Federal Contractors Failing to Pay Afghan Subcontractors, IG Finds

U.S. contractors in war-torn Afghanistan have repeatedly failed to pay their subcontractors, prompting strikes, work stoppages and death threats at a time when U.S. forces are preparing to withdraw, a key inspector general warned on Thursday.

In an alert letter to Secretary of State John Kerry, Defense Secretary Chuck Hagel and regional diplomats, John Sopko, the special inspector general for Afghanistan reconstruction, said that nearly a quarter -- 183 out of 753 -- of complaints to SIGAR’s hotline from 2009 through October 2012 were about Afghan prime contractor and subcontractor nonpayment issues. As a result, he said, his auditors have opened 52 investigations encompassing $69 million in payments owed. An additional 44 such complaints have been filed with the State Department, the U.S. Agency for International Development, and the Defense Department’s inspectors general over the past six years.

Missed payments have resulted in the delay of projects “promoting the stability of Afghanistan,” a belief among Afghan workers that the lapsed payments are the fault of the U.S. government, a threat by one subcontractor to set himself on fire in front of the U.S. embassy, and one threat to blow up a compound of U.S. contractors and government agencies, the letter said.

“We urge you to determine the extent of this problem in the contracts your agency has awarded for Afghanistan reconstruction projects,” Sopko wrote, “and to use any and all possible remedies to (1) more aggressively oversee these contractors and help ensure that Afghanistan subcontractors receive prompt payment for their work and (2) ensure that parties with contract payment disputes resolve these issues according to contract terms.”

Sopko added that his agency can assist with criminal, civil, and administrative responses to the problems.