Navy needs to track $40 billion spent on service contracts per year

Secretary of the Navy Ray Mabus said the Navy and Marine Corps needs to better track the $40 billion a year spent on service contracts for everything from information technology to mowing grass. 

“We know we can save significant amounts of money just by setting up things like contract courts, which require ... contracting officers to come in every year and justify the contracts,” Mabus said Friday morning.

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“Why do we have the contract? Has it been re-bid lately? Is it — is it the best price we can get? Is it needed?” he said at the Center for Strategic and International Studies. 

He said cutting service contracts was harder than cutting platforms, because they were less visible and harder to pinpoint. 

“We have got to make sure that we spend every dollar well,” he said. 

Mabus also said it was important to rein in spending for personnel, in order to preserve fighting capability for troops. 

“And I think that, particularly over the last 10 years with the rise of military compensation going up 40 percent more than [civilians], that we are — we are being fair,” he said. 

At the same time, Mabus said, it is important to continue to spend on biofuel for the Navy, to lessen the military’s reliance on foreign oil and its price fluctuations. 

“Every time the price of oil goes up a dollar a barrel, it costs the Navy and the Marine Corps $30 million in additional fuel costs,” he said. 

He said efforts to produce a nationwide biofuel industry was “going very well,” with four companies contracted to produce biofuel for the Navy. 

“They're contracted to provide us with about 160 million gallons a year at a good bit less than $4 a gallon, which is very competitive with oil and gas,” he said.