U.S. contractors with almost $2 billion worth of counter-narcotics business in Afghanistan will get more scrutiny than they faced for work completed in Latin America over the past decade, government officials said.
DynCorp International, Lockheed Martin, Raytheon, ITT and ARINC, which are working with the Defense and State departments on anti-drug efforts in Afghanistan, performed similar work in Latin America with inadequate competition and little oversight, according to a report by the majority staff of a Senate Homeland Security subcommittee and a previous investigation by the Pentagon’s inspector general.
The contractors should expect new accountability measures at State and the Pentagon, as well as heightened scrutiny from Congress, as the United States seeks to stabilize the government in Afghanistan, where drug trafficking generates as much as $100 million a year for the Taliban, officials said.
“Many of the things we’ve been doing in Afghanistan, it’s not reinventing the wheel — we’ve been doing it in Colombia for a decade, and with many of the same contractors,” said Laura Myron, a spokeswoman for Sen. Claire McCaskill (D-Mo.), chairwoman of the subcommittee.
McCaskill is to convene a hearing this week on Afghanistan contracting, at which she’ll address the counter-narcotics work, Myron said in an e-mail.
The five companies received $1.8 billion, or 57 percent, of the counter-narcotics work in eight Latin American countries between 2005 and 2009, according to the subcommittee report. They got $1.98 billion in total contracting dollars from the Pentagon and State Department for performance in Afghanistan last year, according to data compiled by Bloomberg Government.
Pentagon counter-narcotics activities in Afghanistan include training and equipping security forces, aviation support and construction of border facilities to intercept illicit drug shipments.
The State Department’s Bureau of International Narcotics and Law Enforcement Affairs, or INL, posted a notice June 9 saying that it plans to hire an aviation operations, training and safety adviser for counter-narcotics operations in Afghanistan, a standing position at the U.S. Embassy in Kabul.
The contractor’s duties include directing workers who are “destroying opium poppy and interdicting the flow of the finished narcotic products,” according to the notice.
Contractors in Afghanistan will be working under a new sense of urgency and standards for compliance, experts said.
The “stakes are higher” in Afghanistan, said Paul Rexton Kan, a U.S. Army War College professor and former senior counter-narcotics adviser with the International Security Assistance Force in Afghanistan, or ISAF.
“I would count on the likelihood that they would face more scrutiny than they have in the past” because the focus of ISAF is on anti-corruption, he said.
The Defense Department began to take corrective action on its counter-narcotics contracting after a 2009 department inspector general’s report cited “weaknesses in the management, surveillance and billing processes of the contracting officials” and the Counter-Narcoterrorism Technology Program Office.
As part of its response, the Pentagon “significantly” increased contractor oversight and on-site inspection personnel, Lt. Col. Jim Gregory, a Pentagon spokesman, said in an e-mail.
The department is developing metrics to measure overall program performance, and its counter-narcotics programs “have been among the most successful and cost-effective programs in the past decades,” Gregory said.
The State Department’s response to the subcommittee’s investigation is less certain.
In a written response after the subcommittee’s May 2010 hearing on counter-narcotics contracts, David T. Johnson, then the head of INL, said the office was developing a bureau-specific accounting system that would track the work.
The bureau, which is responsible for about 85 percent of the department’s counter-narcotics appropriations, has yet to implement a “comprehensive inventory of counter-narcotics contracts,” according to a May 26 report by the Government Accountability Office.
Barbara Silberstein, an INL public diplomacy officer, declined to comment on the subcommittee’s report or progress on the new database.
An official for a contractor trade association questioned the State Department’s response.
“I’m more troubled by the lack of oversight by INL — the lack of INL’s ability to know the programs, the contracts and status under its programs — than I am troubled by the lack of a comprehensive database that’s capturing this information,” said Alan Chvotkin, vice president of the Alexandria-based Professional Services Council.
DynCorp, which is owned by New York-based Cerberus Capital Management LP, received 36 percent of the counter-narcotics contracting dollars in Latin America between 2005 and 2009, according to the congressional report.
The company reported $333.5 million in air operations revenue for fiscal 2010, a $36.7 million year-on-year rise partly attributed to increased work from the State Department’s narcotics affairs bureau in Afghanistan even as orders in Colombia declined.
The State Department’s narcotics affairs bureau “has daily and direct oversight of all contract activity through representatives who are stationed at all locations where we operate,” Ashley Burke, a DynCorp spokeswoman, said in an e- mail. The company “fully supports the subcommittee’s emphasis on oversight and transparency,” Burke said.
— Bloomberg Government