November 2, 2007

In Case You Missed It: Troubling Contracting Trends in Iraq

Yesterday, the Chairman of the Commission on Army Acquisition and Program Management in Expeditionary Operations briefed the media on the group’s investigation into Defense Department procurement, During the hearing, Chairman Jacques Gansler made a number of noteworthy comments. Namely, that 50 percent of the expeditionary force in Iraq is made up of contractors. As Senator Byron stated this week on the Senate floor, not all of the President’s recent supplemental request will go to the troops in Iraq and Afghanistan. A substantial portion of that money goes to contractors. Of note, it was also reported this morning that KBR, the former parent company of Halliburton and largest American contractor in Iraq, saw a significant boost in profits because of war contracts in Iraq, even though it is under investigation for fraud in the U.S. and Great Britain.

According to Jacques Gansler, Chairman of the Independent Commission on Army Acquisitions, 50 Percent of the Expeditionary Force In Iraq Is Made Up of Contractors. In his briefing yesterday, Gansler made this alarming statement, “The lack of planning for the expeditionary operations -- namely, when people are going to go to war and 50 percent of their force are going to be contractors, then you want to make sure that they have prepared for that, trained for it, and that the war-fighters are trained and prepared for that.  And that’s what they have now, 50 percent of the force in Iraq are contractors, but they haven’t exercised or prepared for that.  The civilians have not been pre- volunteered for that.  The leadership courses don't include it for the military across the board.  And the exercises don’t include it.” [Department of Defense Briefing, 11/1/07]

• Senator Dorgan Made Clear This Week A Large Portion of the Supplemental Request for the President’s War in Iraq Will Go to Contractors. Senator Dorgan argued, “When [The President] recently asked the Congress for an additional $196 billion--none of it paid for, all emergency--the President said: Now we will see whether the Congress supports the troops. Well, the fact is, not all that money goes to the troops in Iraq and Afghanistan. A substantial portion of that money goes to contractors. [Congressional Record, 10/31/07]

Gansler Also Highlighted The Number of Fraud and Abuse Cases in the Army. With regard to Army procurement, Gansler said, “[T]he Air Force has 70 percent of the jobs in Iraq and Kuwait, only one of the open fraud investigations is Air Force. The Army has 28 percent of the personnel and has 77 out of the 78 open fraud investigations.  Probably more than a coincidence, is the conclusion we reach.  We think it's much more due to leadership and training, and that's one of the reasons why we stress leadership and training in our briefing. [Department of Defense Briefing, 11/1/07]

Today It Was Reported American Contractor KBR, The Former Parent Company of Halliburton, Saw a Boost In Its Profits Due to the Iraq War. KBR, the largest private contractor in Iraq, said that earnings during the third quarter of the year had jumped to $63 million from $7 million for the same period the year before. At the moment, KBR is being investigated by the Justice Department and the Serious Fraud Office in Britain over allegations of bribery and corruption in connection with contracts to build liquefied natural gas pipelines in Nigeria. The company, which split from Halliburton in April, is trying to shape its business to derive more earnings from its non-Iraq enterprises. Bill Utt, chairman and chief executive, has acknowledged that KBR is likely to secure less work in Iraq as troop levels decrease. [Times of London, 11/2/07]

Democrats investigating contractor waste, fraud, and abuse:

Senate Democrats Sought to Create an Independent Commission to Oversee Wartime Contracting. Democrat Senators, led by Senator Jim Webb, have authored legislation strengthening congressional oversight over contractors in Iraq. Specifically, the measure would establish an independent Commission on Wartime Contracting to study and investigate: 1) federal agency contracting for the reconstruction of Iraq and Afghanistan; 2) federal agency contracting for the logistical support of coalition forces in Operation Iraqi Freedom and Operation Enduring Freedom; and 3) federal agency contracting for the performance of security and intelligence functions in Operation Iraqi Freedom and Operation Enduring Freedom. [S. 1825, 2007]

Senate Democrats Sought Accountability from Private Security Contractors. Democratic Senators Jim Webb and Claire McCaskill have offered an amendment to the FY 2008 National Defense Authorization Act, which directs the Department of Defense to promulgate regulations regarding private security contractors. The amendment calls for, among other items, 1) a process for keeping records of private security personnel; 2) requiring private security companies to register the equipment they use; and 3) a process for keeping records on incidents where persons are killed or injured, or property is destroyed. [Amdnt 2127 to H.R. 1585]

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