If you paid $300 million to a company run by a 22 year old CEO and his certified massage therapist VP, would you double check to make sure you got what you paid for? Heck if I ordered a pizza from a couple of characters like that I would look inside the box before ever leaving the counter to make sure they got the toppings right! But in the fox guarding the hen house world of outsourced Department of Defense procurement, skeptics like us need not apply.

News of the US military buying $300 million worth of bad ammunition from a sketchy company is only the latest in a long history of questionable DoD purchasing oversight. As a former employee of the DoD’s Defense Contract Management Command (now DCMA) - who was tasked with making sure the output of what we were spending was actually being fulfilled - I have to say that this case is outrageous by any standards.

There would have to be a complete lack of performance management, QA and other processes to ensure that taxpayers were getting what they paid for. On an individual basis, bullets are a low budget item, which may have contributed to an atmosphere of not needing to monitor compliance with the contract. But when those bullets add up to $300 million, you have to wonder why nobody’s checking up on what they’re getting. And more directly to the point, where was the due diligence in vetting this supplier? Sourcing professionals today know that you have to award by more than price to get the best VALUE. What price have we put on the lives of the people are endangered by being given 50 year old ammunition?

Obviously in the era of Halliburton, no-bid contracts and government incompetence, much will be made of the fact that this happened in a department where 42% of staff are contractors rather than a vetted civilian career workforce. Without the full details it’s hard to tell if this is a case of contractors run amok, or a lack of effective management by the group who hired them. After all, these contractors, like the ammunition company, should be subject to a level of oversight to ensure taxpayer money is being used appropriately. It’s not that contractors have some inherent inability to do the work of the Army’s Contracting Center for Excellence (undoubtedly named without a hint of irony). But in this case, which is certainly bound for Congressional testimony under the Capital Hill kleig lights, someone will be proven corrupt, incompetent or lacking in even the most basic procedural safeguards.

Technology and best practices in this day and age leave no excuse for this type of abuse. Obviously $300 million worth of bad bullets is an extreme case. But the fact that procurement/sourcing abuse occurs among government, contractor or private employees who operate with too little oversight, process or technology should not surprise anyone.

Andy Rubinson is Ariba’s Marketing Manager for Sourcing Solutions. As part of his strategic sourcing and supply chain experience, Andy worked for several years with the DoD as an Acquisition Professional, as well as in the Supply Chain practice of a Big 4 consulting firm.