McCaskill calls for increased oversight of contract work in Afghanistan

By Walter Pincus
Washington Post Staff Writer
Friday, December 18, 2009

The chairman of a Senate investigative subcommittee called Thursday for stepped-up government oversight of contract work in Afghanistan, saying Pentagon auditors have already challenged nearly $1 billion in charges by military contractors.

"What additional controls and government oversight are needed to make sure that these contracts don't result in the waste, fraud and abuse we saw in Iraq?" Sen. Claire McCaskill (D-Mo.) asked a panel of witnesses from the State Department, the U.S. Agency for International Development (USAID) and the Defense Department.

Pentagon auditors had examined $5.9 billion worth of contracts and found about $950 million in "questioned and unsupported costs," she said. "Because auditors have only looked at a fraction of contracts," she said, "the real amount of waste is likely to be much higher."

There are conflicting estimates about the total value of U.S. contracts in operation in Afghanistan. McCaskill sought a single figure and a way to keep track of it -- saying she was "trying to find out who was responsible for putting out this money" -- but the assembled group could not give her a total.

Significant funding has gone to the Pentagon's Commanders Emergency Response Program ($1.3 billion this year), logistics ($1.8 billion), USAID projects (more than $2 billion), equipment for Afghan security forces ($1 billion), the State Department's anti-drug and rule-of-law programs ($900 million) and the Army Corps of Engineers' construction projects (more than $1 billion).

All the witnesses described their agencies' plans to step up oversight and provide additional training for individuals responsible for the initial contracting. USAID, which currently has 180 staff members in Afghanistan, is planning to nearly double that figure in early 2010, according to Charles North, senior deputy director of the agency's Afghanistan-Pakistan Task Force.

Daniel Feldman, a deputy to Richard C. Holbrooke, the administration's special envoy for Afghanistan and Pakistan, said his group has representatives from all government agencies involved and is coordinating and managing the increase in financial analysts and contracting personnel to keep closer track of contractor performance.

Also at the hearing, Edward M. Harrington, deputy assistant secretary of the Army, said DynCorp International, the prime contractor to supply $600 million worth of logistical assistance to troops in southern Afghanistan, had dropped its main subcontractor because the Kuwait-based company was recently indicted on fraud charges in connection with a separate Pentagon contract.

Late Thursday, the indicted firm, Public Warehousing Co. KSC, also known as Agility, issued a statement that confirmed the action but added that it was "a violation of its contract terms."

Agility will continue to do work for a contract, valued at several hundreds of millions of dollars, to supply food and materials through 2011 to U.S. troops in Iraq, Kuwait and Jordan.

Under government rules, Agility has been barred from bidding on new contracts but can keep acting on those it already has while the court case is pending. Agility officials are scheduled to appear for in federal court in Atlanta on Tuesday.

© 2009 The Washington Post Company