The Special Inspector General for Afghanistan Reconstruction (SIGAR) just released a top-level analysis of State Department reconstruction funding in Afghanistan. SIGAR found that State has obligated nearly $4 billion for Afghanistan reconstruction between the beginning of fiscal year 2002 and March 2013, more than two-thirds of which ($2.8 billion, or 69 percent) will go to just one company—DynCorp International.
The State Department’s reconstruction effort relies extensively on contractors. Nearly 90 percent of State’s reconstruction funding—$3.5 billion—was obligated in 55 contracts awarded to 19 recipients, the largest of which is DynCorp. Readers of this blog are probably familiar with DynCorp’s colorful history in Afghanistan, which includes instances of labor smuggling, weak performance and overpayments on a base support services contract, botched construction work on an Afghan Army garrison, and lawsuits filed by disgruntled subcontractors.
The second largest contract recipient is PAE Government Services, which will receive $598 million (15 percent of all State reconstruction funds). PAE was a subsidiary of top federal contractor Lockheed Martin from 2006 to 2011. Last year, former PAE program manager Keith Johnson and his wife, Angela Johnson, pleaded guilty to conspiring to defraud the military on vehicle parts purchases in Afghanistan in 2007 and 2008. The Johnsons were sentenced to prison and ordered to pay $2 million for operating a scheme in which Keith steered millions of dollars in orders to a shell company operated by Angela and to subcontractors who provided kickbacks in return.
The third largest contract recipient is Civilian Police International, LLC (CPI) with $54 million in contracts (slightly more than 1 percent of all State reconstruction aid). CPI was formed in 2004 as a joint venture between L-3 Communications subsidiary MPRI, AECOM, Wackenhut, and KBR specifically to handle law enforcement and criminal justice reconstruction projects in Afghanistan. The track records of Wackenhut and KBR are relatively well-known. You might be less familiar with MPRI, a company founded in 1987 by retired senior military officers that maintains a lucrative relationship with the Pentagon. Earlier this year, MPRI paid $3.2 million to settle allegations that, between 2005 and 2010, it submitted false labor charges on a contract to support the U.S. Army in Afghanistan by billing for employees who had not performed any work. Several years ago, MPRI briefly gained notoriety for its tax avoidance shenanigans (as did KBR).
At this point, you should be wondering why the State Department has entrusted billions of taxpayer dollars to these three particular contractors. The law requires the federal government to award contracts only to responsible vendors—those with satisfactory records of past performance, integrity, and business ethics. Yet the aforementioned incidents certainly reflect poorly on the responsibility of DynCorp, PAE, and three of the four companies that comprise CPI. This is yet another example of the government’s overreliance on contractors and, in the case of MPRI, the influence of the revolving door.
SIGAR requested from all Afghanistan reconstruction agencies comprehensive information about how and where funds have been spent since 2002. We anxiously await future SIGAR analyses, particularly for the two agencies with an even larger role in the reconstruction—the United States Agency for International Development (USAID) and the Department of Defense. As these reports become available, we will post our reactions and insights on this blog.
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