CWC's Final Report: Make Investments in Contracting Oversight

On Aug. 31, the Commission on Wartime Contracting (CWC) released its final report to Congress, detailing contracting issues in Iraq and Afghanistan. Although most media outlets focused on the sensational estimates of funds lost through waste and fraud over the course of the wars – possibly totaling $60 billion – the report makes a much broader and compelling argument for systemic contracting reforms and better contractor oversight. With the current atmosphere of austerity on Capitol Hill, Congress should heed these recommendations.

Congress created the CWC in 2008 by including language in that year's defense authorization. Tasked with examining the extent of reliance on and the performance of private contractors in Iraq and Afghanistan, the commission held 25 hearings over the course of three years, made repeated fact-finding trips to the Middle East, and published several reports to Congress. The CWC has established itself as a remarkably influential source for nonpartisan information on war-related contingency contracting. The commission will wind down and cease operations at the end of September.

The commission makes several broad recommendations, providing details on how to improve contract planning, expand competition, improve interagency coordination, and jettison unsustainable foreign projects abroad, and, most importantly, strengthen the federal government's capacity to provide effective contract management and oversight. Without developing their own capacity for oversight, agencies can get trapped in a vicious cycle of continued dependence on the services of the private sector, as the government is never able to develop the capacity to perform the functions on its own.

Without adequate management and oversight, contractors may overstep their authority and engage in behavior that puts the U.S.'s mission or U.S. personnel at risk. And when the government overrelies on some contractors, it may find it difficult to cut off the offending parties because alternative service providers are not available.

The federal government will only be able to improve contract management and oversight by increasing the number of oversight personnel, according to the commission. Currently, agencies do not have the number of staff needed to oversee the number of contractors working in war zones. A recent U.S. Army report found a similar deficiency of oversight staff in domestic contracting, as well.

Of course, for the federal government to hire more oversight staff, Congress would have to provide the relevant agencies – such as the Department of Defense (DOD), the State Department, and the U.S. Agency for International Development (USAID) – with additional funds. This seems unlikely, though, in light of looming budget cuts that are likely in either outcome provided by the debt ceiling deal.

The CWC report argues that additional upfront investments in contractor oversight will pay off in the end by saving money lost to corruption and fraud.

Even though military personnel are scheduled to begin transitioning out of Iraq at the end of this year and Afghanistan in the near future, the costs of moving out of the arena and the continuing U.S. presence in these countries will be large enough to warrant these immediate investments in oversight personnel.

For instance, the State Department will soon take over responsibility for Iraq from DOD and will have to begin performing many tasks the Pentagon has been carrying out for the last eight years. To perform these tasks, State will rely on a large number of private security contractors (PSCs). In addition to the current small army of roughly 19,000 PSCs in Iraq right now, the agency estimates it will need another 6,000 to 7,000 contractors to carry out its responsibilities.

For over a year now, the CWC has been pointing to the potential challenges of this handoff. State does not have the personnel to oversee the numerous contractors that will soon flood into the country. A similar situation is likely to occur in Afghanistan some years down the road as the U.S. military draws down its forces in the country.

At least some members of Congress recognize the significance of the CWC's recommendations. In September, Rep. John Tierney (D-MA) introduced legislation that would create a permanent special inspector general for overseas contingency operations, an idea originally proposed by Sen. Claire McCaskill (D-MO) and endorsed by the CWC in its final report.

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