AF Orders Year-End Flood of Contracts

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, officials said Thursday.

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.”

‘Unpriced Orders’

Congressional critics maintain that 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. However, Air Force officials said Thursday that they had earlier directed a reduction in the use of unpriced orders and the Dec. 20 directive will not change that.

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

Swarts said 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 purchases of spare parts in fiscal 1986, which began Oct. 1.

Slowdown in Contracts

The prior-year funds have accrued because of a slowdown in the award of contracts, said Swarts and Richard E. Carver, assistant secretary of the Air Force for financial management.

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

“It’s clear that a lot of this has come as a result” of the rapid budget increases, Carver said. “There was an extraordinary increase in available funds and not the concurrent increase in available personnel and systems to match that.”

Time Reduced

In fiscal 1985, Carver said, 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 that 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.”