Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Billion Dollar Audit Missed by Pentagon Watchdog

Corp Watch Pratap Chatterjee

Military auditors failed to complete an audit of the business systems of an Ohio-based contractor even though it had billed for $1 billion worth of work over the last four years, largely done in Afghanistan. Immediately after this fact came to light at a public hearing of the bi-partisan Commission on Wartime Contracting, the Defense Contract Audit Agency (DCAA) scrambled to dispatch an extra ten staff to catch up on the job.

Mission Essential Personnel (MEP), which Corpwatch profiled here, supplies 6,000 translators to the U.S. military, mostly in Afghanistan. The company’s costs have not been singled out as questionable or unsupported, but the failure of the government agency to oversee taxpayer money is an indicator of widespread problems and staff shortages at this key military agency.

“How does the government know we’re getting our money’s worth?” asked Christopher Shays, co-chair of the commission and a former member of Congress from Connecticut, at the July 26 hearing.

“This was a major miss on DCAA’s part,” Michael Thibault, the other co-chair and a former deputy director of DCAA, told CorpWatch.

DCAA has oversight over half a trillion dollars of taxpayer money every year. It is supposed to constitute the “first line of defense” against corruption when the Pentagon contracts anything from bunker-buster-bombs from Lockheed Martin, to rockets from Boeing, or when it subcontracts military support operations as it did when it paid Halliburton subsidiary, KBR, to hire Sri Lankans to clean toilets in Iraq.

Despite past success – including exposing Halliburton’s inability to account for billions of dollars early in the occupation of Iraq – DCAA management has drawn fire in the last two years for giving military contractors a clean bill of health and ignoring serious problems in corporate financial systems spotted by lower ranked staff.

Whistleblowers have charged that instead of actively pursuing waste, fraud, and abuse, the top ranks of DCAA were obsessed with signing off on as many audits as possible in the shortest period of time. DCAA management has also been accused of harassing and intimidating staff who have spoken out. The DCAA estimates that the savings it has made for the taxpayer plummeted from $51 for each dollar spent on staff and overhead in 1984 to just $5 today.

Muzzling A Pentagon Watchdog

The first shot across DCAA’s bow was fired by the Government Accountability Office (GAO), the investigative arm of the U.S. Congress. In a July 2008 report that provoked alarm among politicians, the GAO gave DCAA a failing grade for not complying with government standards on 14 major audits.

“This auditing agency has been exposed as being fundamentally corrupt in the way they issue audits,” Democratic Senator Claire McCaskill, a former Missouri state auditor, told her fellow senators in Congress at the time.

The agency’s lapses also sparked internal criticism and multiple internal upheavals as angry staffers battled management – notably in a public forum via the website of Government Executive magazine.

Then in September 2009 both the GOA and the Pentagon’s inspector general issued critical reports, and the Pentagon, after conducting confidential interviews with 68 DCAA staff, confirmed some allegations of staff harassment.

DCAA History

Founded in 1965 to provide the U.S. Air Force, Army, Navy, and Ordnance Department with uniform oversight of contractors was first headquartered in the now closed Alexandria, Virginia Cameron Station, a cold windowless building fitted with rows of steel gray desks.

Even in the days before computers and modern accounting techniques, its auditors were able to catch corrupt contractors and save millions. To do their jobs, the staff sometimes had to battle their own and Pentagon management who were reluctant to criticize the big contractors.

DCAA expanded quickly. By 1966, it had 3,662 staffers around the country with oversight over $21.5 billion. As the Vietnam War ramped up, the DCAA’s “Flying Squad” would fly Huey helicopters to forward bases in the jungle to check up on work done by contractors.

By the end of the 1980s DCAA had more than 6,000 staff and today, with headquarters in Fort Belvoir, Virginia, it has some 300 offices and sub-offices around the world. The agency’s staff still get on helicopters — now Blackhawks and Chinooks — in Afghanistan, Iraq, and Kuwait to visit forward bases and inspect contractor’s books. Although DCAA primarily serves the U.S. military, it also conducts audits for other agencies including the Department of Energy and the National Aeronautics and Space Administration (NASA).

In the last 45 years, DCAA’s oversight of contract dollars has expanded more than four-fold (adjusted for inflation) to $501 billion in proposed or claimed contractor costs that required 30,352 audits in 2008.

Not surprisingly the agency staff has struggled to keep up with demand, and as far back as the 1980s, it had a six to seven year backlog to complete audits. This lag had a major impact on payments to military contractors, which were typically paid just 85 percent of costs on delivery of services, with the remaining 15 percent paid out several years later — only if the auditors were satisfied.    Please read the full article here

August 30, 2010 Posted by | Afghanistan, Civilian Contractors, Contractor Oversight, Mission Essential Personnel | , , , , , | Leave a comment

Hearings Reveal Lapses in Private Security in War Zones

By Pratap Chatterjee*

WASHINGTON, Jun 21, 2010 (IPS) – Jerry Torres, CEO of Torres Advanced Enterprise Solutions, has a motto: “For Torres, failure is not an option.” A former member of the Green Berets, one of the elite U.S. Army Special Forces, he was awarded “Executive of the Year” at the seventh annual “Greater Washington Government Contractor Awards” in November 2009.

On Monday, Torres, whose company provides translators and armed security guards in Iraq, was invited to testify before the Commission on Wartime Contracting (CWC), a body created in early 2008 to investigate waste, fraud and abuse in military contracting services in Afghanistan and Iraq.

Torres was asked to testify about his failure to obtain the required clearances for “several hundred” Sierra Leonian armed security guards that he had dispatched to protect Forward Operating Base Shield, a U.S. military base in Baghdad, in January 2010.

Torres didn’t show up.

An empty chair at the witness table was placed ready for him together with a placard with his name on it next to those for representatives of three other companies working in Iraq – the London-based Aegis, and DynCorp and Triple Canopy, both Virginia-based companies.

“This commission was going to ask him, under oath, why his firm agreed in January to assume private security responsibilities at FOB Shield with several hundred guards that had not been properly vetted and approved,” said Michael Thibault, one of the co-chairs of the commission and a former deputy director of the Defence Contract Audit Agency.

“This commission was also going to ask Mr. Torres why he personally flew to Iraq, to FOB Shield, and strongly suggested that Torres AES be allowed to post the unapproved guards, guards that would protect American troops, and then to ‘catch-up the approval process’.”

Instead, a lawyer informed the commission staff that Torres was “nervous about appearing”.

The failure of a contractor to appear for an oversight hearing into lapses was just one example that the use of some 18,800 armed “private security contractors” in Iraq and another 23,700 in Afghanistan to protect convoys, diplomatic and other personnel, and military bases and other facilities in Afghanistan and Iraq was not working.

Blackwater’s new Afghan contract

Perhaps the most famous private military contractor in Afghanistan and Iraq – North Carolina-based Blackwater – was not invited to sit at the witness table either, despite the fact that the company had been the subject of several investigations into misconduct.

For example, in September 2007, security guards from North Carolina-based Blackwater guards shot and killed 17 Iraqi civilians in Baghdad’s Nisour Square.

Blackwater staff have also been accused of killing other private security contractors – in December 2006, Andrew J. Moonen, was accused of killing a security guard of the Iraqi vice president, Adel Abdul Mahdi. And as recently as May 2009, four Blackwater contractors were accused of killing an Afghan on the Jalalabad road in Kabul.

Members of the commission noted with astonishment that the State Department had awarded Blackwater a 120-million-dollar contract to guard U.S. consulates in Heart and Mazar-i- Sharif in Afghanistan this past Friday.

Asked to explain why Blackwater was awarded the contract, Charlene R. Lamb, deputy assistant secretary for international programmes at the State Department, stated that the competitors for the contract – DynCorp and Triple Canopy – weren’t as qualified.

Yet Don Ryder of DynCorp and Ignacio Balderas of Triple Canopy testified that they were both qualified and able to do the contract. The two men said that they would consider lodging a formal protest at the State Department Tuesday after a de-briefing with the government.

The choice of Blackwater, which has been banned by the government of Iraq, left the commissioners with little doubt that the contract award system was flawed. “What does it take for poor contractual performance to result in contract termination or non-award of future contracts?” wondered Thibault.

Inherently Governmental

At a previous hearing of the commission last week, John Nagl, president of the Washington, DC-based Centre for a New American Security, submitted a report on the subject that explained why the government was turning to these companies: “Simple math illuminates a major reason for the rise of contractors: The U.S. military simply is not large enough to handle all of the missions assigned to it.”

Yet it appears that the government does not even have the oversight capability to police the companies that it has hired to fill the gap.

Some witnesses and experts said that by definition this work should not be handed out to private contractors in war zone.

“Private security contractors are authorised to use deadly force to protect American lives in a war zone and to me if anything is inherently governmental, it’s that,” said Commissioner Clark Kent Ervin, a former inspector general at both the State Department and the Homeland Security Department. “We don’t have a definitional problem, we have an acknowledgement of reality problem.”

Non-governmental expert Danielle Brian, executive director of the Project on Government Oversight (POGO), said: “It has become clear to POGO that the answer is yes, PSCs are performing inherently governmental functions. A number of jobs that are not necessarily inherently governmental in general become so when they are conducted in a combat zone. Any operations that are critical to the success of the U.S. government’s mission in a combat zone must be controlled by government personnel.”

*This article was produced in partnership with CorpWatch – http://www.corpwatch.org.

June 21, 2010 Posted by | Afghanistan, Blackwater, Civilian Contractors, Contingency Contracting, Contractor Corruption, Contractor Oversight, DynCorp, Iraq, NATO, Private Security Contractor, State Department, Triple Canopy | , , , , , , , , , , | Leave a comment

Mission Essential Translators Expendable

Mission Esential Translators Expendable

by Pratap ChatterjeeSpecial to CorpWatch
August 11th, 2009

Basir “Steve” Ahmed was returning from a bomb-clearing mission in Khogyani district in northeastern Afghanistan when a suicide bomber blew up an explosive-filled vehicle nearby. The blast flipped the military armored truck Ahmed was riding in three or four times, and filled it with smoke. The Afghan translator had been accompanying the 927th Engineer Company near the Pakistan border on that October day in 2008 that would forever change his life.

“I saw the gunner come out and I followed him. The U.S. Army soldiers helped pull me out, but I got burns,” says Ahmed, who had worked as a contract translator with U.S. troops for almost four years. “The last thing I remember was the “dub-dub-dub” of a Chinook helicopter.” A medical evacuation team took the injured men to a U.S. Army hospital at Bagram Base.

Three days later Ahmed regained consciousness, but was suffering from the shrapnel wounds in his scalp and the severe burns covering his right hand and leg.

Full Story here

August 14, 2009 Posted by | Uncategorized | , , , , , , | Leave a comment