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“Important findings of independent audits ought to result in accountability, ” says Senator Chuck Grassley, chairman of the House Committee on Oversight and Government Reform. He’s asking a Navy official about her rejection of recommendations in an audit regarding a contract which failed to meet cost-effectiveness standards.
“The truth is, these projects have been a license to waste the taxpayers’ money.” Grassley said. “They need to be stopped, and decision makers need to be held accountable.”
The subject of the Naval Audit Service Report driving Grassley’s questions is a $90 million contract awarded for photovoltaic projects in Florida, Mississippi, Texas and Virginia using money appropriated by the American Recovery and Reinvestment Act of 2009. Based on a careful review of all relevant facts, the audit concluded that these projects were a waste of money and recommended that they be cancelled.
Grassley said the Naval Audit Service Report spells out the dramatic degree to which these projects fail on cost-effectiveness. With an average payback of 124 years, ranging from a low of 70 all the way up to 324 years and a savings-to-investment ratio in the 0.04-0.20 range, these projects were not even close to meeting energy efficiency standards established in law and regulation. And because the photovoltaic panels have an expected useful life of 25 years, the audit report states, “recovery of investment is impossible … . The panels will never pay for themselves.”
Grassley said contracts like this one show why people at the grass roots are so legitimately frustrated with wasteful government spending. In a letter to Assistant Secretary of the Navy for Energy, Installations and Environment, Jackalyne Pfannenstiel, who is responsible for the decisions that led to the contract awards, Grassley said that by the government’s own standards that carry the force of law, these $90 million photovoltaic projects were not cost effective. “In fact, they were a gross waste of the taxpayers’ money,” he wrote:
“…Recognizing the obligations of the Assistant Secretary’s position to abide by the law and responsibly manage taxpayer money…[f]or reasons I do not yet understand, you appear to have willingly abandoned those responsibilities to further the energy ‘goals’ advocated by the Secretary of the Navy…”
Following the September 2011 release of a separate but related audit conducted by the Inspector General for the Department of Defense, Grassley raised questions directly with the Navy last November. The Navy response said, “There is no absolute requirement on Federal agencies that renewable energy projects be cost-effective in order to be executed.” In his response in a letter, Grassley asked for the law and regulation that exempt such projects from cost-effectiveness standards.
Grassley said he has notified both Secretary of Defense Leon Panetta and Acting Inspector General Lynne M. Halbrooks about his questions regarding the Navy’s response to this audit.
Three days ago Defense Secretary Leon Panetta blasted Congress on the USS Peleliu, during a shipboard visit off the Southern California Coast:
“…Congress did a stupid thing. What they essentially did was to put a gun to their heads and to the head of the country and basically say that if they did not come up with a plan to reduce the deficit, that this so-called sequester process would go into effect…That process would cut $1.2 trillion in federal spending across the board — almost $500 billion to come from the defense budget…The cuts would be implemented across the board, he said, guaranteeing that the force would be hollowed out in the process. “It would guarantee that every area would be cut,” Panetta said. “It would guarantee that it would weaken our defense system for the future…”
“…I told the members of Congress, ‘Look, I’ve got men and women that put their heads, their lives on the line every day to protect this country. I’m just asking you to assume just a little bit of risk here to do what’s right for this country and to solve the problems that we face,’” he told the group.‘If my men in women can do this, then you can do it as well,’ Panetta said he told Congress….So I’m hoping that ultimately they’ll do what’s right and that [sequestration] won’t happen…”
During a recent Senate Budget Committee hearing in on defense spending, Grassley urged Panetta to examine audit recommendations and pursue reforms. He said the Defense Secretary could prevent the problems identified by auditors from being buried in the bureaucracy and never addressed
Grassley said he, for years, has been calling on auditors for the Defense Department’s Inspector General to issue stronger recommendations and said their work is a mission of the highest importance.
In the meantime, Representative Randy Forbes, is urging the Secretary of the Navy to fight for more ships and NOT Green Energy. “You’re the Secretary of the Navy,” he said. “Not the Secretary of Energy.”