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Watchdog Scrutinizes Pentagon Spending in Afghanistan

Part of something is better than all of nothing. Keep this proverb in mind while reading the Special Inspector General for Afghanistan Reconstruction’s (SIGAR) top-level analysis of Department of Defense (DoD) reconstruction spending in Afghanistan.

Between FY 2002 and FY 2014, Congress appropriated $104 billion for Afghanistan reconstruction, 80 percent of which is disbursed by three agencies: DoD, the State Department, and the United States Agency for International Development (USAID). Last year, SIGAR reported on State and USAID’s disbursement of $4 billion and $13.3 billion, respectively.

Yesterday, we finally got a fiscal picture of DoD, by far the largest of the reconstruction agencies with $66 billion in appropriated funds. Unfortunately, we only got part of the picture.

DoD provided SIGAR agency-wide data covering only $21 billion in contracts awarded between FY 2002 and May 2014. About 83 percent of that was spent training and equipping the Afghan National Security Forces (ANSF). Recent trends showing a regression in the strength and capabilities of Afghanistan’s security forces, however, are causing concern about the soundness of that investment.

The largest recipients of DoD contracts were two Afghan-based logistics firms: the Asia Global Shipping Group of Companies and the Parwan Group, with $1.8 billion and $1.4 billion in contracts, respectively. Afghan companies are many of the recipients. One notable exception is Academi Training Center. This North Carolina-based security services company, formerly known as Blackwater, received $309 million in counter-narcotic program contracts. In 2012, Academi entered into a deferred prosecution agreement with the federal government and paid a $7.5 million fine to settle charges of illegally exporting various defense articles to several countries, including ammunition and body armor to Iraq and Afghanistan. (Two years earlier, the company—when it was called Xe Services LLC—entered into a $42 million civil settlement of the matter.)

In separate data submissions to SIGAR, the U.S. Army Corps of Engineers (USACE) reported $8.3 billion in reconstruction funding between FY 2002 and December 2013, and the Army Contracting Command (ACC) reported $9 billion. (Because some USACE and ACC data overlapped with DoD-wide data, SIGAR separated the three funding streams in its analysis.) USACE’s top vendor was Contrack International, which received $891 million in contracts to build infrastructure and facilities for the ANSF. In 2013, Contrack International paid $3.5 million to settle claims that it defrauded USAID to win contracts for water infrastructure projects in Egypt in the 1990s. ACC awarded more than 60 percent of its reconstruction funding—$5.5 billion—to AM General LLC to provide Humvees to the Afghan security forces. Last year, the DoD Inspector General caught AM General overcharging the government at least $1.5 million on a contract to manage Humvee repair parts.

The mysteriously named “Miscellaneous Foreign Awardees” received $29 million in DoD contracts. SIGAR explains: “U.S. government officials use the Miscellaneous Foreign Awardees designator in the Federal Procurement Data System when issuing contract awards to vendors located outside the United States that do not have U.S. government-recognized identification numbers.” The inability to track many foreign recipients of U.S. international aid is a problem that has long plagued the federal spending databases.

SIGAR will try to examine as much of DoD’s $66-billion piece of the reconstruction funding pie as possible. It is exploring the feasibility of issuing a follow-up analysis of some of the missing DoD data. In the meantime, the three top-level audits SIGAR has completed provide useful insight into the billions we have spent to rebuild Afghanistan.

In a previous version of this story, we said Academi Training Center had received $569 million in contracts. Since then, SIGAR has updated its report to say Academi only received $309 million in contracts, and we have changed this blog post to reflect that edit.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Contractor Accountability, Inspector General Oversight, Iraq & Afghanistan Reconstruction Contracts, DOD Oversight, Wasteful Defense Spending

Authors: Neil Gordon

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