Memorandum
DATE: 22 February 1999
TO: Bill Lynn
VIA: A. Maroni____B. Dauer____W. Hall____
FROM: Ron Garant
RE: Pot of Gold
Now that we have the CHEM/DEMIL program in the Army it was worth the trip to Aberdeen MD to demonstrate to them just how much fat can accumulate in OSD managed programs that are relatively untouchable. I will admit that the levels don't approximate the juice that came out of the NRO but it still isn't small change.
Prior to going up I sent the Army the memo at tab (a). After no more than a couple of hours of the standard kabuki dance it became evident to all that they were banking money. The first two R&D documents that we looked at reflected MIPR's going to Rock Island and DOE's Sandia lab to hide excess FY 1998 funds.
Of the $40 million of unbilled FY 1998 R&D funds $8 million related to a MIPR to Rock Island for the development of a portable munitions disposal unit. The MIPR was issued in Aug 1998 and as of September 98 an $11 million FY 1997 MIPR for the same product still had only $8 million billed. There obviously wasn't a requirement for FY 1998 funding for this program.
The second item was a MIPR to SANDIA for $11.0 million that had nothing billed against it. Despite no performance, the MIPR, which had initially been issued in June for $4 million, was amended by the additional $7 million in August. Even with this obvious Mexican banking of excess FY 1998 funds they ended the year with $5.8 million unobligated out of the $66.3 million appropriated. The $173 million FY 1999 program probably has $60 million that could be reprogrammed through stringent financial management practices.
When it comes to the Procurement funds it is like drilling for oil in Saudi Arabia.
Their MIPR's to FEMA dating back to FY 93 total $68 million with only $5 million billed to date. No additional funds should be MIPRed in FY 99 and substantial portions of the FY 97 and 98 funds should be recoverable. This is over and above $62 million of O&M that also went to FEMA which only $6 million billed.
In the world of O&M what they are doing is almost criminal. Here they are contending that they will have a 6-month slip in the program and they had over half of their FY 1998 $416 million unexpended at the end of the year. To make matters even worse there was $53 million of the FY 1997 O&M unexpended at the end of FY 1998. This is 12 months after the end of the fiscal year.
Hopefully the Army SARDA representative caught on to what we were pointing to. Now that we have this program out of the OSD goodie bag there is ample incentive for the Army to step in and do a swamp drain. OSD managed programs don't have the advantage of the zero sum game to keep them in line. We usually have to wait until the numbers are in the billions as with the NRO.
We had processed a 440 releasing the inflation savings a couple weeks ago to keep the wolf from the door. They contended that they were going to have to lay people off i[f] we didn't ad[d] to what they perceived as an under funded program. Attached is the 440 withdrawing the inflation release of a couple weeks ago. I fully expect that the Army will be using a substantial portion of the excess CHEM/DEMIL assets to cover their omnibus reprogramming requirements.
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