Bad Watchdog Season 2 launches June 20.


Entrusting Afghanistan Aid Oversight to Contractors

Last week, the Government Accountability Office (GAO) testified before Congress on the status of the U.S. Agency for International Development’s (USAID) development assistance and reconstruction efforts in Afghanistan. According to the GAO, USAID has invested more than $15 billion in Afghanistan since 2002, but continues to face major oversight challenges. As an example, the GAO cited a recent Special Inspector General for Afghanistan Reconstruction finding that billions of dollars in USAID direct assistance is at high risk of misuse and corruption.

“USAID continued to inconsistently apply performance management procedures, falls short in maintaining institutional knowledge, and needs to improve oversight of contractors,” the GAO testified. That last finding is of particular concern, as you’ll soon see.

Oversight in Afghanistan will only get harder with the planned withdrawal of U.S. combat troops at the end of the year. With a decreased troop presence, USAID will face shrinking “oversight access bubbles” in which monitors can safely travel around to check on U.S.-funded projects.

How is USAID planning to meet the challenge of diminished oversight access in Afghanistan? According to the GAO, by implementing a “remote monitoring program” that will rely on…contractors.

USAID is finalizing plans to award up to three contracts under which contractors will, in the words of the GAO, “verify activities that implementing partners have completed.” Since many of USAID’s implementing partners are contractors, this arrangement boils down to contractors overseeing contractors. It remains to be seen how USAID will structure the program to prevent conflicts of interest, such as contractors evaluating their own work or the work of competitors. In short, who will oversee the overseers?

The outsourcing of oversight by any federal department or agency is risky. However, when the agency is USAID, which has a long history of problems managing contractors, it becomes downright crazy. One need only look at the recent example of USIS to understand the consequences of letting contractors oversee or evaluate contractors. The Office of Personnel Management entrusted USIS with both conducting federal security clearance investigations and performing quality reviews of those investigations. USIS now stands accused of defrauding the government by falsifying 665,000 background checks.