The Commission on Wartime Contracting (CWC), an independent, bipartisan legislative commission established to study wartime contracting in Iraq and Afghanistan in its final report, estimated that at the mid-range, waste and fraud during contingency operations in Iraq and Afghanistan averaged about USD 12 million every day for the past 10 years.
"At least USD 31 billion, and possibly as much as USD 60 billion, has been lost to contract waste and fraud in America's contingency operations in Iraq and Afghanistan," the CWC told the US Congress in its 240-page report, 'Transforming Wartime Contracting: Controlling Costs, Reducing Risks'.
Much more will turn into waste as attention to continuing operations wanes, as US support for projects and programes in Iraq and Afghanistan declines, and as those efforts are revealed as unsustainable, it said.
Pentagon spokesman Col Dave Lapan said the Department of Defense has already implemented a number of steps to improve contingency contracting based on its own analysis, as well as recommendations from the independent reviews of the Government Accountability Office and the Inspector General and the Commission's previous publications and interim reports.
He said the Pentagon shares the Commission's commitment to improving wartime contracting.
"In particular we commend the Commission for shining a spotlight on the risks of over reliance on contractors, on the need to strengthen the contracting function at the agencies, on the value of increasing competition in contracting and on the importance of holding contractors accountable for their performance," Lapan said. US Congressman John Tierney, Ranking Member of the National Security, Homeland Defense, and Foreign Operations Oversight Subcommittee, announced legislation to create a permanent inspector general for contingency operations starting with Iraq and Afghanistan.
He said the Commission on Wartime Contracting's conclusions "are alarming, and its recommendations must be taken seriously by Congress".
"It is clear that we need to have systems in place to audit and monitor how US taxpayer dollars are being spent as soon as the US puts troops on the ground and to enhance prospects for the future safety of our troops," the lawmaker underlined.
"The kind of waste we have witnessed in Iraq and Afghanistan cannot be repeated," Tierney said.
Senator Joe Lieberman, Chairman of the powerful Senate Committee on Homeland Security and Governmental Affairs, said the report provides further proof that vigorous management of contracts is central to successful outcomes - in government and in business.
"That is a lesson that must be applied not only to wartime contracting but to contracting across all federal agencies as we seek to improve government performance, especially in a struggling economy," he said.
The Commission report notes that a consequence of 1990s reductions in the federal acquisition workforce and in support units within the military, the US cannot conduct large or sustained contingency operations without heavy support from contractors.
"Contingency" operations, as defined in federal law for the Department of Defense, are those involving military forces in actual or imminent hostilities, or in response to declared national emergencies.
Civilian agencies use a similar definition.Commission Co-Chair Michael Thibault, former deputy director of the Defense Contract Audit Agency, said "the government has known for 20 years that contractors would be a key part of any major response to large or sustained hostilities or major disasters."
"Yet the government was not prepared to go into Afghanistan in 2001 or Iraq in 2003 using large numbers of contractors, and is still unable to provide effective management and oversight of contract spending that will have exceeded USD 206 billion by the end of September. That has to change," he underlined.