A Hundred Billion Dollars Up in Smoke

It is a pity that last week's Senate Armed Services committee hearing on "Department of Defense Efficiencies Initiatives" did not get more coverage, as there were some startling assertions made.

Consider what Sen. Claire McCaskill (D-MO) said. McCaskill, by the way, is more qualified than most members of Congress to talk on the subject of contracting. During her years as a prosecutor she conducted performance audits on state programs. She was named as one of the select senators to sit on the Permanent Subcommittee on Investigations, formerly known as the Truman Committee. In fact, she was a co-sponsor of a major bill that established a modern day Truman Committee called the Wartime Contracting Commission, charged with investigating wasteful, fraudulent and abusive contracts in the wars in Iraq and Afghanistan.

In addition to working to establish a committee to examine wartime contracting, in 2009 she was named chairman of a new subcommittee that investigates contracting abuses throughout the federal government. The Homeland Security and Governmental Affairs Committee (HSGAC) Subcommittee on Contracting Oversight strives to root out government waste by focusing on contracts and the means by which the federal government provides accountability to those contracts.

So when she says the following we should pay attention:

Let me move on to another subject: contracting. You know, wartime contracting has been stovepiped, mostly because it can be. And I--and the lack of competition is, frankly, a huge part of the problem. And we're not talking about, now--I certainly agreed with Senator McCain, that some of the problem is a lack of competition among Defense contractors for the big stuff. But, there really isn't an excuse for a lot of the services' contracts. We're not talking about a lot of capitalization costs, for a lot of these service contracts. But, once again, what you see is a lack of competition, without a good excuse as to why there's a lack of competition. And that, Secretary Carter, is where I think there is real, real money. And, I just urge you to bring to us, in this effort, how, not only you're looking at contracting in a macro sense, but how you are drilling down on contracting in wartime as it relates, especially, to logistics and troop support.

I--I'm a conservative person when it comes to estimating numbers, because of my auditing background. I think it's very conservative to say that we've had $100 billion go up in smoke in Iraq, from bad contracting, that it's not as if there weren't competing people who could have been brought in; it just was easier not to. And so, I urge you to keep us posted on how you're integrating that kind of contracting into the contracting reforms.

Now, even by the slothful standards of the U.S. Department of Defense that is unquestionably real money. If Sen. McCaskill was exaggerating one would think that a DOD witness would not miss a chance to dispute it. So let's consider what the witness, Under Secretary of Defense for Acquisition, Technology, and Logistics, Ashton Carter, said in response:

You are right, we have--in contingency contracting in Iraq, in the early years, did not have the tradecraft and the controls that were appropriate. We've recognized that. And one of the first things Secretary Gates said to me, when he hired me in this job, was that he wanted to make sure we learned the lessons of Iraq and applied them in Afghanistan. And we're really trying to do that.

So, you--I would like to get our contracting system, in Afghanistan, to a point where we don't need to--we'll still need to be audited, but where we'll pass an audit easily. That means having contracting officers in adequate numbers to do the work right. It means having contracting officer representatives there to make sure the work is done on each contract. And so, for--that means reducing the use of cash, and all of these things. Now--and we have been assiduously working down that list--which is, I think, exactly the same list that you are working down--in Afghanistan, and made considerable progress in each of those areas. We're not where I think we should be, yet.

And speaking of not being where we should be consider what Sen. McCaskill said about the Special Inspector General for Afghanistan Reconstruction.

I have written, now, three letters to the President about the special inspector general over Afghanistan. And we now have had an independent review of his work, by a team of auditors, a peer review. And they have said that it is woefully lacking. And probably the whipped cream and the cherry on this particular situation is that--here's somebody who's supposed to be the eyes and ears looking at contracting in a major way in Afghanistan, and he hires someone on a no-bid contract for $95,000 for 2 months' work.

Now, first of all, how do you decide that somebody's worth 45 grand a month of public money? How do you decide that's the one? And there's no process there. Now, this is the special inspector general over Afghanistan reconstruction, hiring somebody for $95,000, for 2 months' work. And you wonder why the public thinks we've lost our minds. That is not being accountable. And, you know, the person he hired formerly was the DOD IG with a lot of blemishes. I mean, we're not even talking about somebody that is--doesn't come with his own baggage. And the special inspector general over Afghanistan should be fired, today. When you have an independent council of auditors saying that the special inspector general in Afghanistan-- that their law enforcement authority should be removed from them because they don't have the right control processes in place, this is a problem.