Military Told to Cut Spare Parts Orders in Which No Price Is Set

The Defense Department has directed the military services to cut by 32% their backlog of orders for spare parts that have had no price designated beforehand, the Pentagon said Thursday.

That category of parts buying, called “unpriced orders,” reached a backlog of $27.9 billion as of Sept. 30, a Pentagon spokesman said.

An “unpriced order” is one in which contractors are authorized to begin work on a part before there is final agreement on cost, although a ceiling price is included to limit the Pentagon’s liability.

The directive was released two days after Rep. John D. Dingell (D-Mich.), a harsh Pentagon critic, charged that unpriced orders put the government in a virtual no-win situation and are nothing short of “a license to steal.”

Letter to Weinberger

Dingell, chairman of the House Energy and Commerce subcommittee on investigations, originally made the accusations in a Dec. 19 letter to Defense Secretary Caspar W. Weinberger.

He wrote that a subcommittee staff study had concluded that the Pentagon bureaucracy has ignored Weinberger’s directives to reduce unpriced orders.

Unpriced orders are used to buy initial spare parts for weapons; to buy parts needed urgently; when it is in the Pentagon’s interest to prevent a stoppage of the production line, “and sometimes because it has simply been easier,” a Pentagon statement said.

A review by a high-level Pentagon group seeking to implement reforms in buying practices, headed by Deputy Defense Secretary William Howard Taft, concluded on Nov. 7 that the backlog of “unpriced orders” should be reduced in an attempt to save money, the statement said.

The Army, Navy, Air Force and the Defense Logistics Agency, which buys parts for all Pentagon branches, were directed to cut the backlog by 32% by the end of this fiscal year, Sept. 30, it said.