The Project On Government Oversight (POGO) Blog

From Amey to Zakheim: 7 Quotable Quotes on Wartime Contracting Commission's Final Report

By DANA LIEBELSON and BRYAN RAHIJA

Yesterday, the Commission on Wartime Contracting (CWC) held a press conference on Capitol Hill to present their final report. Here are some key quotes from the event, along with a statement from POGO's own Scott Amey.

 

Scott Amey, General Counsel, POGO "The Commission on Wartime Contracting's final report deserves considerable attention to ensure that past blunders are not repeated. The Commission's finding that at least one out of every six taxpayer dollars spent in Iraq and Afghanistan was lost to waste and fraud is not surprising—but it is absurd. In other words, for the past 10 years, the government has thrown $12 million a day out the window and received nothing in return."

 

Clark Kent Ervin, CWC Commissioner, former Department of Homeland Security Inspector General “We are not naïve, we know that this is a time of severe budget constraints. But it’s urgent that these recommendations be implemented. It’s not just an issue of dollars and cents, it’s an issue of safety and national security.”

 

Christopher Shays, CWC Co-Chair, former ten-term Member of the House of Representatives (R-CT) “The government was not prepared to enter the wars with a large number of contractors and the government has become over-reliant on these contractors.”

Non-Partisan Commission Urges Congress to Adopt Contracting Reforms

By DANA LIEBELSON

In these budget-strapped times, it's hard to get Members of Congress to step across the aisle and agree even on where to go for lunch--let alone agree on how to oversee billions of dollars in Afghanistan. But yesterday, the bipartisan commission behind a three-year investigation on wartime contracting did just that by urging Congress to set differences aside and implement reforms to halt massive amounts of fraud and waste in contracting.

"Our final report has no dissenting views from the commission," said Michael J. Thibault, co-chair of the eight-member Commission on Wartime Contracting (CWC), at a press conference. “In fact, [during the investigation] you would have been hard-pressed to tell which commissioners were Republicans and which were Democrats.”

Several of the commissioners present at the conference, which was held Wednesday at the Capitol, went so far as to call the Commission, 'non-partisan'—which was quite different from what we saw from the very divided Financial Crisis Inquiry Commission, another congressionally-mandated panel empowered to examine another troubling big picture problem that has cost taxpayers significant sums of money.

Commission on Wartime Contracting Final Report: A Decade's Lessons on Contingency Contracting

By NEIL GORDON

At least one out of every six dollars spent by U.S. taxpayers on contracts in Iraq and Afghanistan over the past decade--more than $30 billion--has been wasted.

That, and the fact that the government over-relies on contractors for contingency operations, are the key findings in the final report issued today by the Commission on Wartime Contracting in Iraq and Afghanistan (CWC). The eight-member, bipartisan, congressionally chartered commission filed the 240-page report with the House and Senate this morning.

Taxpayers have spent a total of $206 billion on contracts in Iraq and Afghanistan. More than $40 billion of this was awarded to KBR. KBR and 21 other companies accounted for more than half of the total. An additional $38.5 billion went to “miscellaneous foreign contractors,” demonstrating once again the difficulty of compiling reliable, accurate contract spending data in those countries. The CWC estimates that waste and fraud have amounted to at least $31 billion and possibly as much as $60 billion (about $12 million every day for the past 10 years) and warns that we may be at risk of losing an equal amount of money if the governments of Iraq and Afghanistan are unable or unwilling to sustain U.S.-funded projects after we leave.

According to the report, fraud and waste stems from a variety of shortcomings equally attributable to both the government and contractors: poor planning, vague and shifting contract 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. “There are many causes,” the CWC announced in a press release accompanying the report, “and no simple solution.”

Contractor Behind Bungled Embassy Construction Sends State Dept. List of Claims Totaling $375 Million

By JAKE WIENS

It's like a bad movie that never seems to end. First Kuwaiti General Trading & Contracting Company, the contractor responsible for bungling the construction of the U.S. Embassy in Baghdad, has sent the State Department a list of claims totaling hundreds of millions of dollars related to its work on that Embassy, according to people familiar with the situation.

Totaling over $375 million, the claims include $22 million for extra security, nearly $13 million for danger pay, and a hair over $4 million for food shortages. The majority of the claims pertain to a “War Risk” clause in First Kuwaiti’s contracts, according to documents reviewed by POGO.

The claims come more than three years after the completion of the Embassy. They also come just months after a heated exchange during a Commission on Wartime Contracting (CWC) hearing, in which CWC Commissioner Charles Tiefer pressed the State Department’s top management official, Patrick Kennedy, to commit to seek a $132 million rebate from First Kuwaiti.

The State Department Office of Inspector General (OIG) recommended the Department attempt to recover that amount from the contractor in an October 2009 audit. The audit detailed a laundry list of deficiencies associated with First Kuwaiti’s work on the Baghdad Embassy.

In response to the OIG’s recommendations, State asserted that the OIG would “need to furnish the Contracting Officer a detailed breakdown of how each dollar value in these recommendations was computed” in order for State to formally request a rebate.

Nearly two years later, during the CWC hearing, Kennedy claimed that State had repeatedly asked the OIG for this breakdown, and strongly insinuated that they had yet to receive it:

Woes Continue for Afghan National Police Training Program

By BRYAN RAHIJA

A top government contractor's failure to meet contractual agreements with the U.S. government put the entire mission of the Afghan National Police (ANP) training program at risk, according to a new joint audit by the Inspectors General (IGs) for the Department of State and Department of Defense (DoD).

The purpose of the audit was to review the transition of contract administration for the ANP training program from the Department of State to DoD.

The IGs found that DynCorp, the U.S.-based firm that won the billion-dollar contract to provide training personnel and life support (e.g.: food, lodging, and security services) for the ANP, fielded only about 40 percent of the training personnel it was supposed to bring in. From Al Jazeera:

Under a $1 billion, two-year contract signed between the Defence Department and DynCorp International in December 2010, the firm was required to have instructors in place within a 120-day deadline.

Defence officials “reported that the incoming contractor did not have 428 of the 728 required personnel in place within the 120-day transition period,” said the audit.

The most notable discrepancy was in the number of police mentors that DynCorp was supposed to provide to the Afghan forces.

The audit said that 213 of the 377 required “Fielded Police Mentors” were not in their positions during the transition period.

But it wasn't just DynCorp that the IGs faulted. According to the audit, State and DoD failed to put together a comprehensive plan for the transition. Instead, both Departments developed their own plans independently.

FOIA Friday: Does State OIG Really Not Have a List of Closed Investigations?

FOIA FRIDAY

This week's document: Denial of POGO FOIA request for "a list of all closed investigations, from the period of January 2007 through the present." Document agency: State Department Office of Inspector General Document number: OIG FOIA Case No. 11-00031-FOI Document date:  July 19, 2011 Every Friday, POGO will strive to make one document available that we or others have obtained through the Freedom of Information Act (FOIA), especially documents that have not previously been posted online. Some of these documents will be more important than others, some may only be of historical interest— although relevance is in the eye of the beholder. POGO is doing this to highlight the importance of open government and FOIA throughout the year.

By JAKE WIENS

POGO Director of Public Policy Angela Canterbury noted recently that despite presidential memoranda to executive branch agencies instructing them to adopt a presumption of disclosure, "there's still a wide gap between promise and practice" when it comes to FOIA. One of the concerns, as stated by Canterbury, is the inconsistency in disclosure of information across agencies.

That inconsistency is evidenced by today’s FOIA Friday document. In response to a POGO request for a “list of all closed investigations, from the period of January 2007 through the present,” the State Department Office of Inspector General (OIG) responded that after a “thorough” and “reasonable” search, they were not able to find documents responsive to POGO’s request.

They also added, for good measure, that “FOIA does not require agencies to create documents in response to an individual’s request for information.”

Only under the narrowest interpretation of POGO’s request could such a response be possible. While State OIG may not maintain an actual list of closed investigations for that specific timeframe, there is little doubt that they maintain records that would be generally responsive to POGO’s request.

It is difficult to imagine that any agency that conducts investigations does not use some method to track (a database, for instance) the status of those investigations. That method (whether it be a database or some other tool) would almost certainly include a listing of investigations that are closed.

Indeed, requests for a list of closed OIG investigations are routinely processed successfully throughout government. Case in point: The website governmentattic.org has posted dozens of such lists from OIG’s that were obtained using the same exact language as POGO’s request. State OIG’s response is just one more example of the inconsistency in which agencies process FOIA requests.

POGO plans to appeal the decision.

Jake Wiens is a POGO Investigator.

State Department Mishandles $172.4 Million Intended for Afghan Police Training

By ANDRE FRANCISCO

A new joint audit by the Inspectors General (IGs) of the Department of State (DOS) and the Department of Defense (DoD) found that the DOS didn't properly obligate or return to DoD approximately $172.4 million from funds for the training of the Afghan National Police (ANP). Additionally, the report found that some of those funds went to paying contractors for hours they didn’t work.

The DoD gave the DOS $1.26 billion for training of the ANP, but some of this money was improperly spent in other areas, even though it was specifically designated for training the ANP, according to the joint audit.

The report says that the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) used $22.47 million for “a United Nations LOTFA contribution, the Federal Prosecutors Program, counternarcotics personnel salaries, travel costs, and a DynCorp equitable adjustment.” DynCorp is one of the largest military contractors, and it provides security and training in Afghanistan. Some of that money went towards ANP salaries and “reform initiatives,” but not training as it was intended.

Key Watchdog Posts Remain Unfilled Across Executive Branch

By JAKE WIENS

It's beginning to sound like a broken record.

A story published Monday in Federal Times (and available only in the print edition) is the latest of a number of articles to highlight the effort to press the Obama administration to fill numerous Inspector General (IG) vacancies throughout the government.

Despite longstanding concerns raised by POGO and several lawmakers, the Obama administration has not taken action to nominate candidates for many of these essential watchdog positions. And the most egregious example, by far, is at the State Department, where the Office of Inspector General has been without permanent leadership since January 2008.

Citing former State Department IG Clark Ervin, the Federal Times article discussed the importance of having a permanent, rather than an acting IG:

Pentagon Contractor Employee Investigated for Human Trafficking, Fired... But No Prosecutions or Contract Terminations

By NICK SCHWELLENBACH

Yesterday, the State Department released its latest annual report on combating human trafficking. The report said that although one Department of Defense contractor employee was investigated and dismissed in the last year, there have been no prosecutions and no contract terminations:

Allegations against federal contractors engaged in commercial sex and labor exploitation continued to surface in the media. During the reporting period, allegations were investigated and one employee was dismissed by a DoD contractor. The Inspectors General at the Departments of State and Defense and USAID continued their audits of federal contracts to monitor vulnerability to human trafficking and issued public reports of their findings and reparations. USAID also created an entity dedicated to proactively tracking contractor compliance with the authority to suspend contracts and debar contracting firms, a positive step toward increasing enforcement in this area. No prosecutions occurred and no contracts were terminated.

Earlier this month, POGO published an investigation into a case of alleged labor trafficking by a DoD subcontractor in Iraq. In that instance, there were no prosecutions or contract terminations. Last year, I and Washington Post reporter Carol Leonnig wrote that there have been zero prosecutions or contract terminations ever since a tough-sounding "zero tolerance" policy that emphasized prosecutions went into place nearly a decade ago. Experts inside and outside the government told us there is little appetite and investigative resources to go after these crimes. "Zero prosecutions," we quoted attorney Martina Vandenberg, a former Human Rights Watch investigator, "suggests zero effort to enforce the law."

Nick Schwellenbach is POGO's Director of Investigations.

Commission Questions State Dept's "Logically Dubious" Opposition to Contract Oversight Recommendations

By JAKE WIENS

If history is any guide, the State Department is going to have a tough time overseeing the massive influx of private security contractors it will be soon be responsible for managing in Iraq as the military departs at the end of this year. But the bottom line is that they're pretty much stuck with the contractors--and lots of them--so they had better get their act together quickly.

That's the major takeaway from Monday's Commission on Wartime Contracting hearing, in which the commissioners questioned State's top management official, Patrick Kennedy, about the steps his agency has taken (and not taken) to ensure the Department is up to the daunting--and historically unprecedented--task.  

The commissioners acknowledged that State has been working hard to prepare for this transition, but they also raised concerns about State's opposition to a number of the recommendations in the latest CWC report. In his opening statement, Co-Chair Christopher Shays called some of State's responses to the recommendations “cursory,” and others “logically dubious.”

Don't Leave Me This Way: Billions of Taxpayer Dollars at Risk after U.S. Leaves Iraq and Afghanistan

By NEIL GORDON

"Sustainability" is the topic of the fifth Commission on Wartime Contracting (CWC) special report to Congress, which was just issued last Friday. Now that U.S. taxpayers have spent tens of billions of dollars on reconstruction projects in Iraq and Afghanistan, will those countries be able to successfully sustain those efforts after our troops leave?

The CWC gives us little reason to think so. U.S. troop withdrawals from Afghanistan are scheduled to begin in July, and our military presence in Iraq is scheduled to end by the end of this year. Pointing out that even well-planned and executed projects can easily fall victim to fraud, waste, or abuse if the host country is not ready to take over their operation and maintenance, the CWC offers a dire forecast:

The Commission on Wartime Contracting sees no indication that the Department of Defense, the Department of State, and the U.S. Agency for International Development are making adequate plans to ensure that host nations will be able to operate and maintain U.S.-funded projects on their own…The Commission, inspectors general, and others who have examined the past decade’s wartime contracting in Iraq and Afghanistan have thus far identified tens of billions of dollars of waste that has already occurred. Absent effective counter-measures, those findings could pale in comparison to additional waste developing from unsustainable projects and programs. (emphasis added)

In many cases, according to the report, the opportunity to avoid or mitigate waste from sustainment failure has already passed. In Iraq, U.S. contractors built and equipped 133 health care centers for about $345 million but failed to build the capacity of the Iraqi government to sustain the facilities. In Afghanistan, there is a "white elephant" $300 million power plant that the Afghan government cannot afford to operate on its own. Nor can it afford to maintain the U.S.’s $11.4 billion investment in new facilities for the Afghan national security forces. (Senior U.S. government officials told The Washington Post that having to foot most of the bill for sustaining Afghan forces at a cost of $8 billion a year is still cheaper than keeping U.S. troops over there.)

The CWC’s final hurrah will occur at the end of July when it issues its final report to Congress.

Neil Gordon is a POGO Investigator.

Image: CWC.

Out with the Military, in with the Contractors

New, Familiar Challenges for State Dept. in Iraq

By JAKE WIENS

NPR reported yesterday on the challenges the State Department will face in Iraq following the scheduled pullout of the U.S. military at the end of this year.

In order to fill the void created by the departure of the military, State will rely heavily on the use of private security contractors. The Department estimates that it will more than double the number of private security contractors currently operating in Iraq.

Major questions loom about whether State can effectively oversee this influx of contractors. POGO previously touched on this issue in a November 2010 letter urging President Obama to nominate a permanent State Department Inspector General (IG), which has been operating under an acting IG for over three years: