Legislation to Stem Wasteful Spending Goes to President Obama

In our prior post, we mentioned that the military may not enter into broad indemnification agreements with independent contractors for specific wartime projects. This report was based on the lawsuit brought by soldiers who were exposed to a dangerous chemical while serving in Iraq (sodium dichromate) and were led to believe that the material was harmless.

A jury granted an $85 million award, which has not been paid, since the contractor KBR claimed that it was protected from legal actions through its indemnification clause. As such, the U.S. government would be responsible for paying the award.

This was ostensibly was another example of wasteful spending by military contractors, and even before the lawsuit began, Senator Claire McCaskill (D-Missouri) had been working on legislation to improve contracting practices and accountability for wartime projects. In December, the Senate adopted provisions of her Comprehensive Contingency Contracting Reform Act into its National Defense Authorization Act (NDAA).

A press release from McCaskill’s office outlines the critical points of the bill, which the Senate has sent to the President for his signature. They include:

  • Requiring departments and agencies to assess contracting risk in overseas contingency operations and reduce unnecessary reliance in areas including private security contracting;
  • Establishing responsibilities for Inspectors General to oversee all aspects of overseas contingency operations;
  • Improving the contracting process through greater transparency, competition, and professional education; and
  • Instituting additional provisions for accountability by contractors and the federal government, including limits that require proof that development projects are sustainable, prior to providing funding for such projects in overseas contingencies

We hope that these provisions will prevent wasteful spending in the future and provide real accountability when negligent military contractors harm American soldiers.