Report: Contractor waste in war zones could grow

As President Obama nears his decision on reducing U.S. troop presence in Afghanistan, a new report warns of prospects for massive new waste in contractor projects in both Iraq and Afghanistan.

Newly built power plants that sit idle, water treatment plants that produce nonpotable water and facilities constructed for security forces that could potentially exceed $11 billion in costs are some examples given in the report released June 3 by the federal Commission on Wartime Contracting in Iraq and Afghanistan.

Titled "Sustainability: Hidden Costs Risk New Waste," the fifth special report from the congressionally chartered panel set up in 2008 says many of the programs and projects carried out under federal contracts in the war zones "lack plans for staffing, technical support and funding for the long term" in such projects as health clinics and road building.

As a result, said commission co-chairman Michael Thibault, billions could be wasted if projects are turned "over to a host government that can't supply trained people to run it, pay for supplies, or perform essential maintenance."

"A paradigm example stands in Kabul," the report said. "American taxpayers' dollars paid for building the $300 million Tarakhil Power Plant, also known as the Kabul Power Plant. The plant is completed. But it is little used, and the cost to operate and maintain it is too great for the Afghan government to sustain from its own resources."

The report asks the Pentagon, State Department and U.S. Agency for International Development to examine the projects, make a detailed assessment of the host nations' ability to complete the projects, cancel or redesign projects as warranted, and report results to Congress by the end of 2011.

On Monday, Undersecretary of State for Management Patrick Kennedy told a hearing of the Wartime Contracting Commission that the State Department will be ready to take over responsibilities in Iraq from the Defense Department on Oct. 1, as scheduled.

"As the military draws down, and the [State] department's plans are implemented to increase the civilian presence in Iraq, the department is relying on the use of contractors for certain functions which are not inherently governmental," Kennedy said in prepared testimony. "We use contractors in contingency operations when it makes sense and is cost-efficient, as opposed to building up permanent, U.S. direct-hire staff."