Washington: Millions in unspent reconstruction dollars could be left behind in Iraq and Afghanistan if DoD does not fix its contracting review process, a new Government Accountability Office says.
The Defense Department’s acquisition office is facing a review backlog of nearly 58,000 contracts awarded to Iraqis between 2003 and 2010, according to the report. Of those unreviewed contracts, nearly 90 percent have passed the original scheduled dates for review, it adds.
These reviews are required under DoD’s wartime contracting process, to officially close these deals and get them off the department’s books
By not reviewing those contracts, DoD cannot tell whether the money handed to Iraqi firms on those deals was completely spent or if there are extra dollars that need to be returned to the U.S. Government.
“Contract closeout is a key step to ensure the government receives the goods and services it purchased . . .and if done timely, provides opportunities to use unspent funds for other needs and reduces exposure to other financial risks,” according to the report.
But more importantly, without those reviews, DoD cannot clearly verify if that money was used to complete the project or simply pocketed by those Afghan or Iraqi firms, according to the report.
The inability to keep track of these contracts is due to “the lack of advance planning, workforce shortfalls, and contractor accounting challenges” of the part of the DoD expeditionary contracting corps, according to the report.
For example, there is nothing in the department’s rulebook on wartime contracting that requires DoD to review and close out reconstruction deals in a timely manner.
As a result, these deals are left essentially open-ended, with no way of knowing how many millions DoD is leaving on the table in Iraq and Afghanistan.
But in light of the growing budget pressures the department is facing, DoD is doing all it can to be sure it gets every dollar coming to them from these contracts.
In a Sept. 26 letter to the GAO, DoD’s Director of Defense Procurement and Acquisition Policy Dick Ginman said the department is in the midst of getting a number of fixes in place to address the problems pointed out in the office’s report.
First off, Ginman has directed additional resources to the Army’s Contracting Command to ensure contract closeouts are completed quicker. In Iraq and Afghanistan, DoD has ordered Central Command’s contracting office to “monitor and assess” progress on closing out these deals, and report weekly to the command.
At the Pentagon, department officials are also changing its wartime contracting rules to include requirements that will make contract reviews a top priority.