Serco is the new auditor for Iraq
In April, the Pentagon split its largest military contract in Iraq – formerly belonging to the Houston-based corporation KBR, Inc. – among companies Fluor and DynCorp, in addition to KBR.
A fourth company, the British-American service provider Serco, is responsible for managing and overseeing the other three, according to its contract, signed last year and now in effect.
Written in a partisan style, I put much below the fold. This must do as notice of the change in auditing functions from public governmental process to private company until I find the OIG staffing report and contrast that to the significant increase in spending over the last seven years.
Given the severely limited auditing to date by government employees, is privatizing oversight a reasonable thing to do?
Based on the contract, Serco’s duties include planning activities, managerial work, performance reviews, training and budget recommendations. According to an Army Sustainment Command news release last year, Serco is responsible for “analyzing performance contractors’ costs,” “working with the Army to measure contractor performance” and “recommending process improvements.” The company also serves as a liaison between the other three contractors, and between the contractors and the government.
Beyond that self-evaluation, Serco will likely not be subject to much substantive oversight. The company’s prominent new role in Iraq debuts amid a great wave of DOD oversight failures in Washington.
As the “Global War on Terror” (GWOT) continues, oversight mechanisms are understaffed, underfunded and underperforming, according to Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information.
“Virtually the entire expanse of the DOD budget gets no oversight – certainly no aggressive oversight,” said Wheeler, a former Senate staffer and GAO analyst. “I worked on Capitol Hill for over 30 years, and I’ve never seen it as bad as it is now.”
A DOD Inspector General’s Office (OIG) report, released last week by POGO, shows that OIG staffing has remained stagnant since 2000, although DOD funding has more than doubled and defense contracts have steadily multiplied. The report states that the OIG’s shrinking capabilities have left it with “gaps in coverage in important areas.” These include criminal investigation personnel, staff to respond to whistleblower complaints and oversight for intelligence agencies.
“As the delta between the resources of the Department and the DOD IG grows, it will continue to stretch our resources and affect our ability to be an effective oversight function and control for the Department of Defense, and could ultimately impact our ability to provide adequate coverage of services related to the GWOT,” the report states.
The DOD’s marked shortage of resources and oversight personnel opens the door for an increasing number of decisions to be made in response to pressure from contractors, according to Wheeler. He cites the example of weapons procurement. Throughout the Bush administration, many DOD weapons programs have increased in cost while production either remains the same or decreases. Additionally, the DOD has invested significant funds in unnecessary, irrelevant weapons, according to Wheeler, who points to an order of 184 F-22 fighters – $64.5 billion worth of aircraft – planes which have never been used in Iraq or Afghanistan.
In these cases, government actions are often dictated by assessments made by contractors, and costs can easily run out of control.
“If Lockheed says, ‘Oops! We screwed up on the F-22! We need more money,’ then Congress complies,'” Wheeler said.
Oversight from Congress itself has played little role in reining in Defense Department spending and contractor abuse to date, according to Wheeler, who holds that, though some Congress members may want to perform defense oversight, they “don’t know how to do it.”
Moreover, Wheeler notes, when it comes to underfunding the DOD’s inspector general, Congress is to blame. The legislature decides how much money each department office should receive.
However, the past few months have seen a spate of legislation on contracting reform. And Rasor points to a number of pending fraud-related lawsuits that will come to fruition in the next few years. Ultimately, almost any increase in DOD oversight would constitute real improvement, according to Rasor.
“No one was watching the store for the first five years of the war,” she said.