“There is a serious problem in Afghanistan related to disputes regarding the payment of Afghan subcontractors by prime contractors,” John F. Sopko, the inspector general, wrote in a letter accompanying the report, which was sent to numerous senior officials this week, including Secretary of State John F. Kerry and Defense Secretary Chuck Hagel. “SIGAR has received testimonial and documentary evidence from credible sources alleging death threats, work stoppages, and strikes.”

With tens of billions of U.S. tax dollars flowing into Afghanistan since the war began in 2001, government contracting has proved highly lucrative for thousands of U.S. and foreign companies. But many projects also rely heavily on subcontractors, about 90 percent of whom are based in Afghanistan.

In recent years, SIGAR and other government agencies have received a flood of complaints about prime contractors — about 40 percent of whom are U.S.-based — not living up to contractual agreements. According to the report, SIGAR’s hotline received 183 complaints about nonpayment from 2009 through October. Fifty-two investigations are underway into complaints involving a total $69 million.

“While a subcontractor may always face the risk of nonpayment,” the report says, “Afghan subcontractors may be particularly at risk due to a lack of adequate legal protections and limitations placed on the U.S. government’s ability to intervene on their behalf.”

Meanwhile, a growing number of Afghan subcontractors are threatening street justice.

IGAR has documented threats to “blow up a compound of U.S. contractors and government agencies,” detonate suicide bombs, pull weapons on employers or damage property to try to collect money.

“Investigators have found that the prime contractor’s failure to pay is often viewed by the Afghan subcontractor as a failure on the part of the U.S. government,” the report says.

In February, a subcontractor told SIGAR representatives he planned to ignite himself in front of the U.S. Embassy, saying he had not been paid for work on an Army Corps of Engineers project in Helmand province. There is no evidence he followed through on his threat.

The report notes that failure to pay subcontractors also can lead to serious hardship for Afghan workers, many of whom earn only a few hundred dollars a month.

In addition, some Afghan employees have walked off the job amid allegations of nonpayment, threatening the pace of multimillion-dollar U.S.-financed reconstruction projects.

But the inspector general also notes that prime contractors have faced “extortion” following false claims of nonpayment made to Afghan police and courts.

In some cases, the prime contractors or their employees have had their passports seized by Afghan authorities or have been put on the no-fly list at Kabul’s airport so they cannot leave the country until a payment dispute is resolved. Afghan police have also issued arrest warrants for prime contractors accused by Afghan employees of nonpayment.

U.S. authorities are often powerless to intervene, even when it appears the allegation of nonpayment is unfounded.

“We have identified a range of potential risks associated with subcontractor nonpayment,” the report states.

David Snepp, a spokesman for the U.S. Embassy, said State Department officials would review the report.

Sopko recommends that U.S. agencies, including the Defense Department, more aggressively monitor payments to contractors and step in to suspend or revoke contractors’ licenses when payments are not made.

He also recommends more aggressive enforcement through the False Claims Act when it is proved that prime contractors have not made justifiable payments to subcontractors. www.washington post

“Due to the large number of personnel assigned to and supporting the U.S. mission in Iraq, [Diplomatic Security] requires the services of a contractor to assist with the vetting and badging of American citizens, third country nationals, and local nationals,” states the contract solicitation, posted this month on FedBizOpps.gov.

The identity of the firm handling the task is blacked out in the solicitation, which says the new contractor will “assist with various steps of the background and suitability investigation process, check applicants through U.S. government databases, and obtain biometrics data of individuals applying for access to the embassy.”

The State Department had no official comment, but officials speaking on background downplayed the development, saying the shift is part of the yearslong transition from military to civilian control over U.S. operations in Iraq.

Prior to the late-2011 withdrawal of U.S. forces from Iraq, the U.S. Embassy in Baghdad “utilized security resources from both the departments of State and Defense (DoD),” one State Department official said via email. “The vetting capabilities described in the FedBizOpps solicitation are one such capability.”

“The DoD-sourced vetting services contract that previously provided this capability has run its course,” the official said. “DoD no longer has a requirement for such services in Iraq, and the Department of State does. This is why we have begun the solicitation/procurement process to fulfill this operational requirement.”

Another State Department official echoed those comments.

“Obviously, this is something that’s still needed in Iraq and so the State Department has decided they would pick up this contract,” the official said. “There’s no reason for DoD to spend this money when they no longer have a combat command there in Iraq.”

Under Scrutiny

The State Department has been criticized by its internal watchdog agency for not moving fast enough to take control of tasks formerly managed and financed by the U.S. military in Iraq and for failing to rein in rampant spending on contractors.

The State Department and the U.S. Embassy in Baghdad “are behind schedule in implementing a plan to oversee more than $5 billion in contracts,” says a “sensitive but unclassified” report by the State Department’s office of inspector general.

The report, posted June 3 on the inspector general’s website, suggests the Pentagon’s management of the overall vetting process may have been inefficient, putting more pressure on the State Department to improve the system while moving quickly to fill large gaps in the embassy workforce.

The Baghdad facility — often dubbed by news reports as “The Fortress” — is America’s largest overseas diplomatic post and cost roughly three-quarters of a billion dollars to build during the late 2000s.

As of February, the embassy had authorization for 469 local employee positions, but 187 are vacant, according to the inspector general’s report.

Despite more than 10 years in Iraq, the report says, U.S. officials “lack firsthand knowledge of local conditions and the best places to recruit potential candidates,” in part because American diplomats “rarely venture beyond the international zone” surrounding the embassy.

That caution can be explained by the relative instability of security in Iraq: U.S. military forces are no longer the target, but suicide bombings and sectarian conflict between Sunni and Shiite Muslims continue to rage.

But shifting the responsibility for security to the State Department raises its own questions. Elsewhere in the region, the department’s track record on security in postwar environments has been mixed.

Benghazi’s shadow

The department suffered a particularly unfortunate blow last year when armed militants stormed a makeshift diplomatic post and CIA house in the eastern Libyan city of Benghazi, killing U.S. Ambassador J. Christopher Stevens and three other Americans.
In Benghazi, the State Department worked with a British company that hired local guards to protect the diplomatic post. A report by Reuters in October noted that the company Blue Mountain Group hired about 20 Libyan men — including some who said they had minimal training — to screen visitors and help patrol the makeshift post.

Some sustained injuries and said they were ill-prepared to protect themselves or others when armed militants stormed the facility.
But foreign policy insiders generally discourage comparing the Wild West atmosphere of eastern Libya to the postwar security situation in Iraq.

In Baghdad, the embassy’s website says, “a local guard force and other security support personnel” are part of the operation, which also includes “special agents of the State Department’s Diplomatic Security Service” as well as “a Marine security guard detachment.”
No such detachment was on hand in Benghazi.

Iraq also is home to a U.S.-trained military and security force of more than 400,000 active soldiers, unlike Libya, where local militias — some of them with hard-line Islamist agendas — continue jockeying for power.

Furthermore, one State Department official said, “since the U.S. military has pulled out of Iraq, we have not had any U.S. loss of life due to any attacks.”

That said, the official added: “We’re not putting any less emphasis on how we deal with safety and security of our personnel, especially in a high-threat post like Iraq, where security is our No. 1 priority.”
“In no way are we minimizing that threat,” the official said