimes, like when you need your parts delivered promptly by parachute drop from a cruise missile (TomahawkExpress) for example, the delivery costs can be rather high.
 
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  • #21
Danger said:
Bite your tongue, you blathering lunatic! We were not 'created'; we evolved.

If you mean Canada went from a crippled colony to a crippled nation then I guess we evolved...:rolleyes: Are you one of those Canadians who has no problem with people criticizing the US but flips out once someone criticizes Canada?
 
  • #22
Negative; I just dare not let down my 'anti-creationist' guard for an instant.
 
  • #23
Small Company scams Pentagon for $20.5 million

Kinda makes me wonder how much $$$ Haliburton got away with.

http://seattletimes.nwsource.com/html/iraq/2003840515_washers17.html
 
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  • #24
edward said:
Kinda make me wonder how much $$$ Haliburton got away with.
Oh, you know the answer to that, right?

"Go **** yourself!"
--Dick "Not part of the executive branch" Cheney
 

1. Why did the Pentagon pay almost $1 million for two 19-cent washers?

The Pentagon did not intentionally pay $999,798 for two 19-cent washers. This was a result of a clerical error made by a defense contractor who accidentally added two extra zeros to the price of the washers.

2. Who was responsible for the mistake?

The mistake was made by a defense contractor who was responsible for purchasing supplies for the Pentagon. The contractor has not been identified.

3. Was the mistake caught and corrected?

Yes, the mistake was caught and corrected. The Pentagon was able to recover the overcharged amount from the contractor and only paid the actual cost of the washers.

4. Has this type of mistake happened before?

Yes, this type of mistake has happened before. In 2015, the Pentagon paid $8,000 for a helicopter gear worth $500,000 due to a similar error made by a contractor.

5. What measures are being taken to prevent these types of mistakes in the future?

The Pentagon has taken measures to improve oversight and prevent these types of mistakes from happening in the future. They have implemented stricter guidelines for contractor billing and have increased monitoring of expenses to catch any discrepancies.

Pentagon Paid $999,798 to Ship Two 19-Cent Washers to Texas

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