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Panel recommends reforms in war contractor spending to increase accountability, cut waste

WASHINGTON — The U.S. has lost billions of dollars to waste and fraud in Iraq and Afghanistan and stands to repeat that in future wars without big changes in how the government awards and manages contracts for battlefield support and reconstruction projects, independent investigators said Wednesday.

The Wartime Contracting Commission urged Congress and the Obama administration to quickly put in place its recommendations to overhaul the contracting process and increase accountability. The commission even suggested that the joint House-Senate debt reduction committee take a close look at the proposals.

"What you're asking for is more of the same," said Dov Zakheim, a commission member and the Pentagon comptroller during President George W. Bush's first term. "More waste. More fraud. More abuse."

The bipartisan commission, created by Congress in 2008, estimated that at least $31 billion and as much as $60 billion has been lost in Iraq and Afghanistan over the past decade due to lax oversight of contractors, poor planning, inadequate competition and corruption. "I personally believe that the number is much, much closer to $60 billion," Zakheim said.

Yet new legislation incorporating the changes could prove difficult with Republicans and Democrats divided over the best way to reduce the deficit.

Several of the proposals would require new spending, the commission acknowledged, and that would be a hard sell in an election year when reducing the size of government is a priority for many. Other proposals would cost little or simply require money to be shifted from one account to another, the panel said.

"If these recommendations are not implemented, there ought to be a Hall of Shame," said Michael Thibault, co-chairman of the commission. "There's an opportunity at hand."

The commission's 15 recommendations include creating an inspector general to monitor war zone contracting and operations, appointing a senior government official to improve planning and coordination among federal agencies, reducing the use of private security companies, and carefully monitoring contractor performance.

The commission's report said contracting waste in Afghanistan and Iraq could grow as U.S. support for reconstruction projects and programs wanes. That would leave the countries to bear the long-term costs of sustaining the schools, medical clinics, barracks, roads and power plants already built with American money.

Overall, the commission said spending on contracts and grants to support U.S. operations is expected to exceed $206 billion by the end of the 2011 budget year. Based on its investigation, the commission said contracting waste in Afghanistan ranged from 10 percent to 20 percent of the $206 billion total. Fraud during the same period ran between 5 percent and 9 percent of the total, the report said. Fraud includes bribery, kickbacks, bid rigging and defective products, according to the commission.

Military pension report delayed

A Pentagon advisory panel has delayed an expected report on how the military might find savings in its pension system. The Defense Business Board said Wednesday that its final report and recommendations on retirement pay won't be ready this month, as expected, and will likely take a couple more weeks. No reason was given for the delay.

Panel recommends reforms in war contractor spending to increase accountability, cut waste 08/31/11 [Last modified: Wednesday, August 31, 2011 11:36pm]
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