Wartime contracting prone to waste, commission finds

The government has lost at least $31 billion to waste and fraud in Iraq and Afghanistan, reports the Commission on Wartime Contracting. And the true number could be closer to $60 billion, the commission has found.

The bipartisan commission released its final report to Congress on Aug. 31, outlining its findings on making wartime contracting more effective while minimizing fraud and waste. Among the other key points:

• Total spending on contractors in the war zones will exceed $206 billion in the next month.
• Due to reductions in the federal acquisition workforce and in military support units in the 1990s, the government can’t conduct large or sustained contingency operations – including war – without contractor support.
• Despite having known for 20 years that such contractor support would be necessary, the Defense Department was not prepared to manage the contract spending effectively when combat operations began and still doesn't have the needed capabilities.
• The familiar trinity of waste, fraud and abuse are all problems in Afghanistan and Iraq, but waste is by far the biggest problem.
• The causes of waste include "poor decision-making, vague contract requirements, lack of adequately trained federal oversight people in the field, duplicative or unnecessary work, failure to revise or recompete contracts, unsustainable projects, inadequate business processes among contractors, and delayed audits,” said Commission Co-chair Michael Thibault, former deputy director of the Defense Contract Audit Agency.

Download the full report here.

Stan Soloway, president and CEO of the Professional Services Council, found a lot to criticize in the commission's report. The report's recommendations "overlook the messy realities" of contingeny operations, Soloway said in a prepared statement.

"The report’s executive summary blames 'deaths, delays and waste' from stabilization and reconstruction projects in 'insurgent-contested areas' of Afghanistan on the use contractors alone," which contradicts the finidings of  the Special Inspectors General for Iraq and Afghanistan Reconstruction, he said. Those IGs have "cogently pointed to a wide range of challenges and causes of waste, including inadequate statements of work, security instability, and uncoordinated planning," Soloway said.

" Thus, for the commission to suggest that the same problems would not have resulted had government employees been used is both simplistic and unrealistic. This unsupported assumption completely ignores the skills required and available to perform the work, the security situation in such areas, and that, regardless of who is performing work, such projects are a target for insurgents bent on destabilizing a situation," he argued.