Watchdog: Follow the Money

Reforms sought to keep U.S. funds from going to terrorist-linked contractors

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Watchdog,Michal Conger,Secretary of Defense,Federal Budget,Foreign Aid,State Department,USAID,Defense Spending,Follow the Money

Federal officials have paid at least $5 million for reconstruction work in Afghanistan to five subcontractors with ties to enemy groups and it's almost impossible for them to stop doing so, according to Special Inspector General for Afghan Reconstruction John F. Sopko.

The reason is under present law only the Department of Defense can quickly terminate contracts with entities found to have ties to terrorist groups like the Taliban in Afghanistan.

Sopko released a report today asking Congress to extend DOD's termination authority to the U.S. State Department and the U.S. Agency for International Development, which together awarded almost $3 billion in reconstruction contracts in 2012.

The five subcontractors with ties to enemy groups were identified in an April report by DOD.

"The value of these subcontracts was approximately $12 million; about $5 million had been paid to the subcontractors when the contracts were terminated," Sopko said today.

Unless Congress extends the authority to terminate contracts as Sopko asked, the only option available to State Department and USAID is termination "for convenience."

That process is time-consuming and extremely costly because it usually requires the contract be paid in full and a new contractor retained under a new contract to perform the work.

Sens. Kelly Ayotte, R-N.H., and Richard Blumenthal, D-CT, introduced a bill in April to expand the termination authority and prevent U.S. money from going to enemies.

In a July 16 hearing, Ayotte challenged an assertion by USAID's top procurement official, Aman Djahanbani, that his agency's contractor vetting process is sufficiently rigorous to identify problems like terrorist links.

"If it's so rigorous and you think that you have the authorities you need, then why did the Commission on Wartime Contracting find that Afghan sucontractors on a U.S. AID community development program in Kunar Province were paying up to 20 percent of their total subcontract value to the insurgents for 'protection,' and that USAID's Inspector General estimated that over $5 million of program funding was at risk for falling into insurgents' hands?" Ayotte said.

"I find it hard to believe that you have the authorities you need right now to address this problem," she said.

Go here to read the full report.

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