Procurement

The State Department is refuting a new federal audit that found U.S. firms improperly paid almost $1 billion in Afghan taxes, calling its conclusions “not supported” and claiming its recommendations “may undercut” bilateral negotiations.

Tuesday's report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) found that Afghanistan over the past five years has levied more than $921 million in business taxes and penalties on 43 U.S. reconstructions contractors, in violation of agreements between the two countries. The report urges the State Department and Congress to take action, if need be by penalizing taxation of U.S. foreign assistance funding to the war-torn country.

“It's disturbing that the Afghan government is targeting American contractors with unjust taxes and intimidation,” Special Inspector General John Sopko said in a statement accompanying the report. “It's even more disturbing that US agencies are letting it happen – all at the expense of American taxpayers, who have already shouldered a heavy burden on Afghan reconstruction. This needs to end.”

The Obama administration called on the UN to consider the treaty "as soon as possible."

Sen. Corker said the misuse of Iraq reconstruction funding demands a “top-to-bottom” review of the State Department.

Sierra Nevada Corp. and Brazilian-based Embraer beat out Beechcraft for a $427 million Air Force contract to provide planes for the Afghan military.

Sierra Nevada and Embraer will provide 20 light air support planes to the Afghans under the contract, which the companies have won for the second time.

The contract could be worth a maximum of $950 million through 2019.

A group of House lawmakers are complaining that the Pentagon is ignoring a prohibition on funding the Medium Extended Air Defense System (MEADS), which Congress blocked in the 2013 Defense authorization law (NDAA).

Eight House Armed Services members wrote to Pentagon Comptroller Robert Hale asking why the MEADS program received $25 million last month in funding through the end of March.

Two Republican senators introduced dueling legislation back-to-back Thursday to stop arms sales to Egypt.

Sen. Rand Paul (R-Ky.) modeled his bill after a similar amendment to legislation suspending the debt limit that was defeated on the Senate floor, 79-19. The bill prohibits the sale of F-16 aircraft, tanks and other advanced weapons.

“I think it is a blunder of the first proportion to send sophisticated weapons to a country that allowed a mob to attack our embassy and to burn our flag,” Paul said on the Senate floor. “I find it objectionable to send weapons, F-16s and tanks, to a company that allowed a mob chanting ‘death to America’ to threaten our American diplomats.”

Sen. James Inhofe (R-Okla.), the new ranking member on the Senate Armed Services Committee, introduced similar legislation after voting against Paul's amendment but said an outright ban would cost the U.S. defense industry $2.2 billion and diminish America's leverage over Egypt. His bill wouldn't ban sales but would suspend them unless President Obama certifies that Egypt is committed to pursuing peaceful relations with Israel, providing security to U.S. embassies and consulates and respecting minority parties' rights. 

“For decades, the U.S. has had a good relationship with Egypt, training their troops and working together to maintain peace and stability in the region, Inhofe said. “Under Muslim Brotherhood President Morsi, this relationship has come to a halt. We need to continue to support the Egyptian military, which Morsi and the Muslim Brotherhood have currently distanced themselves from. Egypt’s military is our friend – Morsi is our enemy.”

Hagel and his wife hold between $100,001 and $250,000 of Chevron common stock and between $5,001 and $15,000 in dividends.

The Chinese firm Wanxiang America has been given the go-ahead to buy A123 Systems.

The rising costs associated with the Pentagon's next-generation F-35 Joint Strike Fighter have caused another American ally to back off its participation in the program, according to recent reports. 

The search for Canada's newest fighter jet is now under way, according to the country's defense leaders, yet another indication the longtime U.S. ally is planning to walk away from the Pentagon's F-35 Joint Strike Fighter program.