BUNGLING, corruption and mismanagement in the Defence Department have cost taxpayers tens of billions of dollars and put the lives of service personnel at risk.

As Australia's 50,000-strong defence force readies itself for a possible war with Iraq, a Sunday Mail investigation reveals a litany of failures, cover-ups, delays and rorting in the defence bureaucracy. The nation's servicemen and women are regarded as among the best in the world — but are under-equipped and poorly served by their administrative chiefs.

The Sunday Mail has received information from a loose network of more than 70 defence personnel who have tried to report mismanagement and abuses but have been rebuffed and persecuted for their efforts.

Documents obtained show that independent watchdogs within the department are compromised and their investigations vetted by senior bureaucrats. The investigation found:

Security	is so lax that more than 10,000 personnel and contractors with access to sensitive places and information have no security clearance.
Private Contractors	are regularly paid for work never done, with some contracting and management fees taking up as much as 90 per cent of budget.
Logistics and Warehousing	is a shambles with no proper central inventory system. Defence has admitted it does not have a complete list of what it owns and where it is kept.
Bureaucrats	and private contractors destroyed incriminating files and hid evidence during two Defence Department investigations into contracting scams at HMAS Cerberus naval base in Victoria.
Petty Theft	is rife with thousands of mobile phones, televisions, cameras, DVDs and computers stolen each year.
Billions	have been spent patching up defence's central computing systems, which do not work despite 10 years of development.
Service Records	are in such a mess war veterans are having to wait up to 20 years for medals, many dying beforehand.
Buildings And Assets	are leased out to private industry at nominal cost, short-changing the defence budget hundreds of millions of dollars each year.
Ammunition	is in short supply. In East Timor, bullets for patrolling soldiers are rationed.
Defence Bosses	have admitted to the Senate they have an $800 million contingency fund to cover blunders.

Despite dozens of internal reviews, audit reports and Senate inquiries, incompetent and negligent defence bureaucrats have allowed open-ended sweetheart deals with private contractors.

Public servants spend hundreds of hours covering up mistakes and contracting bungles, making sure none is made public. Some of the same senior public servants who have covered up corrupt practices and turned a blind eye to thousands of contracting blunders are now employed with the same contractors on lucrative consultancies to the defence industry.

Recent contracting scandals centre on Defence Materiel Organisation's new major projects, upgrades and modifications, and maintenance contracts for defence establishments.

The top 16 of defence's major acquisition projects have run $5 billion over budget. They include the Collins Class Submarine fiasco, the 30-year-old Seahawk helicopters and the F/A-18 fighter upgrade.

Defence Minister Robert Hill says the creation of the new Defence Materiel Organisation fixed the problems. But defence officials say new projects and contracts are riddled with delays and overruns. They say the same people responsible for the previous problems and blowouts are in charge of the new organisation.

"Many of the supposedly new projects are actually old projects with the same problems — they have just been given new names," one official said.

Hundreds of officials have taken big retirement packages only to bob up again in lucrative 'professional service provider" (consultant) jobs — working for the very firms they failed to supervise properly in their old public service jobs.

The rot in the department is so serious that the two internal investigators charged with looking into defence contract bungles and processes (the 250-strong Inspector-General's Department and Management Audit Branch) have been compromised by defence bureaucrats, who have prevented them from completing thorough investigations.

Defence documents show department official independent investigators sanitised reports and coerced contractors into providing inaccurate information.