[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 110-164]
CONTINGENCY CONTRACTING:
IMPLEMENTING A CALL FOR URGENT REFORM
__________
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
APRIL 10, 2008
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HOUSE COMMITTEE ON ARMED SERVICES
One Hundred Tenth Congress
IKE SKELTON, Missouri, Chairman
JOHN SPRATT, South Carolina DUNCAN HUNTER, California
SOLOMON P. ORTIZ, Texas JIM SAXTON, New Jersey
GENE TAYLOR, Mississippi JOHN M. McHUGH, New York
NEIL ABERCROMBIE, Hawaii TERRY EVERETT, Alabama
SILVESTRE REYES, Texas ROSCOE G. BARTLETT, Maryland
VIC SNYDER, Arkansas HOWARD P. ``BUCK'' McKEON,
ADAM SMITH, Washington California
LORETTA SANCHEZ, California MAC THORNBERRY, Texas
MIKE McINTYRE, North Carolina WALTER B. JONES, North Carolina
ELLEN O. TAUSCHER, California ROBIN HAYES, North Carolina
ROBERT A. BRADY, Pennsylvania W. TODD AKIN, Missouri
ROBERT ANDREWS, New Jersey J. RANDY FORBES, Virginia
SUSAN A. DAVIS, California JEFF MILLER, Florida
RICK LARSEN, Washington JOE WILSON, South Carolina
JIM COOPER, Tennessee FRANK A. LoBIONDO, New Jersey
JIM MARSHALL, Georgia TOM COLE, Oklahoma
MADELEINE Z. BORDALLO, Guam ROB BISHOP, Utah
MARK E. UDALL, Colorado MICHAEL TURNER, Ohio
DAN BOREN, Oklahoma JOHN KLINE, Minnesota
BRAD ELLSWORTH, Indiana PHIL GINGREY, Georgia
NANCY BOYDA, Kansas MIKE ROGERS, Alabama
PATRICK J. MURPHY, Pennsylvania TRENT FRANKS, Arizona
HANK JOHNSON, Georgia BILL SHUSTER, Pennsylvania
CAROL SHEA-PORTER, New Hampshire THELMA DRAKE, Virginia
JOE COURTNEY, Connecticut CATHY McMORRIS RODGERS, Washington
DAVID LOEBSACK, Iowa K. MICHAEL CONAWAY, Texas
KIRSTEN E. GILLIBRAND, New York GEOFF DAVIS, Kentucky
JOE SESTAK, Pennsylvania DOUG LAMBORN, Colorado
GABRIELLE GIFFORDS, Arizona ROB WITTMAN, Virginia
NIKI TSONGAS, Massachusetts
ELIJAH E. CUMMINGS, Maryland
KENDRICK B. MEEK, Florida
KATHY CASTOR, Florida
Erin C. Conaton, Staff Director
Andrew Hunter, Professional Staff Member
Stephanie Sanok, Professional Staff Member
Caterina Dutto, Staff Assistant
C O N T E N T S
----------
CHRONOLOGICAL LIST OF HEARINGS
2008
Page
Hearing:
Thursday, April 10, 2008, Contingency Contracting: Implementing a
Call for Urgent Reform......................................... 1
Appendix:
Thursday, April 10, 2008......................................... 33
----------
THURSDAY, APRIL 10, 2008
CONTINGENCY CONTRACTING: IMPLEMENTING A CALL FOR URGENT REFORM
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Hunter, Hon. Duncan, a Representative from California, Ranking
Member, Committee on Armed Services............................ 2
Skelton, Hon. Ike, a Representative from Missouri, Chairman,
Committee on Armed Services.................................... 1
WITNESSES
Gansler, Dr. Jacques S., Chairman, Army Commission on Army
Acquisition and Program Management in Expeditionary Operations. 8
Parsons, Jeffrey P., Executive Director, Army Contracting Command 6
Young, Hon. John J., Jr., Under Secretary of Defense for
Acquisition, Technology, and Logistics, Department of Defense.. 5
APPENDIX
Prepared Statements:
Gansler, Dr. Jacques S....................................... 66
Parsons, Jeffrey P........................................... 51
Young, Hon. John J., Jr...................................... 37
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
[There were no Questions submitted during the hearing.]
Questions Submitted by Members Post Hearing:
[There were no Questions submitted post hearing.]
CONTINGENCY CONTRACTING: IMPLEMENTING A CALL FOR URGENT REFORM
----------
House of Representatives,
Committee on Armed Services,
Washington, DC, Thursday, April 10, 2008.
The committee met, pursuant to call, at 10:06 a.m., in room
2118, Rayburn House Office Building, Hon. Ike Skelton (chairman
of the committee) presiding.
OPENING STATEMENT OF HON. IKE SKELTON, A REPRESENTATIVE FROM
MISSOURI, CHAIRMAN, COMMITTEE ON ARMED SERVICES
The Chairman. Ladies and gentlemen, we welcome you to
today's hearing on Contingency Contracting: Implementing a Call
for Urgent Reform.
We have with us today the top acquisition official of the
Department of Defense, the Under Secretary of Defense for
Acquisition, Technology, and Logistics, the Honorable John
Young. We also have representing the Army the executive
director of the new Army Contracting Command, Jeff Parsons. And
we also have with us the distinguished former Under Secretary
of Defense for Acquisition, Technology, and Logistics, Dr.
Jacques Gansler, who chaired the Commission on Army Acquisition
and Program Management for Expeditionary Operations. We thank
you, and thank you for your long service, Dr. Gansler.
Let me begin by recognizing that we are here today to
discuss serious problems with contracting and those problems
are in part the result of actions taken by Congress and by our
committee. In the late 1990's, we tried to cut the so-called
``tooth to tail'' ratio in the Department of Defense, and in so
doing we pushed you to significantly reduce the size of the
acquisition workforce.
It is now clear that, just as with the Army's combat force,
the acquisition workforce was cut too much. When the wars in
Afghanistan and Iraq began, the Army lacked the capacity to
manage the explosion in contingency contracting. The result has
been disturbing mismanagement of contracts, unprecedented
waste, and high levels of outright fraud, which all of us
deplore.
We here on this committee have been working to address
these problems now for several years. In our fiscal year 2006
National Defense Authorization Act, we required the Department
of Defense (DOD) to develop and implement a joint contingency
contracting policy, and urged you to establish a contingency
contracting corps. In our fiscal year 2007 bill, we established
the Panel on Contracting Integrity and directed you to expand
the joint policy to areas of requirements and program
management.
In our fiscal year 2008 bill, with our Senate colleagues,
we created an Acquisition Workforce Development Fund and we
required you to work with the State Department and the United
States Agency for International Development (USAID) to clarify
interagency responsibilities for management of contractors and
contracts. We also worked to address policies which have
discouraged highly skilled civilians from deploying to combat
theaters to assist our military personnel.
I want to thank Dr. Gansler for his commission's report.
Dr. Gansler, your commission told the Army what it needed to
hear. That contracting, which has always been a core function
of the Army, but is especially critical in this era where
contractors outnumber soldiers on the battlefield, is simply
not being organized, manned, or resourced properly. Your report
calls for a cultural shift in the Army. I agree with your
assessment.
I give our former colleague Pete Geren a tremendous amount
of credit for requesting your study. I believe, however, that
it will also require great leadership on his part to achieve
the cultural shift in the Army that is needed. Although he is
not here with us today, Mr. Parsons, I hope you will take back
this committee's continuing deep concern about getting
contracting right.
The single most compelling area of your recommendations for
me came in your focus on reestablishing general officers within
the chain of command for contracting. We look forward to
hearing from all of the witnesses about how the Department will
make its decision about this critical issue and whether
legislation is needed.
Let me also commend you, Dr. Gansler, for tackling the
issue of contracting and the Department of Defense's
interagency partners in your report. As I mentioned, we have
required the Department of Defense, State, and USAID to address
this issue in a memorandum of understanding that is due this
summer, but I am also interested in your idea of an Integrated
Expeditionary Command. I hope that all our witnesses will
address the issue of how we manage contractors on the
battlefield when those contractors work for and report to
agencies across the Federal Government.
We look forward to your testimony, and I turn now to my
friend and ranking member, Duncan Hunter.
STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE FROM
CALIFORNIA, RANKING MEMBER, COMMITTEE ON ARMED SERVICES
Mr. Hunter. Thank you, Mr. Chairman, and thanks for calling
this very timely hearing. Before we get started, I just wanted
to recognize that we have a dear friend of mine, Vernon Oakley,
who was with me in the Army in 1969 and 1970. He is with us
today with a contingent of distinguished veterans from the
Virginia and North Carolina area. I am sure glad that they had
an opportunity to come in and to be with us today.
This is a very timely hearing. To our witnesses, we
appreciate you being with us today. I am glad that we had a
chance to schedule this hearing because I think it goes to the
heart of the effectiveness and efficiency of our operations in
Iraq and Afghanistan. I think that one of the best services we
can provide our warfighters to improve their readiness today
and to improve the way we fight in the future, is to capture
the lessons learned that we have learned about how to rapidly
and ethically provide goods and services to our fighting men
and women.
During every major conflict in our Nation's history, the
United States has learned to rapidly procure the equipment and
supplies needed by our warfighters. The price we pay for these
lessons is heavy. It is often paid in the blood of our sons and
daughters. Every time the conflict is over, the capabilities we
have gained atrophy or are subsumed by the peacetime
bureaucracy. We can't allow this to happen again. That is why I
believe that effective contracting is at the very heart of our
ability to effectively win wars and defend this Nation.
When the Gansler Commission's report was released last
November, I have to admit that I read it with mixed emotions.
First and foremost, I was pleased to see that an independent
body validated many of my concerns and recommendations made by
this committee. However, I continue to lament the circumstances
that led Secretary Geren to authorize the commission and the
time and money we have wasted getting there.
I also continue to fear that DOD will only take partial
steps to implement Dr. Gansler's recommendations. In any major
military operation, there will be individuals who see conflict
as an opportunity for personal gain, rather than a call to
duty. It is unfortunate, but it is expected to a certain
degree. But gentlemen, I am afraid that inaction on the part of
the Department has, in large measure, allowed corruption to
take root where it otherwise would not.
In May, 2005, this committee voted to require the Secretary
of Defense to establish a Contingency Contracting Corps. I can
remember sitting down with our senior staff members and
drafting that legislation. Let me read to you briefly from the
report accompanying the fiscal year 2006 National Defense
Authorization Act. ``This corps would be directed by a senior
commissioned officer with appropriate acquisition experience
and qualifications who, when deployed, would report directly to
the combatant commander in an area of operations requiring
contingency contracting support. In addition, this section
would attempt to leverage contingency contracting assets in
both deployed and non-deployed locations to efficiently carry
out the mission of the Contingency Contracting Corps.
``Training of the corps would take into account all
relevant laws, regulations and policies related to contingency
contracting and would be required even when the corps is not
deployed. The committee intends that the commander of the
Contingency Contracting Corps be appointed at a grade senior
enough to interact effectively with a combatant commander. The
committee believes that an office in the rank of lieutenant
general or vice admiral for the Navy is appropriate for this
responsibility. The committee intends that the Contingency
Contracting Corps maintains a sufficient level of readiness in
peacetime to be able to rapidly deploy to emergency contingency
operations.
``The commander of the Contingency Contracting Corps should
consider the development of a standardized contingency
contracting handbook which summarizes all relevant laws,
directives and regulations related to contingency contracting
to assist the day-to-day operations of the contingency
contracting workforce.
``Finally, the committee urges that the Contingency
Contracting Corps utilize an integrated contracting and
financial management system to ensure that contracting
operations are not hindered by technological limitations that
can be easily avoidable through the use of readily available
systems.''
That is what we said in 2005. That sounds an awful lot like
the recommendations of the Gansler Commission. But the
Department fought it with everything that they had. They hated
this idea of a contingency contracting corps, and when it came
time to negotiate with the Senate, who had been scrubbed
heavily by the Administration, we were forced to compromise on
a joint policy on contingency contracting. In reading your
testimony, I see that the development of that policy has paid
dividends, or would have paid dividends. I have to wonder where
we might be today if the Department had been more responsive,
instead of defensive.
Forget about 2005. Where would we be today if the
Department had at anytime in the intervening years implemented
these changes on its own? All the same, ``we told you so'' is
not particularly helpful in assisting you to move forward. We
want you to be successful. I look forward to hearing more about
the actions you have already taken and those that are in the
works.
For example, I understand that the Army has created four
contracting support brigades that will deploy during
contingency operations, but right now each of these so-called
``brigades'' is staffed with only 19 officers and non-
commissioned officers (NCOs). How is the Army planning to
increase the size of these brigades, ensure that they train
with operational forces, and maintain their contingency
contracting competencies during peacetime?
I also understand that the Army plans to place a two-star
in charge of the recently formed Army Contracting Command now
led by Mr. Parsons. But if the Army has no general officers
with experience in contracting, how does the Army plan to fill
that bill in the near term?
I would also like to explore more fully with Dr. Gansler
and Mr. Young the Commission's recommendations regarding the
increase in the number of general officer billets and billets
at the Defense Contract Management Agency.
Dr. Gansler, why do you believe that five Army and five
joint general officer billets represent the right balance?
And Mr. Young, in your testimony you allude to alternative
approaches to the 583 additional billets for the Defense
Contract Management Agency (DCMA) that Dr. Gansler's commission
recommended. Are you at liberty to expand upon that statement?
Finally, I will leave you with a parting recommendation. I
know that the report required by last year's defense bill
regarding the implementation of the Gansler Commission
recommendations is due at the end of May. It was supposed to be
due earlier, but the veto delay pushed the final due date to
the right. Here is my recommendation. If you wait until the end
of May to submit the report, it will be too late for us to
assist you. If the Department needs legislative relief to fix
these provisions and if you wait until the end of May to tell
us, it will be a sign to me that the Department is still not
taking these matters seriously.
So please do everything in your power to do the right thing
now and in time to allow us to assist you. It is unacceptable
to punt to next year or to the next Administration. This
committee will not allow that to happen on the backs of our
Marines and soldiers.
So thanks to our witnesses. I appreciate your testimony
today. One last point, we had in the mid-1990's after the Cold
War, we had a Contracting Acquisition Corps, basically the
shoppers for our military systems, a little in excess of
300,000 people--basically two U.S. Marine Corps's of shoppers,
of acquisition personnel in the Pentagon bureaucracy.
Mr. Chairman, we cut that down to about one U.S. Marine
Corps of acquisition personnel. I think that is plenty. And
looking at the problems and the corruption that we saw in the
contracting problems that have arisen in the last several
years, and people for whom bribery became a way of life, those
problems are not a function of too few people.
Putting more people into the acquisition corps overall in
the huge peacetime bureaucracy that we have that does
acquisition does not change the ethics of the few people that
were in high-level positions who were United States military
officers who bypassed and neglected all ethical standards in
turning to basically a career of self-dealing which has brought
such a tragedy to this country in those areas that you and I
have been briefed on extensively.
So I don't think it is a matter of pumping in another
Marine Corps-sized body of professional shoppers to do the
acquisition for this country. I think it is a matter of having
quality and capability, but also having a Contingency
Contracting Corps which works closely with the combatant
commanders in these warfighting theaters to get what we need to
get to our troops quickly and efficiently, and in some cases to
cut away bureaucracy. But in all of this, there is no
substitute for the honest and ethical soldier. We need to make
sure that we have only those people in those key positions.
So thank you, Mr. Chairman, for holding this hearing. It is
very timely. I welcome our guests. They are very fine public
servants and I look forward to their testimony.
The Chairman. I thank the gentleman. We will now to go to
the witnesses.
Secretary Young, you are on.
STATEMENT OF HON. JOHN J. YOUNG, JR., UNDER SECRETARY OF
DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS, DEPARTMENT
OF DEFENSE
Secretary Young. Chairman Skelton, thank you.
Ranking Member Hunter and distinguished members of the
committee, thank you for the opportunity to appear before you
today. The committee has rightly focused attention on the
Department's contingency contracting capability, as well as the
increasing role of contractors in our deployed forces
operations. The Department is acting with deliberation and
determination on the full spectrum of issues in this area.
I will comment briefly on the key issues seeking to move to
the committee's questions. For a number of reasons, including
the illegal actions of some people, the Secretary of the Army
requested an independent review, and I believe the work done by
Dr. Gansler and his team have been very helpful to the Defense
Department.
With regard to the Gansler Commission, I directed the
Deputy Under Secretary of Defense for Acquisition and
Technology, Tim Finley, to lead a task force to address the
Gansler Commission's recommendations related to the Office of
the Secretary of Defense and to coordinate a comprehensive DOD
response. This task force is actively addressing every
recommendation. I would note the efforts of very experienced
leaders on our team, Jay Assad and Dick Kinman, to work these
issues through a set of subcommittees and work them with the
services so that we have a joint response.
A number of efforts were already underway in the Department
in advance of the commission report, such as the contingency
contracting handbook, which we are using to train people.
Similarly, a number of concerns have been raised regarding the
use of personal security contractors in the Iraqi theater. I
asked the Deputy Under Secretary of Defense for Logistics and
Materiel Readiness, Jack Bell, to coordinate the Department's
response to these issues.
The Department, as you know, has entered into a memorandum
of agreement with the Department of State governing the
coordination of personal security contractor (PSC) movements,
and defining PSC activities and requirements. DOD has
reinforced the training and certification requirements for
these personnel and reiterated that they operate only in self-
defense under the rules for the use of force.
With the help of Congress, the Defense Department is moving
to enforce the Uniform Code of Military Justice and the
Military Expeditionary Extraterritorial Jurisdiction Act,
MEEJA, to improper actions by contractors. The Department still
has many actions to undertake. Some actions, such as increasing
the experience and skills of contracting officers and
rebuilding the contingency contracting capacity in developing
senior leaders, will require time.
I appreciate the Congress's attention to these issues and I
would ask for your continued support of our efforts. I look
forward to your questions.
[The prepared statement of Secretary Young can be found in
the Appendix on page 37.]
The Chairman. Thank you so much, Secretary Young.
Now, the executive director, Army Contracting Command, Mr.
Jeff Parsons. Mr. Parsons.
STATEMENT OF JEFFREY P. PARSONS, EXECUTIVE DIRECTOR, ARMY
CONTRACTING COMMAND
Mr. Parsons. Thank you, Chairman Skelton.
Representative Hunter, distinguished members of the
Committee on the Armed Services, thank you for this opportunity
to appear before you to discuss the Army's efforts to improve
contracting operations in support of expeditionary operations.
Since our last report to you, and in keeping with the
recommendations of the Gansler Commission, Secretary of the
Army Pete Geren directed the realignment of the Army
Contracting Agency to the Army Materiel Command and the
establishment of a two-star Army Contracting Command within the
Army Materiel Command. We established the organization on March
13 as a provisional organization, pending approval of a concept
plan that will formally authorize and resource this new
command.
As the first executive director of the new Army Contracting
Command, it is my job to oversee and implement improvements to
contracting operations, especially in support of expeditionary
operations. I have a written statement that I respectfully
request be made part of the record for today's hearing.
The Chairman. Without objection.
Mr. Parsons. I would like to take this opportunity to thank
the committee members and committee leadership for your
unwavering support to our men and women in uniform. Mr.
Chairman, as you know, the Secretary of the Army created the
Special Commission on Contracting led by Dr. Jack Gansler to
look at the long-term strategic view of the Army's acquisition
and contracting system in support of expeditionary operations.
The Army Contracting Task Force, which was co-chaired by
Lieutenant General Thompson, the military deputy to the
Assistant Secretary of the Army for Acquisition, Logistics and
Technology, and Ms. Kathryn Condon, the executive director of
the commanding general of the Army Materiel Command, was formed
to review current contracting operations and implement
immediate corrective actions where necessary.
The Gansler Commission's four key recommendations for
improvement are consistent with the Army Contracting Task Force
findings. The Army is making steady progress in addressing the
structural weaknesses and shortcomings identified, and we
continue to work closely with the Office of the Secretary of
Defense and our sister services on the way forward.
It is clear that achieving our objective will require
resources, time and sustained leadership focus. My written
statement outlines the major actions taken to date, which
include accelerating plans to set up the contracting structure
recommended by the commission and increasing the size of the
contracting workforce.
As a result of ongoing operations in Southwest Asia, the
Army has increased its focus on contingency contracting. Up
until two years ago, we did not have a defined structure to
support expeditionary operations or support a modular Army. We
now have established a contingency contracting structure that
consists of contingency contracting support brigades,
contingency contracting battalions, and four-person contingency
contracting teams.
We are beginning to fill with trained military contracting
officers and noncommissioned officers the 4 brigades, 6
battalions, and 121 teams previously established. We will
continue to expand the structure over the next few years by
adding 3 new brigades, 5 battalions and 51 teams. This
structure consists of active-duty personnel, reservists, and
National Guard members.
The critically important issue is the size, structure and
training of the military and civilian contracting workforce.
The acquisition workforce has declined significantly in the
last decade, while the workload and the number of dollars
associated with that workload have increased significantly.
Furthermore, the Army has never fought an extended conflict
that requires such reliance on contractor support deployed with
our forces. We are addressing the need to expand, train,
structure and empower our contracting and non-contracting
personnel to support the full range of military operations.
We are developing a detailed contracting campaign plan to
implement the necessary changes to contracting, incorporating
improvements in doctrine, organization, training, leadership
and materiel. This will require Army, the Office of the
Secretary of Defense (OSD), the Administration and Congress
working together to make the systemic fixes needed for
contracting to be a significant core competency.
This concludes my opening remarks, Mr. Chairman. I look
forward to your questions.
[The prepared statement of Mr. Parsons can be found in the
Appendix on page 51.]
The Chairman. Thank you, Mr. Parsons.
Now, an old friend, Dr. Jack Gansler.
STATEMENT OF DR. JACQUES S. GANSLER, CHAIRMAN, ARMY COMMISSION
ON ARMY ACQUISITION AND PROGRAM MANAGEMENT IN EXPEDITIONARY
OPERATIONS
Dr. Gansler. Thank you, Mr. Chairman.
I would like to very briefly summarize my prepared remarks,
and I would request that the prepared statement be made part of
the record.
The Chairman. Without objection.
Dr. Gansler. Last summer, I was asked by the Secretary of
the Army, Pete Geren, to convene an independent commission to
assess the Army's capability in expeditionary contracting and
program management. I was honored to chair the Commission on
Army Acquisition and Program Management for Expeditionary
Operations. I was joined by five very distinguished
commissioners, people with unique insight and expertise in
government acquisition, including program management and
contracting.
Specifically, the commissioners included General David
Maddox, General Leon Salomon, Rear Admiral David Oliver, and
two very senior experienced Department of Defense civilians,
David Berteau and George Singley. Our charter was forward
looking. We were asked to recommend actions to ensure that the
operational Army and the overall Department of Defense would be
best positioned for future expeditionary operations, operations
which will most likely be joint, multi-agency, political-
military events.
Let me simply highlight for you the three most critical
items requiring action by the Congress. First, increase general
officer billets for the Army and for joint organizations in the
contracting area back to the levels we suggested that existed
in 1990. We believe there are appropriate actions in the other
services as well.
Second, increase the number and the training of government
contracting personnel, military and civilian, including those
required for the increased role that is necessary in the
Defense Contract Management Agency.
And third, increase incentives and awards for the civilian
government contracting personnel who volunteer to go into
dangerous expeditionary operations. These benefits should be
similar to the benefits received by their military and by their
private sector counterparts.
I must emphasize that we found that the DOD has an
extremely dedicated corps of contracting people. The problem is
that they are understaffed, overworked, under-trained, under-
supported, and most important, under-valued. The commission
greatly appreciates the very strong support we have already
received from the Congress, particularly from this committee as
well.
The commission is also heartened by the strong support from
the Department's leadership. Concurrent with the report's
release, the commission briefed both the Secretary of Defense
and the Secretary of the Army. Each indicated full support of
the commission's report. And to ensure forward momentum, both
the Army and the Office of the Secretary of Defense have
established task forces for implementation. The Office of the
Secretary of Defense task force includes the other services and
relevant agencies.
These task forces are coordinated with each other and with
the stakeholders, including the commission. We were briefed by
the Army in January and expect another briefing in a few weeks.
I personally met with the OSD leadership approximately once a
month. The Army and OSD are working together to develop a
scorecard to ensure changes have an enduring impact on
expeditionary operations.
This scorecard will be used to continuously monitor and
measure the improvements undertaken in response to the
commission's recommendations. They have kept the commission
apprised of progress and frequently solicit our feedback on
implementation activities.
During these progress reviews, the commission has heard of
some very noteworthy implementation actions already. For
example, OSD has published an important tool, a joint handbook
for contingency contracting, which didn't exist previously.
Also, the Army has restructured its contracting organization
per the commission recommendations.
The commissioners were delighted to participate in the
February, 2008 ceremony to, I must point out provisionally,
stand up the new Army Contracting Command. During our
interactions with the Army and with OSD, we have heard that in
all cases they are aiming to implement the intent of all the
commission's recommendations. We look forward to working with
them to ensure full and successful implementation.
In closing, as the Secretary of Defense noted in his
response to our report, the problems the commission identified
are not just confined to the U.S. Army. Many have been
identified across the DOD, and in fact more broadly across the
government. Independently, each of these problems is a daunting
challenge. Together, they demand a significant cultural,
structural and policy overhaul of the kind that requires a
specific focus by senior leadership.
It is heartening that our commission's report has received
as much positive attention as it has from the Congress, the
Army and the Defense Department. We believe this issue is
critical to America's future security, particularly to our
warfighters, but also to our taxpayers. It deserves priority
attention.
Thank you.
[The prepared statement of Dr. Gansler can be found in the
Appendix on page 66.]
The Chairman. Dr. Gansler, thank you so much.
Secretary Young, let me ask you, if I may, the
understanding that the Secretary's required reports will not be
due until the end of May, which is in all probability past the
markup time here in our committee. Can you tell us if you
believe that any statutory relief is required in order to fully
implement the fixes that are identified in the Gansler
Commission report? In particular, do you believe that such
relief is required in the area of assigning sufficient general
officers to such contracting? That would be helpful.
Secretary Young. We are taking a couple of steps. First and
foremost, I would tell you activities in the Department require
funding. The supplemental will include funds that lets the
Defense Contract Management Agency hire additional people to
immediately support operations, so the supplemental is critical
to the Department in many ways. One small way is DCMA and its
ability to add support as the commission called for in-theater.
Beyond that, the commission, as you know, made a number of
legislative proposals. The Department is reviewing each of
those and has indeed drafted potential legislative proposals
that are being considered in the Federal Government for
communication to the Congress. Some of those I think are
obvious and what you would expect, and that is when we have a
protest environment, we need expedited procedures to resolve
protests so we can move forward.
We need relief in some areas, we believe, to assure
contracting officers have the authority to buy goods and
services in the country where the contingency operations are
occurring. In some cases, consistent with my comment about
DCMA, we need expedited hiring authority where we have
shortages of skills in particular places.
And then with regard to civilians who volunteer and go to
serve in these positions in-theater, there are commission
recommendations that I think have merit with regard to letting
them adjust their life insurance through the federal life
insurance program, and possibly expanding on what the committee
has already given us some relief on, and that is an annual pay
cap so that they can be paid for the work they do.
The Chairman. It would help if you could get your
recommendations to us I would hope before May 1. I know that is
pushing a bit, but that would certainly help.
Mr. Hunter.
Mr. Hunter. Thank you, Mr. Chairman.
Again, thank you, gentlemen.
Dr. Gansler, I am looking at the recommendations here. I
think it is page 52 of the establishing an expeditionary
contingency contracting command. It looks like a Xerox of what
the committee wrote in 2005, does it not?
Dr. Gansler. It certainly has the same intent, congressman.
Mr. Hunter. What do you think, in your estimation, you
know, one reason we put this thing in was not just to ensure
the integrity of the system. Again, as you know, you have had
the briefings on what occurred in Kuwait. There is no
substitute for honesty. You can't reform a dishonest system
with more effective overlays and boxes and a change of command.
There is no substitute for an honest officer and in some cases
we did not have that.
But one reason that we put this section in and voted it out
of this committee was to ensure also that we respond to
combatant commanders for things that they need, which developed
as a result of looking at the warfighting theaters in Iraq and
Afghanistan and understanding that in many cases you had two
U.S. Marine Corps and you had two U.S. Armies. You had the
operators who were in-theater and who were out there in the
battlefield everyday trying to win the war. And then you had
the storekeepers, if you will, the producers of systems who
have their own kingdom, their own issues, somewhat removed and
disconnected from the battlefield commanders.
When we would go over on congressional delegations (CODELs)
and we would say, what do you need, and we would see basic
things that people needed, and we would get back here and we
would review what had been the reaction and the response from
the bureaucracy to the warfighters. It was in many cases a
pretty tepid and a slow response. So the idea was we were going
to hook things up.
We were going to have a Contingency Contracting Corps which
worked quickly and under the direction of the combatant
commanders in the theater. So when the combatant commander in
the theater would say, I need more armor up here to protect my
guys from being killed and having their legs blown off from
roadside mines, he got reaction from the bureaucracy that was
in the continental United States (CONUS).
That is why we put this language in, providing for the
Contingency Contracting Corps. So I would hope that as we move
this thing forward, that we move it forward with an eye not
just to have a reform of these ethical lapses that we have
had--and you really can't reform ethical lapses with structure;
you have to reform it with people who will be honest--but that
we would also look to the need to get equipment quickly to the
battlefield.
That is really the idea that you would have in some cases a
colonel in the combatant commands beseeching a two- or three-
star general back here in CONUS in the bureaucracy to get a
piece of equipment. And the response is often very lukewarm and
not a response that really did justice to the warfighters. That
is one reason we put this thing in here.
Did you look at that dimension--the idea of moving
equipment quickly into the warfighter's hands, not just the
ethical problems that we have seen in-theater?
Dr. Gansler. Yes, Congressman. Let me definitely comment on
that because that is a major issue--the response time. I would
also highlight the fact that when we think about contracting,
we need to think much more than just the person who writes the
contract. This is the requirements process. You know, if a
general says, I want this, has he defined it adequately in
order to be able to buy it.
It also involves the program management. After the contract
is signed, the management of it was very weak over there and
that was part of the problem that caused some of the fraud and
abuse, because people weren't monitoring the contract after
they were awarded.
But I strongly agree with you about the importance of the
military leadership in this environment, this expeditionary
environment, where people are literally shooting.
And that is why we do need these general officers for this
expeditionary operation, who have the experience and who can be
listened to by the top commanders. It is the combat commanders
who aren't appreciating fully the value of the fact that more
than half of their force are actually contractors and these
people need to be a part of the culture, in effect, recognized
as they go through their leadership training that they are
going to be facing this in the future.
This is the typical environment we are going to have in the
future, and that people need to be trained for that, and you
need military leadership over there to do it. But you also need
it as part of the overall institutional Army.
And that is the reason we argued so strongly for the
general officers and for the joint operations.
As you pointed out, properly, this is going to be a joint
activity. And since the command of this needs to be a joint
command, the other services are going to have to step up to it.
Defense Contract Management Agency also used to have, in
1994, general officers. They have none now, either. The Army
had five general officers in 1990, they have zero now with a
contracting background.
This is what we want to fill that gap back in. The number
of contracts, the number of actions. Certainly in an
expeditionary operation, the difficulty, as you point out, the
need for expeditious treatment, and the fact that it is an
environment in which they need rapid response when they are
being shot at.
That requires you to have people who are trained and
experienced, not only in writing contracts, but in managing
those contracts, you know.
Mr. Hunter. Let me ask this question: When you have a
warfighting environment, as you have in Iraq and Afghanistan,
do you feel that there is a place for the combatant commander
to be able to command the delivery of a system into the
theater, rather than ask for it?
Dr. Gansler. Well, in fact----
Mr. Hunter. In other words, to command the development of a
system?
Dr. Gansler. One of the problems we have now is the lack of
clarity in the chain of command for contractors. Do they report
back through Rock Island? Do they report through someone out in
the field who can actually say, ``I need that now''?
Now, they can't say I need it now to violate the law. It
has to be within the laws. But they need fast response, and
they need people who are skilled and experienced in getting
this.
And most of the time, by the way, this is services, not
even equipment, so----
Mr. Hunter. How about if you have a difference in judgment?
Let's say you have a combatant commander, let's say you are
General Petraeus, in-theater. Would you say I need a certain
type of jammer immediately. And I have looked at them. Let's
say he says I have looked at this thing that the Brits have or
that the Israelis have, or something that has been developed by
this company. And I have looked at it and I have looked at this
performance. That is what I need. I want them.
Should he be able to command the production of that system
into his command, or should he simply be able to make a request
that will be, then, evaluated and ruled on by a requirements
counsel in CONUS, in the bureaucracy? What do you think?
Dr. Gansler. Well, I think, first of all, he needs to do
this through his organization. There are some legal people who
are chartered to sign the contracts.
But I personally believe that he should have the ability
for those fast responses, in an environment of wartime, to be
able to not have to go back into the chain of command, not have
to go through the regular requirements process or the budget
process or the congressional approval process. He needs to be
able to get that fast response. That is the reason most of the
federal acquisition regulations have a little asterisk. It says
in wartime, you can take some exceptions. That is what John
Young just pointed out. They now have a manual that points out
to train people.
Mr. Hunter [continuing]. By this company. I have looked at
it, and I have looked at this from the bureaucracy. What do you
think?
Dr. Gansler. Oh, I think in an environment of wartime to be
able to not have to go back into the chain of command, not have
to go through the regular requirements process or the budget
process or the congressional approval process. He needs to be
able to get that fast response. That is the reason most of the
federal acquisition regulations have a little asterisk. It says
in wartime, you can take some exceptions. That is what John
Young just pointed out. They now have a manual that points out
to train people.
Mr. Hunter. Well, we have a manual that we gave you guys.
It is one page and it is a law, and the law says this. And we
wrote this thing several years ago to get the first portable
jammer that we had ever had into theater. It is one page. It
says the Secretary of Defense (SecDef) can say if he can
certify that he is taking casualties on the battlefield and he
needs a certain piece of equipment that will allay those
casualties, he can order the production of that system and
waive every acquisition regulation on the books in doing it.
And he signs his name at the bottom of the page.
He has only done that twice. He did that with our jammer
that this committee mandated, and we did that because there was
no portable jammer for our dismounted troops. All these
jammers, as you know, are pretty heavy. So we mandated and then
put in money for the first 10,000--the first portable jammers
we have ever had. We got them researched and developed (R&D'd),
produced and delivered to the field in 70 days. But DOD has
never used that particular provision since.
My question is a threshold, important question for us to
decide. Should a combatant commander who is fighting a war be
able to command the production system to give him something? Or
should he simply be in a position to request it and have his
request ruled on by the bureaucracy in the states? That is a
threshold question we are going to have to decide.
We are entrusting these guys with the lives of our troops
and making momentous decisions. I think that was manifest in
the last couple of days with General Petraeus's testimony.
Should a General Petraeus be able to command the production of
an article and to have the system back here serve that
production command? Or should they be autonomous in their own
right and be able to rule on whether or not General Petraeus's
request is a valid one, a reasonable one, and give what they
think the requirement bodies here feel should be produced?
Where do you come down on that basic decision?
Dr. Gansler. I think there should be standby legislation
for the next expeditionary operation, as well as the current
one, that allows them to do that. As you suggested, it may even
be a foreign product that they have to buy. They could go
through some of the other provisions. I think that they need to
have the ability to get what they need when they need it, as
long as it is within the law. So therefore, if there are any
laws that prohibit them from doing it, those have to be in
standby provision waived.
Mr. Hunter. Okay. But you think the combatant commander
should be able to command the production of an item?
Dr. Gansler. Yes.
Mr. Hunter. Okay. Thank you.
Thank you, Mr. Chairman.
The Chairman. I thank the gentleman.
Mr. Ortiz.
Mr. Ortiz. Thank you, Mr. Chairman.
I thank the witnesses for joining us today.
Dr. Parsons, Dr. Gansler's November, 2007 report
identified, ``the Army acquisition workforce is not adequately
staffed, trained, structured or empowered to meet the needs of
the 21st century deployed warfighters,'' based on the fact that
only 56 percent of the military officers and 53 percent of the
civilians in the contracting career field are being certified
for their current positions. I think what we have done in the
past years is that we overwhelmed the system.
I can remember when I first came back in the 1980's and
1990's, when I came to Congress, it appeared that every
military facility and even depots had a yard sale. You know, A-
76 came in, and look what we have inside the depots. We will
contract it out. But nothing was being done on the outside to
bring jobs into the depots.
Now, I am a firm believer that contracting out, when it
makes sense, it is good. But I think what we have done is that
we have completely overwhelmed the system to where there is no
accountability. All you have to do is go back and look at what
is happening now.
But I appreciate what you all are doing. This is a good
beginning, but I think that the system that we have in place is
totally overwhelmed. By Dr. Gansler's report, we need to corral
and bring it back to where we have a balance, and to where we
do justice to the taxpayers.
What is the Army's plan--and I know, Mr. Parsons, that you
touched on it--to address the current challenge to increase the
workforce expertise in acquisition, technology and logistic
programs? And how long do you think it will take to accomplish
this plan? At the same time, what is the plan to provide short-
term oversight and protection for the taxpayers? I think this
is very serious, but I am glad that something is being done
now.
Mr. Parsons. Congressman, we have been very active in
increasing our training and preparation of our acquisition
workforce, not just contracting, but across the board.
Lieutenant General Thompson, who is the military deputy to the
Army acquisition executive, is in charge of overseeing the
acquisition corps and making sure they are trained.
Your point on their certification levels has been something
that he has been focused on tremendously. He has issued
guidance out to all the commanders to ensure that we are
getting our acquisition workforce properly trained,
specifically for the jobs that they are in.
The plan that we have put together to put together this
Army Contracting Command really is a three-year plan that is
going to require us to hire some additional people and bring on
new military members. It is a very aggressive plan. We have
training plans put in place to get them trained as quickly as
we can. To be honest with you, part of that is they have to
have the experience. You can send people to classrooms, but we
have to get them into the workforce where they are actually
doing the day-to-day contracting to get prepared for the
future.
In regard to your remarks about the outsourcing, one of the
other things the Army is doing right now is taking a very hard
look through a total Army analysis on what portion of our work
should be accomplished by soldiers; which could be accomplished
by Department of Army civilians; and which should be done by
contractors. So your point is a good one. The Army is taking a
hard look at that as well.
Mr. Ortiz. I know that today we are focusing on a small
area, but what really concerns me is that when you have 140,000
troops fighting a war, but you have 200,000 contractors. I
think that we need to do something to correct this. I know that
we are paying out a lot of money, and maybe at the time it
needs to be done. I am not pointing fingers at anybody. But I
just can't imagine having 200,000 contractors out there and
only 140,000 troops.
But that is a subject for another day. I just want to thank
you for being with us today, and I appreciate your help.
I yield back my time.
Mr. Parsons. Thank you.
The Chairman. Thank you.
Mr. Bartlett.
Mr. Bartlett. Thank you very much.
There are two general contracting modes, and I am going to
grossly oversimplify them for this discussion, that can be used
in contracting. I have two questions relevant to that. Which
one of these do we use and where? And have we done definitive
studies to determine the efficacy of these two different modes
of contracting?
One is to determine what you need, the performance
characteristics of the platform you need. And then to design
something which will provide you that performance, to then let
the contract, and then to assign a number of people to watch
every detail of the manufacturing process to make sure that
they are doing it right.
The other mode of contracting is to determine what you
would like your platform to do, to very carefully define the
performance characteristics, and then to accept delivery of
that after it meets these performance requirements.
As an example, I understand that the Israelis can buy a
fighter plane much cheaper than we buy the fighter plane
because we buy the fighter plane after it has been produced on
an assembly line where we have a lot of people looking over the
shoulders of those making it. That slows down the process and
we pay twice for that. We pay the people looking over the
shoulder and we pay the increased time it takes to build the
plane because they are looking over the shoulder. The Israelis
simply buy the plane if it flies.
Now, which of these contracting modes do we use and where?
And have we done definitive studies to determine which of these
modes is the more efficacious?
Secretary Young. I guess that is my question. I am not sure
either of those modes are black and white. I think people would
characterize some of the comments you made about the first
mode, to some of the older practices, there was a time, as
Secretary Gates pointed out, when we had 24,000 people in the
Defense Contract Management Agency. I don't know, but certainly
then we had more people to go and monitor the production
process and monitor contracts.
Today, they are at 9,000, and we are pulling people out of
any of those monitoring jobs where possible to send them to
Iraq to work on contingency contracting oversight. So I can't
tell you that we are in that latter model. We do try to do
adequate oversight. I would tell you many of the recent reports
from U.S. Government Accountability Office (GAO) and other
people characterize our oversight as deficient at this point in
time. But we are doing what we think is responsible and what
the Congress has asked us to do in monitoring the performance
of contractors and asking them to meet specifications.
Mr. Bartlett. Sometimes the size of our bureaucracy reminds
me of a complaint that our founding fathers had against King
George. I have no idea what he did, but their complaint was
that he had established a multitude of new offices and sent
hither swarms of officers to harass our people and eat out
their substance. I thought that was a great definition of our
regulatory agencies, and reasonably described the over-
assignment of people to monitor what is going on.
Have we done definitive studies to determine which of these
modes are more efficacious? And if we haven't, shouldn't we?
Because these are two distinctly different modes. You are
saying we have kind of an amalgamation now sometimes, but these
are two distinctly different modes of procurement, two totally
different philosophies. Which of these is the more efficacious
philosophy?
Secretary Young. There probably are definitive studies. I
mean, things like performance-based logistics and performance-
based contracting tend to resemble this latter model, where we
set a standard and ask people to deliver to that. But I could
cite for you examples where we have done that, and we now have
issues where the Congress has cited and it has been reported
and it is being investigated, where people didn't perform to
those specifications.
I don't think the government is prepared to accept limited
to no oversight over the process. The real question I think you
are rightly asking is what is the right balance of oversight to
get efficiency.
Mr. Bartlett. How do we get there? Is it trial and error?
Is there a program or procedure for getting there?
Secretary Young. I think we are maturing and have a ways to
go in looking through a lot of efforts of our training
processes and deciding essentially what is the right size of a
program office, what are the minimum functions they need, what
skills do those people have to have. We are working very hard
on determining the competency required in our acquisition
workforce. I think that takes us several steps toward what you
are talking about.
Mr. Bartlett. Thank you very much, Mr. Chairman.
The Chairman. Dr. Snyder.
Dr. Snyder. Thank you, Mr. Chairman.
Dr. Gansler, I wanted to ask you--Mr. Hunter has obviously
spent a lot of time working to understand these issues and has
talked for some years now about the shoppers. I think that is a
generic term for anyone involved in contractors. There is no
military occupational specialty (MOS) for a shopper. I assume
that most of the people we are talking about were formerly
called the contracting office technical representative.
I need to be sure if we are talking about the same thing.
Your report uses the word ``understaffed'' several times. You
talk about the need for additional people. Are you and Mr.
Hunter in conflict on this point? Is he saying we don't need
more and you are saying we do need more?
Dr. Gansler. I think we are probably using a different
definition in the sense that the person who writes the contract
is just one piece of a very extended process associated with
contracting. I would argue that the program management people,
for example, are not really shoppers. They are in a sense an
oversight function, but a management function, really. I would
argue that the people who end up testing the equipment--are
they shoppers?
And the people most important--and this is what we were
talking about earlier--the people who write the requirements,
the combatant commanders. They are very much involved in the
acquisition process. I wouldn't call them shoppers. They are
people with the need.
So I think there is a different definition of the total
scope. For example, the Defense Contract Management Agency
people that John Young just talked about, those people are the
ones who monitor the program after the contract is written.
They try to check the performance. Now, they do some of that in
the factory, but the biggest problem in Iraq and Afghanistan
has been buying services, not buying products. They need
somebody who can monitor those contracts afterwards.
In fact, one of the problems we found in Iraq and Kuwait
was that there were no people there to close out contracts.
That is a perfect invitation to fraud and abuse, if you can't
close out. So there needed to be some people doing that. There
were no people there who were doing pricing. A contractor said
it was going to cost X. Okay, it is going to cost X. We need
some government people who can say, no, X isn't what it should
be. It should be X minus Y.
So there is a whole spectrum here associated with the
overall contracting process that I think we feel there were
clearly inadequate numbers. But much more important was the
training in terms of expeditionary operations--what you can do
and can't do in an environment of an expeditionary operation.
As Congressman Hunter pointed out, the combatant commander
needs to be able to say, I need this, and I want to know how to
expedite that process; I don't want to hold six months of
writing the request; I don't want to hold six months for the
competition.
Dr. Snyder. Let me ask, in your study, you talked about
staffing, the training, the needs in an expeditionary
situation. Did you run into any situations or did your study
encompass or discover any kind of coziness in the arrangements
between the watchdogs and the people that are contracting with
the government? Or did you not delve into that kind of thing?
Dr. Gansler. No, we didn't find that at all. In fact, what
we found was an inadequate number of the oversight program
management people, and inadequately trained. They would walk up
and say, you are now a contract monitor. They would say, well,
what is that? That is not a proper training for those jobs, but
there weren't enough people doing that, so they had to have
somebody who was going to do it.
Dr. Snyder. Mr. Parsons, maybe you are the person to ask. I
want you to pretend that I am a builder and I am overseas right
now in Kuwait or Iraq--say, in Iraq. We have an incident in
which a mess hall and a water system is destroyed, and we need
to get it back up right away. And you want to use an
undefinitized contract action to get that thing moving.
Walk me through as somebody who may not have done one of
those before. What is the process by which you are going to
give me assurances that we are going to get this thing moving
and built, and then how does it play on out from there?
Mr. Parsons. To issue an undefinitized contract action?
Dr. Snyder. Yes.
Mr. Parsons. Sir, if there is an urgent need and there is
money available, the contracting officers are trained to react
to that as quickly as possible. They can either use an existing
contract to place an order against. If there is not an existing
contract, they can issue a letter contract. They have expedited
procedures to do that, especially in a contingency environment
today.
Dr. Snyder. So as the builder, what will I get from this
person?
Mr. Parsons. What do you get for the purchase?
Dr. Snyder. Yes, what will I get from this person? You are
going to give me something. I assume you are going to give me
something within 12 hours of the mess hall going down. You need
the mess hall put back up. What will I get to get me going?
Mr. Parsons. Sir, I guess I am not really following.
Dr. Snyder. Well, you are not going to have time. I assume
by the nature of these is you are not going to have time to lay
out a 50-page contract describing this, with specs and
everything. What am I going to get to get me going? I assume
you are going to give me some kind of letter. That is the
nature of undefinitized contract action, is it not? What are
you going to give me?
Mr. Parsons. Sir, I would say that for the situation you
are describing today, we have existing contracts for those
dining halls, so it is a matter of just giving direction to the
contractor to come in and effect the repairs and put in place
whatever equipment may have been destroyed or hurt. And then
issuing a change order or a direction to change the contract,
they can act on that instantly and place money against it
instantly, and then the contractor provides the----
Dr. Snyder. I am out of time now, but you are using
undefinitized contract actions (UCAs) in Iraq and Afghanistan,
are you not?
Mr. Parsons. Yes.
Dr. Snyder. Yes. Well, we didn't get to how that was going
to be.
Okay. Thank you.
The Chairman. Thank you.
Mr. Jones from North Carolina.
Mr. Jones. Mr. Chairman, thank you very much.
Gentlemen, thank you for being here today.
Secretary Young, I am going to write a letter to you
regarding the Small Arms Program with the United States Army
and the future of the program, and also the M4 carbine, what
the future looks like for that weapon. So I am going to put
that in writing to you and your staff, if you don't mind,
instead of asking you those questions.
I want to go to the point that some of my colleagues have
picked up. I will never forget as long as I live, in 2005 I was
visiting Camp Lejeune, which is in my district. I don't
remember, it might have been a sergeant major or master
sergeant, whatever. They were showing me the new sports bar at
Camp Lejeune, and we were there about five o'clock, and we were
chatting at one of the stand-up bars. He had been to Iraq
twice. He said to me, will we ever know how much money
Halliburton has made off this war? That was three and a half
years ago, and I still remember it like I can see him today as
I am looking at you.
That goes to this point. I think what you gentlemen are
bringing to the Congress today, and my many friends here on
this dais who have been here longer than I in leadership, this
to me is absolutely so critical not only to the warfighter, but
to the taxpayer. You will never be perfect in contracts or in
oversight, but the fact is that we do a better job, and that
enhances the warfighter, but also helps the taxpayer.
One thing that Ms. Boyda said, and I am sorry she left, but
she asked last week that doesn't specifically speak to your
report, but I want to know if this came up in the discussion.
She asked Mr. Bell a question about the mine resistant ambush
protected (MRAP) vehicle, with the progress. He said, well, it
is moving forward, and he said we have a little problem there
and we have to buy a certain type of steel from a foreign
country.
That is not your fault, but the fact is as we discuss how
we are going to make contracting more efficient, and this
country becomes more and more dependent on foreign governments
to make equipment, possibly one day to make weapons. I don't
know. Maybe they are doing that now. But this is interrelated
to what you are recommending.
Is there a concern from people at your level, and maybe you
can do nothing about the economy of this country, and I know
you can't, but the point is as we continue to become more and
more of a service nation and the fact that certain types of
steel has to be bought from foreign countries to help complete
the MRAP vehicle, is a great concern to me as a citizen.
Does this indirectly--it is an issue that will be before
the United States Army, the Department of Defense? Indirectly,
it will relate to the contract because if they have to
negotiate, or someone above them negotiate it, to buy products
from foreign countries.
Secretary Young. MRAP is a pretty special case, but it is a
very good illustration of that in that we now have a fairly
complex body of legislation. So some of the people don't get to
manage programs right now. They have to find their way through
all the rules, regulations and statutory limitations on trying
to buy products. MRAP ran into exactly that. Luckily, within
that maze, there was a waiver that let us buy some foreign
steel.
As you know, MRAP has put a steel capacity demand on this
nation that is unprecedented and that is going to go away in
about six more months. So then you end up with another
question, and that is, do we maintain that level of capacity
and potentially not use it? And what will the taxpayer pay for
that? That is another hard question.
In the alternative, another question that I feel enormous
pressure from the Congress and my own enterprise, is to control
the cost of weapons systems. There is no question that in many
places, there is a premium for doing business where the
business volume is small and companies don't want to go into
that business space. So we try very hard to use U.S. companies.
In some places, though, there are commodity products in our
weapons systems that U.S. suppliers don't want to be in that
business. So I can either pay them a lot to be in that
business, increase the cost of weapons, and then I have a lot
of questions about the cost of weapons. Or I rely on worldwide
availability of some commodities.
So you have asked a very good question with a lot of
different dimensions to it. The next piece of that answer is
yes. As director of defense research and engineering (DDR&E), I
tried to understand and update our critical technologies list
so we at least understood what technologies were critical to
this Nation and to our weapons systems, and we could make sure
we had access, if not U.S. capability, in those critical
technology areas. I think we require continued vigilance in
that space.
Mr. Jones. Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Jones.
I think we have time for Ms. Davis to make inquiry, and
then we will break. We have a total of three votes--a 15-minute
vote and two 5-minute votes.
Mrs. Davis.
Mrs. Davis of California. Thank you, Mr. Chairman.
Thank you to all of you for being here.
I wonder if you could expand somewhat on the value culture,
because basically in your remarks you say that none of this is
going to work if we don't address that systemically. As I read
it quickly, really you are referring to at least five billets,
I think, within the Defense Management Agency. Can you give me
more of a sense of that? Because what I am trying to understand
is what are the obstacles to doing that? If we grab hold of
that, what else do you have to clear away in order to have that
kind of a culture change? Is it just having the billets there?
How does that work?
And if I might just follow up with a totally different
question. When I was in Iraq, I happened to sit with a colonel
who was working on a water project in the Green Zone. He was
furious about the way the contract had been let and the lack of
use of local contractors, the dollars that had been wasted and
literally thrown away in the Green Zone over that project. How
does this solve his problem there? Is it related and how do we
get at that?
Dr. Gansler. Ultimately, it involves smart people who are
buyers and managing their contracts and so forth. But it
clearly does come down to the people and their stature and
their value. That is where the culture part comes in. If the
culture says that everyone in uniform must be somebody who is a
tank commander, a fighter pilot, or ship-driver, rather than
some people in senior positions in the military also taking
care of things like contracting, then you have a real problem
because it is not respected and it is not listened to. When you
get into an environment in which you really need something
badly, the people aren't there to do that job.
So these are people who are senior people in the military.
That is the general officers we asked for. It is also some of
the noncommissioned people who are trained in this field, and
it is all the way up. It is a career path question in terms of
culture. If there are no general officers, why, as a major,
would you want to go into that career? You want to have a place
you can get promoted to. So there is a culture that holds you
back.
On the civilian side, these are all volunteers. If you
don't get any benefits or rewards for going overseas and
getting shot at, why would you want to do that when you can
stay home with your family? So that is a challenge as well.
Mrs. Davis of California. Is there a different financial
incentive that you are talking about? Clearly, it hasn't been
valued, so that there has been no reason for people to do that.
But on the other hand, is there something else, something more
insidious that is at play that makes it difficult for people
even to want to make that decision if the career path was
there?
Dr. Gansler. In the sense of the civilians, I think it does
require some additional financial incentives because they see
that their military counterparts and their contractor
counterparts are getting benefits and they are not. In
addition, at home their current boss says, we need you here;
you can't go. Unless there are enough people to be able to fill
those gaps, you will have no one back home doing the
contracting work that should be done.
So there again needs to be a look at the total needs
between expeditionary and at home. I think in general, the
recognition of the problem which is now what we have because of
all the fraud and other things, now should get people's
attention to the cultural change.
Fortunately, Secretary Geren has really placed a lot of
emphasis on this now, and I think that Secretary Gates is
placing emphasis on it. That is necessary, but not sufficient.
The senior people in uniform also have to place emphasis on it.
It has to be part of their training, part of their cultural
indoctrination. That includes the recognition of the importance
of these civilians who are taking part in this activity.
Mrs. Davis of California. You looked at the Army, but we
are assuming this is DOD-wide. These are all the services. What
in the way of jointness needs to happen so that this is spread
throughout? Does every service need to take its own look at
this issue? Or is it something that you think can actually take
hold because one service perhaps is going to show the best
practices and then the rest will follow suit?
Dr. Gansler. We think it follows for the other services as
well. We have heard that there are similar problems, but we
didn't investigate those in depth. But clearly, the activities
in the future will be joint, not only joint between various
parts of the DOD, but joint with the State Department which has
to be worked out as well.
Mrs. Davis of California. Right. Interagency reform.
Dr. Gansler. Interagency is going to clearly be a major
issue for the cultural change as well.
Mrs. Davis of California. Right. Thank you for your work.
Secretary Young. Mr. Chairman, if I had a chance maybe when
we come back, I would like to expand on that.
The Chairman. We have a moment right now. Go ahead.
Secretary Young. Okay. As someone who has been in the
building several years, I want to amplify what Jack said. You
have to have senior flag officer positions to which people can
aspire to and be promoted to and pursue those as career paths
if you want to get people. Right now, the Army doesn't have
contracting people at junior levels because there is no flag
officer level to aspire to in the Army.
The Congress has laws about promotion rates in the
acquisition workforce. You talk about the number of flag
officers, but these issues are really one at a time.
Incrementally, I have frequently seen us not promote one less
acquisition person and one more line officer. And then I find
myself being asked by the chiefs of the services to take line
officers to run acquisition programs in areas where they don't
have the skills for it.
Furthermore, those choices to take away those contracting
billets and apply them into line officer functions creates more
pressure not to promote contracting officers because now the
demand is promote another line officer to fill that job, which
is a job I just created by stealing the contracting billet.
We have to restore those billets. The service chiefs are
going to have to acknowledge the need for these contracting
skills, acknowledge the need for these contracting billets, and
acknowledge the need to promote people in these positions.
Mrs. Davis of California. I appreciate that.
Can I just ask a quick question. I think what the public
would get from some of this is that somewhere along the line,
people are making a whole lot more money within their contracts
because somehow there is not the oversight that has been built
into what I would think would be the officer corps. Is that--?
Dr. Gansler. I personally don't think that is the issue.
Mrs. Davis of California. Okay.
Dr. Gansler. I think it is the warfighter is not getting
what he needs. That is what is really critical. That is the
perspective here. The contractors are trying to do their job
under the contract and the government needs to supervise that.
But the real problem is I really believe the warfighter has to
be satisfied in their needs.
The Chairman. Thank you.
Mr. Young, let me ask you, are you recommending flag
officer billets in addition to what we have?
Secretary Young. I am not prepared to, and I don't think I
have the authority to do that, sir.
The Chairman. No, I am asking you on a personal and
professional level. You have the authority to answer my
question.
Secretary Young. There is no question we need to restore
the joint billets. For two years now, we have needed a military
officer to be the head of the Defense Contract Management
Agency and haven't been able to get a qualified nominee. The
services have to have promotion change, and then they have to
have some robustness in that so that I can fill joint flag
officer billets. I believe some of the billets that have been
taken out of these positions need to be restored. If we cannot
accomplish that, then we will have to put new flag officer
billets into these positions.
The Chairman. That answered the question. Thank you.
We have three votes. We shall return and we appreciate your
patience. Thank you.
[Recess.]
The Chairman. We have Mr. Johnson, Mr. Ellsworth when we
come back, and hopefully we will have others join us.
Mr. Johnson is next on the list.
Mr. Johnson.
Mr. Johnson. Thank you, Mr. Chairman.
I was just wondering if there is any--I mean, there has
been a suggestion that the ability to authorize and appropriate
expenditures should be shifted from Congress to a field
commander. Is that a fair assessment of what we have been
talking about this morning?
The Chairman. Excuse me. May I make a suggestion? Would you
get just a little closer to the microphone?
Mr. Johnson. All right. Thank you.
The Chairman. Thank you.
Mr. Johnson. It just seems to me that that could be a
constitutional issue. I don't know if anybody is prepared to
answer that.
Dr. Gansler. When I answered Congressman Hunter about the
authority of the combatant commander to make a decision that he
needed something, it was certainly intended that that be within
the dollars available. Secretary Young pointed out, unless for
example it was in the supplemental and those dollars were
needed, then as long as the dollars were available, then you
could go get something that the combatant commander badly
needs.
On the other hand, he needs to be able to say, I need this,
rather than, I would like to have it and I wish I had the
money. The money has to be there. You don't want to change that
responsibility. But within the dollars available, then the
combatant commanders need to be able to get what they need when
they need it. They can do that through the acquisition
capability of their organization. They don't do it themselves.
They don't go out and buy something on the shelf like we might
do at the supermarket. They say, I need a tent city or I need
meals, or whatever, and then they go through their acquisition
authorities, and with the dollars available, that was what we
are talking about.
Mr. Johnson. So you are not advocating a change in the law
in that regard?
Dr. Gansler. No.
Mr. Johnson. Okay.
Secretary Young. No, I am not. I would make clear, though
that being able to do things is extremely contingent on the
availability of funds to do it. In fact, in some places the
Congress has helped. We could not have built MRAPs, for
example, without extraordinary actions on the part of the
Congress.
Another piece of this, though, is when we build our budget,
it is a cumbersome process, and then we come and defend it
before the Congress. So a lot of people do a lot of good work
to build a budget that delivers a broad spectrum of capability
for the Nation through the Defense Department. Those people
rightly hold those dollars because it is their chance to
deliver a high mobility multipurpose wheeled vehicle (HUMVEE)
or their chance to deliver a ship.
When new requirements emerge, it is not as simple. As I
tell people, every dollar in the Defense Department comes to a
zip code. Going back and getting that mail, getting that dollar
back to go do something that is very urgent in the field is
tougher than it sounds. That is why it is critical where the
Congress provides us some flexibility in funding that lets us
respond to combatant commander demands, to be able to have
those funds to do that.
Dr. Gansler. To answer your point, the Congress officially
authorized during the Balkans environment that there be a
standby fund to be able to address exactly your problem. The
Congress has also authorized that for USAID. They have not
authorized that in the DOD activities even in Iraq today. As a
result, there are significant inefficiencies associated with
the flow of money. So there are some financial issues. I
covered that in my statement.
Mr. Johnson. And once we are able to politically be more
expedient in terms of the money, we still need the
transformation of the Army's culture toward contracting to
change. And we need a major systematic change in the way that
the Army organizes, trains and equips for contracting.
How will the Army ensure that changes currently being
considered achieve this sort of comprehensive cultural shift,
rather than just resulting in a reversion to the norm when
attention shifts from this issue?
Mr. Parsons. I will go ahead and address that, congressman.
One of the things that we have done, and it gets to the
point that Dr. Gansler made about making a career path for
people who want to come into contracting in the military and
have the ability to accelerate and get promoted, is we have now
developed this structure that will allow us to bring officers
and NCOs in at the five- or six-year point and give them a very
deliberate career path.
For the officers, that could be leading a contingency
contracting team. They could move up then to be a battalion
commander or eventually a brigade commander. One of the
commands that is now going to be part of the Army Contracting
Command is a one-star expeditionary contracting command. So
part of change in the culture of getting people who want to be
professionals in the contracting career field is to provide
that type of a career path.
The other thing that we are doing, too, gets to another
point of the Gansler Commission report, is we need to make sure
that the operational Army understands contracting. So we have
expanded the amount of training that we are giving to non-
acquisition-type people. So all new two-star general officers
now have a block of construction on contracting and contractor
management. We are starting to do that at the senior service
colleges and the intermediate-level of education as well.
So those are some of the things that we are doing in the
Army to try to change the culture so that people recognize the
importance of contracting and contractor management, and also
have a desire to be in this career field.
Secretary Young. I would just add, I think your point is
exactly right. It will require the leadership level. It can be
worked from those levels and you do have to have a promotion
path that brings people into that career field and trains them.
For example, to the chairman's question, additional flag
billets actually rewards the bad behavior where the Army took
five contracting positions and put them somewhere else in the
Army. Over time, that erosion cannot happen again.
If the Congress decides to give them five additional flags,
the leadership from here forward--and there is no question in
the current leadership with Secretary Geren has this view--but
ensuing leadership has to keep those flag positions in place
and not decide to go to a flavor-of-the-day command over on the
line side and steal those flag officers.
Mr. Johnson. Thank you.
The Chairman. Dr. Gingrey.
Dr. Gingrey. Mr. Chairman, thank you.
I want to thank the witnesses. I have found this hearing
particularly interesting, and I am encouraged by the testimony
of each one of you.
Dr. Gansler, it sounds like the report that you were
commissioned to provide by Secretary Geren is very similar, as
the ranking member, Duncan Hunter, mentioned in regard to what
we had in the authorization bill a couple of years ago. So I am
pleased that we have said double-dittos here, as we definitely
need to do.
Mr. Parsons, I think you just made some comments that I
fully agree with in regard to the training--and Secretary Young
also in regard to where you put these offices. You need a track
that is a real track, and not one that keeps shifting back and
forth, so that there is a career path, as you point out, for
this level of expertise.
So I am encouraged by all of that. When you are talking
about in this op tempo that we are faced with now, with as much
as $10 billion a month, obviously there are a lot of contracts.
There are a lot of things that have to be done pretty quickly.
I am not sure that I fully agree with Ranking Member Hunter in
regard to a combatant commander being able to snap their
fingers too quickly and getting something done. I think we have
the Community Emergency Response Team (CERT) program for
smaller things, and I think that works pretty well, but if you
have a major acquisition certainly it needs to be vetted a bit.
So although I am usually right in line with my former chairman
and now ranking member, I will have a little caveat there and
concern.
My question, and this will be directed mainly to you,
Secretary Young, I have been pleased the chairman appointed me
as the ranking member on a roles and missions ad hoc committee.
We completed our report. It was a six-month study chaired by
Jim Cooper, my colleague in the majority from Tennessee. We
looked a lot, Mr. Secretary, at this jointness, not within the
branches of the military, not Goldwater-Nichols, but maybe a
next phase of that in the jointness interagency approach.
I think we probably need that in regard to this
contracting. In fact, section H-61 of the National Defense
Authorization Act of 2008 required DOD, the State Department
and USAID to enter into a memorandum of understanding on
contracting in Iraq and Afghanistan no later than July 1, 2008.
The memorandum will clarify the roles and missions of these
respective agencies in managing and overseeing contracts.
The question very specifically is what progress has been
made on that memorandum of understanding, and how do you feel
about the importance of this interagency jointness in regard to
contracting?
Secretary Young. I will try to be brief, and maybe I could
reserve one second to comment on your other point. But my
understanding is that the memorandum of understanding (MOU) is
in draft and being coordinated. I believe it has become as or
more important in the last months as we recognize the total
importance of, one, agencies understanding what other agencies
are doing in terms of contractors and with contractors, be they
personal security or contractors performing war functions.
And then frankly, the theater continues to reemphasize all
the way up to the combatant commanders the need for interagency
cooperation to succeed in these phases of war activities where
there is a combination of trying to restore peace and
opportunity in the Nation and still warfare against contingency
operations. You might not expect it, but it is very important
for interagency cooperation of our whole national effort to
achieve success there.
If I could use one second to comment about the other one, I
agree with you very much, and I didn't speak earlier. The
combatant commander, it is vitally important for them to say
what they need, and sometimes point, but they do not have
enough time to look at all the ways to solve their problems. If
anything has come up short, we do need the acquisition team to
act with urgency when they bring that to our attention. But we
do have urgent operational need statement processes that have
done a lot of things for combatant commanders fairly quickly.
You never know whether one thing they see could be done
much better. I do know if we buy something they want and it
fails, the acquisition team is going to take the black eye for
it. So I want to have one chance to make sure we meet their
requirement and meet their need, not necessarily with the
hardware, but if the hardware is right, we will go buy it.
Dr. Gingrey. Right indeed. And there is a fine line there,
of course, as we all understand.
Mr. Chairman, thank you.
The Chairman. Thank you.
Mr. Ellsworth of Indiana.
Mr. Ellsworth. Thank you, Mr. Chairman.
And thank you, gentlemen, for being here. I appreciate what
you are doing. I don't think a lot of people, and sometimes
ourselves, understand the daunting task that you have in trying
to equip our warfighters with everything like we talked about--
food, weapons, equipment, toilet paper, toothpaste--the entire
gamut of everything they need to do their job. We appreciate
that.
I have to associate my comments with Mr. Jones earlier that
we also, while everyone on this committee, Republicans and
Democrats, want to do everything we can for the warfighter,
that we have to also have that responsibility. Those soldiers'
families are home paying taxes and want us to watch their
dollars also.
Mr. Gansler, I would call attention to one of the things
you said in your earlier statement that we have to give them
incentives and rewards. On page three of your document, it
talks about the problem is understaffed, overworked, under-
trained, under-supported, and most importantly, under-valued.
I would like you to explore that a little further. Some of
these contractors who do go south, are we making excuses for
them? Isn't the carrot their salary, the contract and the
profit they build into that contract themselves? I know that
some of the contractors--and I remember when I was in
government before I took this job, I lost two deputy sheriffs.
I can remember the brochure offering $125,000 a year tax free,
and they quit my department and went over and served in a
security sense. So is that not the incentive and reward?
And going back to my former life, I always thought my
deputies deserved more money and deserved a bigger salary, but
county government didn't let me give them that. They knew that
when they signed that contract coming in. They knew they were
going to make this much and here was their insurance package
and here was their benefit package and here was their pension
and their dollars. I knew they deserved more money, but when
they did mess up and steal or they took something they didn't
deserve, then they either got fired and they got punished and
some went to jail.
So my question would be, are we making excuses? I think
this committee and this Congress should give you everything you
need to do your job, but I don't also want to make excuses for
those that head south, and out of greed steal from this
government.
I guess my ultimate question is, how many are in jail? How
many have we prosecuted and arrested? And I am not talking
about the country-club jail. I am talking about the Gray Bar
Motel, and we backed the U-hauls up to their houses with their
wife and kids there and took the proceeds like we did from drug
dealers and take their drug proceeds. How many times have we
put their pictures in the paper in their hometown newspaper and
say, here is the guy that stole your tax dollars?
I appreciate what you are doing, and I don't know if there
is an answer to this question, but I don't want to enable these
folks and say it is our fault. We are all overworked, and I
have a lot of people overworked. It didn't mean they stole and
they had a right. It is like that old thing, well, it is a big
company and they won't miss it. I think this is a huge task,
but we have to keep in mind, we just have to give you the tools
to do what is right and to catch the bad actors when they mess
up. And then give them that punishment, give them the stick,
not the carrot.
So if you want to respond, that is fine.
Dr. Gansler. I would very much like to respond, because I
do separate the illegal actions from what we requested for the
volunteer government workers. I think on illegal actions, there
is absolutely no basis for anything except putting them in
jail. That is certainly the case in the civil world. It is the
case here as well. That is why we have jails, and we certainly
want to make sure that there are no illegal actions. Even one
is bad. As you know, we have over 90 cases being looked at and
trying to put them in jail is they deserve to go to jail.
The issue we are really talking about, however, are the
civilian government employees who when they signed up, they
signed up to work in Dayton, Ohio doing contracting, and now
they are being asked to go over in a war zone, get shot at, not
have their insurance covered, not given many major long-term
health benefits, not given tax waivers, et cetera, and being
told go over.
Those people are the ones that we feel deserve something
for volunteering to go to something they hadn't signed up for
originally. We think those provisions need to be considered. It
is almost unethical that those people aren't being rewarded for
what they are doing, which is volunteer to go into a war zone
for the country's good and for the taxpayer's good. If they are
overseeing a contract, that is for the taxpayer's good. The
fact that you have people overseeing them is probably going to
cut back on the amount of illegal actions.
Mr. Ellsworth. I couldn't agree more. I appreciate that
clarification.
Mr. Chairman, I have no further questions. Thank you.
The Chairman. Thank you.
Mr. Spratt.
Mr. Spratt. Thank you very much for your contribution and
your effort. This has been done several times before, though. I
am sure you found along the path you traveled many other
instances where other commissions have tried to effect similar
change and somehow or another it has not taken root and it
really hasn't blossomed.
The last commission, as I recall, was the Packard
commission.
Dr. Gansler. I served on that.
Mr. Spratt. You were on that commission?
Dr. Gansler. Yes.
Mr. Spratt. As I recall, Mr. Packard came to the conclusion
that the easiest way to get good talent aboard was to go to the
uniformed military services, that while there was good and
commendable talent in the civilian ranks, you were more apt to
find it in the military, and in the near-term to attract
military officers into these procurement and acquisition and
program management posts than go out and look for civilian
talent.
That requires creating a procurement corps, as it were,
that is a credible, attractive, appealing career path for
military officers. Would you agree we simply don't have that
today in any of the services--the Army or any of the other
services?
Dr. Gansler. Yes. In fact, that is particularly the point
of the general officer positions, that if you are going to come
in as a major, or you are going to come in as a captain, trying
to decide on what my career is going to be in the Army. And if
there is no potential to become a general, you are not going to
stick in that if you are a top person. So we have to create
that incentive.
I would argue it is not an either/or, though, between
military and civilian. There are civilian roles in this case
and there are military roles, but we need at the leadership,
particularly in the expeditionary environment, senior military
people.
Mr. Spratt. Well, I had this experience when I was in the
service and worked at the Pentagon some many years ago. An
officer was created by McNamara through Robert Anthony, who was
a professor of finance at Harvard Business School. He brought
down from Harvard during Vietnam young men who needed a direct
commission in Officer Candidate School (OCS) and things like
that. He brought them down and set up the Operations Analysis
Group. And in that group were guys like Hank Paulson and Steve
Hadley. It attracted an unusually appealing group of very
capable people, but it didn't retain them.
Nevertheless, they made a huge contribution while they were
there. I thought then really the services and DOD together
don't make a good case for the attractiveness of these jobs. If
they gave these young bushy-tailed management ambitious types,
very bright types, the opportunity, some would stay longer than
two to three years. Some might even stay 20 years if rising to
the top meant something other than being just a senior
bureaucrat.
We simply have not been able to take that and
institutionalize it for some reason. Is it because of the
forces against that at the Pentagon? Or is it just difficult to
do? Do you have an explanation for that?
Dr. Gansler. That was the cultural change we talked about
earlier, where the warfighters need to recognize the value of
these people who are supporting them. Their career paths need
to be equal. They need to be rewarded for the work they do,
whether it is civilian or military.
Mr. Spratt. They also want line management authority. They
really want to be doing something. They don't want to just fill
some administrative job doing ministerial things and carry out
orders from below and shuffle papers. They want to make tough
management decisions and have those decisions respected.
Dr. Gansler. And they have to be respected as individuals,
and that does require some senior positions, particularly on
the military side.
Mr. Spratt. One of the things that we picked up from
previous inquiries here is that there needs to be some
differential or merit pay to recognize talent and to recognize
performance, to recognize thoroughness and effort and things
like this. There needs to be at least a pay band. There was a
China Lake experiment that is frequently referred to. We tried
to codify that some years ago, and I think we lost the trail.
We are as guilty as anybody else because from time to time, we
come to this task and say, this needs addressing, this needs
serious attention.
And then we do something. We pass a bill and we don't
follow it up adequately to see that it is being carried out. To
some extent, all we can do is jawbone the Defense Department
anyway. If they are not inclined and are not structurally able
to make the change, we kind of are left to our own frustrations
here.
What did you find about differential pay? Do you think that
is an essential part of the solution here?
Dr. Gansler. You referred back to the Packard commission.
We actually looked at the China Lake experiment at that time
and recommended it. But Congress authorized me when I was Under
Secretary to run an experiment with it.
Mr. Spratt. I sponsored the legislation.
Dr. Gansler. Exactly. Of the 90,000 people you approved,
only 30,000 signed up. The unions fought it fiercely. My last
year in office, I was sued for some people who didn't get their
pay for living another year, instead of contributing.
John, you may want to comment on the current personnel
system. It is trying to do that again, and I think it should be
encouraged.
Secretary Young. I would agree. It is critical, and we have
tried very hard and been given the tools through the national
security personnel system to discriminate in terms of
performance and recognize it with financial rewards, as opposed
to minor variations in pay that don't discriminate and reward
people's performance. It is a very important tool for us going
forward.
Mr. Spratt. In connection with that pay, I think
particularly with the government pension being an important
part of the incentive for people to work in the Federal
Government, there needs to be more portability, it seems to me,
of pensions. That way, you can attract young people. They may
give you five years. They may give you 10 years, but it will be
10 good years they will give you. And they are not going to do
that unless they have something to show for that 10 years.
Most of them, unless they have something like a pension
that they can pick up and take with them, roll it over or
something along those lines, so that the pay package is an
attractive pay package, not just in terms of current income,
but pension income, too.
Secretary Young. Mr. Chairman, could I add a comment, if
you don't mind?
The Chairman. Yes.
Secretary Young. I do think, since you raised the Packard
commission, the trend, and certainly what I have experienced in
the building, is where we are on the edge of eroding some of
the capability of our acquisition workforce which the Congress
has focused a lot of attention in. Those people, especially as
the comments have arisen of late about the cost growth in
programs and the movement of requirements, some of that--you
know, it is not perfect--but some of that is tied to the fact
that I need an acquisition program manager to do what you said:
make tough decisions and take tough stands to defend the
taxpayer's dollars.
He is often doing that with a requirements officer who is a
very capable line officer, has a very good promotion potential
to flag, and worried about if I say no to this requirement
because I think it is a little excessive and it is definitely
going to cost us a lot more tax money and it is going to break
my budget, is that going to hurt me in that flag board when it
comes up?
We have to continue to take care of those people and
actually give them more responsibility and authority to be good
stewards of the taxpayer's dollar, meet the warfighter's
requirements, but as you know, the system has come to set those
requirements bars excessively high and chase dollars. Sometimes
we need to moderate that. That is another hearing discussion,
but it is very important to talk about that issue the way you
did.
The Chairman. I thank the gentleman.
What was the China Lake experiment?
Dr. Gansler. It was basically trying to pay people for
their performance, rather than for having lived another year.
The Chairman. Rather than what?
Dr. Gansler. Rather than just living another year and
having a temperature of 98.6 degrees. The whole idea was you
will rate people on their current pay and their performance,
and if their current pay is low relative to what they should be
getting, then you give them a significant impact. If their pay
is high and they are not performing, you don't give them a
significant impact. So it is pay for performance, which is, as
John said, basically what they are trying to now implement with
the personnel system.
Secretary Young. Mr. Chairman, I believe it also had
another dimension of hiring. It was a demo program that
included the dimension, too, of us being able to hire technical
people who can command greater salaries out in industry--can we
have different hiring processes and pay processes that will let
us hire the best engineering talent, which isn't always the
case today in the government.
The Chairman. Thank you.
One last question. Back in the 1990's, we passed the
Defense Acquisition Workforce Improvement Act, which required
workforce training to perform necessary duties. Should we
revisit that act that we passed as it relates to contingency
contracting?
Secretary Young. I certainly would welcome comments from my
colleagues. For my part, I would tell you I think the Act has
been very effective. The training that we are putting in place
has effectively trained people. We need to constantly improve
that training. One of our bigger issues, and I regret that
Congressman Hunter is not here, is the DOD budget is up 34
percent since 2001. The research and development (R&D) budget
is up 70 percent, and we have spent over $600 billion of
supplemental money, without adding much in the way of
workforce.
I think the Congress has a legitimate expectation that
those monies will be carefully managed and overseen, not
wastefully, but appropriately. I am going to have to add some
people to the workforce in the right skill areas. In fact, the
demands are greater than we see here, where industry
increasingly offers us unrealistic programs. Then we have
protests, as you are well aware. That puts greater burdens on
the government team, and then now we need things to be
interoperable because that brings great value to the joint
warfighter.
Some of that integration has to occur on the government
side to at least define it, because I can't tell----
The Chairman. Will you make formal recommendations along
those lines?
Secretary Young. Yes, sir.
The Chairman. I would appreciate it very much.
Any other questions? If not, I thank my colleagues and
thank the witnesses. It has just been excellent.
[Whereupon, at 12:32 p.m., the committee was adjourned.]
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A P P E N D I X
April 10, 2008
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
April 10, 2008
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