Pentagon Pays $720 Million for Storage Containers…in Late Fees
Wednesday, August 31, 2011
Shipping container in Afghanistan
The Department of Defense managed to consume nearly three quarters of a billion dollars by having to pay late fees on rented shipping containers used for the wars in Afghanistan and Iraq, as well as for other purposes.
After reviewing federal data and contracts, USA Today determined that the Pentagon spent more than $720 million since 2001 on fees for shipping containers it failed to return on time. Although much of the loss was attributable to poor financial management, John Pike, executive director of Globalsecurity.org, told USA Today that another problem was that military leaders thought the wars in Afghanistan would end quickly and that late fees would be minimal.
Commonly used in maritime shipping, the containers have played key roles in Iraq and Afghanistan, serving as storage, shelter and building material. Each one can cost more than $2,200 in late fees alone, however.
The fees peaked in 2004, when the Defense Department spent $128 million. By 2008, only $17 million was paid for overdue containers, before the cost went up again in 2010, to $30 million.
Overall, the fees declined last decade, thanks to better management, using government-owned containers, buying rather than renting containers, and capping the cost of purchasing delinquent boxes.
Pentagon Pays $720M in Late Fees for Storage Containers (by Tom Vanden Brook, USA Today)
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