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Afghan aid a 'confusing labyrinth,' audit finds

U.S. agencies spending the most on Afghanistan reconstruction projects cannot easily show where their money goes and are not tracking contracts in a shared database, a government watchdog reported Wednesday.
Afghan soldiers come out of the Pul-i-Charkhi prison on the eastern outskirts of Kabul
The Pul-i-Charkhi prison in Kabul, Afghanistan's largest prison, was the focus of a controversial renovation contract cited in the new audit by a special inspector general.Omar Sobhani / Reuters
/ Source: news services

U.S. agencies spending the most on Afghanistan reconstruction projects cannot easily show where their money goes and are not tracking contracts in a shared database, a government watchdog reported Wednesday.

The Special Inspector General's Office for Afghanistan Reconstruction called it a "confusing labyrinth" of agencies and contractors that did not coordinate their work well.

"There is still no central U.S. government database to track reconstruction projects from the various U.S. agencies and departments, let alone, the international community," SIGAR said in a statement accompanying the audit.

The office developed its own list of contractors and found that that nearly 7,000 received almost $18 billion between 2007 and 2009 from the Defense Department, State Department and the U.S. Agency for International Development.

Those three agencies are the biggest spenders on Afghanistan projects, yet they do not separate money for that work from other U.S.-funded projects around the world. That makes it hard to keep watch on spending and identify the contractors receiving the money, according to the report.

The inspector general, Arnold Fields, said it is the first such accounting of contractors since the U.S. started its rebuilding effort in Afghanistan in 2001. The tab so far is about $55 billion.

Fields said the information is "crucial because if we don't even know who we're giving money to, it is nearly impossible to conduct systemwide oversight."

The three agencies are supposed to report their contractors in a shared database so they can keep track of projects and avoid duplication. But the "agencies have faced challenges" in doing that, Fields' office said.

It identified Defense Department reconstruction contracts for construction, supplies and logistics worth $11.5 billion going to more than 6,615 contractors from the 2007 to 2009 budget years. Of that, $5.8 billion went to 41 contractors.

USAID awarded $3.8 billion, including about $2 billion in contracts. Two contractors received about $1 billion for energy and road projects. The agency spent about $1.1 billion on cooperative agreements with partners working in the country, including $562 million for road and agriculture programs managed by one group, International Relief and Development.

The State Department awarded contracts worth $2.4 billion with 25 vendors. That includes $1.8 billion with DynCorp International for police and special anti-narcotic training.

One example SIGAR highlighted was the Department of Defense's use of four contracting organizations managing Pentagon-funded reconstruction contracts.

"The audit found that not only do those four DOD contracting organizations not coordinate and share information with one another, there is minimal sharing of information across government agencies," it said in a statement.

The 7,000 contractors and other recipients of contract funds included for-profit and non-profit groups, multilateral organizations like the United Nations or the World Bank and some U.S. federal agencies, it said.

SIGAR had tried to analyze contracting for the years 2002-7, but found much of the data the government agencies had compiled prior to 2007 was "too poor to be analyzed," it said.

The audit underscores the challenges the Obama administration faces in meeting two major goals of the Afghan reconstruction effort: training, equipping, and housing up to 134,000 Afghan national police by September 2011; and hiring Afghan-owned companies to rebuild the country's infrastructure.

While Afghan firms are eager for the lucrative reconstruction contracts, they can be overwhelmed by the tight schedules and tough standards.

The audit cited the example of an Afghan-owned company that bungled the construction of police stations so badly that the buildings are at risk of collapse, undermining U.S.-led efforts to beef up the country's security forces.

The company, Basirat Construction Firm, cut corners with low-quality concrete, substandard roofing, uninsulated windows, and plastic plumbing.

The six police stations were built in Helmand and Kandahar provinces in the country's violent south, where the international coalition and Afghan security forces are trying to wrest control of the region from the Taliban.

The audit also faulted the Army Corps of Engineers for failing to properly oversee the work, while still paying Basirat close to $5 million — more than 90 percent of the contract value.

Basirat is liable for fixing an estimated $1 million worth of problems at the stations, the audit said. But the company has little incentive to make the repairs, according to the report, because it's already collected most of the money.

In August, the State Department accused Basirat and another Afghan-owned company, Al Watan Construction, of fraud on a separate contract to renovate the country's largest prison. Both companies have been suspended from receiving new government contracts while the fraud charges are investigated, according to internal State Department documents.

At a hearing held last December by the Commission on Wartime Contracting, assistant Pentagon inspector general Kenneth Moorefield said few Afghan companies have the experience "to effectively undertake and complete projects at the required standards."

In comments reprinted in the audit, the Corps of Engineers said security challenges in the construction zones makes oversight of the police station construction very difficult. But the Corps of Engineers agreed that "construction at each site did not meet all contract requirements" and said Basirat is committed to making the needed repairs.

Obaidur Rahman, Basisrat's owner, did not respond to an e-mail seeking comment.

The Corps of Engineers awarded the police station contract to Basirat in May 2007 and construction was to be completed by January 2009 — a date that had to be extended by more than a year.

Even as Basirat was being chided by the Corps for what the inspector general's report describes as "deficient work and chronic schedule delays," the State Department elected to hire Basirat and Al Watan in July 2009 to renovate the vast Pul-i-Charkhi prison on the outskirts of Kabul.

Two months ago, Corey Rindner, the State Department's top procurement official, informed Basirat and Al Watan they were being suspended for violating U.S. procurement rules.

According to Rindner, Rahman improperly provided confidential bid proposal information about State Department contracts to Nadeem Naqibullah, an Al Watan executive. Rahman also paid $30,000 to the contracting officer who had been overseeing the Pul-i-Charkhi prison renovation, Rindner wrote in Aug. 26 letters from Rindner to Rahman and Naqibullah.

These "actions demonstrate a lack of business integrity or honesty that seriously affects your present responsibility to hold or perform government contracts," Rindner wrote.