Waste Cited in U.S. Aerial Warfare on Drugs Overseas : Narcotics: An agency paid excessive prices to Textron for aircraft parts. The Pentagon is called in to help cut costs.

A State Department agency may have squandered one-third of its budget earmarked for an anti-drug air war in a dozen foreign countries, according to an internal audit made available to The Times.

The losses occurred because the Bureau of International Narcotics Matters, until last summer, routinely paid “excessively high” commercial prices for aircraft equipment used to search out and eradicate crops of illicit drugs overseas, the report said.

The finding by the department’s Office of the Inspector General blames the problem on “poor planning” and a lack of aggressiveness by the narcotics bureau, which oversees much of the U.S. effort to extend its war on drugs to the countries that supply them.

The 34-page document does not attempt to assess the amount of money wasted. But it estimates that the narcotics bureau could save at least one-third of the $64 million budgeted for aviation costs this year by taking advantage of lower-cost suppliers.

In a formal response, bureau officials reported that the shortcomings had already been addressed through a new arrangement that gives the Department of Defense an increased role in providing and maintaining the State Department air fleet.

The audit could provide new ammunition for critics who have raised questions about the suitability of the State Department agency to coordinate an overseas operation that is largely military in nature.

It followed by only six months a separate State Department audit that described the narcotics bureau’s programs as both “ineffective” and “unnecessarily dangerous,” warning that ill-equipped aircraft and a lack of security put U.S. personnel at considerable risk.

That report noted that bureau assault helicopters used in Peru and Bolivia for raids on coca-growing areas and cocaine laboratories lacked defensive weapons and said the aircraft were often not available because of a lack of spare parts.

The new audit, which focused on the procurement of those parts for operations in Bolivia and Pakistan, was broadly critical of what it described as an inadequate system in which the Bureau of International Narcotics Matters had paid “high commercial prices for spare parts despite the existence of more cost-effective alternatives.”

It said that the typical procedure was for bureau procurement officers simply to purchase all helicopter parts at commercial rates directly from a private contractor, Bell Helicopter Textron Inc., even when the parts were made by other manufacturers.

As a result, the report said: “(The bureau) has supported its aircraft with costly off-the-shelf parts, paying almost full commercial prices for replacement parts.”

One example showed that the State Department had paid $839.20 a unit to Bell Helicopter for an unspecified part that the Defense Department could have obtained for $54.32.

Bell Helicopter came under government scrutiny in 1988 for allegations that it had fraudulently overcharged the Army for helicopter parts, and it agreed to return $90 million to the U.S. government.

The new State Department audit reported cases in which the company had overcharged the narcotics bureau and recommended that the bureau seek more than $125,000 in compensation. A State Department official said Wednesday that the reimbursement had been received. A Bell Helicopter spokesman, Bob Leder, said the company would have no comment.

But the audit directed its strongest criticisms at the State Department agency rather than the contractor, saying that the narcotics bureau “did not adequately plan its spare parts requirements or aggressively pursue lower-cost Department of Defense or private sector alternatives to paying commercial prices.”

It said that the bureau had rarely sought competitive bids and that it should have taken advantage of an Army procurement process that guarantees substantial discounts. It faulted the agency in other cases for buying new parts when it could have repaired old ones, as in August, 1988, when it paid $290,000 for a helicopter transmission that could have been repaired for $100,000.

The State Department narcotics bureau is to receive $115 million to fund its anti-drug work next year. Of this, $64 million is earmarked for support of aviation operations in 12 countries.

Although acknowledging many of the criticisms, bureau officials contended in their response that the flaws cited by the inspector general had been resolved by last summer under a multimillion-dollar agreement that increases the role played by the Defense Department in the air war.

The new system calls for the Pentagon to lend dozens of helicopters and attack jets to the State Department for use in its $28-million air wing operation in Peru, Bolivia and other countries and to maintain them.

At the same time, the narcotics bureau transferred its remaining procurement authority for the operation to a private subcontractor, Corporate Jet, of Opa Locka, Fla. A State Department official stressed Wednesday that the contractor, unlike the narcotics bureau, is obligated to consult with the Defense Department and private suppliers to seek the lowest possible prices.

However, separate State Department programs that provide assistance for airborne drug eradication programs administered by the governments of Mexico, Colombia and Pakistan continue to rely heavily for spare parts on potentially wasteful contracts with Bell Helicopter and other companies, the official said.