Panel finds contracting blunders hinder wartime operations

The government's objectives in Iraq and Afghanistan are being compromised because it lacks enough qualified and well-trained acquisition and oversight professionals capable of monitoring billions of dollars in federal contracts overseas, according to a new report on wartime contracting.

The first report from the congressionally appointed Commission of Wartime Contracting concluded that six years after the U.S. invasion of Iraq, the government remains unable to properly award, manage and audit vital contracts that support logistics, security and reconstruction missions.

"The disturbing implications go far beyond questions of good management and financial responsibility," Commission co-Chairman Michael Thibault told the House Oversight and Government Reform Subcommittee on National Security and Foreign Affairs on Wednesday. "They directly involve our nation's ability to achieve policy objectives and provide proper support and protection for our warfighters and civilian employees engaged in contingency operations."

The 121-page report indicated an array of problems in overseas acquisition related to staffing, logistics and planning. For example, 70 percent of the contract work in Iraq is performed by subcontractors, but the government has little visibility into their operations.

"We don't have enough people watching the contractors," said Christopher Shays, a former Republican congressman from Connecticut and the commission's other co-chairman.

The lack of coordination and oversight was evident in the $30 million construction of a dining facility at Camp Delta in Iraq, the commission reported.

The Army's Central Command said a new facility was needed because the current dining hall was dilapidated and inadequate. But during an April visit to Iraq, the commission learned that the existing mess hall had just been renovated, and the command was basing its contracting decision on outdated paperwork.

The new facility is due to be completed in December 2009; the majority of U.S. forces are expected to leave Iraq the following August.

The panel reported more sloppy decision-making in Afghanistan, after the Army Corps of Engineers approved the construction work of a multimillion-dollar facility intended to serve as the headquarters for U.S. forces in the country. But the commission discovered broken fixtures, hundreds of tiles missing from the ceiling and bathrooms that did not work.

Lawmakers said such carelessness would not occur if the private sector was picking up the dime.

"It's only happening because it's taxpayers' dollars," said Rep. Stephen Lynch, D-Mass. "We can't continue to operate this way in terms of contracts going out without proper accountability standards."

But Alan Chvotkin, vice president of the Professional Services Council, a contractor trade association, noted that the dining hall example speaks to structural government mismanagement rather than outright fraud.

"There is no question, as evidenced by the several objective reviews, that the vast majority of contractors, government and military personnel have not only acted honorably, but courageously in the execution of this difficult and dangerous mission," Chvotkin testified.

More than 240,000 contractor employees -- roughly 80 percent of them foreign nationals -- currently work in Iraq and Afghanistan, outnumbering U.S. military personnel in the two theaters, the commission found.

The report said the government needed additional contracting officer representatives in the regions as most of the existing personnel typically were undertrained and overworked. In Afghanistan, one COR told the commission that he was responsible for overseeing 15 contracts and conducting four performance reviews in addition to his three primary duties, Thibault said.

"The broken COR system, combined with other issues like a severe shortage of subject matter experts to inspect electrical and other specialized work, is a perfect storm for our government's contracting workforce," he said.

Panelist suggested that waste, fraud and abuse likely will be exacerbated as the United States begins to pull out of Iraq and build up forces in Afghanistan.

U.S. bases in Iraq hold more than 600,000 pieces of property, from generators and trucks to tools and clothing. But because of poor documentation in the early days of Iraq operations and a shortage of property management officers, base commanders reported to the commission that they cannot account for every piece of property, document its ownership or confirm that it has been properly maintained.

Many of the problems the commission cited are not new. In fact, several government watchdogs and auditors have issued more than 500 reports and offered nearly 1,300 recommendations for improving wartime acquisition in recent years. Many of those suggestions have been gathering dust, panelists said.

The commission will follow up on those recommendations when it issues its final report in August 2010.