Report criticizes spending by contractor hired to train Iraqi police

By Walter Pincus
Washington Post Staff Writer
Monday, January 25, 2010

For the second time in three years, the special inspector general for Iraq reconstruction has sharply criticized spending by DynCorp International on its five-year-old, $2.5 billion contract to train Iraqi police.

At the same time, the special inspector general, Stuart W. Bowen Jr., cited the State Department for its continuing failure to adequately oversee the contract, in a report that is to be released Monday. The report deals only with funding and not with the program's success or failure.

The most dramatic charge in the report is that as a result of the State Department's failure to manage the various task orders assigned to DynCorps, "over $2.5 billion in U.S. funds are vulnerable to waste and fraud." The report says that for years there was only one contracting officer in Iraq responsible for overseeing performance and expenditures made by DynCorps, and although that number had grown to three in November, the State Department had fallen short in supplying resources and controls.

That charge is "unfounded," wrote David T. Johnson, the assistant secretary of State who oversees the contract, in a memo. "This assertion is not substantiated in the report nor is it consistent with [the State Department's] comprehensive invoicing process which takes place in the United States." He added that 19 percent of the invoices on the contract have been rejected, which has saved $9 million.

In a statement, DynCorp spokesman Douglas Ebner told the Associated Press that the company has done well in a "difficult environment" and that it welcomes additional oversight personnel.

A 2007 audit by the Office of the Special Inspector General for Iraq Reconstruction said, "Weak and sometimes non-existent contract administration were the root cause of the problems we identified." At that time, the State Department pledged to fix the problem.

Bowen told reporters recently, "I think they need to act quickly to remedy this long-standing concern."

Johnson, in his memo, agreed that in Iraq, contracting officers need to be increased "significantly."

Three years ago, the Office of the Special Inspector General for Iraq Reconstruction reported several examples of waste, including DynCorp's expenditure of $43.8 million for manufacture and storage of a residential camp that was not used. It also said the State Department spent $36.4 million for weapons and equipment that could not be accounted for because of vague invoices and lack of backup information, the same charges being leveled now.

At that time, the State Department agreed to replace the then-contract officer with a private contract employee.

The new Office of the Special Inspector General for Iraq report draws attention to lesser examples, including a $4.5 million apparent waste when the State Department hired security guards for six contract employees who had their own protection force.

The report drew an immediate response from Capitol Hill. Sen. Claire McCaskill (D-Mo.,) chairman of the Senate Subcommittee on Contracting Oversight, said in a statement that DynCorp is also responsible for training police in Afghanistan, "so I don't have any confidence that they're doing a better job there. . . . If we don't correct this immediately, we are going to be having the same conversation a few years from now."

Sen. Susan Collins (R-Maine), a member of the contracting panel, said the report's finding that $2.5 billion in spending has not been adequately documented is "simply outrageous." She said it illustrated "the need to move quickly and systemically to reform how the government manages federal contracts in the field, particularly in complex environments like Iraq, Afghanistan and Haiti."

Sen. Joseph I. Lieberman (I-Conn.), chairman of the Senate Homeland Security and Governmental Affairs Committee, said, "The State Department appears to be sleepwalking through its oversight obligations."

Referring to past reports on the DynCorp contract, he added, "A vigorous contract management strategy for this contract is now more urgent than it has ever been."

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