Waste! Fraud! Abuse! (Maybe Not)

A friend of mine with long experience in the federal bureaucracy asked me if I would post what follows. I obviously agreed.

I don’t know anything about a purported watchdog group calling itself “Open the Books,” but is recent Substack post, “Pentagon Should Focus on Defense Priorities, not Lavish Dinners, After Historic $93.4B “Use-It-or-Lose-It” September,” was widely shared on social media. The gist of the piece:

Open the Books has tracked the annual September spending bonanza for nearly a decade. Military spending has spiked every year, regardless of which party controlled the White House.

However, there has never been anything quite like September 2025, when $93.4 billion was spent on grants and contracts. Since at least 2008 — and presumably in history — no federal agency has ever spent so much on grants and contracts in a single month.

In the last five working days of September alone, the DoD spent $50.1 billion on grants and contracts. That’s more than the annual defense budget of countries like Israel and Italy. In fact, there are only nine foreign countries that spend that much on their military in an entire year!

These amounts only include money sent to entities outside the government, not salaries for service members and scores of other expenses.

Let’s talk about the rhythm of U.S. government spending. I’m sure that there are some wildly inappropriate purchases in this list given the propensity of this administration for waste, fraud, and abuse, but it’s also important not to lose track of the orders of magnitude of the U.S. armed services, and to fall prey to the idea that government workers should never have a comfortable working environment because “tax payer dollars”.

U.S. government spending is also deeply distorted by the current political environment, where there is never a budget on October 1 anymore, and there are multiple continuing resolutions that last for months. These articles also don’t seem to address the difference between committing funds to a contract and costing those funds.

Let’s start with the orders of magnitude. Let’s set aside arguments about the appropriate size of the U.S. military and just focus on status quo reality. There are about 1.3 million uniformed service members in the U.S. military. The U.S. military operates over 400 mess
halls. About 26,000 people work at the Pentagon (civilian and uniforms). When you look at big numbers from government spending, you need to look at how the spending is actually allocated. Did they spend $1M on salmon for one event? Or is that $1M spread across 400 mess halls, which is $2,500 per mess hall, and anyone who has run food service will tell you that is not outrageous. An effective military needs to eat well and nutritiously. Consider also footstools and Dora the Explorer stickers. The U.S. military operates 160 schools in the U.S. and abroad with about 67,000 children. And garbage collection? Do we really think that there shouldn’t be garbage collection at U.S. military facilities?

The same goes for office furniture. There are a lot of people and they need a lot of desks. $257M sounds like a lot. In addition to the 1.3M service members, the Department of Defense also employs about 800,000 civilians, about 2.1M total employees. Let’s assume that maybe half of these people need office furniture (contrary to what Pete Hegseth might tell you, the real strength of the U.S. military is logistics and planning, and that involves people who spend a lot of time at desks). That’s $257 per desk jockey. Not everyone needs new furniture at the same time, but a typical office involves a desk, file cabinets, a desk chair, a guest chair, and a bookshelf. Office furniture also includes furniture for conference rooms: large tables, chairs to sit in, etc.

Usually there are nicer chairs at the table, and more bare bones chairs along the walls to accommodate more people than can sit at the table. Again, not all furniture needs to be replaced at once, but all durable goods wear and break over time. ȚV shows depict U.S. government, especially military and intelligence, operating out of bright, modern facilities, with stylish furnishings and state of the art everything. That’s about as realistic as the Friends apartment in NYC. It’s not like that. At all.

Dan here, interjecting with an anecdote: during the year I spent at the Pentagon, the thermostat for our wing of the office was located in my cubicle. It sat near my two computers, which due to separation requirements could not be relocated. The computers put off enough heat that, left to its own devices, the HVAC system would run far too cold. Our solution was to lean cans of soda against the thermostat, keeping them on rotation for when they inevitably lost their chill.

Now let’s talk about the September issue. It is indeed true that there is pressure to spend money in September, and that “use it or lose it” is a factor. But there are other considerations in play. Contracting officers HATE August and September, because everyone is trying to get something in under the wire for the fiscal year. So why does that happen?

First, the U.S. gov budget cycle is completely fucked up and has been for 20 years. Congress used to pass a budget for the next fiscal year before the current fiscal year ended; occasionally negotiations might stretch into the first couple weeks of the new year and there would be a short continuing resolution, which allows the government to keep spending at the same levels as the previous fiscal year, to cover the gap. That process has not functioned since midway through the first Obama administration, when Mitch McConnell set about to deliberately make Obama a one term president by grinding everything in Congress to a halt. Since then, lengthy periods of no budget have become standard, with CRs lasting for months or even for a full year.

A CR means that funds are allocated to the wrong thing, like last year you bought a new car but this year you want to do a home remodel, but you only have money that you can spend on a car, which you don’t need since you already have a new car. Car money can’t be spent on remodeling, so the remodeling project can’t start and the car money sits in your account unused. You can’t even start the remodeling project because you don’t know if you will eventually have the money for it or how much you’ll be able to spend.

Finally, halfway though the year, you finally have your remodeling budget, which was supposed to be spread over the full year, but now you have a year’s worth of money to spend in only six months. But at least now you can start actually working on it. You need to find and interview contractors, do a design, figure out everything you need for the project (equipment and supplies), pick the best contractor for your job and negotiate over the price, and finally, sign an agreement for the work. That takes a lot of time, particularly for big projects in the government.

If funding becomes available in March, you might spend several months on design and finding the right contractor, and suddenly, boom, it’s August or September. You can’t start working on the plan earlier because you can’t promise in a contract to spend money that you don’t have.

The messed up budget cycle has other effects that distort spending decisions. Let’s say you have a long-term activity that you budget for every year and it involves renewing a contract. It’s OK to spend under a CR because it’s the same activity as last year. But under a CR, you only have access to the proportion of the total funding equivalent to the length of the CR. So, for a two week CR, you have your annual budget divided by 26. Since you can’t place a contract with money you don’t have, the work is delayed. Multiple CRs are even worse, because you get the money in multiple small bits. So to provide continuity, many agencies place contracts in August or September that will pay for things that will occur or be received in the next fiscal year, so there’s no gap.

Last year it was VERY clear that there was going to be a CR and possibly a shutdown, so that also affects the timing of spending decisions. The garbage collection cost likely falls into this category: year-long contracts for garbage collection placed for the next fiscal year, because that’s something you don’t want to have a lapse in because of a CR.

Lastly, let’s talk about the end of year IT push, which is related to the furniture push. In many cases, buying new computer equipment or furniture is not deemed essential. Instead, organizations will wait until late in the fiscal year to see if there is “left over” funding after the critical things have been purchased. There is always uncertainty in planning estimates, and it’s very hard to get extra money if you underestimate how much something will cost. So planning estimates that are used to create project and procurement budgets usually include a contingency cushion to account for unexpected situations.

If the extra isn’t needed to complete the work, then there is a bit left over. As you get close to the end of the year, you can see whether the contingency funds were needed or if there is some left over that can be used for things like furniture and computers. If not, someone keeps sitting in a broken chair; maybe next year there will be some extra to replace it, but in the meantime, that person does have a chair. Padding estimates can get out of hand, but anyone who plans any kind of budget will tell you that if you try to plan everything to the exact penny, you will come up short somewhere.

A final point on government contracting: there is a distinction between signing a contract and when the money is actually spent: commitment vs. costing. When you sign a contract, you commit to a paying an invoice at some point in the future, which when the funds are actually costed.

You can’t commit funds you don’t have, but that funding isn’t necessarily costed immediately. A contract might cover work in multiple stages or a service that is provided for the entire year, or a regular delivery (like a subscription) over the duration of the contract. So that contract hurriedly committed in September might actually be for goods and services for the next year. It might even be for multiple years. Costing can happen over the entire period of the contract. You might recall that DOGE cancelled multiyear contracts and claimed that they saved the entire value of the contract, when actually most of the money had already been costed. It’s like paying for a year-long subscription, cancelling part way through the year with a prorated refund, and then claiming you saved the cost of the entire one year subscription.

So yes, it’s good to keep a critical eye on government spending decisions. But it’s also important to put it in the correct context.