I hold no brief for the major defense contractors who have been swindling the taxpayers, but I would point a finger at the Pentagon, which might very well borrow a line from Walt Kelly's "Pogo" and say: "We have met the enemy and they are us."
Item: All material that is shipped to various stocking points must be identified with LOGMARS bar codes, which is an acronym for "Logistic Marking System"--the vertical bars used by supermarket scanners to identify and price grocery purchases. When printed by the hundreds of thousands the cost per unit is minimal, but when required to identify five or 10 items the cost becomes astronomical.
Most small contractors do not have the sophisticated equipment required to print the bar code labels, and must pay commercial packaging houses, which charge a minimum of $15 for the first 100 labels and 5 cents each thereafter. An order for five $3 toggle switches costs the Pentagon $30 when the cost of bar code labeling ($15) is added. The Defense Department could save thousands of dollars by waiving the necessity of bar codes on purchases of fewer than 100 units.
Item: Certain categories of materiel must be packaged to meet particular specifications. An electrical connector that may cost several hundred dollars and serve as part of a critical electronic system in a fighter aircraft is placed in the same category as a 10-cent plastic connector, which could survive the stomping of a 500-pound gorilla and must be packaged the same as the delicate electrical connector. Commercial packaging houses base their prices on government specifications for each category. Result: It costs up to 5 cents to package a $200 connector--and it costs up to 50 cents to package a 10-cent connector.