buglerbilly
31-08-10, 01:42 PM
(Source: Center for Public Integrity; issued Aug. 29, 2010)
To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.
But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:
-- Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
-- Subcontracted security forces in Afghanistan are suspected of bribing both Taliban and Afghan government officials;
-- U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has allegedly ended up in the pockets of insurgents; and
-- A former contractor employee alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.
Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor.
That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.
“There are good reasons for using subcontractors,” said Christopher Shays, a former Republican lawmaker who is now co-chair of the congressionally created Commission on Wartime Contracting. “Business economists tell us that subcontracting can help businesses tap into specialized skills, configure their organization to meet changing needs, and adjust to shifts in demand.”
Subcontractors do everything from providing translators for American soldiers to trucking supplies into war zones, as well as building military bases and providing security. Without foreign subcontractors, U.S. troops could not operate halfway around the globe.
But in footing the bill for all this work by a network of companies, the U.S. government often doesn’t know who it is ultimately paying. And that can lead to fraud, shoddy work, or even taxpayer funds ending up in the hands of enemy fighters.
“What makes sense for a renovation project in Connecticut or Maryland can create some unique risks when the contractor is hiring subcontractors in a combat zone halfway around the world,” said Shays. (end of excerpt)
Click here for the full article (HTML format) on the CPI website.
http://www.publicintegrity.org/articles/entry/2368/
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To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.
But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:
-- Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
-- Subcontracted security forces in Afghanistan are suspected of bribing both Taliban and Afghan government officials;
-- U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has allegedly ended up in the pockets of insurgents; and
-- A former contractor employee alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.
Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor.
That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.
“There are good reasons for using subcontractors,” said Christopher Shays, a former Republican lawmaker who is now co-chair of the congressionally created Commission on Wartime Contracting. “Business economists tell us that subcontracting can help businesses tap into specialized skills, configure their organization to meet changing needs, and adjust to shifts in demand.”
Subcontractors do everything from providing translators for American soldiers to trucking supplies into war zones, as well as building military bases and providing security. Without foreign subcontractors, U.S. troops could not operate halfway around the globe.
But in footing the bill for all this work by a network of companies, the U.S. government often doesn’t know who it is ultimately paying. And that can lead to fraud, shoddy work, or even taxpayer funds ending up in the hands of enemy fighters.
“What makes sense for a renovation project in Connecticut or Maryland can create some unique risks when the contractor is hiring subcontractors in a combat zone halfway around the world,” said Shays. (end of excerpt)
Click here for the full article (HTML format) on the CPI website.
http://www.publicintegrity.org/articles/entry/2368/
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