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Going after waste in defense contracts

US Capitol Building

KAI RYSSDAL: Politics is often referred to as a horse race. And there was a trifecta of sorts today on Capitol Hill. Auditors of the three main agencies responsible for keeping track of Iraq reconstruction were at the witness table.

You might be able to guess how things went during the hearing by the House Government Reform Committee. About $10 billion in Pentagon and State Department spending has been wasted or not properly accounted for. A number that could grow, one of the auditors said, with the president's plans to send more troops.

The House hearings provided a perfect launch pad for new contracting legislation introduced today over in the Senate. Eric Niiler has more from Washington.


ERIC NIILER: Democratic Senator John Kerry of Massachusetts doesn't mince words when it comes to some U.S. firms doing work in Iraq.
JOHN KERRY: Shady battlefield contracting. Contractors who are not interested in getting the troops what they need at the lowest cost possible or helping to save taxpayer dollars, Contractors who just want to walk away with as much as they can for themselves.

Kerry and fellow Democrats introduced legislation today that would toughen federal contracting rules.

The bill boosts penalties for so-called war profiteers who overcharge the government. It also requires more competitive bidding. Prohibits political cronies from overseeing contracting agencies. And bans companies who show a pattern of cheating from getting more contracts.

Senator Byron Dorgan of North Dakota is a co-sponsor.

BYRON DORGAN: There have been circumstances where, on the same day, in a criminal court in one of Virginia's suburbs, the same company was defending itself against criminal charges. And in the Pentagon, it was signing a new contract.

But critics say contractors need flexibility in war zones, not more rules.

Stan Soloway of the Professional Services Council says real reforms should go beyond the blame game.

STAN SOLOWAY: There's huge underlying personnel policy issues that . . . they're totally being ignored here in favor of sort of a polemic attack on contractors, many of whom are living and dying in harms way.

The bill has no Republican co-sponsors. If passed, it would only apply to future government contracts.

In Washington, I'm Eric Niiler for Marketplace.

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