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Pentagon Pays $20 For Each 85-Cent Ice Cube Tray

based on a report by Lauren Markoe and Seth Borenstein. October 23, 2005

The Pentagon paid $20 each for plastic ice-cube trays that once cost 85 cents. A supplier was paid more than $81 each for coffee makers that for years were purchased from the manufacturer for $29.

That's because instead of receiving competitive bids or buying directly from manufacturers as it once did, the Pentagon now uses middlemen who set prices. It's the equivalent of shopping for weekly groceries at a convenience store.

The higher prices are the result of a Defense Department purchasing program called prime vendor, which favors a handful of firms.

The Defense Department touts the program as one of its "best practices" and credits it with timely deliveries that have eliminated the need for expensive inventories and warehousing. For purchases under the food prime-vendor program alone, the DLA claimed a savings of $250 million in five years.

But those savings would have happened even without turning to the prime-vendor program, competing suppliers say. Most suppliers for years have offered goods on an as-needed basis so that the military doesn't need to store them in costly warehouses.

One manufacturer who previously sold directly to the government but now sells to the prime vendors said the system doesn't make sense.

Rep. James Clyburn, D-S.C., called for an investigation of the program.

"Can Congress do anything? Yes. Will Congress do anything? No," he said.

You have been reading excerpts from "Pentagon purchases: Millions in markups" by Lauren Markoe and Seth Borenstein. You can read the entire piece here: tinyurl.com/9u33k. Thanks to The Seattle Times at seattletimes.nwsource.com.

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