CONTRIBUTORS

Reducing waste in war contracts

Posted Aug. 31, 2011, at 6:08 p.m.

At least one in every six dollars of U.S. spending for contracts and grants in Iraq and Afghanistan over the past decade, or more than $30 billion, has been wasted. And at least that much could again turn into waste if the host governments are unable or unwilling to sustain U.S.-funded projects after our involvement ends.

Those sobering but conservative numbers are a key finding of the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan, which will submit its report to Congress on Wednesday. All eight commissioners agree that major changes in law and policy are needed to avoid confusion and waste in the next contingency, whether it involves armed struggle overseas or response to disasters at home.

Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak interagency coordination, and subpar performance or outright misconduct by some contractors and federal employees. Both government and contractors need to do better.

Our final report shows that the costs of contracting waste and fraud extend beyond the disservice to taxpayers. The costs include diminishing for U.S. military, diplomatic and development efforts; fostering corruption in host countries; and undermining U.S. standing and influence overseas.

The contractor workforce in Iraq and Afghanistan has at times exceeded 260,000 people and has sometimes outnumbered U.S. military forces in theater. The roughly 1-to-1 ratio sustained over the years reflects a basic operating truth that Defense Department officials expressed in testimony to the commission: The United States cannot conduct large or prolonged military operations without contractor support.

Defense doctrine has for more than 20 years held that contractors are part of the “total force” to be deployed in contingency operations. Nonetheless, the United States embarked on operations in Afghanistan in 2001 and in Iraq in 2003 without adequate planning or contract-management personnel to handle the enormous scale and numbers of contracts. In that sense and in others, America is overrelying on contractors.

Poor planning, federal understaffing and overreliance led to billions of dollars of contracts awarded without effective competition, legions of foreign subcontractors not subject to U.S. laws, private security guards performing tasks that can easily escalate into combat, unprosecuted instances of apparent fraud, and projects that are unlikely to be sustained by the governments of Iraq and Afghanistan.

Projects that are or may be unsustainable are a serious problem. For instance, U.S. taxpayers spent $40 million on a prison that Iraq did not want and that was never finished. U.S. taxpayers poured $300 million into a Kabul power plant that requires funding and technical expertise beyond the Afghan government’s capabilities. Meanwhile, a federal official testified to the commission that an $11.4 billion program of facilities for the Afghan National Security Forces is “at risk” of unsustainability.

Many examples of poor planning, bad management, weak accountability, misconduct and the waste that results from them are detailed in our final report. But Congress asked us to do more than describe problems; it instructed us to recommend improvements.

Our final report includes 15 strategic recommendations to improve contingency contracting. They include:

• Designating a “dual-hatted” official to serve in the Office of Management and Budget and to participate in National Security Council meetings to ensure that the many agencies involved in contingency contracts or grants are properly resourced and coordinated;

• Making more rigorous use of risk analysis when deciding to use contractors, rather than assuming that any task not on a list of “inherently governmental function” is appropriate for contracting;

• Requiring that officials examine current and proposed projects for risk of unsustainability, and cancel or modify those that have no credible prospect of operating successfully; and

• Creating a permanent inspector general for contingency operations so that investigative personnel are ready to deploy at the outset of a contingency, and to monitor preparedness and training between contingencies.

These and 11 other recommendations are detailed in our final report, which will be available Wednesday at www.wartimecontracting.gov.

Our report is not an attack on contractors. In general, contractors have provided essential and effective support to U.S. personnel in Iraq and Afghanistan. But the costs have been excessive, largely because of a shrunken federal acquisition workforce and a lack of effective planning to use contractors and the discipline of competition.

If Congress and the Obama administration adopt our recommendations, they will find large opportunities to save money in contingency operations and to produce more economical and effective outcomes in future hostilities and national emergencies.

Christopher Shays, a former Republican congressman from Connecticut, and Mark Thibault, a former deputy director of the Defense Contract Audit Agency, co-chaired the bipartisan federal Commission on Wartime Contracting in Iraq and Afghanistan.

 

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