Since the invasion of Afghanistan, the Pentagon’s escalating use of outside contractors has coincided with a decrease in oversight, endangering the well-being of American troops serving there and in Iraq. The Department of Defense (DOD) has suffered a “complete breakdown in the procurement process” during the past seven years, according to Representative Henry Waxman, a California Democrat and chairman of the Committee on Oversight and Government Reform, echoing the findings of the Center for Public Integrity’s Windfalls of War projects. Examples abound of companies providing substandard supplies to American forces, such as when Kellogg Brown & Root (KBR), the largest contractor in Iraq, provided contaminated water to 5,000 U.S. troops in 2005 and when Halliburton, then KBR’s parent company, engaged in overcharges and questionable costs of $212.3 million for oil reconstruction work, as reported by DOD auditors. In July 2008, the Pentagon revealed that 16 Americans had died of accidental electrocution in Iraq, some tied to faulty wiring at facilities run by U.S. contractors. Among the problems cited by former electricians: inexperienced employees, including foreign electricians who did not speak English. Another problem plaguing U.S. contractors have been fires — 283 of them over just five months at facilities maintained by KBR, according to a 2007 report by the Defense Contract Management Agency. The most glaring case of poor oversight may be AEY Inc., which was awarded a nearly $300 million contract to supply ammunition for Afghanistan’s army and police. In a case that Representative Tom Davis, a Virginia Republican, said speaks “volumes about what’s wrong with the military contracting process today,” AEY was allegedly run out of an unmarked office in Miami Beach by a 22-year-old; much of the ammunition he sold were reportedly old rounds shipped from Albania that were considered so unstable that NATO and the United States spent millions of dollars to destroy the stockpiles. These, prosecutors charge, included $10 million worth of rounds manufactured in China in the 1960s; the selling of Chinese ammunition is a breach of U.S. law. All this allegedly happened despite AEY being on a State Department watch list since 2005.
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Despite congressional oversight investigations, contracting in Iraq continues to be an ongoing problem. The heads of AEY were indicted by a grand jury in July on a variety of fraud charges; they have pleaded not guilty. On its list of urgent policy concerns for the next administration, the Government Accountability Office included “undisciplined defense spending.” However, changes may be coming. Testifying in front of Congress in June, Brigadier General William N. Phillips stated that the Army is implementing a series of recommendations from the Commission on Army Acquisition and Program Management in Expeditionary Operations, as a “longer-term resolution of contracting issues.” In November, the Pentagon’s Defense Contract Management Agency issued a “Level III Corrective Action Request,” one step below a suspension or termination of a contract, to KBR in response to the electrocution deaths in Iraq.