Congressman Rob Andrews announced that the Department of Defense has agreed to save millions in taxpayer dollars by revising a controversial food services contract for the Marine Corps, making the contract more competitive by awarding it to two vendors instead of one. Rep. Andrews, who led a panel on cutting wasteful Pentagon spending in the last Congress, insisted that the DoD control costs, ensure quality, and open up competition to additional vendors, leading to the new contract, which was awarded last month.
Since 2002, the catering group Sodexo has been the Marine Corps' sole provider of food services. While Sodexo estimated their price tag at $881 million for the eight years between 2002 and 2010, costs spiraled out of control and reached as high as $1.2 billion -- spending $319 million more in taxpayer money than expected. In late 2010, the Department of Defense indicated it would simply renew this contract -- without cost control reforms. As a result of Andrews's recommendations, DoD shortened the initial length of the contracts from 5 years to 1, awarded half the contracts to a separate vendor, and required that the vendors, not the taxpayers, pick up the tab for increases in the price of food.
"Anytime anyone buys services, having companies compete for business will drive down costs," said Andrews. "If you own a small business, and there's only one office supply store in town, and they raise the price on paper for whatever reason, you're stuck. But if all of the sudden, there are two stores selling office supplies, now you have a choice to make, and the managers of those stores know it."
In the last Congress, the House Armed Services Committee chose Rep. Andrews to lead the Panel on Defense Acquisition Reform. Because the Panel found that service contracts, like Sodexo's, account for 60 percent of the Pentagon's procurement spending, Andrews and Congressman K. Michael Conaway (R-TX) sponsored the IMPROVE Acquisition Act, which recommended increased competition in the bidding for service contracts. The IMPROVE Act was signed into law by President Obama as part of the Defense Authorization Act on January 7, 2011.
"The IMPROVE Act will continue to give us the tools to search for and find ways to cut Pentagon cost overruns while ensuring that our servicemembers have the resources they need," said Andrews. "This contract is the first example of many savings we can achieve."