Pentagon Failed to Collect Payment for $1 Billion in Fuel, Bombs and Services Sent to Allies, Accountability Office Finds

The Government Accountability Office (GAO) published a new report Wednesday revealing that poor Department of Defense (DOD) record-keeping is to blame for some $1 billion in outstanding payments owed to the U.S. by allied nations provided with American military support.

The outstanding fees include those owed by the Saudi Arabia-led coalition that is fighting Houthi rebels in Yemen. The fees covered mid-air refueling and bombs for military aircraft, the GAO reported.

The DOD uses acquisition and cross-servicing agreements (ACSA) to provide logistics support, supplies and services directly to 104 partner countries. Nations then pay these back by cost-reimbursement or through the exchange of supplies or services of equal value.

The GAO report covered 2014 to 2019, during which time there was around $5 billion worth of ACSA activity. The unpaid amount represented 20 percent of the total—a "substantial portion" according to GAO international affairs and trade Director Jason Blair.

Blair explained that the DOD has a database in which it is supposed to track all ACSA transactions, but that they did not maintain "quality data on what the status of those transactions really was" and that there were "a lot of errors" in how transactions were recorded.

For around 12 percent of the ACSA transactions from October 2013 through March 2018, the DOD could not verify whether they had been reimbursed or not.

The GAO estimated that the Pentagon was fully reimbursed for 64 percent of ACSA orders authorized from October 2013 through March 2018—around 6,000 orders—but did not for 24 percent.

Among the outstanding fees were hundreds of millions of dollars in support for the Saudi-led coalition fighting in Yemen. The U.S. and other Western nations have been providing logistical and intelligence support to the coalition, despite international criticism and domestic opposition.

In response to a congressional inquiry, the DOD identified reimbursable fees of more than $261 million for flying hours and $37 million for fuel provided in support of the Saudi-led coalition. Because the Saudis had not signed an ACSA agreement before June 2016, the UAE reimbursed the transactions before this date with the Saudis picking up the remainder of the bill.

It was agreed in May 2019 that the Saudi portion would be paid in monthly installments over the coming year. As of the end of February, around $59 million in flight hours and fuel was still to be reimbursed.

In 2015, the DOD also provided $2 million worth of general-purpose bombs to the UAE, which were then re-transferred to Saudi Arabia as an ACSA transaction.

The GAO report said the DOD failed to record the order until 2019. To date, the department has received two-thirds of the value of the weapons in the form of reciprocal support. The Pentagon said it would receive the rest of the amount as in-kind reimbursement from the UAE in September 2020.

Other ACSA activity included logistical support for NATO Supreme Headquarters Allied Powers Europe; airlift support for Armenia, Georgia, and Mongolia (via a German ACSA re-transfer); and medical services to Oman (via a U.K. ACSA re-transfer).

Blair told Newsweek the GAO did not identify key factors explaining why certain countries owed more than others, though suggested that as DOD implemented the report's recommendations "analyzing that type of question would help them come up with a risk-based approach to overseeing ACSAs."

Blair said lax record-keeping could limit DOD ability to collect on outstanding fees. "DOD hadn't always sent invoices," he explained. "So of course, we're not going to get repayment from foreign partners if we haven't asked them to pay us."

DOD also did not adequately follow up on invoices that were sent, Blair added. "They hadn't actively followed up in order to collect that debt and hadn't implemented any kind of accountability to make sure that they were going to get more timely reimbursement," he said.

"The overarching theme is about the lack of oversight of the activities," Blair told Newsweek. "Whether it's not sending invoices at all or not following up in a timely manner to ensure repayment, both of those could be addressed with better senior-level oversight."

Blair said that the GAO recommended that the DOD "improve the quality of data" being recorded and "go back and review their records and update them to make sure they've got accurate information."

"They need to solve some of these systemic issues," Blair added. Newsweek has contacted the DOD to request comment on the report.

Saudi Arabia, military, US, Pentagon, reimbursement, ACSA
This file photo shows a Saudi F-15 fighter jet landing at the Khamis Mushayt military airbase, Saudi Arabia, on November 16, 2015. FAYEZ NURELDINE/AFP via Getty Images/Getty