waste

Contractors in Afghanistan, A Recipe for Failure

Armand Biroonak — Fri, 18 Dec 2009 07:19:54 -0500

Similar to Iraq, the use of contractors by the U.S. government in Afghanistan stands at unprecedented levels. In fact, contractors in Afghanistan outnumber American troops –and will continue to do so despite Obama’s troop increase in 2010. This heavy reliance on contractors is not only a cause for alarm, but also cause for failure.

Already over 100,000 contractors are in Afghanistan, largely local hires, with contracts valued at near $8.5 billion the past year. These numbers will rise too, it is predicted that by next year total contractors in Afghanistan will grow, totaling 130,000 to 160,000.

Contractors Harm the U.S. Mission

Contrary to popular belief, outsourcing military and reconstruction operations in many cases costs much more and can be harmful to the overall mission. This was the case for contractors in Iraq, where private security firms such as Blackwater, committed numerous atrocities against civilians and helped fuel the insurgency, while pocketing billions.

For Afghanistan, the use of contractors is not much better. Stunningly, according to a recent article in the Nation, American military contractors are paying suspected insurgents and the Taliban, yes the TALIBAN! to protect military supply routes from harm. As Aram Roston reports,

“In this grotesque carnival...It is an accepted fact of the military logistics operation in Afghanistan that the US government funds the very forces American troops are fighting. And it is a deadly irony, because these funds add up to a huge amount of money for the Taliban. In fact, US military officials in Kabul estimate that a minimum of 10 percent of the Pentagon's logistics contracts--hundreds of millions of dollars--consists of payments to insurgents.”

Meanwhile, American efforts to build an Afghan army are muddled. A Congressional hearing Thursday lead by Senator Claire McCaskill, (D-MO) spotlighted that contractors pay Afghans more to cook for the troops, than the U.S. military pays for Afghans to serve in their national army or local police force. This stands as a big problem since wisely; Afghans choose the former means of employment, rather than the latter. This also poses a huge setback for Obama, as he stated his goal for the U.S. to help build up an Afghan army, to then allow for U.S. withdrawal by 2011.

It is not only security that is harmed by contractors’ work, but also reconstruction efforts. The international aid agency Oxfam found that USAID awards more than half of its Afghan aid to just five U.S. private contractors. While for every $100 of aid dispensed for the region, a mere $10 reaches Afghanistan.

And oversight for contractors is abysmal. The Special Inspector General for Afghanistan Reconstruction (SIGAR), is responsible for the oversight of some $50 billion (FY 2010) for Afghan development, but the office has done little auditing and oversight to ensure that contractors are completing the job to build the country’s infrastructure. To date, the office has received only $23 million for its work.

With little seen improvements to their country, coupled with American support for a very corrupt government, and ongoing violence, it is hard to believe that Afghans will treat the American presence very kindly. In all, Obama’s strategy for Afghanistan is quite dubious, but the presence of contractors challenges what little chance for success we had to begin with. And considering the failures and billions lost in Iraq on the issue –I have a feeling this will not be my last post.

Congress Breaks with Administration, Protects Defense Lobby

Armand Biroonak — Mon, 06 Jul 2009 16:57:34 -0400

Ignoring earlier recommendations of the Secretary of Defense, Robert Gates, the 2010 defense bill throws funding lifelines to failed weapons systems slated to be cut. Resisting the call to reform, the House Armed Services Committee showcased their protection of the defense lobby instead. Already Obama has promised to veto their bill moving through the Senate, making for quite a fight if cuts are not restored.

The National Defense Authorization Act passed by the House and now in the Senate provides $680 billion in 2010 for defense related activities—of which $180 billion is set aside for weapons acquisition. Members of the House Armed Services Committee—responsible for the bill and voting unanimously in support of it—asserted their reasons for opposing key cuts outlined by the Obama administration:

Chairman of House Armed Services, Rep. Ike Skelton (D-MO), painted a rosy picture of the bill’s objectives by affirming:

“This year’s defense bill promotes our main policy objectives: restoring military readiness; eliminating waste and recovering savings through acquisition reform; and maintaining robust oversight of the Department of Defense.”

Yet, provisions in the bill shun expert military opinions. Gates opposes the bill’s continuation of the F-22 program and the Navy’s Top Officer criticized the bill’s plan to alter the development of the already delayed, expensive F-35 jet program.

Ranking Member, Rep. Roscoe Bartlett (R-MD):

“The Administration is gently slapped in this bill for its failure to provide Congress with the standard analyses required to justify significant changes in several major programs. In addition to ballistic missile defense cuts, these include cuts in the Joint Cargo Aircraft (JCA), Future Combat Systems (FCS) and the F-22.’”

However, Bartlett only needs to go as far as the numerous GAO reports that point to the ballooning costs and unproven design of programs to understand why the Administration called for cuts or reduced funding. The Future Combat Systems is conservatively estimated to cost $160 billion and faces significant deficiencies in development.

The F-22 Raptor has been called “an expensive weapon in search of a mission.” Designed for a Soviet threat that no longer exists, the jet has constantly been re-modernized for decades. Facing cost overruns of over 200 percent, it is the most expensive fighter jet ever made. The Undersecretary of Pentagon Acquisitions even stated that its mission capable rate is “troubling.”

Ranking Member, Rep. Todd Akin (R-MO):

“This bill is a decent one, given the fiscal restraints that President Obama and the Democrat Congress have imposed on the Department of Defense. We should be spending more on the defense of our nation, but this is a reasonable start.”

Spend more on defense?? Akin must have missed the facts; the U.S. spent more in 2008 on defense than the next 45 highest spending countries in the world combined. And accounts for 48 percent of the world's total military spending. Or that defense spending consumes over one-third of total government spending.

As shocking as it may be that Congress so flagrantly ignores the facts—it is no surprise. The defense lobby heavily finances some of the most ardent defenders of these weapons programs. Skelton enjoys hefty financial support from nearly every top defense company. One of Lockheed Martin’s top congressional recipients is Rep. Saxby Chambliss—among the most vocal for continuing F-22 production.

LOOKING FORWARD:

Gates’ call for cuts may be a small step to curb immense Pentagon spending, but even this tiny reform may be squashed. A few battles are sure to take place both within and outside Congress this month as the defense bill moves through the Senate. Obama issued a veto threat against the legislation—a first for his presidency—while defense reformers Sens. Levin and McCain affirmed they will “fight on the floor” against the F-22. Of course those in Congress whose priorities fall with big industry rather than reality will be ready to battle as well.

Pentagon Fails Reform at Every Angle

Armand Biroonak — Mon, 06 Apr 2009 16:45:43 -0400

Secretary of Defense Robert Gates announced Monday a proposal to reform the defense budget by cutting or scaling back some major weapons programs and strengthening oversight of the acquisitions process. The recommendations made by the Secretary should be applauded, but it is only a small step to curb defense spending. Looking forward the budget for FY 2010 and beyond maintain current levels of funding, without pressuring the Pentagon to make substantial cuts. Instead, it appears the Administration is relying on the Pentagon to trim spending and end waste on its own. If the past is any indicator, this approach won’t work.

Obama’s FY 2010 budget provides a 4 percent increase in defense funding from 2009. To its credit, it does include the cost of war in the defense budget—no longer hidden as off-budget supplementals—but that only accounts for part of the increase.

The increase is hard to defend. Compared to 2000, the FY 2010 defense budget has increased a whopping 78%. While defense spending will continue to represent nearly half of all discretionary spending through 2013.

Secretary Gates has stated the defense funding “spigot” is closing. Adding that the Pentagon will have to reform, make tough spending choices, and expand accountability.

That is a good warning, but without the pressure from funding cuts, the Pentagon’s record of self-imposed reform is dismal. Take DOD’s latest efforts to improve its major weapons acquisitions process. The GAO again this March found their efforts insufficient due to the absence of proper oversight. The system is plagued with nearly $300 billion in cost overruns, numerous scheduling delays and inadequate testing.

The GAO cites in the report common problems of Pentagon management:

“DOD’s processes are fragmented. Once a program begins, it too often moves forward with inadequate technology, design, testing, and manufacturing knowledge, making it impossible to successfully execute the program within established cost, schedule, and performance targets. Furthermore, DOD officials are rarely held accountable for poor decisions or poor program outcomes.”

The problems outlined above are echoed in similar Pentagon cases:

• The Base Realignment and Closure Act of 2005 was to save $2.3 billion with the consolidation of duplicate operations, but a recent GAO report questions whether any savings can be yielded at all. Already 88 percent of the Pentagon’s estimated savings with the move are no longer achievable due to mismanagement of funding, lack of interagency coordination and oversight among the Pentagon’s branches.

• The expensive Missile Defense system shows little improvements made in management and cost controls for the $10 billion a year program. A key contributor to ballooning costs is the Pentagon decision to exempt Missile Defense from standard cost and test baselines. The Pentagon reasoned the “exclusion from traditional oversight was to allow for ‘flexibility’ for development.” Not surprisingly, the complete opposite is true—skyrocketing costs, with nearly every missile system failing in testing.

How to Reform?

Secretary Gates’ recent announcement eliminates some major programs, such as the F-22 Raptor jet, but stops well short of cutting the numerous weapons systems costing tens of billions.

Senators Carl Levin (D-MI) and John McCain (R-AZ) are also taking a small step in the right direction. The Reforming Weapons Acquisitions Reform Act is an effort to inject accountability and avoid cost overruns on projects, but much more must be done.

True reform is making cuts in funding to force the Pentagon to make wiser spending choices and curb waste. Less funding will ensure Cold War weaponry and helicopters that kill more Marines in testing than combat are no longer produced. A leaner, efficient Pentagon with healthy contract competition and strict oversight will not only ensure American security, but also free up funds to strengthen domestic programs that face cuts.

See my past blog on defense waste here.

Foreign Policy in Focus of the Institute for Policy Studies lay out specific defense cuts here.

The Department of Defense Contractors

Armand Biroonak — Fri, 20 Feb 2009 10:12:27 -0500

The conservatives proclaiming now is a time of “fiscal responsibility” must have forgotten that they enacted tax cuts for the rich and spent $12 billion a month in Iraq. Now there is a growing right-wing movement to cut so-called “wasteful entitlement” programs such as Social Security as a means of balancing the budget. Meanwhile, make any attempt to cut defense spending and conservatives are ready to attack. Why are conservatives so hostile to cuts? Those lucrative defense contracts would be placed in jeopardy, of course.

Defense consumes more than one-third of all government expenditures. DOD’s expected expenditures in 2009 are $741 billion; include other affiliated agencies and operations this figure comes to nearly $1 trillion. Since 2001, defense spending has increased over 110 percent and is at its highest compared to any other period except World War II. This level of spending is astonishing, considering that the U.S. spends more on defense than the next 45 highest spending countries combined—including 5.8 times more than China (2nd highest), 10.2 times more than Russia (3rd highest), and 98.6 times more than Iran (22nd highest) – and will account for 48 percent of the world's total military spending.

Criticize this obscene level of funding and conservatives are armed with their empty rhetoric of “supporting the troops” and “protecting America.” In reality, the defense budget serves as a profit bonanza for defense contractors. Over the past eight years defense contractors have seen their profits soar to record levels, even amid the recession.

For instance, the Iraq War is the most privatized war this nation has seen, with nearly 20 percent of funding for operations—about $85 billion—going to private contractors such as Halliburton or Blackwater.

Our intelligence community is outsourced also, with 70 percent of the intelligence budget going to contractors. Moreover, funding does not even stay on American soil, approximately one-third of defense contracts for the Iraq and Afghan Wars have gone to foreign companies.

Amid the funding blitz, the Defense Department continues to fail nearly every audit performed. According to a July 2008 General Accountability Office report, the Defense Contract Audit Agency (responsible for all DOD accounting and contract audits) “improperly influenced the audit scope, conclusions, and opinions of some audits. Problems call into question the reliability of pricing audit reports issued connected with over $6.4 billion in government contract negotiations."

This outright fraud and lack of transparency is nothing new for the Pentagon, as numerous examples point to their mismanagement and waste. The most infamous of DOD contract failures is the F-22 Raptor fighter jet program developed by Lockheed Martin; originally slated to be delivered in the mid 1980s, delivery has yet to be completed with an ever ballooning cost over $65 billion. The Air Force began in 2006 another multibillion dollar redevelopment of the Cold War era jet.

More highlights of waste:

The Pentagon faces $300 billion in cost overruns for 72 weapons systems acquisitions provided by contractors such as Boeing and Northrop Grumman.
In Iraq, $13 billion for development and reconstruction paid to contractors is unaccounted for, while little work was completed.
The Pentagon still rewarded private contractors with $8 billion in performance bonuses without consideration of cost overruns and delays.

The revolving door of the military industrial complex must shut. According to the GAO, between 2004 and 2006 2,435 former DOD officials were hired by one or more defense contractors, many former DOD employees working on contracts related to their former agencies and influencing contract decisions. Moreover, defense contractors have been found to cost more due to overruns and billing, endanger troops’ lives due to delivery delays or shoddy construction and jeopardize the success of military objectives.

Conservatives and deficit hawks who continue to attack important social programs that benefit average Americans must be shamed. Our nation’s fiscal and national security shall no longer be used as a pawn to enrich the defense establishment and contractors. Barney Frank is a proponent of cutting the defense budget by as much as 25 percent and will hold a Congressional hearing next week. We will see if the Obama administration too begins to cut the lifeline of the military industrial complex when the OMB releases their budget next Thursday.

More than $13 Billion for Iraq Reconstruction Unaccounted For

Armand Biroonak — Wed, 01 Oct 2008 17:06:18 -0400

A former Iraqi official recently estimated that more than $13 billion meant for reconstruction projects in Iraq was wasted or stolen through elaborate fraud schemes.