Lawmaker asks overseers to agree on meaning of ‘waste’

The chairman of the House Armed Services Committee on Thursday challenged leaders of the oversight community to develop a common definition of wasteful spending, as well as estimates of the level of waste in the Iraq reconstruction effort.

During the committee's first oversight hearing in the new Congress, Chairman Ike Skelton, D-Mo., took steps to frame the debate by giving four oversight officials 60 days to reach agreement on a definition for waste.

He also asked the four men -- Comptroller General David M. Walker, Defense Department Acting Inspector General Thomas Gimble, State Department Inspector General Howard Krongard and Special Inspector General for Iraq Reconstruction Stuart Bowen -- to estimate the level of reconstruction-related waste in percentage and dollar terms.

Skelton's request came after the four panelists equivocated on this. Bowen, asked to support an estimate that as much as $3 billion-or nearly 20 percent of reconstruction spending-could be wasteful, said his office was working on getting "hard data," but that the result depended on the definition of waste.

Bowen said SIGIR is reviewing the work of the major reconstruction contractors, and has nearly completed an audit of work by Bechtel Corp., the largest recipient of funds. The audit will show the projects for which the company originally received contracts and will indicate what was completed. He said the potential waste could be between 10 percent and 15 percent.

Based on the Government Accountability Office's reviews, reconstruction contracts have had average overhead rates of about 30 percent, Walker said, calling that "very high." That figure includes about 10 percent of spending on security, he said.

"My personal opinion is that it depends upon how you define waste," Walker said. "There's a lot of waste that doesn't have anything to do with security issues ...when the government says I want you to do X by Y time, but you don't give enough guidance on the details, or you ask the contractor to do something that's totally unrealistic, that can result in tremendous waste."

"I think the numbers will, frankly, be higher than what you'd expect," Walker added.

The State Department IG declined to guess at a figure, but agreed that the definition would be central.

Following Skelton's request for common ground, Walker was quick to go on the record that he considered it waste when costs go up because contracts do not clearly define the government's requirements or the requirements are frequently modified. But he downplayed the difficulty of reaching agreement on a definition, saying the more difficult task would be coming up with an estimate.

Rep. Duncan Hunter, R-Calif. and the committee's ranking member, said the overseers should take care not to describe all inefficiency as waste. He said cost overruns on the construction of submarines and B-2 bombers, for example, did not constitute waste.

"That thing called the television over there will translate that into some idea in a pejorative way that there are dishonest people in the American government who are undertaking massive, massive wasteful programs with the implication of self-dealing," Hunter said.