How CBP wasted $69M on border fence steel
Since 2008, Customs and Border Protection has wasted $69 million mismanaging the purchase and storage of steel for fence construction along the southwestern border, according to a Nov. 7 report (.pdf) from the Homeland Security Department's office of inspector general.
Because it planned poorly, the report says, CBP bought 27,557 more tons of steel than it needed, at a cost of $44 million, and had to keep that extra steel in storage. Then, CBP spent $9.8 million more than necessary to store the extra steel because it extended the original storage contract instead of moving the extra steel to a cheaper location.
CBP told the IG that it will use the extra steel for future projects if it has to build additional fencing. The agency also said it can use the steel to repair existing fence--for example, in January 2011 it used 500 tons of steel for that purpose.
The agency also lost money when its contractor overrode the purchasing system's selection of a subcontractor bid and chose a higher-priced subcontractor instead. The difference in bids was $13.5 million, but CBP did not ask for documentation to justify the decision. If it had, it would have found that the contractor failed to adequately document its decision, justify the perceived benefits and follow the evaluation critera, the IG says.
The report adds that CBP wasted about $282,000 in interest fees because it entered the contract into its system incorrectly and did not have a notification process to remind offices of invoice due dates. As a result, the IG says, it paid one-fourth of its invoices late.
On top of that, CBP relied on verbal information instead of documentation for goods received, so it cannot guarantee that the government received the amount of steel it paid the contractor for.
- go to the IG report (.pdf)
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