Defense Department auditors found that 95 military contractors ran up overcharges totaling hundreds of millions of dollars during the past four years, The New York Times reported Tuesday.
A confidential report by the Defense Department's Inspector General's office details what appears to be the most extensive study of military contracts pricing practices ever carried out by federal investigators, the Times said.Officials of the Defense Contract Audit Agency and the Inspector General's office studied contracts held by 460 divisions of 95 contractors dating back to July 1984, the report said.
The audit covered contracts for a variety of products totaling $54.3 billion.
The study gives detailed documentation that overcharging on military contracts is widespread and also says that specific instances of inflated pricing seldom come to public attention, the Times said.
However, the confidential report also concluded that the margins of overpricing are generally slight.
It says that although the overcharges represent only a small fraction of the $150 billion in supply contracts awarded annually by the Pentagon, taken as a whole the inflated charges constitute a considerable sum.
"Contract overpricing was a recurrent problem for the 95 contractors audited," Stephen A. Trodden, the Pentagon's assistant inspector general for auditing, told the Times.
"Of the 774 pricing actions audited, 365 (47.2 percent) were overpriced by $788.9 million," Trodden said, adding that the total represented 1.5 percent of the aggregate value of the contracts studied.
The Times said that in the past many military contractors whose contracts have come up for review have opted to contest the process with lengthy negotiations.
Traditionally, roughly half of the government's claims of "defective pricing," have been sustained.