DoD

The 3 Largest Recipients of State Department Afghan Aid

June 10, 2014 | CONTRACTS, Humanitarian & Aid, OVERSEAS INTEL

The Special Inspector General for Afghanistan Reconstruction (SIGAR) just released a top-level analysis of State Department reconstruction funding in Afghanistan. SIGAR found that State has obligated nearly $4 billion for Afghanistan reconstruction between the beginning of fiscal year 2002 and March 2013, more than two-thirds of which ($2.8 billion, or 69 percent) will go to just one company—DynCorp International.

The State Department’s reconstruction effort relies extensively on contractors. Nearly 90 percent of State’s reconstruction funding—$3.5 billion—was obligated in 55 contracts awarded to 19 recipients, the largest of which is DynCorp. Readers of this blog are probably familiar with DynCorp’s colorful history in Afghanistan, which includes instances of labor smuggling, weak performance and overpayments on a base support services contract, botched construction work on an Afghan Army garrison, and lawsuits filed by disgruntled subcontractors.

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The second largest contract recipient is PAE Government Services, which will receive $598 million (15 percent of all State reconstruction funds). PAE was a subsidiary of top federal contractor Lockheed Martin from 2006 to 2011. Last year, former PAE program manager Keith Johnson and his wife, Angela Johnson, pleaded guilty to conspiring to defraud the military on vehicle parts purchases in Afghanistan in 2007 and 2008. The Johnsons were sentenced to prison and ordered to pay $2 million for operating a scheme in which Keith steered millions of dollars in orders to a shell company operated by Angela and to subcontractors who provided kickbacks in return.

The third largest contract recipient is Civilian Police International, LLC (CPI) with $54 million in contracts (slightly more than 1 percent of all State reconstruction aid). CPI was formed in 2004 as a joint venture between L-3 Communications subsidiary MPRI, AECOM, Wackenhut, and KBR specifically to handle law enforcement and criminal justice reconstruction projects in Afghanistan. The track records of Wackenhut and KBR are relatively well-known. You might be less familiar with MPRI, a company founded in 1987 by retired senior military officers that maintains a lucrative relationship with the Pentagon. Earlier this year, MPRI paid $3.2 million to settle allegations that, between 2005 and 2010, it submitted false labor charges on a contract to support the U.S. Army in Afghanistan by billing for employees who had not performed any work. Several years ago, MPRI briefly gained notoriety for its tax avoidance shenanigans (as did KBR).

At this point, you should be wondering why the State Department has entrusted billions of taxpayer dollars to these three particular contractors. The law requires the federal government to award contracts only to responsible vendors—those with satisfactory records of past performance, integrity, and business ethics. Yet the aforementioned incidents certainly reflect poorly on the responsibility of DynCorp, PAE, and three of the four companies that comprise CPI. This is yet another example of the government’s overreliance on contractors and, in the case of MPRI, the influence of the revolving door.

SIGAR requested from all Afghanistan reconstruction agencies comprehensive information about how and where funds have been spent since 2002. We anxiously await future SIGAR analyses, particularly for the two agencies with an even larger role in the reconstruction—the United States Agency for International Development (USAID) and the Department of Defense.

The Future of Overseas Contingency Operations in Afghanistan

April 2, 2014 | OVERSEAS INTEL, The Danger Zone

The President’s budget this past year reflect a unified approach to budgeting for the Department of Defense (DOD), Department of State, and U.S. Agency for International Development (USAID) operations in conflict areas. By aligning priority missions across these agencies, the Budget takes advantage of the efficiencies, improves coordination, and reduced overall costs. Further, isolating the military and civilian costs related to temporary and extraordinary requirements in the OCO request promotes transparency and efficiency across the security agencies of the Federal Government. The President’s 2013 Budget provided $96.7 billion for these operations, a reduction of 24 percent below last years enacted level.

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The Budget also reflects the Administration’s efforts to constrain OCO spending in the years beyond 2013. The Budget Control Act of 2011 (BCA) established year-by-year caps on discretionary spending for agencies’ base budgets through 2021, reducing the 10-year budget deficit by about $1 trillion. However, the BCA did not limit OCO funding.

Leaving OCO funding unconstrained could allow future Administrations and Congresses to use it as a convenient vehicle to evade the fiscal discipline that the BCA caps require elsewhere in the Budget. With the end of our military presence in Iraq, and as troops continue to draw down in Afghanistan, the Budget proposes a binding cap on OCO spending, as well. From 2013 through 2021, the Budget limits OCO appropriations to $450 billion. Given the need for ample flexibility in budgeting for overseas contingencies, this is a multi-year total cap, rather than
a series of year-by-year caps, and future Congresses may adjust it in the event of a national emergency requiring additional OCO spending.

Transitions from Military to Civilian led Missions

The Budget funded several key efforts in the transition from military to civilian-led missions, including:

• Supporting a smaller number of U.S. forces in Afghanistan, down from about 100,000 at the beginning of 2012 to about 68,000 at the beginning of 2013.

• Supporting the continued development and professionalization of the Afghan National Security Forces (ANSF), enabling the ANSF to take increasing responsibility for the security of Afghanistan.

• Laying the groundwork to expand the civilian footprint in Afghanistan as U.S. forces draw down, while focusing civilian assistance on foundational investments in economic growth, reconciliation and reintegration, and capacity building.

• Reducing Iraq-related costs dramatically, reflecting the withdrawal of U.S. troops completed in December 2011.

• Strengthening the State Department’s capacity to manage over 400 essential activities that it has taken over from DOD at Embassy Baghdad and three regional consulates in Iraq.

• Operating police and criminal justice hub facilities and security cooperation sites to continue enhancing Iraqi security forces and civilian ministries.

Reduces Defense Spending in Line with Troop Withdrawals.

The Budget reflects a significant decrease in the OCO request for DOD, from $115.3 billion enacted in 2012 to $88.5 billion requested in 2013. This reflects the withdrawal of U.S. troops from Iraq and a 30 percent decline in the number of troops deployed to Afghanistan. Nearly all of these DOD funds support Operation Enduring Freedom (OEF), which is primarily conducted in Afghanistan. For OEF, the Budget funds military operations, incremental personnel costs, force protection, repair and replacement
of damaged equipment, activities to counter and defeat improvised explosive devices, intelligence activities, support for coalition partners, and the training, equipping, and sustaining of the ANSF. To support implementation of the Nation’s new defense strategy, the Budget funds, within the OCO request, the portion of the Army and Marine Corps end strength that DOD will remove from the force within the next five years. This end strength supports current operations in Afghanistan and elsewhere, but will not be required as troops withdraw.

The Budget provides $2.9 billion to support DOD’s Iraq-related costs, including repair and replacement of equipment leaving the country, replenishment of munitions previously expended in combat, and the operation of the Office of Security Cooperation-Iraq (OSC-I). This is a reduction of about $7 billion from the 2012 enacted level for Iraq. Under the aegis of the U.S. diplomatic mission to Iraq, OSC-I is the cornerstone of the U.S.-Iraqi strategic security partnership and serves as the hub of both security assistance and security cooperation activities, including cooperation on counterterrorism, counterproliferation, maritime security, and air defense.

Provides Department of State and USAID Funding for Civilian-Led Missions.

The Budget reflects the OCO costs associated with Department of State and USAID activities in Iraq, Afghanistan, and Pakistan. Overall, the 2013 request for OCO represents a decrease of $2.9 billion from the 2012 enacted level, and reflects a more conservative OCO definition that avoids the risk of inadequate base funding for enduring activities once OCO funding under the proposed cap is exhausted. These 2013 OCO costs are limited to certain near-term operational, security and development components of assistance programs related to stabilization and counterinsurgency operations, protection of civilian personnel, and oversight activities of the Special Inspector General for Afghanistan. In Iraq, these temporary operations and assistance programs are necessary to sustain a civilian-led mission; strengthen the capacity of the Iraqi government through police training, criminal justice programs, and military assistance; and ensure the Department and USAID have the necessary resources to support and secure the diplomatic mission. For Afghanistan and Pakistan, unique challenges require near-term stabilization and development assistance to support a responsible security transition in Afghanistan and support Pakistan’s counterinsurgency programs. In Afghanistan, OCO funding will provide the initial infrastructure to maintain the diplomatic platform and security posture as Afghan forces take greater responsibility for security operations.

Defense Agencies Get Ready for Major $40 Billion in Contract Awards this Fall

September 30, 2013 | OVERSEAS INTEL

Several noteworthy Defense Department contracts are up for competition this fall and winter. All three contracting programs are being re-competed, and incumbent contractors are expected to take part in each competition. These large contract vehicles provide opportunities for both large and small businesses. For many contractors, it makes sense to consider teaming relationships; a place on one of these behemoths could provide vendors with exposure to new purchasing departments.

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Here is a look at the three:

Army

The service’s Information Technology Enterprise Solutions 3 Services contract vehicle is expected to cover a wide range of work for Army infrastructure worldwide. The contract also includes command, control, communications, computers and information management requirements.

ITES 3S, as it’s known, will have an unrestricted competition. Given its predecessor contract’s duration of three base years with three two-year options, ITES 3S contracts may run for up to nine years.

The total effort is valued at $25 billion, and Deltek expects the solicitation’s release in March.

Air Force

The Contract Augmentation Program IV contract will continue to provide the Air Force with civil engineering and services support for noncombat overseas operations.

AFCAP IV will be an unrestricted competition. Given its predecessor contract’s duration of one base year with nine one-year options, AFCAP IV contracts may run for up to 10 years.

The Air Force has not shared the ceiling of the new program, but the predecessor initiative has a ceiling value of $10 billion.

So far, the contractors on the predecessor vehicle — Washington Group International, CH2M Hill, the joint venture of URS/Berger, Bechtel, Readiness Management Support and DynCorp International — have received nearly $2 billion.

This solicitation is expected in January.

Defense Intelligence Agency

The Solutions for the Information Technology Enterprise II program provides worldwide information technology and technical support services to the Defense Intelligence Agency.

These services include design, development, fielding and sustainment of global intelligence and command and control assets.

The agency is still determining an acquisition strategy. The previous SITE competition resulted in 11 awards — six to large businesses and five to small businesses — with a total value of $6.6 billion.

Contracts are anticipated to have a one-year base period with four one-year option periods. The total ceiling value for SITE II contracts will be $5 billion.

Research done by Ashley Bergander research manager at Herndon-based at www.deltek.com

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