WASHINGTON – The annual national defense bill, which was approved yesterday by the Senate Armed Services Committee, includes two key amendments from Senator Claire McCaskill that overlap with her role as the top-ranking Democrat on the Homeland Security and Governmental Affairs Committee.
One provision requires that the Department of Defense (DoD) determine the “beneficial owner” of high security leased space in buildings that it rents. A “beneficial owner” is the company or individual who ultimately controls and thus profits from a building. However, that ultimate beneficial owner may be affiliated with a foreign government or a transnational criminal organization hiding behind numerous shell companies and front companies making it difficult to identify them. Without knowledge of the ultimate beneficial owner, DoD cannot guarantee the security of its facilities or communications therein, and may be inadvertently funding enemies of the United States.
“We need to take every possible precaution when it comes to securing the space the Department of Defense is working out of—I’m glad we’ve closed this security gap in this year’s NDAA,” McCaskill said.
A separate amendment increases transparency at DoD by requiring the agency to include spending estimates on service contracts in their annual and five-year budget reports. In FY 2014 for example, DoD planned to spend over $85 billion for service contracts – more than twice as much as it spent on goods such as armor, vehicles, and artillery for our troops – without first producing any estimates for what its service contract needs were and whether those needs could have been met more cheaply by doing the work in-house.
“If we’re going to use contractors instead of doing things internally, we need to make absolutely sure that decision is made with an eye toward saving taxpayers’ money—and this amendment will help ensure smarter contracting choices,” McCaskill said.