Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

The Invisible Foreign Subcontractor

David Isenberg at Huffington Post  August 16, 2012

See also Davids blog Institute of Strategic Satire

Last year I wrote a report for the Project on Government Oversight about and subsequently testified to Congress, regarding a Kuwaiti-based KBR subcontractor which had exploited hundreds of third-country nationals (TCN) coming from various South Asian countries.

Some of the subsequent press coverage criticized KBR, but that missed the point. Sure, in several respect KBR could have done much better, but at least it held special inspections documenting atrocious living conditions and threatened to cut off awards to the subcontractor.

But the real story is how little information the U.S. government has over the operations of foreign subcontractors. As I noted in my congressional testimony:

Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency – most likely the Defense Department, State Department, or U.S. Agency for International Development – will award work to a “prime” contractor. That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.

But in footing the bill for all this work by a network of companies, the U.S. government often doesn’t know who it is ultimately paying. And that can lead to fraud, shoddy work, or even taxpayer funds ending up in the hands of enemy fighters.

For more detail the article “Limitations Of the Contingency Contracting Framework: Finding Effective Ways To Police Foreign Subcontractors In Iraq And Afghanistan” by Carissa N. Tyler in the Winter 2012 issue of the Public Contract Law Journal provides some valuable detail on the scope of this problem. For example, “Subcontractors are responsible for approximately seventy percent of the work of prime contractors; however, the Government has extremely limited visibility into these subcontractors’ operations. U.S. taxpayer dollars are at risk because U.S. agencies cannot directly police foreign subcontractors. “

Please read the entire article here

August 16, 2012 Posted by | Civilian Contractors, Contractor Corruption, Contractor Oversight | , , , , , , , | Leave a comment

The Struggle to Police Foreign Subcontractors in Iraq and Afghanistan

Billions at Stake, but U.S. Investigators Stymied by Murky Rules, Enforcement Obstacles

To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.

But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:

  • Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
  • Subcontracted security forces in Afghanistan are suspected of bribing both Taliban and Afghan government officials;
  • U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has allegedly ended up in the pockets of insurgents; and
  • A former contractor employee alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.

Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor. That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.

“There are good reasons for using subcontractors,” said Christopher Shays, a former Republican lawmaker who is now co-chair of the congressionally created Commission on Wartime Contracting. “Business economists tell us that subcontracting can help businesses tap into specialized skills, configure their organization to meet changing needs, and adjust to shifts in demand.”

Subcontractors do everything from providing translators for American soldiers to trucking supplies into war zones, as well as building military bases and providing security. Without foreign subcontractors, U.S. troops could not operate halfway around the globe.

But in footing the bill for all this work by a network of companies, the U.S. government often doesn’t know who it is ultimately paying. And that can lead to fraud, shoddy work, or even taxpayer funds ending up in the hands of enemy fighters.  Please read the entire article here

August 29, 2010 Posted by | Afghanistan, ArmorGroup, Civilian Contractors, DynCorp, Iraq, KBR, Pentagon, Wartime Contracting | , , | Leave a comment

   

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