06/26/2010 05:12 am ET Updated May 25, 2011

State Beats Pentagon, Unfortunately

Recently I wrote about the contract for training the Afghan National Police. Actually I wrote about a Newsweek/Pro Publica article on the subject. This contract was held DynCorp which naturally enough, given some of the allegations in the article, took exception with what I wrote.

I don't know what the truth is. T. Christian Miller from Pro Publica who worked on the article has an outstanding record on reporting on this issue. But DynCorp said it had records proving it did everything required under the contract. Hopefully, the truth of the matter will come out in the near future.

But since DynCorp subsequently brought up the issue of its record, albeit limited to Afghanistan, I think it fair to look back further. So let's step into Mr. Peabody's time machine and look at its performance doing similar training in Iraq.

We don't have to travel very far in time; only to February 24, when the House Foreign Affairs Subcommittee on International Organizations, Human Rights, and Oversight, chaired by Rep. Russ Carnahan (D-MO) held a hearing, "Hard Lessons Learned in Iraq and Benchmarks for Future Reconstruction Efforts." The witness was Stuart W. Bowen, Jr., Special Inspector General for Iraq Reconstruction (SIGIR). Before you read the below excerpt. bear in mind that it says as much about the U.S. government as it does about DynCorp.

REP. CARNAHAN: Thank you. Now I want to move on to talk about the issue of the police training. When I traveled to Iraq back in early 2005, I had a tour of a police training facility, and there was much fanfare about -- this was one of the highest priorities for success in the country, and substantial funding had been provided to it, and there were glowing numbers about how quickly they were going to get the numbers of police trained up to where they needed to be. And, you know, even today, as you mentioned, General McChrystal saying, you know, that's one of the number one priorities, is to get our police trained. You know, between 2005 and now we haven't seen anywhere near the progress that we need to have seen. And I guess with the planned withdrawal of U.S. troops from Iraq by December 31, 2011, what challenges do you foresee -- I guess my first question - what challenges in terms of the transition and responsibility from the military to state, and do you believe state will be able to successfully take over that training program in October of 2011?

MR. BOWEN: First of all, great question, because I think it is the critical issue to ensure improved security in Iraq going forward. We're going to go down to 50,000 troops in four months. And that's going to obviously mean that the Iraqis have to shoulder the complete security burden moving forward. We have trained hundreds of thousands of police and equipped them over the last five years, and we're doing an audit now to provide you the particulars of how the military executed the police training contract. And that'll be out later this year.

But the transition issue I think that's paramount is the fact that the contract and the management of the contract that we criticize in this -- most recent audits, the DynCorp contract, is up for bid right now in Iraq, and no surprise. DynCorp is one of the bidders for that, and I think that it's got -- it's a contract that has to be managed by the State Department. And the core of our criticism was the lack of in-country oversight, the failure to review invoices, the questions raised about the vulnerability to fraud and waste regarding billions of taxpayer dollars.

Those weaknesses have not been remedied yet. Now, Deputy Secretary Lew, when I met with him on this a month ago, assured me that he is going to take a personal interest and ensure that there is adequate oversight. But that promise needs to be fulfilled, and thus, here is the issue, the number one issue, ensuring contract management of this continuingly very expensive oversight package for Iraq.

REP. CARNAHAN: So to the question of this transition, how do you see that happening?

MR. BOWEN: Well, I have visited with the State Department, individual in charge of management. It's going to be a radical reform, I think, of the approach simply because of the limited assets the State Department has vis-a-vis the Department of Defense. And so it's going to move, as he described it, up to 30,000 feet from 5,000 feet. It's going to be about macro improvements to ministry capacity, and it'll be a reduction -- there won't be the individual police training execution at the level that's going on now.

REP. CARNAHAN: And to the specific contract, you indicated we have put $2.5 billion into police training -- that's correct --

MR. BOWEN: Mm-hmm, yes, sir.

REP. CARNAHAN: -- and that this is the largest single contract --


REP. CARNAHAN: -- in all of the Iraq reconstruction?

MR. BOWEN: In State Department --


MR. BOWEN: -- in -- the State Department has ever managed.

REP. CARNAHAN: In State Department history.


REP. CARNAHAN: And how many U.S. government officials were overseeing this contract?

MR. BOWEN: In-country contracting Office of Representatives -- three. This is the tough story here, Chairman Carnahan. We looked at this four years ago, and the problem we identified four years ago was lack of contract management raised in our first audit issued in first month of 2007. Then we got into the whole contract and found that it was inauditable, and so we issued a review in October saying the State Department asked for three to five years to get their records in order because it just -- it was a mess. And then we went in in 2008 to see if there were remedial measures, and there were. Then we go in last summer and find the same problem, three people in-country overseeing a contact that has -- that is spending hundreds of millions of taxpayer dollars. And more disturbing -- the lack of clarity about who was supposed to do what. The in-country contracting Office of Representatives -- my auditors interviewed said well, invoice accountability is being done back in Washington. We went back to Washington, asked them. They said it's being done in Iraq. Huge vulnerability.

REP. CARNAHAN: And with regard to the contractor, DynCorp, describe how that contract was initially awarded.

MR. BOWEN: It was an existing contract that was held by the State Department that was used
-- I don't have the specific facts of the bidding process, but it was in existence in 2004 and used to apply to this program in -- at the level of $2.5 billion. And again, as I said, it was DOD money that went into it. So I think DOD was looking for a vehicle that it could use to spend this money, and it did so, and I think there are some questions about that process. But it certainly shows how bifurcated or disjointed both the source of the money, the contract management of the money, and then the execution of the contract, all different places. It shows, I think, just the lack of clarity in stabilization reconstruction contracting.

REP. CARNAHAN: And in your reviews, to what extent can you account for how that money has been spent?

MR. BOWEN: As I said, we're looking at the execution of it now. My auditors in Iraq are
today reviewing that matter, and the outcomes, which are an important question for you, we
will answer later this year.

REP. CARNAHAN: And you expect that report out when?

MR. BOWEN: By July. No later than July.

REP. CARNAHAN: I'm going to yield to Judge Poe.

REP. POE: Thank you, Mr. Chairman. I had just one question. Which of our government agencies, in your opinion, was the most irresponsible about money, DOD, State Department, USAID?

MR. BOWEN: I think that the State Department did not carry out its contract oversight responsibilities sufficiently enough. In this particular contract we're discussing - is the most egregious example of that. And the disturbing point is it hasn't remediated that weakness sufficiently today.

REP. POE: All right, thank you. Thank you, Mr. Chairman.

REP. CARNAHAN: Thank you, Judge Poe. Yeah, I think if -- I don't know anything about police training, but if I had a $2.5 billion contract, I think I could figure out a way to train police. I mean, that's outrageous.

Think about that last question and Bowen's answer for a moment. When the State Department is judged to be more irresponsible than the Pentagon in terms of contract oversight you know you have a huge problem on your hands.