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Giving Karzai Aid and a 20 Percent Profit

Karzai's decree, which was ostensibly a move to fight corruption and prevent civilian casualties, ordered the dissolution of private security contractors within four months without a backup plan to provide security for reconstruction activities. The Ministry of the Interior eventually determined that the companies could see out the end of their contracts; a target date of March 2013 was then set for APPF, which aims to have 25,000 guards by then, to assume security responsibility over all coalition construction sites.

The inspector general analyzed 13 projects in which security under the APPF is expected to cost as much as 46 percent higher, an additional $3.1 million.

This includes new fees that Karzai's rent-a-cops will rake in -- a 20 percent profit to most charges associated with each guard, Trent testified.

"Shame on us," Tienery said. "I've watched [Karzai's] act for a long time… we rolled over again."

Even while the Afghan government will be pulling in a tidy profit, it will do so while still pulling in international funds Kabul says it needs to pay for police and military past the 2014 withdrawal date.

"We're going to spend more for the same thing," Chaffetz said. "…We're moving, in my estimation, in the wrong direction. We pay for everything."

"The APPF official website acknowledges the uncertainty about how much the new arrangement is going to cost, noting that 'while it is impossible to provide exact figures at this time before contracts have been established, we expect there will be some increase in cost for companies, particularly if they choose to use the services of a Risk Management Consultancy in addition to contracting with the APPF for guards,'" Trent said.

The inspector general was only able to provide a minimum for security costs for 29 of USAID's largest projects from 2009-2011: $2.9 billion, in which security costs per project ranged from 14 percent to 42 percent.

"We don't whether costs will go up, we don't know whether costs will go down," Thier, who estimated a 16 percent increase, said when grilled about the expenditures. "Our current indication today is that none of our programs are going to shut down."

An industry group brought up recent violence to the committee in regard to Karzai's new way of doing security business.

"When bidding on new work in Afghanistan, companies will need to rely for the first time on the APPF for the vetting and training of new guards," the Professional Services Council, which represents government contractors, said in a submitted statement to the committee. "Given growing concerns about so-called 'green on blue' attacks by uniformed Afghans on U.S. and coalition personnel, the use of new APPF guards complicates both the risk assessment and cost projections when deciding whether, and at what price, development projects can be successfully completed in Afghanistan."

"The Afghan government is saying you have no choice, you have to do this," Chaffetz said. "I don't think the State Department's standing up enough."