Story highlights

Commission on Wartime Contracting addresses House committee

The commission says the U.S. lost billions in contractor waste and fraud

It warns against repeating the same mistakes

The commission was created to examine wartime contracting practices

Washington CNN  — 

The State Department came under fire on Capitol Hill on Tuesday for plans to bring in thousands of private contractors to protect diplomats once American troops withdraw from Iraq at the end of the year.

“We are very, very worried,” Dov Zakheim told the House Oversight and Government Reform Committee. Zakheim and other members of the Commission on Wartime Contracting said they were concerned that as many as 17,000 contractors will arrive, raising questions about cost, liability and the ability of the State Department to supervise them.

“Our recommendation was they need to pay more attention to getting those contractors in place and then overseeing their operation,” commission member Katherine Schinasi said.

At the State Department, spokeswoman Victoria Nuland said at her afternoon briefing that she did not have numbers of incoming contractors available. “In an environment where U.S. forces are withdrawing who have in the past provided security for our civilian programs, we’re going to have to do some contract security, but those numbers do sound high to me,” Nuland said.

Some lawmakers called it a game, as the Pentagon draws down while the State Department builds up. “The Obama administration is about to see a major surge of contractors there in Iraq –17,000 contractors, 5,500 private security contractors – as the military goes away,” said Rep. Jason Chaffetz, R-Utah. “Are we just playing a little bit of a shell game here?”

Under its agreement with Iraq, the Pentagon is steadily withdrawing some 40,000 troops from Iraq between now and December 31, although negotiations are under way that could alter that, leaving a small force behind for training and security.

Zakheim warned of the potential for a repeat of a 2007 incident in Baghdad in which 17 Iraqi civilians were shot and killed by contractors guarding a U.S. diplomat. After that, the State Department changed how contractors were monitored on the job.

Most of the hearing focused on warnings that the U.S. is set to repeat the same multibillion-dollar mistakes, and over-reliance on contractors, that plagued the wars in Iraq and Afghanistan.

The Commission on Wartime Contracting, the mandate for which expired Friday, has identified enormous waste of taxpayer dollars and estimated in reports to Congress that at least $31 billion, and as much as $60 billion, has been lost in Iraq and Afghanistan through waste and fraud.

“The bottom line is we rely on contractors too heavily, manage them too loosely, and we pay too much for what we get,” commission member Robert Henke said Tuesday in testimony to the House Committee on Oversight and Government Reform.

“The wasteful contract outcomes in Iraq and Afghanistan demonstrate that federal agencies’ dependence on contractors, while acknowledged, is not thought to be important enough to warrant the thorough planning and superb execution … that wartime demands,” he added.

The commission says that while contractors have provided vital, highly effective support, the cycle of waste is set to start again during the next overseas operations, whenever and wherever those may be.

The U.S. Defense Department has spent $206 billion on contractors to support the latest wars. Rep. Darrell Issa, R-California, chairman of the House Oversight and Government Reform Committee, said contractor costs would continue to rise as the State Department increases its workforce in Iraq because of the withdrawal of U.S. troops. “The State Department will increase its manpower from about 8,000 to 17,000, the great majority of whom will be contractors for security, medical, maintenance, aviation and other functions,” Issa said.

The congressman said President Barack Obama has failed to combat waste and fraud. “This record will continue unless this administration takes concrete actions to protect precious taxpayer dollars,” Issa said. “The United States has not achieved the peace dividend that this administration promised by doubling down in Afghanistan.”

Henke told the committee there is a need for urgent action to change laws and practices and to boost competition.

“Reforms can still save money in Iraq and Afghanistan, avoid unintended consequences and improve foreign policy outcomes there,” he said. “The government would be foolish to ignore the lessons of the past decade and refuse to prepare for better use of contracting resources.”

The eight-member Commission on Wartime Contracting is “an independent, bipartisan legislative commission established to study wartime contracting in Iraq and Afghanistan,” its website says. The panel was created as part of the National Defense Authorization Act for Fiscal Year 2008 and “mandated by Congress to study federal agency contracting for the reconstruction, logistical support of coalition forces, and the performance of security functions, in Iraq and Afghanistan,” the website said.

The commission was required to assess several factors regarding war zone contracting, “including the extent of waste, fraud, abuse, and mismanagement of wartime contracts,” according to its website.

The commissioners said there may never be a full accounting of how much money was lost, especially in Afghanistan. “We don’t know how much has been siphoned off by all these crooks, it is just hard to get to,” Zakheim said. He said subcontractors, some with links to insurgents, were a particular problem. “These are a bunch of crooks, insurgents saying, ‘Well if you want protection, here is a number to call.’ It’s something like out of HBO,” he said.

And Chris Shays, co-chairman of the contracting commission, who was chairman of the House committee, said he gets really angry when he sees waste and abuse.

“What is happening is treasonous activity is taking place,” he said. “The people who commit fraud are basically committing, in my judgment, treason.”