Key Points and Summary: The U.S. military faces a different kind of battle—one against wasteful spending.
-A recent audit found the Air Force overpaid $150,000 for soap dispensers, while another investigation revealed $1,500 coffee cups for pilots.
-These examples highlight systemic financial mismanagement in the Pentagon’s $850 billion budget.
Pentagon Waste Exposed: Can SecDef Pete Hegseth Fix It?
It’s easy to picture the battlefield as a distant desert or tropical war zone. But there’s a different fight unfolding much closer to home: the one for responsible spending at the Pentagon. Winning that battle should be new Secretary of Defense Pete Hegseth’s first mission on the job.
Most Americans support a strong, adequately-funded military, but concerns arise when the Air Force uses nearly $150,000 of that funding on soap dispensers for lavatories—to cite one of many such examples.
In October 2024, a two-year audit by the DoD Office of Inspector General (DoDIG) revealed that Boeing, a major defense contractor, overcharged the Air Force by nearly 8,000 percent to obtain spare parts for the C-17 Globemaster III (a soap dispenser, believe it or not), leading the Air Force to overpay it by $149,072.
The DoDIG also found that of 46 randomly audited soap-dispenser spare parts, the Air Force was overpaying for 12. Reason Magazine estimated that this mismanagement cost taxpayers $4.3 million—an embarrassing failure of oversight and accountability.
Nor was the DoDIG the only group to find instances of wasteful spending. In 2018, a congressional inquiryrevealed that the Air Force was spending nearly $1,300 for each reheatable coffee cup used on KC-10 aircraft – and then replacing them instead of repairing them whenever their handles broke. According to Senator Chuck Grassley, the Air Force spent $32,000 replacing just 25 cups.
Then-Air Force Secretary Heather Wilson attributed this cost to the cups’ special design, which allowed them to plug into the aircraft’s electrical system and therefore required FAA certification. Yet a replacement part could be 3D-printed for just 50 cents.
The amounts wasted in these examples are small in the context of an $850 billion defense budget, but they indicate a broader problem of systemic financial mismanagement. If such waste exists in minor expenditures, imagine how much money is wasted in larger contracts. American taxpayers deserve better.
The Air Force does not need overpriced soap dispensers, especially when replacement parts could be sourced at fair market prices. And unless Air Force coffee gives pilots superhuman abilities, the idea that it needs $1,500 FAA-certified coffee cups is insane and an insult to taxpayers.
A more efficient Department of Defense should be able to protect the U.S. without squandering funds on overpriced equipment and unnecessary expenditures.
One way to do this is by expanding the use of fixed-price contracting.
Under the current cost-plus system, the government reimburses contractor expenses and then pays an additional amount – a setup that doesn’t punish wasteful spending or encourage defense contractors to optimize costs. In contrast, a fixed-price contracting system would incentivize defense contractors to cut their costs by tying their profit to their efficiency.
An F-35A Lighting II takes off for a Red Flag-Nellis 24-2 night mission at Nellis Air Force Base, Nevada, March 18, 2024. The presence of the F-35s offers the U.S., Allies, and partners a versatile and highly capable system, enhancing collective defense measures while reinforcing the NATO Alliance’s commitment to leveraging top-tier military capabilities for regional security and deterrence. (U.S. Air Force photo by 1st Lt. Jimmy Cummings)
Fixed-price contracts are not novel. They have previously proven effective in controlling costs, with the U.S. Space Force leading the charge in their adoption. Advocates for this system (including Frank Calvelli, the Assistant Secretary for Space Acquisitions in the Air Force) argue that fixed-price contracts place greater responsibility on suppliers to stay within budget.
It’s time for the Department of Defense and the defense industry to focus on lethality and reduce waste. Switching to fixed-price contracting is a good place to start.
About the Authors:
Jim Fein is a Research Assistant for National Security and European Affairs at The Heritage Foundation. Ka’Von Johnson is a member of Heritage’s Young Leaders Program.
