The US Department of Defense is reviewing contracting data stored in the Federal Procurement Data System (FPDS) after a series of clerical errors in the classification of some contracts came to light.

The mix-ups, involving military contracts worth about $1.4 billion overall, wrongly classified the place of performance (PoP) by listing the work as being done in foreign countries when, in fact, the jobs were carried out in the United States. The source of the problem was classification codes: some US states and foreign countries share the same two-letter designation. Texas and Turkmenistan, for example, are both known in the FPDS system as TX.

The FPDS is a publicly available online database of US government contracts worth more than $3,000.

A EurasiaNet.org investigation earlier in July uncovered inaccurate FPDS data in a Congressional Research Service (CRS) report published in May, titled Department of Defense Contractors in Afghanistan and Iraq: Background and Analysis.

According to the erroneous figures contained in the May report, the Pentagon supposedly spent $180.5 million on contracts performed in Turkmenistan in 2010, apparently $23.7 million more than was spent in Pakistan in the same year. From 2005-2010, Turkmenistan was inaccurately reported as the PoP for contracts worth $421 million.

In a follow-up to that May report, CRS analysts undertook a review of contract obligations from 2005-2010, focusing on 29 countries that share the same code as a US state. Other prime examples of such code-sharing include Canada and California (CA) and Moldova and Maryland (MD).

According the report, released July 22 and titled DoD Trends in Overseas Contracting Obligations, the CRS found that the country coding error rate varied greatly from year to year. In 2008, for example, the rate was 20 percent. The next year, however, the rate was just 3 percent, and then it shot up again in 2010 to 16 percent.

“Congress, legislative and executive branch agencies, analysts, and the public all rely on FPDS as a primary source of information for understanding how the federal government spends contracting dollars,” the report states.

“If the data contained in FPDS is sufficiently unreliable, the data may not provide an appropriate basis for measuring or assessing federal contracting, making policy decisions, or providing transparency into government operations,” the report continued. “In some circumstances, unreliable data could lead analysts and decision makers to draw incorrect or misleading conclusions. The result could be the implementation of policies that squander resources and waste taxpayer dollars.”

Within days of being notified of the Turkmenistan-Texas error by EurasiaNet.org, the Pentagon moved to correct the coding flaw. As a result, “the contracts listed incorrectly in FPDS as having been performed in Turkmenistan appear to have been substantially corrected for FY2009 and FY2010,” the CRS report noted. The value of contracts concerning Turkmenistan during those two fiscal years “dropped by more than $100 million,” the report also noted.

A permanent fix to help the Defense Department avoid future mistakes appears to be a long way off. If a new version of the FPDS was to use three letter codes for foreign countries, federal agencies would have to upgrade their own systems, a process that could take upwards of two years, the CRS report added.