Mandated Oversight Missing in Afghan Contracts
WASHINGTON, 15 Feb
Lack of oversight of United States Agency for International Development (USAID) contractors in Afghanistan is not a new story.
But when all eight USAID contractors in Afghanistan who had been called in for a roundtable meeting with Sen. Claire McCaskill earlier this month said they do not have to file any documents with USAID for the multi-million-dollar projects they are working on, even the senator was surprised.
"I knew USAID wasn't excited about SPOT filing," she said at the Feb. 3 roundtable meeting of the Senate Subcommittee on Contracting Oversight. "But I didn't know they were this unexcited."
In 2008, USAID, the State and Defence Departments signed a memorandum of understanding agreeing that the Synchronised Predeployment and Operational Tracker, or SPOT, would be the system of record.
However, representatives of the organisations present at the roundtable meeting said their contracts with USAID did not include a clause on having to file SPOT documents.
As late as November last year, the Government Accountability Office found that USAID does not require SPOT documents from its contractors in Afghanistan and has no time frame for doing so.
The roundtable had invited Black & Veatch, Creative Associates International, Chemonics International, Inc., Deloitte & Touche (BearingPoint), Development Alternatives, Inc., International Relief and Development Inc., International Resources Group, and the Louis Berger Group.
Among those present, all except the Louis Berger Group report exclusively to USAID. Louis Berger also reports to a private contractor.
The information the agencies were required to track as part of SPOT includes a brief description of the contract, its total value, and whether it was awarded competitively, and for contractor personnel working under contracts in Iraq or Afghanistan, the total number employed, total number performing security functions, and total number who have been killed or wounded.
The three government entities have different requirements for a SPOT filing when it comes to Afghanistan.
USAID, and the two cabinet departments, had said in November that they lack the resources to verify the information reported by the contractors, particularly for work performed at remote sites where security conditions make it difficult for U.S. government officials to regularly visit.
The lack of coordination between USAID and its contractors was also clear during the meeting of the Senate Subcommittee on Contracting Oversight in February.
The contractors told McCaskill that USAID officials do not visit the sites, which are usually "outside the wire" of security zones, and preferred to follow up on their work by e-mail from embassy compounds or bases. The USAID officials do not get outside the wire as much as they historically did, said Dick McCall, senior vice president of Creative Associates.
USAID and the State Department have been sending more and more civilian officers to track the progress of development work in Afghanistan, as part of its new civil-military strategy.
Secretary of State Hillary Clinton announced that there could be as many as 1,500 civilian officers in the war-torn country by 2011.
But most of the civilian surge occurs inside the security zones, said James Boomgard, president and CEO of Development Alternatives, Inc. And so supervision of work and interaction with USAID officials occurs only irregularly, he said.
Lack of adequately trained local staff is also hindering development work in Afghanistan, where, compared to Iraq, the ratio of expatriates in development projects is higher.
The panelists also told McCaskill that many USAID officials in Afghanistan are inexperienced. Those who are new to Afghanistan "tend to set unrealistic expectations" for contractors, Boomgard said.
The contractors said that this meant that government officials were unable to see the successes, failures, and challenges of the projects and can't carry out quality oversight work. The contractors also acknowledged understaffing problems at USAID, a result of budget cuts over the last decade.
According to Dick Owens of International relief and Development, Inc., the contractors are now expected to work "behind the clearing", or where troops have not yet secured the area. That increases the risks and slows down activity, he said.
One result is that years after the projects were supposed to be completed, there is little information on their status.
McCaskill, who is currently on a week-long trip to visit troops overseas, including in Afghanistan, questioned why contractors and grant recipients have not been more successful in educating women, building roads, generating electricity and developing agriculture, after nearly 10 billion dollars in USAID funds have been invested in the country since 2002.
USAID is not the only government agency that has failed to keep up with the oversight process. In a report in June last year, the federal Commission on Wartime Contracting in Iraq and Afghanistan said that neither the military nor the federal civilian workforces have expanded to keep pace with the enormous growth in the number and value of contingency contracts in recent years.
It pointed out how contracting officials withhold provisions recommended by auditors, and many contract audit recommendations are not properly resolved.
Many of the contractors who met with McCaskill have a bad track record of implementing projects. Maryland-based Development Alternatives, Inc. (DAI) was cited by the Inspector General's office in January for ineffective use of USAID funds in tribal regions of Pakistan over the last year.
A 2009 report from the Inspector General criticised DAI's performance on a 164-million-dollar contract to promote local governance. Success, the audit found, was "highly questionable" in part because DAI "had no overall strategy" for implementing local projects.
DAI continues to receive USAID funds for projects in both Iraq and Afghanistan.
The Louis Berger Group isn't free from controversy either. It is one of the contractors of the 300-million-dollar power plant project in Afghanistan that has been plagued by delays and allegations of impropriety.
The plant is part of the 1.4-billion-dollar project awarded to Louis Berger Group, Inc. and Black & Veatch Joint Venture through 2011 to improve road, power generation capacity and power transmission networks across Afghanistan.
A Louis Berger committee member, who is a former member of the Australian army, was jailed in the United States for his involvement in a 900,000-dollar Afghanistan security contract kickback case this month, the Sydney Morning Herald reported on Feb. 6. Scott Anthony Walker was a coordinator for the 1.4-billion-dollar infrastructure project.
Officials have criticised implementation of aid through contractors for years. A CorpWatch report quoted Jean Mazurelle, the World Bank director in Kabul, saying that 35 to 40 percent of all international aid sent to Afghanistan is "badly spent".
Mazurelle told Agence France Press in 2005: "In Afghanistan the wastage of aid is sky-high: there is real looting going on, mainly by private enterprises. It is a scandal. In 30 years of my career, I have never seen anything like it."
International development is a burgeoning industry that has attracted major defence and security contractors as the United States continues to pour money into foreign assistance.
In 2009, L-3, the sixth largest U.S. defence contractor, bought International Resources Group. The Washington D.C.-based group provides management services to USAID, the World Bank, Asian Development Bank, Inter-American Development Bank and the United Nations, among others.
In January, DynCorp, a private military contractor, announced that it had acquired Casals and Associates, an international development and strategic communications firm.
Casals' clients include EPA, UNDP, USAID, the Defence Department, Department of Energy, HUD, and Department of Health and Human Services, besides other federal government departments and private companies, including Ernest and Young.