Wartime commission: reforms needed to prevent future contract waste, fraud & abuse

Concluding its three-year investigation into the staggering contract waste, fraud and abuse in Iraq and Afghanistan, the Commission on Wartime Contracting strongly urged Congress to follow through on a series of reforms and warned that inaction would waste billions of dollars in the future.

“Reform is urgent because failure to enact powerful reforms will guarantee that new cycles of waste and fraud will accompany the response to that next contingency,” testified Robert Henke, member of the Commission on Wartime Contracting in Iraq and Afghanistan.

The commission’s final report estimated that between $31 billion to $60 billion were wasted in private contracts during U.S. operations in Iraq and Afghanistan. Much of the waste could have been prevented through better planning, more competition, greater oversight and management to hold private contractors accountable for performance and accurate billing.

“The waste and fraud associated with these expenditures is mind-numbing,” said Rep. Darrell Issa (R-CA), Chairman of the House Committee on Oversight and Government Reform. “The United States has not achieved peace and will not get a peace dividend unless we, in fact, are able to stem waste both created within our government and by our partners in Iraq and Afghanistan.”

Bold reform is necessary because the federal agencies involved in war efforts, including the Defense Department, the State Department, and U.S. Agency for International Development (USAID), cannot handle large military or reconstruction operations without the use of private contractors. At the same time, these agencies are not properly equipped to oversee and manage the thousands of private contractors they’re required to hire. This sets up a system that allows private contractors to get away with poor performances and over-billing because government agencies do not have the resources and manpower necessary to properly manage and audit the contracts.

“The bottom line is this: We rely on contractors too heavily; we manage them too loosely, and we pay too much for what we get,” said Henke.

Some of the reforms recommended by the commission include:

  • Phasing out the use of private contractors in certain roles that would be better handled by the government, such as security
  • Creating a team of specialists that can be deployed to war zones to oversee and manage private contractors
  • Improving record-keeping of past performances by private contractors and monitoring of overseas subcontractors to ensure fair billing and accountability
  • Giving federal agencies the funding they need to hire the right people to perform the oversight work
  • Establishing a permanent inspector general’s office to oversee war contracting from day one

Following the commission’s recommendation, Rep. John Tierney (D-MA) has introduced H.R. 2280 “Contingency Operation and Emergency Oversight Act of 2011” to create a permanent inspector general’s office for wartime contracting that could help prevent waste and fraud before it happens. H.R. 2280 has been referred to the House Foreign Affairs, Armed Services, and Oversight and Government Reform committees. Click here to track the bill’s latest developments.

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