Lack of Oversight Opens Gaps for Corruption in Military Contracting

April 25, 2011 Updated: October 1, 2015

HIRED HANDS: Civilian contractors from the Philippines build a church for troops at Forward Operating Base Delaram in Helmand province, southern Afghanistan on April 4. Ways of eliminating waste, fraud, and corruption among contractors are being discussed by the Commission on Wartime Contracting in Iraq and Afghanistan. (Peter Parks/Getty Images )
HIRED HANDS: Civilian contractors from the Philippines build a church for troops at Forward Operating Base Delaram in Helmand province, southern Afghanistan on April 4. Ways of eliminating waste, fraud, and corruption among contractors are being discussed by the Commission on Wartime Contracting in Iraq and Afghanistan. (Peter Parks/Getty Images )
Better oversight is needed to close loopholes in the military’s growing use of contractors. In current operations in Iraq and Afghanistan, local sources provide everything from food to ammunition, freeing up troops while less critical tasks are taken care of by local businesses.

The use of contractors has proven invaluable amid a tightening military budget, as it relieves the United States of massive costs otherwise spent shipping supplies into remote areas. Yet, while growing reliance on services is increasing the number of providers, those in charge of oversight are getting more work than they can handle—a factor leaving gaps for corruption and waste.

The need for better oversight was among the leading themes in an April 25 hearing by the Commission on Wartime Contracting in Iraq and Afghanistan. The commission is gearing up to release a final report to Congress in July with recommendations to address current problems with contracting.

An interim report issued in February stated, “When government agencies lack experienced and qualified workers to provide oversight, the potential for waste, fraud, and abuse in contract performance increases exponentially.”

Its 32 recommendations to repair the system included the creation of an inspector general’s office for contingency operations, positions of oversight at multiple levels, and a certification program for troops sent to hire contractors.

A key problem is that while contractors constitute half of the total force in Iraq and Afghanistan, “The Army had been treating it as a side issue rather than a core capability,” stated to Jacques Gansler, chairman of the Defense Science Board Task Force on Improvement to Services Contracting, in a prepared statement read to the commission.

Gansler added that troops sent to acquire contractors are “understaffed, overworked, undertrained, undersupported, and, I would argue, most importantly, undervalued.”

While use of contractors is growing, management positions are being reduced. Gansler pointed out that in the 1990s the Army had five slots and four joint slots for general officer contracting management positions. That number dropped to no Army slots and just one joint slot.

“These general officers are needed to initiate and sustain improvements to acquisition, grow future leaders, and support leadership efforts,” he said.

Seeds to repair this have been planted. In April 2009, the Defense Department set out to fill 10,000 new positions for a civilian acquisition force, but it could take until 2015 to fill the roles.

Things get complicated once they hit the ground, however. Since the military depends on contractors for crucial services, a supply gap is something they cannot afford. This has led some providers maintaining contracts regardless of corruption, and the lack of competition has allowed monopolies to form.

Commissioner Charles Tiefer stated during a March 28 hearing that lack of competition and incumbent providers having too large of an advantage are the “two evils in the sole sourced extensions.”

The lone witness at the March 28 hearing, Ashton Carter, undersecretary of Defense for Acquisition, Technology, and Logistics, stated that the lack of competition is due to difficulty in finding reliable contractors. He stated, “The argument can be made that it’s simply too hard to change sources. … We can’t afford to let the troops down.”

This issue was brought up during the latest hearing, and reducing reliance on contractors was among the cards on the table—an idea that made the headline of the February report: “Correcting overreliance on contractors in contingency operations.”

According to Gansler, the current problems with contractors are merely reflections of other issues further up the chain. “The government’s focus should not be on decreasing contractors, but instead on ensuring they are performing appropriate functions, and then properly managing them,” he said.

Paul Francis, managing director Acquisition and Sourcing Management, Government Accountability Office (GAO), stated that his office identified Department of Defense (DOD) “contract management as a high-risk area in 1992 and raised concerns in 1997 about DOD’s management and use of contractors to support deployed forces in Bosnia. In the years since then, GAO has continued to identify a need for DOD to better manage and oversee its acquisition of services.”

The “DOD faces a number of longstanding and systemic challenges that hinder its ability to achieve more successful acquisition outcomes,” Francis said, adding “These challenges include addressing the issues posed by DOD’s reliance on contractors.”

Follow Joshua on Twitter: @JoshJPhilipp