The film, War Dogs (Todd Phillips, 2016) and is somewhat based on the true-story of Efraim Diveroli and David Packouz. These two men had won a three hundred million dollar contract in 2007 from the United States (US) government in order to arm US forces and allies in Afghanistan. Although this was a pop culture film, it raised many issues concerning war as an industry and the Pentagon procurement process.
The film begins by showing its audience how war is a truly money-making machine. By providing statistics such as how much it costs to outfit soldiers and how much it costs to provide air conditioning to US troops, the film does an excellent job at showing that war is a multi-billion dollar industry in the US.
Then, the film explains to its audience how the Pentagon procurement process functions and how it has changed over the past 20 years. Diveroli explains that there is an online marketplace, FedBizOpps, where private companies can bid to fulfill Pentagon contracts and how President George W. Bush made it so that the Pentagon must “share the wealth” by providing smaller companies with the opportunity to win smaller bids.
It becomes clear that private companies always try to bid on the huge contracts because these contracts are worth the most, while many of the smaller proposals lack bids. Still, these smaller bids are worth millions of dollars. Diveroli and Packouz use this to their advantage. Their company, AEY Inc., bids on these smaller proposals and is able to make large profit margins.
Although Diveroli and Packouz are making steady profits, with a seemingly endless amount of proposals being offered by the Pentagon, they can’t help but look to the bigger proposals. Then, in mid 2006, a nearly 300 million dollar contract was released by the Pentagon. This contract was to provide the Afghan National Army with 100 million rounds of AK47 ammunition, 100 000 grenades, anti-aircraft rockets, sniper rifles, mortars.
Shockingly, AEY Inc. was able to undercut competitors by tens of millions of dollars and won the bid. In the film, Diveroli and Packouz must provide information for three audits and must attend an in-person interview with procurement officers. Although they forge the audit information and are high during the interview, no red flags are raised by the US government and it is agreed that AEY Inc. will be rewarded the contract.
AEY Inc. unsurprisingly struggles to fulfill this contract, as this is its first contract that surpasses even a few million dollars, and this results in Diveroli and Packouz having to commit fraud while attempting to successfully complete the contract.
Even though parts of the film are obviously exaggerated, the Pentagon did actually give a 300 million dollar arms contract to two (irresponsible) young men in 2007, and the winner of this contract was responsible for arming the Afghan National Army. This means that the winner of this contract was responsible for ensuring that US troops and allies were properly able to defend themselves and civilians in Afghanistan and to fight the war on terrorism.
Although this situation was investigated by the House Committee on Oversight and Government Reform, the Department of Defense’s inspector general and the Immigration and Customs Enforcement, it was too little too late – the damage was already done. The idea that the Pentagon simply gave this contract to the lowest bidder, with an obviously weak vetting process, is incredibly negligent. Furthermore, the fact that Divroli ended up spending only approximately four years in prison, while Packouz spent less than a year on house arrest, does not send a clear message to future bidders that the US government will punish those who commit arms fraud.
War Dogs was an excellent depiction of the carelessness that can occur when those responsible for ensuring conscientious decisions are being made start caring more about the bottom line than the lives at risk. Although War Dogs takes many artistic liberties, the moral of the story is true: countries must ensure that their procurement process does not solely preoccupy itself with the cost of fulfilling contracts, but also with the legitimacy of the companies fulfilling the contracts. This should be a lesson learned for the US, and, hopefully, a warning to other countries on how procurement processes can fail.
Paxton Mayer is a first-year M.A. candidate at the Norman Paterson School of International Affairs at Carleton University, Ottawa. Her research focuses on the organizational structure and strategy of criminal and terrorist groups.
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The views expressed in this article are the author’s own and do not necessarily reflect iAffairs’ editorial stance.