“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

Both reports faulted the Pentagon for its inability to provide accurate data on the total number of contractors employed by the Defense Department and the missions those contractors perform.

“Current databases are not sufficiently customized to track important contract data. Even when information is tracked, questions remain as to the reliability of the information,” CRS reported.

One problem is the military services use different methodologies to track contractors. “DOD components used various methods and data sources, including their inventories of contracted services, to estimate contractor [full time equivalents] for budget submissions,” GAO said.

Its analysis found that “the contractor FTE estimates have significant limitations and do not accurately reflect the number of contractors providing services to DOD.” Those limitations included estimating techniques based on potentially inaccurate inventory data, GAO said.

Contract personnel provide a wide range of services, including transportation, construction and base support functions as well as intelligence analysis and private security.

CRS noted that by using contractors on an as-needed basis, the Pentagon can save money and free uniformed personnel to focus on combat operations. The department also can use contractors with specialized skills, such as linguists or weapons maintenance experts, to quickly support specific battlefield needs.

But CRS noted that many analysts believe contractors undermined the military’s credibility and effectiveness in both Iraq and Afghanistan and it criticized Defense for poor planning in how it uses contractors in operational support roles.

“The ineffective use of contractors can prevent troops from receiving what they need, when they need it, and can lead to the wasteful spending of billions of dollars,” CRS said.

GAO said the Pentagon needs to develop a “strategic human capital management” plan that determines the appropriate mix of military, civilian, and contractor workforces and the functions of each.

In a response to the GAO report, Rick Robbins, the department’s director of force manning and requirements, said Defense officials recognized that the contractor FTE information provided in the department’s 2013 and 2014 budget submissions had significant limitations.

He said a reliable, current inventory of contractor FTEs is a fundamental building block for developing future contractor FTE estimates and noted that the department has initiated efforts to improve inventory data by collecting it directly from contractors, using the Army’s Contractor Manpower Reporting Application as a model. - By: NEXTGOV.com