military, army, A Terminal High Altitude Area Defense interceptor, THAAD
A Terminal High Altitude Area Defense interceptor (THAAD) designed and built by Lockheed Martin as primary contractor. Key subcontractors include Raytheon, Boeing, Aerojet Rocketdyne, Honeywell, BAE Systems, Oshkosh Defense, and MiltonCAT. Photo credit: DoD

Every year, the Pentagon gives hundreds of billions of dollars to military contractors, often with minimal oversight or accountability. Now, a bipartisan group of senators wants to put an end to this waste.

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Overcharging the Pentagon is good business for defense contractors. With a budget of $800 billion, the Department of Defense (DOD) has deep pockets, and various investigations conducted over many years show that nobody there seems to care that much where all that money goes. A bipartisan group of senators now says enough is enough and wants to put an end to this waste.

In a letter to Secretary of Defense Lloyd J. Austin III, the lawmakers point to the long history of price gouging from defense contractors and note that a recent investigation from CBS News “uncovered massive over-charges from defense contractors accounting for hundreds of millions of dollars.”

It is noteworthy that this effort brought together an unlikely coalition of senators, including Sens. Bernie Sanders (I-VT), Chuck Grassley (R-IA), Elizabeth Warren (D-MA), Mike Braun (R-IN) and Ron Wyden (D-OR).

The senators state that the list of price-gougers includes some of the biggest and most prominent defense contractors.

“Lockheed Martin, Boeing, Raytheon, and TransDigm are among the offenders, dramatically overcharging the Department and U.S. taxpayers while reaping enormous profits, seeing their stock prices soar, and handing out massive executive compensation packages,” the letter says.

One prominent example they provide is that Raytheon has increased the price of Stinger missiles sevenfold, meaning that the company profits immensely from replacing every missile sent to Ukraine to fight Russia.

The letter is not only remarkable because it was signed by senators from both ends of the political spectrum, which is a rarity these days, but also because of the frankness of its language and for going after companies that are often shielded from criticism because of the jobs they provide, their role in US defense, and because they give a lot of money to lawmakers.

None of this stopped the senators from saying that the contractors have “fleeced” US taxpayers and “abused the trust government has placed in them.”

The lawmakers note that almost half of DOD’s budget will go to private contractors, which only highlights the “importance of reining in this out-of-control price gouging.”

The senators strongly criticize the Pentagon for not properly accounting for where the billions of dollars given to defense contractors ends up and whether taxpayers are getting their money’s worth.

“DOD has consistently failed to implement [the Government Accountability Office’s] recommendations, prioritize financial management and fraud reduction, or mobilize sufficient resources to pass an audit,” they write.

Demanding that Austin provide them with an update on DOD’s efforts to put in place better accounting and auditing practices, as well as what is being done to investigate the abuses that CBS News reported, the senators end their letter with a clear warning that massive defense budgets with no accountability are no longer a foregone conclusion.

“DOD can no longer expect Congress or the American taxpayer to underwrite record military spending while simultaneously failing to account for the hundreds of billions it hands out every year to spectacularly profitable private corporations,” they write.


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