Panel links poor US Army contract system to fraud
By Kristin Roberts
WASHINGTON, Nov 1 (Reuters) - An independent panel on Thursday called for an overhaul of the U.S. Army's military contracting operations in Iraq and Afghanistan, saying systemic problems such as a lack of oversight had contributed to fraud.
"This is a systemic issue within the Army and within the DoD (Department of Defense)," said Jacques Gansler, former undersecretary of defense for acquisitions and chairman of the commission that studied the problem.
"It usually takes a crisis to make change. We have a crisis, we can make those changes," he told reporters.
The group, appointed by the Army in August, highlighted problems in the Army's management of contracts that help supply and support troops in Iraq and Afghanistan. Those ranged from too few personnel to manage contracts to poor training and little oversight.
Defense Secretary Robert Gates said he was "dismayed by a lot of the findings" in the report but encouraged by the group's suggested improvements.
The panel found the number of personnel responsible for managing contracts in Kuwait, Iraq and Afghanistan dropped as the number of contracts and their dollar value soared over 12 years.
For example, personnel at the Army Materiel Command, which provides technology and acquisition support for troops on the ground, dropped 53 percent since 1995 as the dollar-value of contracts climbed 382 percent, according to the commission.
Only about 50 percent of all Army contracting personnel are certified to do their jobs, the commission found.
'PROBABLY MORE THAN A COINCIDENCE'
The group did not study the ongoing probes of possible fraud in military contracting, but said the Army was involved with a disproportionate number of the cases.
Of the total contracting workforce in Kuwait, 28 percent are Army personnel. But the Army is involved in 77 of 78 open fraud investigations, Gansler said.
"It's probably more than a coincidence is the conclusion we've reached," he said. "We think it's much more due to leadership and training."
The commission recommended restructuring the organization in part by establishing an Army Contracting Command to create more streamlined authority. It sought a separate command unit to manage all contracts, including State Department contracts, in individual war zones.
It also urged a 25 percent increase in the contracting workforce. It said Congress should authorize 10 more officer positions to improve oversight and encourage the Army to place a higher priority on contract management.
Gates said the Pentagon would pursue the panel's recommendations.
"One of the lessons that I took away from the report is the need for all of the services, but especially the Army, to focus on rebuilding contracting as an attractive career path," he said.
