It turns out that scattering cash into the wind would have been more efficient than the U.S. system for awarding reconstruction contracts during the Iraq and Afghanistan wars. A two-year inquiry by a congressionally created panel finds that at least 15 percent of the $206 billion-with-a-B spent on wartime contracts thus far has been lost to waste, fraud and abuse. That very conservative estimate is likely to grow — and it amounts to an indictment not just of wartime contracts, but the wars themselves.
The Commission on Wartime Contracting (.pdf) concludes that “vast amounts” of contract money in Iraq and Afghanistan provided “little or no benefit” to the war efforts. The commission confirmed $31 billion in contractor cash lost to corruption or dysfunction. But it warned that the true figure could be as high as $60 billion, or “$12 million every day for the past 10 years.”
And even that massive figure — almost 30 percent of all wartime contract dollars — isn’t the whole story. Iraq and Afghanistan remain riddled with corruption. That corruption endangers all the “apparently well-designed projects and programs” that the U.S. has launched in both countries. Untold “billions of dollars” are liable to “turn into waste” in the future, says the report, “if the host governments cannot or will not commit the funds, staff, and expertise to operate and maintain them” — especially money spent on the Afghan military and on Iraqi healthcare centers.
How did wartime contracting turn into a sludge of waste and fraud? It’s not just the Pentagon’s sole-source contracting jones, which Sharon Weinberger has shone a spotlight onto all week long here at Danger Room. (The commission does, however, write that the U.S. has “awarded task orders for excessive durations without adequate competition.”) It’s also the sheer ignorance of U.S. war planners.
“U.S. officials lack an understanding of the need to reconcile short-term military and longer-term development goals and objectives,” the commission finds, “realistically assess host-country conditions and capabilities, and work within the constraints of local economies’ absorptive capacity for influxes of cash.”
Afghanistan’s GDP is about $27 billion. Yet onto that barren economic landscape, the U.S. has dumped about $450 billion in war-related cash.
Anthony Cordesman of the Center for Strategic and International Studies incisively observed last year that the huge cash infusion made corruption “an ‘existential necessity’ for those who could get the money.” Yet the U.S. never considers its own war spending to be a systemic driver of the corruption that squanders it.
Nor does prolonged time on the ground in either Iraq or Afghanistan rectify that ignorance. “Lack of knowledge of local contractor and subcontractor companies” is rampant, the commission finds. Look no further than the warlords and insurgent pals that the U.S. has hired to guard its military bases, a trend that’s accelerating for special-operations forces in Afghanistan. Not only can that ignorance undermine the very goals of the war, but it’s a “major contributor” to wasted money.
And on top of all of that is another systemic failure. The commission finds that the Pentagon still lacks sufficient numbers of dedicated personnel to perform basic oversight of its mega-contracts. There aren’t “acquisition personnel and structures needed to manage and oversee an unprecedentedly large contractor force that at times has outnumbered troops in the field.”
That helps explain how a company like Blackwater could set up a shell company called Paravant to win a contract training Afghan soldiers without anyone at the Pentagon noticing. Astonishingly, the supposed watchdogs at the Defense Contract Audit Agency have a backlog of unaudited incurred costs that will “exceed $1 trillion in 2016.”
Ten years of war haven’t changed the Pentagon’s acquisitions mindset. War contracts get less emphasis than big-ticket items like planes and ships. ”More than half of defense-contract spending is for services and not for hardware procurement,” the commission finds. “Yet Defense’s culture and processes remain focused on weapons systems.”
One major oversight of the commission’s own: it doesn’t focus on the CIA’s contract personnel. CIA cash receives extremely little public scrutiny, and it can go to things that undermine U.S. war goals, like, say, propping up Afghan warlords such as Ahmed Wali Karzai.
The commission provides numerous recommendations for what it calls “urgent” reform, from hiring tons more contract overseers to curbing the use of private security contractors. And one of the commission’s sponsors, Sen. Jim Webb (D-Virginia), a Reagan-administration Navy secretary, promises that its report will be more than unhappy bedtime reading. “I would like to express my strong view that these recommendations will be listened to and, when appropriate, acted on by the United States Congress,” Webb told reporters Wednesday.
But it’s been 10 years of waste, fraud and abuse in Iraq and Afghanistan, and both wars are winding down. If there ever is any contractor reform, it may come too late for the wars the U.S. is actually waging. And the commission finds that a major driver of all the wasted cash is basic ignorance — a problem that can’t be solved by implementing any well-intentioned set of reformist bullet points.