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Air Force Ordered Contract Speedup at End of Year

January 2, 1986

WASHINGTON (AP) _ The Air Force, awash in money because of delays in awarding spare-parts contracts, ordered its buyers to place as many contracts as possible during the final 10 days of 1985.

A directive issued Dec. 20 by the Air Force Logistics Command cautioned the service’s 3,000 procurement agents not to ignore ″constraints of law, directives, prudence and bona fide need rules.″

But it added: ″There is currently much focus and pressure on prior year unobligated funds ... You should therefore attempt to obligate available Prior Year 84 and Prior Year 85 funds to the maximum extent possible for inclusion in the 31 Dec. 85 accounting reports.″

Congressional critics maintain such spending directives encourage waste and the issuance of so-called ″unpriced orders,″ by which the Pentagon agrees to buy a part first and then negotiates the price later. Air Force officials said Thursday, however, they had earlier directed a reduction in the use of unpriced orders and the Dec. 20 directive would not change that.

″It won’t cause people to do dumb things,″ said Col. Robert F. Swarts, a logistician who works for the deputy Air Force chief of staff.

According to Swarts, the Air Force had roughly $700 million left over from prior year budgets as of Dec. 1, two months after the end of fiscal 1985. Another $3 billion has been budgeted for spare parts purchases in fiscal 1986, which began on Oct. 1.

The prior year funds have accrued not because the money isn’t needed, but because of a slowdown in the award of contracts, said Swarts and Richard E. Carver, the assistant Air Force secretary for financial management.

The slowdown occurred because of a new emphasis on contract competition, prompted by well-publicized ″horror stories″ about spare parts prices, and because of difficulties in overseeing the rapid budget hikes that accompanied President Reagan’s military buildup, the two said.

″It’s clear that a lot of this has come as a result of the (budget) ramp- up,″ said Carver. ″There was an extraordinary increase in available funds, and not the concurrent increase in available personnel and systems to match that.″

In fiscal 1985, Carver continued, the Air Force managed to reduce from 280 days to 260 days the amount of time it takes to process spare parts orders of $100,000 or more. That number should continue to decline as contracting efficiency improves, he added.

Swarts said the Dec. 20 order was prompted by ″some pretty intense pressure″ from top Defense Department officials on the Air Force to spend its spare parts budget faster. He said the Air Force has been told it must demonstrate how it intends to spend the remaining fiscal 1984 and fiscal 1985 funds before the $3 billion contained in the fiscal 1986 budget is released.

″There’s been some tendency for them not to want to release a lot of our money,″ Swarts said, ″so there has been a lot of pressure on us to show that we can get our program under control.″

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