Wednesday, February 17, 2010

Progress in Afghanistan Contract Oversight; Measured Optimism

I recently wrote a piece for contract management improvements in reconstruction and nation-building initiatives. Updates were provided by Senator Claire McCaskill, (D-Mo), who is completing an overseas trip, including Afghanistan, and stated she was encouraged by what she saw in Afghanistan.

During the trip, auditors told McCaskill oversight agencies are working more collaboratively, ensuring contracts are properly scoped and are not duplicative.

According to Sen. McCaskill, she was encouraged by “indications” that training is being conducted for auditors, contract managers and others with procurement oversight. What those indications entail is not specified. As Sen. McCaskill is a former auditor, I fear those “indications” she was privy too may seem reasonable to her, but may not be adequate for the type of responsibilities and workload these contract personnel will be undertaking.

McCaskill also focused the contracting oversight portion of her trip on the Commander's Emergency Response Program (CERP) funds – which are a type of micro-lending program for small scale projects. She went on to say that most projects under CERP were in the $20,000 range, but now about half the programs cost $500,000 or more. This is a troubling development, as it seems that larger contracts are being awarded under CERP, presumably as a work around to bypass procurement processes in the name of speed. The Senator stated that she will further investigate CERP funds and how they are being used when she returns to Washington, and I hope she lives up to that commitment. CERP is also referred to as “Walking Around Money,” and I believe waste, fraud, and abuse seem to be inevitable with this program as I do not know anybody that walks around with $500,000 in their wallets.

Unfortunately, little progress has been made with monitoring of U.S. Agency for International Development contracts for reconstruction, humanitarian and other development work in Afghanistan, according to the Senator:

…"There's an awful lot of oversight being done there by e-mail because the work is done outside the wire," McCaskill said. "The work is being done in places government officials cannot easily get to, to oversee them."…

Oversight done via email? I’m all for using technology to increase procurement efficiency, but that seems to be taking things a bit too far.

Sunday, February 14, 2010

Oversight of Contracting Needs To Be Overhauled In Rebuilding Efforts

As the devastation unfolds in the aftermath of the earthquake in Haiti, it is clear that rebuilding the country will be one of the greatest nation-building exercises ever undertaken. To that end, federal agencies have started turning to contractors to support the missions of recovery and relief, and ultimately, reconstruction.

What is troubling is the lack of oversight and accountability whenever disaster strikes, both domestically and abroad. The United States is certainly no stranger to devastation, most notably with Hurricanes Katrina and Rita, and the floods that devastated the Midwest last year. However, processes and systems seem to still lack the capability to track the contract funding and ensure that performance is being managed and monitored. The Department of Defense has predictably been spending the most in Haiti, on items such as barges, ships, and relief supplies. However, there never seems to be little efforts to account for the spending. It is always a focus after the fact, but even then contract data is either incorrect or non-existent. It is this lack of accountability that seems to be unfolding in Haiti, and the Department of State and the U.S. Agency for International Development (USAID), who will no doubt be heavily involved in any reconstruction mission, have had their contract management failures in the spotlight with the their reconstruction efforts in Iraq and Afghanistan.

The Special Inspector General for Iraq Reconstruction recently issued a scathing report taking State to task on it contracting and oversight practices.

…The Department of State (DoS) Bureau of International Narcotics and Law Enforcement Affairs (INL) contract with DynCorp International includes task orders to support the Department of Defense’s (DoD) Iraqi police training program...

…INL continues to exhibit weak oversight of the DynCorp task orders for support of the Iraqi police training program. INL lacks sufficient resources and controls to adequately manage the task orders with DynCorp. As a result, over $2.5 billion in U.S. funds are vulnerable to waste and fraud…

Apparently in 2005, the Inspector General told State that INL's staffing was inadequate to keep pace with its workload, and oversight of the contracts for Iraq needed to be strengthened. Again the calls went out in 2007, with the same response that INL “planned” to increase staffing and improve contract management. Those “plans” seem to still be in the works, as by November 2009, there were three contract monitors in Iraq for the police training work; a $2.5 billion contract. State had responded with plans to boost that figure to 11. Although I am not a fan of talking about numbers, but rather favor skills and capability, it seems that fraud, waste, and abuse will continue to be difficult to manage with such few personnel.

The situation in Afghanistan is no different. Recent congressional hearings focused on Defense and the State departments' ability to handle a rise of contractors in Afghanistan.

…According to the Congressional Research Service, if the ratio of contractors to U.S. military personnel remains roughly the same, the deployment of 30,000 more troops to Afghanistan would require 26,000 to 56,000 additional contractors. The number of contractors in Afghanistan already is growing; from June to September, there was a 40 percent increase in Defense contractors alone...

…Auditors found "much of [the] waste [in Iraq] stemmed from inadequate contracting management, including contractors overseeing contractors, poor coordination of interagency efforts, continual personnel turnover and the challenges of contracting in a war zone," Senator Claire McCaskill (D-Mo) said…

USAID responded with their mitigation plan for Afghanistan by hiring more contracting officer technical representatives (COTR) and regional inspectors general, improve COTR training for quality-control and assurance, and boost the number and quality of site visits, according to Charles North, senior deputy director of the USAID Afghanistan-Pakistan Task Force. The report also stated that the agency also is modifying contracts to include more stringent reporting measures and providing additional guidance for COTRs in ensuring compliance. This would certainly be a step in the right direction, but it is the accountability to execute that ultimately will lead to results and improvements in ensuring the mission is being achieved and that taxpayer funds are not being wasted.

These efforts by USAID needs to be established by all contracting offices as a matter of course and contracting strategies before execution and not after the fact, as it is seems to be unfolding in Haiti. Only by establishing procedures and processes upfront can the reconstruction mission be done effectively and efficiently. Further, lessons learned need to be incorporated and accountability needs to be brought into the process in hopes of putting Inspector General reports and recommendations to good use as tools for improvement and not triggers for congressional hearings and investigations.