US accused of 'mismanagement' of Iraq police contract

The US state department's gross mismanagement of a multibillion-dollar contract for training Iraqi police has left US funds vulnerable to waste and fraud, a watchdog said today. In a scathing report, Stuart Bowen, the special inspector general for Iraq reconstruction , strongly criticised both the state department and DynCorp International, the firm that won the $2.5bn (£1.5bn) contract in 2004 – the largest awarded by the state department. The state department's bureau of international narcotics and law enforcement, which administers the six-year-old training contract, has failed to adequately increase oversight personnel of the contract despite warnings since 2005 from auditors and Congress, Bowen said in an audit to be released today. "Poor contract management which plagued the early years of the contract" have largely continued because the bureau's initiatives to improve performance have "fallen short", Bowen said. "As a result, over $2.5bn in US funds are vulnerable to waste and fraud." Members of Congress said the latest findings cast doubt on DynCorp's ability to handle similar contracts in Afghanistan. "I don't have any confidence that they're doing a better job there … If we don't correct this immediately, we are going to be having the same conversation a few years from now," said Senator Claire McCaskill, the Democratic chairman of the Senate subcommittee on contracting oversight. The report says that for years there was only one contracting officer in Iraq responsible for overseeing performance and expenditures made by DynCorp. Overwhelmed by paperwork, the officer was approving all DynCorp invoices without questioning them. That means there is "no confidence in the accuracy of payments of more than $1bn to DynCorp" during the early stages of the contract, the report says. There are now three contracting officers in Iraq overseeing the work, but the audit says that is still too few. These officers also lack needed guidance on how to do the job. That charge is "unfounded", David Johnson, the assistant secretary of state who oversees the contract, wrote in a memo. "This assertion is not substantiated in the report nor is it consistent with [the state department's] comprehensive invoicing process which takes place in the United States." He added that 19% of the invoices on the contract have been rejected, which has saved $9m. In a statement, DynCorp spokesman Douglas Ebner told the Associated Press that the company has done well in a "difficult environment" and that it welcomes additional oversight personnel. Bowen said there was no indication DynCorp misspent any of the $2.5bn, yet the state department is reviewing all the company's vouchers, some of which have "high error rates and poor or missing support documentation". "We still don't know whether the government got value from those task orders," Bowen said. "We can't determine it because they haven't done sufficient remedial work to get the documents in order to make a judgment about whether the US got value or whether there was waste or fraud." Among the examples of mismanagement, the report cited the example of $4.5m spent a year on a 16-person security detail to protect six US contractors in Iraq who already had a team of hired guards. Three years ago, the office of the special inspector general for Iraq reconstruction reported several examples of waste , including DynCorp's spending on $43.8m for manufacture and storage of a residential camp that was not used. It also said the state department spent $36.4m for weapons and equipment that could not be accounted for because of vague invoices and lack of backup information, the same criticisms raised now.