If a project is a $1 billion over budget, and nobody hears about it, then did it really happen?
That’s a question that a group of Senators hope to resolve for good.
This week, Senators Joni Ernst (R-IA), Mike Braun (R-IN) and Rand Paul (R-KY) introduced the Billion Dollar Boondoggle Act. The bill aims to shed light on federal projects that are more than $1 billion over budget or run 5 years or more behind schedule. The bill would require the President’s annual budget to include a list of all the projects that meet those criteria with an explanation of the project, the reason for the overruns, updated cost and timeline information, and any performance bonuses that were awarded for work on the project.
The federal government is a $4.5 trillion-per-year enterprise. It’s difficult to wrap one’s head around how truly massive that is. If you spent $10,000 a day, it would take over a million years to spend the annual budget. The task of the 535 members of Congress to appropriate and oversee those funds seems borderline impossible. And it might be. But members can certainly make it easier on themselves by enacting some basic reforms.
Right now, the only reliable way to learn about these boondoggles are through enterprising reporters and dogged oversight agencies. These sources have uncovered several projects that have gone off the tracks.
One prominent recent example is the high-speed bullet train in California. The project’s cost estimate doubled from $33.6 billion to $77.3 billion and its timeline for completion was pushed from 2020 to 2033. Prior to it possibly being scaled back by California Governor Newsom, $3.5 billion of federal funds were put into the project.
Another recent boondoggle was the Rocky Mountain Regional VA Medical Center which opened last year, five years late and $1 billion over budget. The facility has the title of most expensive VA medical center ever yet has the same number or rooms as a nearby VA facility.
The Hanford nuclear site in Washington is a decade-spanning boondoggle. The project to cleanup nuclear waste from weapons development is 25 years behind schedule and could cost $100 billion over budget.
NASA will spend $8.9 billion in tax dollars on the Space Launch System (primarily through a Boeing contract), which is $2.7 billion more than the original estimate. A report found that the project’s problems “can be traced largely to management, technical, and infrastructure issues driven by Boeing’s poor performance” yet NASA awarded Boeing $323 million in performance bonuses.
These are a few examples of the massive boondoggles that we know about. But there are likely many more that we don’t know. Just look at the Department of Defense, which has been struggling to piece together an audit for over 20 years. Or the Department of Homeland Security, where a GAO review found that only 2 of 22 major acquisitions were on track to meet cost and schedule estimates – with an average of an 18 percent cost overrun and a delay of 3.5 years.
The Billion-Dollar Boondoggle Act will not prevent these massive problems from occurring. But alerting Congress and the public to the problems as they occur could prevent them from spiraling out of control. Congress can step in and require better management and cost-controls or terminate the project if necessary. At the very least, the heightened attention would prevent federal agencies from giving out performance bonuses for boondoggles.
Better yet, there will be a huge incentive for project managers and contractors to stay off the boondoggle list – keeping more projects on schedule and on budget.
A penny saved is a penny earned. A billion wasted can never be returned.
