U.S. crackdown on wasteful war contractors urged by panel

The U.S. government should prohibit wasteful and corrupt companies from receiving federal contracts in war zones, a commission authorized by Congress said.

“Suspensions and debarment can be powerful tools to protect the government’s interests,” said an eight-page summary of the Commission on Wartime Contracting’s final report, released today.

More than $30 billion has been wasted from U.S.-funded Iraq and Afghanistan contracts, about one in every six dollars of the $192.5 billion spent on contracts and grants from 2002 to 2011, the panel said. Those findings were disclosed in a Washington Post column by the commission’s leaders published in the newspaper Aug. 29.

“Fostering a culture of accountability is especially difficult in war zones where the contractor community is made up of U.S., local and third-party nationals, where gathering a stable of responsible, competitive companies is a challenge,” the report’s summary said.

The call for a crackdown could reinforce legislative proposals in the pending fiscal 2012 defense policy bill. They would require any defense contractor to quickly lose funding if a subcontractor is found to have connections to the Taliban, al- Qaeda or insurgent groups.

Recommendations

The commission issued 15 recommendations that it said would improve contractors’ performance and reduce wasteful spending.

They include phasing out the use of private security contractors in some circumstances; expanding the authority of military and civilian officials responsible for contingency contracting; creating a permanent inspector general’s office for contingency operations; and setting annual goals to increase competition for wartime contracts.

The panel also recommended increasing staffing and authority of the Pentagon’s primary oversight units, the Defense Contract Management Agency and Defense Contract Audit Agency, to ensure better access to contractor records.

The Pentagon on Aug. 16 put into effect one of the commission’s ideas: authority to withhold contractor payments for significant deficiencies in any of six primary business systems. The panel report includes 15 recommendations for improving such enforcement.

The commission was established by the fiscal 2008 defense bill at the insistence of Senate Armed Services Committee members James Webb of Virginia and Claire McCaskill of Missouri, both Democrats. They remain on the panel, putting them in position to press its recommendations in the next defense budget.

‘Shocking’

“It is shocking that the commission found such rampant waste, fraud and abuse,” McCaskill said in a statement yesterday. “I plan to begin working immediately to implement their recommendations.”

The commission said the amount of wasteful spending could grow to as much as $60 billion in Iraq and Afghanistan if their governments fail to maintain adequate controls.

“Examples range from the $35 billion Congress has appropriated since 2002 to train, equip and support the Afghan National Security Forces to scores of health-care centers in Iraq that far exceed the Ministry of Health’s ability to maintain them,” the summary said.