Pentagon Computer System Called a $40-Million Failure

The Pentagon’s latest effort to unscramble its tangled foreign military sales accounts has been a $40-million failure, the House Government Operations Committee said Tuesday.

It said a costly new computer system for straightening out the botched program was two years behind schedule, had thousands of unresolved problems and ultimately could cost $75 million without performing well.

As a result, the committee said, the Defense Department cannot say why there is an unreconciled $1-billion difference between cash on hand in a special trust fund and total payments by foreign countries that purchase U.S. military equipment through the foreign military sales program.

“The (foreign military sales) trust fund system is in shambles,” Committee Chairman Jack Brooks (D-Tex.) said.

The Pentagon has been trying since 1976 to improve its accounting procedures for foreign military sales, which have amounted to $170 billion in more than 87,000 sales since the program was started more than three decades ago.

The congressional watchdog committee said it has not been able to unsnarl the books because of lost records, extraordinary delays in reporting sales by the separate military services and inability to correct mistakes made long ago.

The new accounting system, developed by the SAGE firm of Rockville, Md., for the military, was supposed to be ready in October, 1986. Now the completion date has been postponed until next October, or two years behind schedule. As of last September, according to the report, the Pentagon had spent $40 million on the system without any success.