America’s Big Companies That Made More Money from the Afghanistan War

Companies that earn more money in Afghanistan

The conflict in Afghanistan, which came to an end on August 30 with the withdrawal of the last troops present in Kabul, cost the U.S. Treasury about $2.3 billion, according to calculations by the University’s Cost of War project. from Brown (Rhode Island).

The seizure of power in Afghanistan by the Taliban as well as the accelerated and chaotic departure of U.S. forces from that country were considered by some analysts as a sign that this war had been a failure.

But what for many may have been a losing war, for others it was an opportunity for big profits.

Of the $2.3 trillion that this conflict cost between 2001 and 2021, around $1.05 trillion was used to finance the expenses and operations of the Department of Defense in Afghanistan.

A substantial portion of those funds was used to pay for the services of private companies that supported US operations in Afghanistan.

“That war had very small American forces – all volunteers – supplemented by military contractors. Overall, there were twice as many contractors as there were American soldiers,” says Linda Bilmes, a professor at the Kennedy School of Government at the University of California. Harvard.

Bilmes explains to BBC Mundo that politically a limit was set on the number of troops that were going to be deployed in the country and that the number of required contractors was often defined based on this.

“Since there was a lot of work to be done, that meant contractors were loading fuel onto planes, driving trucks, cooking, cleaning, piloting helicopters, and transporting all kinds of equipment and materials. They also built military bases, airports, runways, etc. etc…”, he adds.

The five companies that invoiced the most

More than a hundred companies (from the United States and other countries) received contracts from the Pentagon to carry out all kinds of services in Afghanistan and among them were some that had billions of dollars in revenue.

Although there is no official ranking that shows which companies benefited the most, Professor Heidi Peltier, director of the “20 Years of War” project at Boston University – which is part of the Cost of War project – shared with BBC Mundo their estimates not yet published.

These were prepared from a review of the data available on the government website, which offers access to official information on US government spending and was created after the 2008 financial crisis.

“These figures basically cover the period 2008-2021, although some contracts included maybe a little earlier than 2008, so the actual figures could be a bit higher if we had all the information available since 2001,” explained Peltier.

According to these estimates, the top three US contractors in Afghanistan were Dyncorp, Fluor, and Kellogg Brown and Root (KBR).

These companies obtained contracts as part of the Logistics Augmentation Program with Civilian Personnel (known in English as LOGCAP), as well as other minor contracts.

“LOGCAP contracts are generally multi-year umbrella contracts that allow them to offer all kinds of services in different areas including logistics, management, transportation, support and maintenance of equipment, airplanes, etc.”, said Peltier.

Among its multiple tasks in Afghanistan, DynCorp was in charge of equipping and training the National Police of that country, as well as its anti-narcotics forces, in addition to providing a team of bodyguards for the protection of politician Hamid Karzai, when he was president.

According to Peltier’s calculations, Dyncorp – which was recently acquired by the Amentum consortium – obtained contracts valued at $14.4 billion, including $7.5 billion in LOGCAP contracts.

“Since 2002, Dyncorp International has stood shoulder to shoulder with our government clients and their allies in Afghanistan. We provide a wide range of critical support to our clients,” said a company spokesperson in response to a BBC Mundo inquiry about its activities. in Afghanistan.

He added that because it is a private company they do not reveal the details of their contracts or their finances.

Fluor, a Texas-based corporation, was in charge of the construction of U.S. military bases in southern Afghanistan.

According to the company on its website, it also operated 76 forward operating bases in that country, supporting more than 100,000 soldiers and serving more than 191,000 meals a day.

In total, Fluor Corporation received contracts for $13.5 billion, of which $12.6 billion correspond to LOGCAP contracts, according to Peltier’s calculations.

BBC Mundo sent a request to Fluor to inquire about its activities during the war in Afghanistan, but at the time of publishing this note, we had not received a response.

Kellogg Brown Root (KBR), meanwhile, has been in charge of engineering and logistics work to support US troops by providing them with lodging, food and other basic services.

This company was also in charge of providing ground support to NATO air operations at various airports in Afghanistan, which included all kinds of tasks: from the maintenance of the runways to the servicing of airplanes and the management of aeronautical communications.

According to Peltier estimates, KBR received contracts from the Pentagon in the amount of $3.6 billion.

“KBR supported the United States Armed Forces in Afghanistan from 2002 to 2010 through a competitive contract within the Logistics Increase Program with Civilian Personnel, which we won in December 2001,” a spokesperson for that company told BBC Mundo.

“Through that program, we provided support in 82 different bases of the United States Army with services such as food, laundry, electricity, sanitation and maintenance. In July 2009, the Army awarded continuation contracts under this program to Dyncorp and Fluor, which jointly took over the services provided by KBR. KBR’s services ended in September 2010, “he added.

The fourth highest-grossing company was Raytheon, one of the largest aerospace and defense companies in the United States, which won contracts for $2.5 billion to provide services in Afghanistan.

One of his most recent assignments was training the Afghan Air Force, for which he obtained a contract for $145 million in 2020.

Aegis LLC, a security and intelligence company based in Virginia, was the fifth highest-grossing company in Afghanistan, where it reached contracts for $1.2 billion.

His work includes having been in charge of providing security services for the United States embassy in Kabul.

BBC Mundo contacted Aegis to ask them about their activities in Afghanistan, but at the time of publishing this note, they had not responded.

What about defense companies?

The experts consulted by BBC Mundo coincide in pointing out that the large US defense contractors such as Boeing, Raytheon, Lockheed Martin, General Dynamics and Northrop Grumman were great beneficiaries of the war in Afghanistan.

They made a ton of money from the war,” says Linda Bilmes.

However, it is difficult to determine how much money they actually billed because their contracts were not directly linked to operations in Afghanistan.

“All of them got contracts to make things in the United States that were used in Afghanistan, but that is not reported as part of the expenses in that country,” says Peltier.

A report released this week by the Cost of War project portrays these five companies as major beneficiaries of US military spending since 9/11.

“Between fiscal years 2001-2020, these five companies alone shared about $2.1 trillion in Pentagon contracts (calculated in 2021 dollars),” the report says.

BBC Mundo sent inquiries to these five companies about how the war in Afghanistan had affected their businesses and contracts.

General Dynamics declined to comment, while the others had not responded to the request at the time of this publication.

Peltier uses the case of Raytheon as an example and points out that that company obtained much more money than the $2.5 billion indicated above since that amount corresponds only to the contracts it obtained to be executed directly in Afghanistan.

“If Raytheon got a contract for a weapons or communications system and they built it in the United States and then it was used in Afghanistan, that is not reflected in the database as a contract related to that country,” he says.

This aerospace technology company offers a wide range of weapons, navigation and communication systems, among others, which in many cases have been developed to respond to specific needs of the United States Armed Forces and which are integrated into the military equipment used in Afghanistan.

For example, Raytheon is responsible for the radar and night vision system used by the new versions of the Osprey V-22, a multi-role aircraft with vertical take-off capability developed by Boeing and widely used in Afghanistan.

Boeing is also the maker of the F-15 and F-18 fighter jets that Linda Bilmes explained were the “workhorses” of U.S. forces in Afghanistan.

But Boeing does not appear on the list of top contractors, nor does Lockheed Martin, another large defense company, maker of the Blackhawk helicopters, which were used extensively in the Asian country.

“In the case of General Dynamics, they made most of the light armored vehicles and did a lot of work-related to cybersecurity in Afghanistan,” says Bilmes.

The expert explains that these large defense companies made a lot of money with many things that cannot be directly linked to the war that just ended.

“Let’s say, for example, you sold an airplane. It could have been used in Afghanistan, but it could also have been used for training in Kansas,” he says.

“These are things that are made under long-term contracts and it turns out that because we were involved in Iraq and Afghanistan, these companies did very well during these 20 years of war, but we cannot specifically attribute that to the operations in Afghanistan,” he says.

In response to a BBC Mundo query, Pentagon spokeswoman Jessica Maxwell confirmed the difficulties in determining how much money these five large defense contractors obtained for their equipment and services used in Afghanistan.

” It is impossible to get such an estimate. The Department of Defense buys a wide variety of products and services from these companies, but these are not purchased ‘just for’ Afghanistan. We buy them for operations around the world. Some were used in Afghanistan: some for a short time or intermittently (like transport planes) and others for longer periods,” he said.

Monopolies and exorbitant prices

Bilmes points out that during the war in Afghanistan, contractors had the upper hand when it came to setting prices for their services.

“Many of these contracts were awarded without competition or with very little competition. This is because in some cases the supplier was a monopoly, but also because there were not many companies capable of doing the work that was needed. Thus, they could ask almost the price they would like,” he says.

He assures that in many cases, companies raised prices arguing the deterioration of the security situation and the resulting difficulties in reaching the places where services had to be provided.

Asked about the way in which contracts were awarded during the war in Afghanistan, the Pentagon spokeswoman pointed out that, although they do not have an estimate on contracts related to Afghanistan, the Pentagon “normally contracts competitively around 95% of its contracting operations and around 50% of the dollars [used] for contracts.”

“The policy of the Department of Defense is to contract competitively as much as possible. Although most of the weapons systems were tendered during the early stages of their development, it is true that in most cases, there is a sole source of production,” he added.

Bilmes points out that sometimes there was enormous usury, but other times it was simple corruption.

“There was the case where I painted a building and charged 20 times the cost, which was usury. There was also a level of corruption where you pocketed the money and didn’t paint the building. And then there was what I call ‘budget ghost ‘that happened when there was nothing to paint and you just kept the money, “he says.

“That was the level we were at in Afghanistan, particularly with some local contractors,” he says.

Bilmes says there were also many subcontractors, but information about how much money they charged is not available, making it difficult to keep track of the money.

In this regard, the Pentagon spokeswoman assures BBC Mundo that federal laws and regulations contain” a robust system of protection to guarantee fair and reasonable prices for goods and services, even in processes in which there is only one supplier.”

“Specifically, the Act on Truthful Data on Costs or Prices – formerly known as the Truth in Negotiations Act (TINA) – requires non-commercial contractors that are sole suppliers to provide up-to-date, accurate and complete data on costs and prices to allow the government negotiates fair and reasonable prices,” he says.

Regarding allegations of alleged corruption, Maxwell indicates that any evidence of fraud, abuse, usury, or corruption should be reported to the Inspector General of the Department of Defense for investigation.

The Inspector General’s office has reported that between 2008 and 2017, the United States lost about $15.5 billion to reconstruction efforts in Afghanistan through misuse or fraud, The New York Times reported.

In any case, for Bilmes, the war did not benefit a single type of company but rather a variety of companies, including defense companies, but also logistics companies, construction companies and fuel suppliers, as well as specialized companies. that offered services or goods that no one else could provide such as critical software parts or programs for the military operation in Afghanistan.

“Actually, there were many companies that did very well with this,” he concludes.