Waste, Fraud, and Abuse in U.S. Contracts in Afghanistan

In preparation for hearings on the government’s contractors in Afghanistan by the Senate Subcommittee on Contracting Oversight, the majority staff has prepared a memorandum, dated December 16, 2009, which gives an overview. I commend this report to your attention with the caveat “read it and weep.”

Not that this information differs in its general contours from the information in scores of similar reports I have read over the past three decades. In the field of military and foreign-policy-related contracting, only the criminals’ identities change (although some do persist); the crimes remain the same. The general rule in this area of government action is:  no misfeasance or malfeasance goes unrewarded.

Please do not take my word for these things; read the report for yourself. It’s available online. Because it was prepared by the subcommittee staff, you won’t have to worry about the kinds of biases that unfriendly commentators such as I might bring to the matter. The situation is bad enough even when described in the usual bland language beloved by all government flunkies.

Here are the first three items of the summary:

Wasteful Spending on Defense Department Contracts Nears $1 Billion. According to federal auditors, approximately $950 million in questioned and unsupported costs has been submitted by Defense Department contractors for work in Afghanistan. This represents 16% of the total contract dollars examined.

Afghanistan Contract Spending Exceeds $23 Billion. According the Federal Procurement Data System (FPDS), the United States has spent more than $23 billion on contracts performed in Afghanistan since 2002.

Number of Defense Department Contractors in Afghanistan May Reach 160,000. There are currently 104,000 Defense Department contractors currently [sic] working in Afghanistan. The increase in troops may require an additional 56,000 Defense Department contractors, bringing the total number of Defense contractors in Afghanistan to 160,000

The 104,000 military contract workers in Afghanistan as of September 30, 2009, compares to approximately 64,000 uniformed U.S. military personnel there at that time. Thus, the contract workers made up 62 percent of the total force. With the number of uniformed personnel scheduled to increase by 30,000 during the next six months, and assuming that the contract workforce increases by the projected maximum of 56,000, the contract workers will make up 63 percent of the total U.S. force in mid-2010.

The contractors perform a wide variety of tasks for the military, including feeding the troops, doing their laundry, building and maintaining their housing, taking care of warehousing and other logistical needs, administering contracts, making translations, and providing security. The final two items are especially interesting in that they call our attention to the facts that (1) the American soldiers―men and women from places such as Sioux City, Newark, and Chattanooga―are somewhat at a loss to understand Pashto and other local languages and hence are completely clueless as to what’s going on in the country they’re trying to control; and that (2) the U.S. uniformed personnel, armed to the teeth, feel the need for more than 10,000 armed civilian workers to provide security.

The report proceeds under such headings as “Failure to Apply Lessons Learned from Iraq,” “Poor Coordination of Interagency Efforts,” and “Continual Personnel Turnover.” Its third major section is titled “Waste, Fraud, Abuse, and Mismanagement Mar Afghanistan Reconstruction and Development.” Subheadings include “Inadequate Contracting and Program Management Practices” and “Contractors Overseeing Contractors.” I’m sure you are beginning to get the picture. I don’t want to spoil your reading by giving away all the details. Trust me, however: it’s a pretty juicy story, even when expressed in dry bureaucratese.

Over the years, I have noticed that such orgies of military waste, fraud, and abuse are always attributed in large measure to mistakes, oversights, inadequately trained personnel, poor planning, and so forth—that is, to incompetence, rather than to criminal intent. But ask yourself: if these same “problems” have infected a contracting system for almost seventy years, can they possibly be honest mistakes? These attributes of government contracts are hardly secrets. They have been spelled out in countless official reports and analyzed by hundreds of academic experts and others. Why haven’t the problems been fixed?

The answer is all too obvious: one man’s waste, fraud, and abuse and another man’s road to riches. The military contracting system works in this seemingly atrocious way precisely because that’s how the powers that be want it to operate. When the dust settles, hundreds of billions of dollars will have been relocated from the taxpayers’ pockets to those of the officially contracted pirates who habitually infest these waters, persons associated with firms such as KBR, Fluor, DynCorp, and Xe. Of course, a portion of the loot returns in various forms to the members of Congress and the executive-branch officials who authorize and purport to oversee the whole predatory apparatus.

Robert Higgs is Senior Fellow in Political Economy at the Independent Institute, author or editor of over fourteen Independent books, and Editor at Large of Independent’s quarterly journal The Independent Review.
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