SIGAR HIGH-RISK LIST

HIGH-RISK LIST
• acceptance of incomplete or defective work and unjustified releases of
contractor liability
• failure to hold contractors and contracting officers accountable for violating contracts
or procedures
• poor or no documentation of project progress and contractor performance
• widespread lack of compliance with published rules, policies, and standards
A striking, but not at all unique, example of SIGAR findings on contracting is its July
2016 inspection report on the Bagrami Industrial Park about five miles east of Kabul.
USAID engaged a U.S. firm, Technologists Inc., to perform construction work including a
water-supply and sewage collection and treatment system. USAID accepted the contractor’s
work. But two on-site visits by SIGAR engineers found that the water-supply system was
not completed in accordance with contract requirements and that the sewer collection and
treatment system had not been built at all.
Worse yet, USAID told SIGAR that it had accepted the contractor’s work “as is.” Because
of that acceptance, and because USAID made no claim under federal regulatory provisions
regarding latent defects or fraud, SIGAR concluded, “It appears that no further action can
be taken against the contractor to recover the funds spent on the deficient and, in some
cases, nonexistent systems discussed in this report.” 208
Other examples of SIGAR’s work illustrate a variety of weaknesses in
contract management:
• A 2016 SIGAR Inspections report found that construction of the new $155 million,
U.S.-funded headquarters building for the Afghan Ministry of Defense failed to satisfy
several contract requirements, including separation joints and lateral bracing to protect
against seismic activity and proper roof drainage. 209
• In October 2016, SIGAR alerted Secretary of Defense Ashton Carter and several
senior military officers that more than 900 fire doors installed at the Afghan Ministry
of Interior complex in Kabul did not meet contract requirements that included
certification by recognized testing laboratories. The Combined Security Transition
Command–Afghanistan funded the $90 million construction, and the U.S. Army Corps
of Engineers administered the contracts. The failure to monitor contract compliance
raises concerns about safety, possible overpayment for inferior products, and fraud. 210
• In November 2016, SIGAR alerted the Overseas Private Investment Corporation about
serious deficiencies in the management and oversight of $85 million in loans made for
the construction of a hotel and an adjacent office building directly across the street
from and overlooking the U.S. Embassy in Kabul. OPIC did not regularly visit the sites
or have an on-site monitoring presence at either construction project, but instead
relied almost exclusively on the representations made by the loan recipients regarding
the status of the projects. As a result, the $85 million in loans is gone, the buildings
were never completed and are uninhabitable, and the U.S. Embassy is now forced to
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION