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.

About the Author

Technology journalist Michael Hardy is a former FCW editor.

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Reader comments

Fri, Sep 2, 2011 Sentinel

How many auditors and qualified managers could have been hired with that wasted $30B?

Thu, Sep 1, 2011

Basic problem is that they let the military services write checks and buy stuff. That is outside their main mission and skill set. There needs to be one agency doing ALL the buying and contracting for all federal agencies.

Thu, Sep 1, 2011

And this surprises anyone? War has always been an economic boon to contractors and costly to the government! Defense contractors' motto "feast or famine", respectively wartime/peactime. The fact that anyone could think you wouldn't have waste and there is such a thing as adequate oversight on wars - absurd!

Thu, Sep 1, 2011

The commission report assumes that the waste is the result of using contractors and not government personnel. That is an unsupported assumption. Anyone who has been involved in such massive contingency operations when few or no contractors were in-theater has seen massive waste because of over-lapping missions, poor communications, rapidly changing requirements, and other "fog of war" factors. There is an old saying in the Army that describes the aftermath of such an operation, "An auditor is someone who strolls onto the battlefield after the war is over and bayonets the survivors."

Thu, Sep 1, 2011 Jack Huntsville, AL

Waste, fraud, and abuse are synonymous with revenue and profit to the contractors, who do not care one bit as long as they get the contract. The cure for the waste, fraud, and abuse caused by massive increases in contractor participation in war is not to hire more people to manage the process....the solution is to stop the war. We have achieved nothing other than lining the pockets of the largest defense contractors and fermenting additional hatred and bloodshed in Iraq and Afghanistan as the local leaders fight for our dollars. End the war, you'll end the waste, fraud, and abuse.

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