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24 Jul 2012

Contractor mistrust costs $20 billion per year

With the federal government hunting everywhere for savings, a university study revealed what could be the missing link, particularly in defense. A May 2012 university research report, featured in Washington Technology, suggests the Defense Department has installed unneeded administrative bureaucracy in procurement due to perceived adversarial relationships between buyers and suppliers.\r\n\r\nOf the current $400 billion of DOD procurement, about $100 billion is allocated to administrative costs. The authors of the study said that 20 percent of the department's administrative spending is unneeded, and, if eliminated, could save about $20 billion in the budget per year.


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