War-related contracting wasted up to $60 billion, commission reports

A staggering $12 million squandered every day for the last 10 years -- that was among the findings the Wartime Contracting Commission uncovered in more than two years of investigating war-related spending since 2001.

Releasing its report on Wednesday, the bipartisan commission set up by Congress urged lawmakers to enact many of its recommendations in order to prevent billions more in wasteful spending in Iraq and Afghanistan.

It found that between $31 billion and $60 billion spent on projects in Iraq and Afghanistan over the last 10 years has been lost to waste and fraud. That amounts to as much as 29 percent of the $206 billion spent on security, infrastructure, and other projects in those two countries over the last decade. If the amount of contract fraud and waste falls in the middle of the commission's estimated range - and at least one commissioner said he believes it is closer to the high end -- the commission concluded that it comes to $12 million wasted every day for the last 10 years.

"The commission sunsets on Sept. 30, but the problems in contingency contracting do not," said former Rep. Chris Shays, D-Conn., the commission's co-chair. "There is still time to make a difference in Iraq and Afghanistan, and there will be new contingencies."

The commission acknowledged that many of its recommendations, such as the creation of a permanent inspector general for contingency operations and more personnel and resources to protect the government's interests in war contracting, would require an upfront investment during a time of fiscal belt-tightening.

But several of the eight commissioners argued that the money required to implement the reforms would be significantly outweighed by the savings generated.

"Unfortunately, the current stress on the budget may discourage members of Congress from supporting the investments that some of our recommendations would require," Shays said. "I appreciate the difficulty of proposing new spending in a time of revenue constraints, but some of the reforms require no new spending and some could be made by simply reallocating existing resources."

But holding back funds and blocking the reforms that do require some upfront funds "would really be false economy," Shays added.

Among its 15 recommendations, the commission wants Congress to provide resources for contingency contracting reform to mitigate the problems uncovered in the report. In addition, the commission wants lawmakers to pass legislation requiring the agencies to provide updates on their efforts to implement the recommendations.

Sen. Claire McCaskill, D-Mo., who chairs the Senate Homeland Security Subcommittee on Contracting Oversight and who pushed for the creation of the commission, said she intends "to go at this as hard as I know how." McCaskill, a former state auditor, said the commission's recommendations could save billions and could make it easier to find the significant cuts to the military's budget that are expected over the next 10 years.

"Particularly in this budget climate, we cannot waste this kind of money under the umbrella of contracting practices," she said during a teleconference with reporters.

There could be amendments as a result of the commission's report made to the fiscal 2012 defense authorization and appropriations bills, which are both expected to move through the Senate this fall, McCaskill said. Several congressional committees are expected to hold hearings on the report after lawmakers return to Capitol Hill next week.

Shays, meanwhile, said he hopes the super committee charged with trimming the federal deficit by at least $1.2 trillion reviews the commission's recommendations to find savings.

"We're just one small part of their mammoth task, but if they don't take a good look at it, it would be a failing," he said.