Money for nothing: Late fees ending for Pentagon
By TOM VANDEN BROOK | USA Today | Published: April 10, 2014
The Pentagon racked up some nasty late fees — $620 million-plus since the wars in Iraq and Afghanistan began in 2001 — for failing to return shipping containers on time.
After chiding from the Senate and embarrassment in the press, the military appears to have broken its bad habit. In the 2014 fiscal year, the military paid out no fees for failing to return shipping containers on time, said Mark Wright, a Pentagon spokesman.
The problem surfaced early in the wars, but the fire hose of money gushed by the Pentagon during its free-spending, peak-war years pushed it below the surface. A story in USA TODAY in 2011 followed by prodding from Sen. Tom Carper, D-Del., focused attention on the issue.
The late fees piled up in much the same way as a past-due library book. Shipping boxes, ranging from 20 to 40 feet in length and chock full of gear, have been the preferred method of getting cargo to Iraq and Afghanistan. Once there, troops repurposed the metal shells for shelter, storage, even bathrooms. The problem is most are owned by shipping companies, not the federal government. And late fees mount because those firms charge daily penalties for containers not returned on time. Under a rent-to-own arrangement, the Pentagon was paying nearly $7,400 for a container worth $3,200.
Not a very good deal for taxpayers.
Military transportation officials got a handle on the problem with the help of a contractor. Now, the Pentagon is asking to extend the contract to help get the bulk of the remaining gear out of Afghanistan by the end of this year. There are about 40,000 containers remaining there valued at $160 million.
A document justifying the need for an extension of the contract notes that without the outside help, the Pentagon could mistake containers it owns for those it leases. That means the military "will incur the cost of returning a container to (America) only to learn that is not a (Department of Defense) container."
Make a mistake and bring the wrong one home, and the late fees could top $4,000 per container.
With the contract extended, Wright said, late fees "are expected to continue to decline and additional costs avoided."
It's a costly lesson the Pentagon doesn't want to learn again.