The Pentagon has serious problems balancing its books, staying on budget for major projects and keeping track of its inventories. The General Accountability Office has identified $295 billion in cost overruns on Pentagon programs. A big part of the problem is former military leaders who move to lucrative private-sector jobs with defense contractors—more than 2,400 of them in 2006 alone.

Those former employeeshave the insider knowledge to manipulate the Pentagon’s inefficient contracting practices; and they continue to rake in millions of dollars in performance bonuses despite failing to stay on time or on budget and fulfill their contracts.