[Senate Hearing 110-437]
[From the U.S. Government Publishing Office]
S. Hrg. 110-437
MANAGEMENT AND OVERSIGHT OF CONTINGENCY CONTRACTING IN HOSTILE ZONES
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JOINT HEARING
before the
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
INFORMATION, FEDERAL SERVICES, AND
INTERNATIONAL SECURITY SUBCOMMITTEE
and the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
THE FEDERAL WORKFORCE, AND THE
DISTRICT OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON HOMELAND SECURITY
AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JANUARY 24, 2008
__________
Available via http://www.gpoaccess.gov/congress/index.html
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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41-448 PDF WASHINGTON DC: 2008
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana TOM COBURN, Oklahoma
BARACK OBAMA, Illinois PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri JOHN WARNER, Virginia
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES,
AND INTERNATIONAL SECURITY SUBCOMMITTEE
THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
BARACK OBAMA, Illinois GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri PETE V. DOMENICI, New Mexico
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
John Kilvington, Staff Director
Katy French, Minority Staff Director
Monisha Smith, Chief Clerk
OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE
DISTRICT OF COLUMBIA SUBCOMMITTEE
DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan GEORGE V. VOINOVICH, Ohio
THOMAS R. CARPER, Delaware TED STEVENS, Alaska
MARK L. PRYOR, Arkansas TOM COBURN, Oklahoma
MARY L. LANDRIEU, Louisiana JOHN WARNER, Virginia
Richard J. Kessler, Staff Director
Jennifer A. Hemingway, Minority Staff Director
Jessica Nagasako, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Carper............................................... 1
Senator Akaka................................................ 3
Senator Collins.............................................. 5
Senator McCaskill............................................ 8
Senator Levin................................................ 48
WITNESSES
Thursday, January 24, 2008
Stuart W. Bowen, Jr., Special Inspector General for Iraq
Reconstruction................................................. 9
William M. Solis, Director, Defense Capabilities and Management,
U.S. Government Accountability Office, accompanied by Carole F.
Coffey, Assistant Director, Defense Capabilities and Management
Team, U.S. Government Accountability Office.................... 11
Dina L. Rasor, Director, Follow the Money Project and co-author
of ``Betraying Our Troops: The Destructive Results of
Privatizing War''.............................................. 13
Robert H. Bauman, Investigator, Follow the Money Project and co-
author of ``Betraying Our Troops: The Destructive Results of
Privatizing War''.............................................. 15
Perry Jefferies, First Sergeant, U.S. Army (Ret.), Iraq and
Afghanistan Veterans of America................................ 17
Hon. P. Jackson Bell, Deputy Under Secretary of Defense for
Logistics and Materiel Readiness, U.S. Department of Defense... 35
General David M. Maddox, U.S. Army (Ret.), Former Commander in
Chief, U.S. Army Europe, Member of the Gansler Commission...... 36
Hon. John Herbst, Ambassador of Ukraine (2003-2006) and
Uzbekistan (2000-2006), Coordinator for Reconstruction and
Stabilization, U.S. Department of State........................ 40
William H. Moser, Deputy Assistant Secretary for Logistics
Management, U.S. Department of State........................... 42
James R. Kunder, Acting Deputy Assistant Administrator, U.S.
Agency for International Development........................... 44
Alphabetical List of Witnesses
Bauman, Robert H.:
Testimony.................................................... 15
Prepared statement with Dina Rasor........................... 101
Bell, Hon. P. Jackson:
Testimony.................................................... 35
Prepared statement........................................... 123
Bowen, Stuart W., Jr.:
Testimony.................................................... 90
Prepared statement........................................... 57
Herbst, Hon. John:
Testimony.................................................... 40
Prepared statement........................................... 155
Jefferies, Perry:
Testimony.................................................... 17
Prepared statement........................................... 114
Kunder, James R.:
Testimony.................................................... 44
Prepared statement........................................... 166
Maddox, General David M.:
Testimony.................................................... 36
Prepared statement........................................... 131
Moser, William H.:
Testimony.................................................... 42
Prepared statement........................................... 162
Rasor, Dina L.:
Testimony.................................................... 13
Prepared statement with Robert Bauman........................ 101
Solis, William M.:
Testimony.................................................... 11
Prepared statement........................................... 73
APPENDIX
``Urgent Reform Required: Army Expeditionary Contracting,''
Report of the ``Commission on Army Acquisition and Program
Management in Expeditionary Operations,'' submitted by General
Maddox......................................................... 142
Chart entitled ``Diminished Foreign Service Cadre Erodes
Technical Leadership, Oversight, Policy Impact on Foreign
Nations, and Innovation,'' submitted for the Record by Mr.
Kunder......................................................... 175
Report entitled ``Logistics Civil Augmentation Program (LOGCAP)
LOGCAP Support Unit (LSU) Det. Y8--Iraq, After Action Report &
Lessons Learned, Operation Iraqi Freedom,'' submitted by Mr.
Bauman......................................................... 176
Charts submitted for the Record by Senator Carper................ 210
Questions and responses for the Record from:
Mr. Bauman and Ms. Rasor..................................... 217
Mr. Jefferies................................................ 222
Mr. Bell..................................................... 226
Mr. Kunder................................................... 239
MANAGEMENT AND OVERSIGHT OF CONTINGENCY CONTRACTING IN HOSTILE ZONES
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THURSDAY, JANUARY 24, 2008
U.S. Senate,
Subcommittee on Federal Financial
Management, Government Information,
Federal Service,and International Security,
and the Subcommittee on Oversight of
Government Management, the Federal Workforce,
and the District of Columbia,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittees met, pursuant to notice, at 2:30 p.m., in
Room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Subcommittee, presiding.
Present: Senators Carper, Akaka, Levin, McCaskill, and
Collins.
OPENING STATEMENT OF SENATOR CARPER
Chairman Carper. The Subcommittee will come to order. I
want to thank my colleague, my dear friend, Senator Akaka, for
co-hosting and co-chairing this hearing with me today.
We will be joined shortly by others of our colleagues. The
Senate is working today on FISA legislation dealing with the
surveillance court that was established, thirty-some years ago,
I believe.
And we are going to be voting on and off during the
afternoon on amendments to that bill. We just finished the
first, and I am sure more will follow. Hopefully, they will not
be too disruptive.
But I would like to say when I am Majority Leader, we won't
have these votes interrupting my Subcommittee hearings, so that
will probably be a while.
Well, we are glad you are all here and we will be welcoming
Senator Coburn shortly; Senator Collins, who is the Ranking
Member of the full Committee; and others as they come and go in
the afternoon.
Nearly 5 years after going into Iraq, we still do not know
how many contractors are there. We have estimates, but they
differ.
Last summer, the U.S. Central Command told us that there
were about 130,000. Then later, they updated that number to
approximately 180,000 contractors. The Gansler Commission
Report, which came out in October, estimated that there may be
160,000 contractors in Iraq.
The Government Accountability Office (GAO) bases its cost
estimate on what the Department of Defense said last year,
which was that there are over 120,000 contractors in Iraq.
But whatever estimate we ultimately accept, one thing seems
for sure: We now have maybe as many, maybe even more,
contractors in Iraq as we have U.S. troops.
There is an old saying that you cannot manage what you
cannot measure. And we in Congress are in a position to try to
oversee contracting in Iraq among other places--without our
government agencies knowing how many contractors there actually
are in theater.
Certainly, the continuing lack of management attention and
proper oversight over the contractors in a war zone has
resulted in runaway costs. Unfortunately, waste, fraud, and
abuse are all too common in Iraq.
Out of $57 billion worth of contracts for services and for
reconstruction work in Iraq, the Defense Contract Audit Agency
has reported that more than $10 billion, or roughly one-sixth
of the total spent on contracts, is either questionable or
cannot be supported because of lack of contractor information
needed to assess costs.
To date, there are more than 80 separate criminal
investigations into contracts totaling more, I believe, than $5
billion. And despite the dedicated, talented, and hard working
contracting professionals we have, contract abuse appears to
have become endemic.
Late last year, we learned that the U.S. military paid a
Florida company nearly $32 million to build barracks and
offices for Iraqi army units, even though nothing was ever
built.
Earlier last year, the Special Inspector General of Iraq--
he is with us today--told us that Parsons Global, Inc., was
charged with building 140 primary health care centers
throughout Iraq, but only completed six after 2 years and $.5
billion dollars had been spent.
Parsons was also paid $62 million to build the Iraqi Police
College, but the barracks failed to include proper plumbing,
causing sewage to leak through the floors. The building, my
staff has learned, has not yet been repaired. Construction of
the $600 million U.S. Embassy in Baghdad continues to be
plagued with safety and construction problems, and a
contractor, First Kuwaiti, has been accused of labor abuses and
human trafficking. And the list goes on.
But let me be quick to add, though, that the story is not
all gloom and doom. There are strides being made on all fronts,
and they are worthy of recognition.
In response to the 2007 Department of Defense Authorization
Bill, the DOD has established a comprehensive policy and
program framework for managing contractors and contractor
personnel deployed with our forces on contingency operations.
The Army, under the leadership of our former colleague,
Secretary Pete Geren, commissioned the Gansler Report, and,
with the blessing of Defense Secretary Gates, has begun
implementing some of its recommendations.
A Memorandum of Agreement has been recently reached between
the Department of Defense and the Department of State defining
the authorities and the responsibilities of private sector
contractors in Iraq.
With the leadership of Senators Lieberman and Collins, we
were able to get more accountability in contracting. And, with
the leadership of the freshman senators, we were able to pass
into law the Wartime Contracting Commission. I, along with, I
think, most of my colleagues here and on our full Committee
were co-sponsors of both pieces of legislation.
I called for this hearing for two reasons: First, how to
figure out how to improve contracting practices in Iraq and
Afghanistan; and second, how to prevent these contracting
problems from happening again.
As elected Members of Congress, we have an obligation to
safeguard American taxpayer dollars, wherever they are being
spent. The point of this hearing is to move forward and plan
better for future contingencies, which the United States is
certain to face.
Today, I want to try to ensure the following--and we have a
couple of charts set up here with the goals of today's
hearing.\1\
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\1\ The charts referred to by Senator Carper appears in the
Appendix on page 210.
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Goal one is that the workforce problems caused by
inadequate staffing on the contracting and contract management
sides are being addressed and solved; second is that the lack
of training for military personnel and civilians on the
battlefield is remedied before the next contingency operation.
And third is that we capture the lessons learned and inculcate
them into military leadership schools and civilian training for
contracting officers.
And if you will just look to the other side of the room,
number four and five--number four that we are planning U.S.
government-wide how to deal with reconstruction and
stabilization crises in conflict and post-conflict areas, and
who should be charged to implement those interagency
activities; and finally that Congress plays an effective and
active role in the path forward.
To date, the United States has appropriated nearly $630
billion for Iraq and Afghanistan, and has spent nearly $470
billion in Iraq alone.
A large part of that money is going to contractors,
contractors involved in providing services to our troops and in
reconstruction projects. Since 2003, we have passed nine
supplemental bills for Iraq and Afghanistan. We will be asked
to vote on another one later this year.
At home, we are addressing huge, growing fiscal imbalances
due to our aging population, skyrocketing healthcare costs, and
a sharp decline in the housing sector. And now, we are facing a
recession.
We need to do everything we can to make sure the American
taxpayer is getting what he or she paid for, and that is what
we intend to do. Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Senator Carper. It is
great to be with you and to work with you.
I want to thank you personally for organizing this
important hearing and for jointly conducting it with the
Oversight of Government Management Subcommittee.
I recently held a hearing in my capacity as Chairman of the
Armed Services Readiness Subcommittee, which examined deeply
rooted problems in Army contracting.
At that hearing, we took testimony from Dr. Gansler, who
spearheaded a very revealing and thorough report, which we will
hear about from our second panel today.
Contracting specialists are being asked to oversee an
increasingly large number of contracts, as was mentioned by the
Chairman. Since 1999, the number of contracting specialists has
been frozen at about 30,000 at the Department of Defense, even
as the number of contracts has ballooned.
We have seen less oversight and less accountability at the
Department of Defense and government-wide as well. It seems not
a week goes by where I do not see yet another news story about
waste, fraud, abuse, and even violence carried out by
contractors in theater.
Last year, the Armed Services Committee heard about
appalling contractor waste and abuse committed by Halliburton
under the LOGCAP contract. The Special Inspector General's
reports likewise have painted a troubling picture of
contracting failures in Iraq.
It also came to light recently that contract security
officers in Iraq working for the Department of State used
unjustified lethal force against Iraqi civilians. Shockingly,
it seems that these contractors are immune from prosecution
under either Iraqi or U.S. law.
Most recently, we learned of contractors in Iraq committing
crimes against their fellow employees, including rape, with
virtually no response from this Administration.
Contracting can be a valuable tool to supplement government
services and fulfill our responsibilities to our troops and to
the American people. But at times, it seems that this
Administration is turning contracts into corporate giveaways.
We must restore accountability, without question. Congress,
the military, and the State Department must redouble their
efforts to reduce the financial costs to American taxpayers, as
well as tragic human costs that can result from failures of a
contractor oversight and accountability.
These failures are the result of a crisis on multiple
levels. First, there is a workforce crisis. As I noted a moment
ago, the number of acquisition specialists has remained
stagnant while contracting has expanded dramatically.
The shortage of acquisition workers will continue to get
worse if we do not address it. According to the Federal
Acquisition Institute in their Fiscal Year 2006 annual report
on the Federal acquisition workforce, over half of the Federal
Government's acquisition workforce will be eligible to retire
in the next 10 years. Many of these will be at the Department
of Defense.
Second, there is a management crisis. We simply do not have
enough individuals to conduct adequate contract planning,
execution, and oversight.
Unfortunately, planning and oversight often go by the
wayside so that contracting specialists can meet deadlines and
get deliverables. This, again, is not acceptable.
The acquisition workforce needs enough competent managers
to oversee the billions of dollars of taxpayers' money spent on
contracts.
Finally, the most troubling: There is a crisis of
accountability. Committees from both the House and the Senate
have held countless hearings on contracting problems in Iraq
and Afghanistan for the past 4 years. We created a Special
Inspector General for Iraq.
Still, no one in this Administration has been able and been
held accountable for these failures. Problems are consistently
overlooked or ignored.
We need to shift course in the management of contracting.
While it is imperative to look at the past to find what has
gone wrong, it is more important to look to what can be done
better.
I fully support many of the recommendations made by the
Gansler Commission and by the Government Accountability Office.
I am committed to working with my colleagues to continue
oversight in this critical area, and I am equally committed to
taking any necessary steps to fix these problems.
Agencies must invest more in recruiting top-quality
contracting specialists to provide for oversight. Such an
investment would be far less costly than paying for more
flawed, wasteful, multi-million dollar contracts.
I plan to work especially vigorously on the workforce
aspect of this issue in my capacity as Chairman of both the
Oversight of the Government Management Subcommittee and the
Armed Services Readiness Subcommittee.
I would like to invite my colleagues here to join me at a
hearing on my OGM Subcommittee which we will hold soon on
government-wide acquisition workforce challenges.
This is a serious problem throughout the government and it
needs our urgent attention.
Again, thank you, Senator Carper, for agreeing to hold this
joint hearing, and I thank our witnesses for coming here to
provide their valuable insight. I hope our hearing today will
lead to some real progress. Thank you very much.
Senator Carper. You bet, Mr. Chairman. Thank you, and it is
just an honor to sit here next to you and I think this makes a
lot of sense for us to do this together. Senator Collins,
welcome.
OPENING STATEMENT OF SENATOR COLLINS
Senator Collins. Thank you, Mr. Chairman. Mr. Chairmen, I
guess I need to say today.
I want to commend you both for holding this joint hearing,
and for your diligent focus on a very serious problem, and that
is ensuring that taxpayers' dollars are wisely spent no matter
the circumstances.
Our Committee, both at the full Committee level and at the
Subcommittee level, has held countless hearings looking at
contracting, highlighting examples of wasteful spending, even
examples of outright fraud.
We have found that natural disasters and military
deployments since the year 2000 have helped to double the
dollar volume of Federal contracting, which now exceeds an
astonishing $400 billion a year. A vast amount of that
contracting has gone to the Iraq reconstruction effort, but
there were also billions of dollars that have been spent in
reconstruction efforts for the Gulf Coast in the wake of
Hurricane Katrina.
But whether you are looking at the Iraqi reconstruction
effort or the reconstruction of the Gulf Coast, unfortunately,
you see common problems.
You see an insufficient Federal workforce to oversee and
write the requirements for those contracts. You see a lack of
training. You see a lack of a contingency contracting corps
that could be assembled to respond to a natural disaster. And
not coincidentally, you see an over-reliance on non-
competitive, no-bid contracts, which do not ensure that the
taxpayer is getting the best value and the highest quality
goods.
Meanwhile, and not coincidentally, the GAO, the Special
Inspector General for Iraq Reconstruction, and agency
inspectors general have identified waste, fraud and abuse, and
fiscal mismanagement exceeding billions of dollars.
These problems demand action. They waste taxpayers' dollars
and impede the achievement of program objectives. Contracting
problems in war zones carry additional risks of frustrating the
military missions, jeopardizing relations with friendly
governments, and diluting the effectiveness of America's
financial commitments to promoting security, stability, and
respect for human rights.
Last fall's report by former Under Secretary of Defense Dr.
Gansler paralleled what this Committee has found in its
investigations, and, again, it is the same litany of problems--
an over-reliance on no-bid contracts, a vastly expanded
workload, insufficient staffing, insufficient training, and
deficient oversight.
I believe the Senate took an important step toward
contracting reform with its unanimous passage of S. 680, the
Contracting and Accountability Act, which both Chairmen have
co-sponsored.
It is a bipartisan bill, and it would make a big
difference. It not only addresses the over-reliance on sole
source, no-bid contracts, but it really focuses on the
acquisition workforce.
That is far less glamorous, but arguably it is even more
important than the new restrictions that we have imposed or
will impose on no-bid contracts.
The legislation would also establish a contingency
contracting corps, to ensure that trained and experienced
contracting officers can deploy to combat zones or to areas
struck by natural disaster.
The House has also passed a contracting reform bill, and I
hope that this will be one of the accomplishments that we can
get done this year.
Again, I want to commend both Chairmen for their interest
and commitment to this issue, and I am very pleased to join
them this afternoon. Thank you.
Senator Carper. Thank you very much, Senator Collins, and
we are pleased to join you in support of that legislation.
Senator Collins. Thank you.
Senator Carper. Thank you for your leadership.
I am going to go ahead and introduce our witnesses at this
time, and we will start with Stuart Bowen. It is always a
pleasure to have you with us, the Special Inspector General for
Iraq Reconstruction, who I have learned just yesterday was
married not long ago at Rehoboth Beach, Delaware.
Mr. Bowen. That's right.
Senator Carper. That's got to be the start to a good
wedding, a good marriage.
Mr. Bowen. Thank you.
Senator Carper. Four years into his job, he's been to Iraq
18 times. I think Senator Biden may have the high number here
in the Senate. He has, I think, been eight or nine times, so
you have doubled our list.
When you go, how long do you stay?
Mr. Bowen. Two to 3 weeks.
Senator Carper. OK.
Mr. Bowen. In the summer, sometimes 4 to 5 weeks.
Senator Carper. OK. I think I would shorten those summer
visits, if I were you. It is pretty hot over there in the
summer.
Well, 4 years into his job, Mr. Bowen has been to Iraq, as
I said, for 18 times, more than twice the number of, as far as
I know, any of us in the Senate.
He has been a vocal advocate of ensuring fiscal stewardship
over the $44 billion in U.S. appropriated reconstruction funds.
Thank you, sir.
Mr. Bowen. Thank you.
Senator Carper. Thanks for joining us. Our next witness,
Bill Solis, is Director of the Defense Capabilities and
Management Team in the U.S. Government Accountability Office.
His portfolio of work covers issues such as contractors on
the battlefield, supply chain management, force protection for
ground forces, and equipment reset. He is joined today by his
colleague from GAO, Carol Coffey, and the two of you look a
whole lot like the folks from the GAO who briefed Senator
McCaskill and myself and our staffs before we went to Iraq back
in June. So, it is good to see you both. Thank you for your
help then and thank you for your help today; and frankly, your
help in preparing for this hearing.
Dina Rasor is a partner in the Bauman and Rasor Group.
Currently, she serves as Director of the Follow the Money
Project, which is dedicated to making sure U.S. soldiers have
the equipment they need in Iraq and Afghanistan by following
the money allocated for the war effort.
She previously served the Project on Military Procurement
for 10 years, which exposed event scandals in the 1980's,
including over pricing and fraud in procurement systems, such
as the infamous $7,600 coffee brewers--I remember those--and
the $670 armrest in the C-5 cargo plane, which we have
stationed at Dover Air Force Base. And did you ever work on P-
3s, anything on the P-3 aircraft, the Navy P-3 aircraft?
Ms. Rasor. A little bit.
Senator Carper. OK. Fair enough.
Ms. Rasor. I've worked a lot on airlift, though.
Senator Carper. OK. As I recall, the coffee brewer was one
that would make coffee at sea level. It would make coffee at
50,000 feet. It would make coffee a thousand feet below the
water.
Ms. Rasor. Well, the specs were just that it would still
make coffee after an impact of 40 G's, which no C-5 would
survive, but you would still have coffee.
Senator Carper. Yes. I always wondered how good was that
coffee. That is a lot of money for a cup of coffee.
Ms. Rasor. Soldiers--troops told me not so good.
Senator Carper. All right. Thank you, Ms. Rasor.
Robert Bauman is an investigator with the Follow the Money
Project and a partner in Bauman and Rasor Group. He has 24
years of experience as a DOD Criminal Investigator,
investigating many large defense contractors.
He and Dina Rasor have recently co-authored a book entitled
``Betraying Our Troops: The Destructive Results of Privatizing
the War.'' Was that published last year?
Ms. Rasor. Yes.
Senator Carper. Good. And finally, I really want to extend
a warm welcome to Perry Jefferies, First Sergeant, U.S. Army,
Retired. We were talking earlier, and he tells me he had served
25 years. Is that correct?
Mr. Jefferies. Between the Texas National Guard and the
U.S. Army, yes, sir.
Senator Carper. All right. Well, thank you so much for a
quarter of a century of service to our Nation.
As a First Sergeant with the Army's Fourth Infantry
Division in Iraq, Mr. Jefferies earned the Bronze Star. And
while in the Army, he served in Korea and Germany in infantry,
armor, and cavalry units, and as an instructor at the Armor
School at Fort Knox. Upon retirement, he was awarded the Legion
of Merit.
He is a founding member of Iraq and Afghanistan Veterans of
America, and again, our country owes you a huge debt of
gratitude. Thank you for your service.
Before I turn it over to Mr. Bowen to offer his statement,
I am going to ask our witnesses to try to stick to around 5
minutes. If you go a little bit over that, it is not the end of
the world, but I try to ask you to adhere to that.
We have been joined by Senator McCaskill, and I was just
mentioning before we went on our CODEL to Iraq and Kuwait and
other places how Mr. Solis and Ms. Coffey were good enough to
brief us and our staff. They denied it. But we know it was
them.
Senator McCaskill, would you like to make any statement at
all before we turn it over to our witnesses?
OPENING STATEMENT OF SENATOR McCASKILL
Senator McCaskill. Well, there are a number of people that
are testifying today that have been of great assistance to me
since I have arrived in Washington. This is, in a weird way,
the stuff that I find most exciting. I know that is hard for
people to understand that I think contracting and following the
money is very important. And I am glad we are having this
hearing, Mr. Chairman.
I learned a lot when I was in Kuwait and Iraq looking at
contracting issues, and most of it was not good. Most of it
would make most Americans sick to their stomach.
We clearly were not prepared for contracting in the way
that we engaged in contracting in this conflict. We were not
prepared by being trained. We were not prepared by process. We
were not prepared by oversight. And we certainly were not
prepared for accountability.
And I think it is very important that we focus on one
important fact. Things don't change unless there are
consequences. If people are not fired or demoted or if there is
not a failure to promote in the military because of massive
failure of appropriate oversight and management, things will
not change.
One of the most disheartening things I heard when I was in
Kuwait and Iraq was the admission by many people I talked to
that the exact same mistakes had been made in Bosnia.
And guess what they did after Bosnia? They did a lessons
learned. And guess what happened to the lessons learned? Nobody
read it before Iraq. And so, the same mistakes were repeated
again.
And there is no way we can look the American people in the
eye and say that we are not going to let this happen again
unless there are consequences when people fail to look out for
the taxpayers' money in a way that is responsible.
So this hearing is important, but I do think that the
Contracting Commission, which I am very excited about that will
be a bipartisan effort beginning next year, if we do not look
at their recommendations in the coming years, and make sure
that this is not just about talk, and these hearings are very
important and I know how many of them we have had. There have
been, by my count, I think 300 different reports written about
contracting problems. And there have been, by my count, tens
upon thousands. I think we have figured out now, there are
around 30,000 auditors in the Department of Defense alone.
Now, this does not make America feel good about where we
are.
So, I am glad we are having this hearing. And I do not want
to be the gloom and doom person here, but I will tell you I do
not think all the hearings in the world are going to make a
difference until somebody starts losing their job. Somebody
loses a star. Someone fails to get a star. Someone at the
Department of Defense is fired because of how they have done
their job when it comes to watching taxpayer money. Thank you,
Mr. Chairman.
Senator Carper. Senator McCaskill, we thank you as well.
Mr. Bowen, please proceed.
STATEMENT OF STUART W. BOWEN, JR.,\1\ SPECIAL INSPECTOR GENERAL
FOR IRAQ RECONSTRUCTION
Mr. Bowen. Thank you, Mr. Chairman, Ranking Member Collins,
Senator McCaskill, and Members of the Committee. I am pleased
to be here to address the topic of today's hearing, Management
and Oversight of Contingency Contracting in Hostile Zones, one
of which I travel regularly.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Bowen appears in the Appendix on
page 57.
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I am here to tell you that there are two fundamental
aspects to analyzing this issue in my view: First, the
oversight of the contracting processes in a contingency zone;
and, second, oversight of contractors on the battlefield.
My office's work has focused chiefly on the former issue,
and my testimony today, which I will summarize briefly,
analyzes that matter.
SIGIR's mandate gives us broad jurisdiction to look across
agency lines in overseeing the use of about $45 billion in U.S.
Government money appropriated for the relief and reconstruction
of Iraq.
We have issued more than 200 audits, opened more than 200
inspections, opened more than 300 investigations, and issued
three lessons learned reports. My talk today will focus on our
lessons learned report on contracting and procurement.
Our next quarterly report will be delivered to the Congress
in 5 days, and, as you noted, I leave for my 19th trip to Iraq
next month.
In my remarks, there are three matters I would like to
address briefly: One, our recommendations regarding contracting
in Iraq reconstruction; two, what congressional actions have
been taken and their efficacy, and three, the core challenge
with analyzing and addressing the problems of contingency
operations management.
In 2006, we issued our second lessons learned report on
contracting and procurement. The first lessons learned report
was on human capital management, and the last one, presented to
this Committee last spring, was on program management.
At the hearing before the full Committee in August, we
presented our findings and conclusions. We noted that our
extensive review, which included interviewing all those in
charge of contracting in Iraq and reviewing all the documents
related to it that, indeed, found contracting procurement
personnel were not adequately included in the planning for Iraq
reconstruction. There was too broad a use of sole source
contracts early on in the process and especially limited
competition contracts; that there was no single set of
contracting regulations at work in Iraq. There were a whole
series of agency-driven versions of the Federal Acquisition
Regulation.
There was no deployable contracting system available at the
time that the Iraq relief and reconstruction began. There was
no single unified contracting entity to manage contracting in
theater. There was a failure in Iraq to definitize contracts as
one of our audits identified in detail, and there was an
overuse of the expensive design-build, cost-based contracts,
with limited, or not effective enough, invoice review. We
continue to do our invoice review of those contracts, but
different contracting mechanisms would have been better.
Our recommendations promoted the creation of a contingency
Federal Acquisition Regulation, institutionalization of
programs like the Commanders' Emergency Response Program,
including contracting officials early on in contingency ops,
and creating a contingency contracting corps, which S. 680
proposes to do, and which has passed the Senate.
The Senate has acted through S. 680 in a very effective way
to address some of our recommendations, including the
contingency contracting corps issue; the need to address cost-
plus contracts and get control and oversight on them; and to
address the dramatic drop in the acquisition workforce over the
last 15 years.
The OMB Office of Federal Procurement Policy has adopted
SIGIR's guidance for contingency contracts, and, so, that
recommendation is having an effect within the Executive Branch
as well, and additional evidence is the Gansler Report, a very
effective review of the Department of the Army's contracting
challenges, echoing similar problems, ones that this Committee
has uncovered in hearings and ones that we have identified in
our reporting.
The next phase of our lessons learned effort will be to
look at contingency operation management writ large, which was
the issue that Senator McCaskill was addressing. The
contracting problems, the personnel problems, the program
management problems are symptoms of a larger issue, and that is
for the U.S. Government to address how it is structured to
manage operations, relief and reconstruction operations, in a
contingency environment.
And with that, that concludes my brief statement. I look
forward to your questions. Thank you, Mr. Chairman.
Senator Carper. Very fine. Thank you for that statement and
for your work. Mr. Solis, you are recognized.
Mr. Solis. Thank you.
Senator Carper. Why don't you proceed?
STATEMENT OF WILLIAM M. SOLIS,\1\ DIRECTOR, DEFENSE
CAPABILITIES AND MANAGEMENT, ACCOMPANIED BY CAROLE F. COFFEY,
ASSISTANT DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT TEAM,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Solis. Chairman Carper, Senator Collins, and Senator
McCaskill, I am pleased to be here today to discuss a number of
issues regarding the oversight and management of the
contracting with the beginning of military operations in Iraq,
the scope, size, and use of contractors has grown
exponentially, making the management and oversight of them more
complex.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Solis appears in the Appendix on
page 73.
---------------------------------------------------------------------------
Your continuing oversight of this issue is paramount, not
only to improving the management of contractors, but also helps
ensure our military members receive high quality contract
services in the most economical and efficient manner.
My testimony will focus first on the problems that DOD has
faced in managing and overseeing contractor support to deployed
forces; and second, the future challenges that DOD will need to
address to improve its oversight and management of contractors
at deployed locations.
In addition, as you requested, we have developed several
actions the Congress may wish to consider requiring DOD to take
on.
Since 1997, we have reported on long-standing problems that
have hindered DOD's management and oversight of contractors at
deployed locations. Examples of these problems include: The
failure to follow planning guidance; an inadequate number of
contract oversight and management personnel; the lack of
visibility over contracts and the number of contractors;
failure to systemically collect and distribute lessons learned;
and a lack of comprehensive training for contractor oversight
personnel and military commanders.
In addition, we have also reported on the lack of high
level attention and leadership within DOD to deal with these
problems. Not surprisingly and in some cases where there has
been a lack of oversight and training with contractors, there
have been both monetary and operational consequences.
To its credit and in response to some of our
recommendations, DOD has begun to address some of these long-
standing issues by designating a focal point within the OSD to
deal with contractor oversight issues, implementing a database
to maintain accountability of contractor personnel in Iraq and
Afghanistan, issuing in 2005, a comprehensive guidance on
contractor support to deployed forces, which is a noteworthy
improvement.
However, we found little evidence that DOD and its
components were implementing the 2005 guidance or much of the
other guidance addressing management and oversight of
contractors supporting deployed forces.
Therefore, we believe, the issue is now centered on DOD
leadership ensuring that existing guidance is being implemented
and complied with.
Based on our past work, several additional challenges will
need to be addressed by DOD to improve oversight and management
of contractors supporting deployed forces in future operations.
These challenges include a number of broader issues, such
as incorporating contractors as part of the total force,
determining the proper balance of military, civilians, and
contractors in future contingencies and operations, clarifying
how DOD will work with other government agencies in future
contingencies and operations, and addressing the use and role
of contractors in its plan to expand and transform the Army and
Marine Corps.
As requested, we have considered some specific legislative
remedies for the challenges facing DOD. While we believe DOD
bears the primary responsibility for taking actions to address
these challenges, there are three actions that the Congress may
wish to consider requiring DOD to take in order to improve
oversight and management of contractors and ultimately to
improve services provided to the war fighter.
These include: Again, determining the appropriate balance
of contractors and military personnel as it shapes its forces
for the future, including the use and role of contractor
support to deployed forces and force structure and readiness
reporting; and ensuring that operation plans include specific
information on the use and role of contractor support to
deployed forces.
In closing, I think it is important to recognize that we
are dealing with a very complex and complicated issue. Today,
there are as many contractors supporting military forces in
Iraq as there are military forces themselves.
These contractors provide a large range of services. Put
simply: Contractors are an enormous and essential part of our
way our military operates today, and DOD's efforts to address
long-standing challenges with its oversight and management of
contractors at deployed locations touches fundamental aspects
of how the military is organized, how resources and
responsibilities are allocated, and how it prepares for and
executes the missions in peace time and during combat.
What is needed is an institutional change that accepts the
reality of contractors as a vital part of the total force and
fundamental change in how DOD thinks about, plans for, and
executes its use of contractors to support deployed forces.
As an officer told us in 2006, ``contractors are not fire
and forget.''
This concludes my prepared remarks. I will be happy to
answer any question that you may have.
Senator Carper. Mr. Solis, thank you very much for your
testimony, to both of you for your help in past months and also
in preparation for this hearing.
Mr. Solis. Thank you.
Senator Carper. Ms. Rasor, you are recognized and please
proceed.
STATEMENT OF DINA L. RASOR,\1\ DIRECTOR, FOLLOW THE MONEY
PROJECT; AND CO-AUTHOR OF ``BETRAYING OUR TROOPS: THE
DESTRUCTIVE RESULTS OF PRIVATIZING WAR''
Ms. Rasor. OK. Thank you very much for having us today. I
wanted to say--I guess we are kind of dating ourselves--but
between the two of us we have 50 years of experience of looking
at this, so it is very frustrating to see where we are today.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Rasor and Mr. Bauman appears in
the Appendix on page 101.
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We took time out of our normal work to write this book,
because we heard so much from so many soldiers that troubled
us. And when we were writing the book, we wanted to write it
from the soldier and the contractor employee's point of view.
And we spent a lot of time talking to a lot of people.
But one of the things that I learned the most about--in the
course of writing this book--is how did this get started? How
is it that we suddenly had this giant leap in the amount of
contractors compared to the Gulf War and wars before this?
And I am going to be discussing about contractors on the
battlefield in hostile areas where they should be, where they
should not be, and then I am going to defer to Robert Bauman
with all his years of training in oversight, although we both
talk about oversight.
When we interviewed General Paul Kern, the head of the Army
Materiel Command, for this book, he brought out something that
I had not thought of, and it just did not dawn on me. He said,
I was told to prepare for this war in a short--I am
paraphrasing him here--amount of time for this war. And there
was suddenly a troop cap put on us, and it was not just a troop
cap on people who pulled the trigger. It was a troop cap on the
people who did the logistics.
And, of course, many of you may know that logistics is the
weak sister in the sense of getting funding in the Army and the
Department of Defense. It is not the glamour career.
And so, he is looking around saying I do not have enough
people. What am I going to do?
Well, they pulled out the LOGCAP III contract that KBR had
to service troops around the world--Bosnia and other places.
And when they pulled it out, it was a $60 million a year
contract. It has now accrued, most estimates I have heard, $26
billion. That is contract growth.
So what happened was suddenly because of this troop cap,
because of this force, this contract was exploded in ways never
thought of before, and I think of Iraq now as the land of
unintended consequences. And one of the unintended consequences
that I am very concerned about that is where the contractors
are and how much do you rely on them and how do the troops rely
on them?
This situation was an anomaly. It does not have to be
permanent. We do not have to have contractors in hostile zones
at this level. I am not against contractors. I am not against
the use of contractors. I am for using contractors where it
makes sense, where it saves money, and when they have effective
oversight.
But there is an Achilles' heel here. The Achilles' heel is
you cannot put people--contractors and contractor employees--in
vital logistics areas in a hostile zone, where the soldiers
have to rely on them getting through for their food, water
supplies, ammunition, and everything else.
And there is a reason for that. When you join the Armed
Forces, you take an oath. You are under the Uniform Code of
Military Justice. And we all know how patriotic our troops are.
But the reason that we have the Uniform Code of Military
Justice is you give up some of your constitutional rights, and
one of them is you cannot just quit and go home. You stay.
And you are expected to stay and fight. If you are an Army
truck driver and you think that road is dangerous and you tell
your sergeant you do not want to go there--you know in the back
of your mind, your goal is--your choices are drive or be
brought up on charges.
And the reason is that war is chaos. War is dangerous, and
you ask people in war to do things against their own self
interest. And that is why we have a military.
When you put a contractor truck driver in that situation--I
am not talking about driving in a safe situation--I am talking
about driving those long convoys, those thin lines of supply
support from base to base in Kuwait--you have got two problems.
One, are you asking the contractor to supply food and water to
soldiers in outlying areas, which, by the way, the LOGCAP
contract requires them to do, but they do not do it.
When you do that, you have two problems. You have a
contractor who has a statement of work who may decide I do not
want to do some of this or all of it. I do not want to do some
of it. Our book is full of that, of them halfway doing it.
And the commander does not have the same kind of control of
going up as he would someone under him, relieving him of
command for not doing his job and putting in someone else.
The commander has the job going back and forth with our
peace time procurement rules; to run back, start a breach of
contract proceedings in the United States. And the other part
of that is contractor employees can quit at any time. That is
their constitutional right, and they have.
One of the examples is when you all remember when one of
the first KBR truck convoys blew up and Tommy Hamil got
kidnapped, and he was in a car with the insurgency, with a gun
to his head. And that was flashed all over the news. Well, a
whole lot of contracting truck drivers quit, and there were a
thousand trucks stopped at the Turkish border, and the Army had
to scramble to find somebody to drive them.
Senator Carper. Ms. Rasor, I could listen to you testify,
frankly, for a whole lot longer, but finish your thought. And
we will----
Ms. Rasor. Yes. OK.
Senator Carper [continuing]. Turn it over to Mr. Bauman.
Ms. Rasor. All right. So, I wanted to put this into the
mix, because this is something people do not think about.
Now, what are we going to do if the Iraqi Parliament
decides to pull the immunity for the contractors? How many more
will go home and leave us in the lurch? I really would like you
to listen to Perry Jefferies on this.
So, I would like to say that my suggestion is you have to
pull the contractors back to the safe fortified bases, to
Kuwait, to the Green Zone, and figure out the line in the sand
that you do not go across so that our soldiers are not stuck
when the contractor fails to perform or the contractor
employees quit. Their lives are at stake. And I am just
appalled that this could happen to our troops.
Now, I am going to turn it over to Mr. Bauman to talk more
about the things that----
Senator Carper. Mr. Bauman, you are welcome. Thank you.
STATEMENT OF ROBERT H. BAUMAN,\1\ INVESTIGATOR, FOLLOW THE
MONEY PROJECT; AND CO-AUTHOR OF ``BETRAYING OUR TROOPS: THE
DESTRUCTIVE RESULTS OF PRIVATIZING WAR''
Mr. Bauman. Good afternoon, Mr. Chairman, and Members of
the Subcommittees.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Rasor and Mr. Bauman appears in
the Appendix on page 101.
---------------------------------------------------------------------------
I am here today with Ms. Rasor to speak about the problem
with acquisition management and oversight for contingency
contracts in Iraq.
It has been well documented by government agencies that the
Army's management and oversight of its contingency contracts
for services in Iraq and Afghanistan has been seriously
deficient. Our book also discloses on-the-ground accounts of
how poor acquisition management and oversight has affected our
troops.
Deficient acquisition management and oversight seriously
erodes the government's ability to maintain control and
accountability of its contracts.
Such deficiencies should not have been a surprise for the
Army. As far back as 1994, the GAO and other agencies have
disclosed these problems on the part of the Army on contingency
contracts.
Despite years of being aware of the problems, the Army has
taken no substantive action to resolve their management and
oversight problems. There is no telling how many billions of
dollars have been wasted as a result.
A startling example of just how dysfunctional and
ineffective oversight has been on the ground in Iraq,
especially for the LOGCAP contract, was revealed in a 2005
LOGCAP Team Detachment after-action report we obtained from a
source who was part of that team.
LOGCAP support personnel, who are also called planners,
were assigned to all the primary bases in Iraq between 2004 and
2005 and were required to submit comments and issues regarding
their tour of duty.
These submissions were rolled up into the after action
report submitted through the LOGCAP chain of command. I request
this report be included for the record.\1\
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\1\ The report entitled ``Logistics Civil Augmentation Program
(LOGCAP) LOGCAP Support Unit (LSU) Det. Y8--Iraq, After Action Report &
Lessons Learned, Operation Iraqi Freedom,'' submitted by Mr. Bauman
appears in the Appendix on page 176.
---------------------------------------------------------------------------
Senator Carper. Without objection.
Mr. Bauman. These planners were there to monitor the
contract and provide advice, assistance, and recommendations on
LOGCAP issues to the Administrative Contracting Officer, the
military, and KBR. Unfortunately, they did not have authority
over the contractor or the ACO.
The report disclosed a lack of support by their chain of
command and being at the mercy of KBR for life support that was
inadequate, untimely, and unresponsive.
ACOs were not trained in LOGCAP and inexperienced in their
roles. The LOGCAP program manager acted as a cheerleader for
KBR and led the charge in supporting boondoggles for the
contractor.
Planners suggested possible conflicts of interest and
unethical or criminal activities between DCMA, the LOGCAP
program manager, other unnamed government agencies, and KBR in
monitoring the contract, including possible collusion.
Although the Gansler Commission Report was correct in
recommending the need for more skilled acquisition and contract
monitoring personnel, that alone does not address the root
problems for defense contracting in general.
Those root problems are the significant weakening of
contract laws and regulations over the last 13\1/2\ years,
under the guise of acquisition reform, and the partnering
process between DOD and contractors.
The Federal Acquisition Streaming Act and the Federal
Acquisition Reform Act, both enacted in the 1990's, impacted
Federal procurement laws and regulations by repealing or
superseding various aspects of the statutory basis for
government contracting such as weakening the use of the cost
accounting standards, the backbone of controlling contractor
costs.
The partnering process in DOD contracting is a concept that
has been a disaster for government agencies and the taxpayer.
Based on a mutual commitment between government and industry to
work cooperatively as a team, it accepts the concept of mutual
common interests among the parties to further the interests of
the contract. But it does not consider where those interests
might be different, especially when it comes to pricing of
contracts, technical issues, or differences in manpower, skill,
and experience.
Large contractors in particular have far more acquisition
resources, skill, and experience than DOD, and, therefore,
dominate the acquisition process under this process.
With partnering, a large contractor can insinuate itself
into the acquisition process and dominate or influence
acquisition management and oversight to its benefit.
It seems the Army has decided the best way to remedy its
deficiencies in acquisition management and oversight is to
outsource these functions, such as what has been happening for
the new LOGCAP IV contract. Contractors managing contractors
compromises the government's control of the process and creates
a conflict of objectives between contractors in the DOD.
It also questions the support contractor's relationships
and motive with the contractors it will oversee and evaluate.
But who is going to watch the watchers? Certainly, not the
Army. They do not have the resources to do that. Acquisition
and oversight should be considered an inherently governmental
function to maintain the government's authority over
contingency contracting and to have a contractor manage other
contractors is tantamount to having a fox guarding the hen
house.
We recommend that the Congress incorporate remedies
strongly recommended by GAO, SIGIR, and the Gansler Commission
to grow the oversight acquisition personnel who have been
trained and are skilled in this type of contracting.
At the same time, FASA, FARA, and SARA laws should be
repealed or modified, as they effect government contracting to
include strengthening CAS to provide acquisition and oversight
personnel with the tools to control costs.
We also recommend eliminating the partnering process. There
needs to be a clear acquisition authority over the contractor
and over the process.
Acquisition management and oversight should be an
inherently government function. Therefore, Congress should
enact a law restricting or eliminating the privatization of
this process.
I look forward to your questions.
Senator Carper. I am sure you will have some. Thank you so
much, Mr. Bauman, for being here and for your help today.
Mr. Jefferies, again, we are grateful for your service. We
are grateful that you are here. And you are recognized for 5
minutes or so. Take a little more if you need it, but try to
stick to that if you can. Thank you.
STATEMENT OF PERRY JEFFERIES,\1\ FIRST SERGEANT, U.S. ARMY
(RET.), IRAQ AND AFGHANISTAN VETERANS OF AMERICA
Mr. Jefferies. Thank you, sir. Good afternoon, Chairman
Carper, Ranking Member Collins, and Senator McCaskill.
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\1\ The prepared statement of Mr. Jefferies appears in the Appendix
on page 114.
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I am here to speak about the effects of contingency
contracting on the battlefield as I encountered them in my role
as a Calvary First Sergeant in Iraq. This is a short version of
my full statement, and you have got the rest of it for the
record.
Senator Carper. Your full statement will be made a part of
the record.
Mr. Jefferies. I encountered these effects as the First
Sergeant for Headquarters Troop, 1 Squadron, 10 U.S. Cavalry
where I was assigned since June 2000 until I retired in 2004.
I served in that role while I was in Iraq from April
through October 2003. My troops' role was to staff, supply,
treat, arm, and support Force Package I, the lead element of
the 4 Infantry Division during Operation Iraqi Freedom I.
We were tasked organized with a field artillery battalion
and elements of a support battalion, specifically the Forward
Logistics Element that we called the FLE.
Just to try to give you an idea of how big this element
was, my troop or my squadron on its own normally had about 800
people. In Iraq, we moved with about 2,000 people, a fairly
self-sufficient task force.
I retired from the Army in 2004 and I am testifying today
as a private citizen.
But Chief of Staff General Peter Schoomaker wants retirees
to wear this new Army Retired lapel pin and think while you are
doing it: ``I was a soldier, I am a soldier, and I always will
be a soldier.'' My director asked me what made me an expert to
come here and testify today, and I told him because I lived it,
and I am still a soldier.
Soldiers are expected to maintain the Professional Army
Ethic, and that means to speak out with the value of candor
when it is needed. And I think there are some important issues,
and I think that my soldiers were affected by the way these
contracts worked while we were in Iraq and that needs to be
said.
I would like to point out that I work as a contractor at
Fort Hood, and I understand that some services can be delivered
by contractors in an efficient and responsible manner, and I
try to do that every day. And that frees soldiers to train for
war and to do those other important tasks instead of some of
the miscellany that they might get caught up in otherwise.
But what I refer here to are some large-scale support tasks
doctrinally provided by combat support or combat service
support units that were supposed to be provided to our unit in
Iraq by civilian companies.
While I was in Iraq, the task force that I was part of
moved independently from our higher headquarters and support
units. That made us rely on contractors in various locations to
provide bulk supplies and services to us. When these
contractors failed to provide or to deliver, their failure
impacted my soldiers in a negative way. And I will discuss two
issues now. There are others in my longer statement and some
examples. To paraphrase one of my former commanders, whom I
discussed my appearance with here today, he said we had just
enough stuff to kick in the door, but we could not stay in the
room for very long without help. And I think that should be
changed.
We were affected when water, food, and repair parts were
not delivered to my unit in a timely manner. There were many
weeks in Iraq when my entire unit survived on what we called
two and two's--two bottles of water and two MREs, or packaged
meals ready-to-eat a day.
It is infuriating to know now that the water from our unit
was sitting inside storage containers inside Iraq, but never
moved forward. By Army supply doctrine, our higher headquarters
was supposed to push these supplies to us--in other words,
deliver what we needed. But, since the Army was relying on the
LOGCAP contract to provide these supplies, other missions were
assigned to our support, transportation, and logistics
personnel that were supposed to get that done. So even though
those supplies were paid for and designated for our use, they
did not make that final mile, and they were never handed off to
my unit or the element that supported them.
When we departed from Kuwait to attack into Iraq, we
carried with us all the food, water, and other supplies we
could put our hands on. We literally covered our tracked
vehicles with bottles of water and food.
Thankfully, we were organized with the Forward Logistics
Element from the 404th Forward Support Battalion, so we had a
little bit of extra capability, and we were near to self-
sufficient for a few days. But even with all those plans and
all of our soldiers' hard extra work to make them work, we felt
our first supply shortages as soon as we crossed the gate into
Iraq and saw Iraqi children standing by the side of the road.
They held leaflets that the U.S. forces had dropped before them
promising them food, water, and medicine. And they were
literally begging for food and water, and we did not have any
to give them.
This system was troubled, too, by the absence of the normal
supply runs. We were not able to evacuate our prisoners or
broken equipment to rear areas as we had trained to do because
since there were no trucks coming forward, there was no back
haul capability to take it back.
We moved through Iraq from Kuwait to Baghdad to Tikrit and
then finally out to the eastern border, near Iran. As the main
hostilities settled down so did we; first, in some positions in
the desert that we called the dust bowl, and later we moved to
the Kirkush Military Training Barracks--named Camp Caldwell
after a young soldier who died there the first night we
arrived.
While we were at the dust bowl, water ran so short that
even our scouts who stood on the checkpoints in the 120-degree
sun were restricted to one or two one-liter bottles of water
per day.
When a laundry unit finally reported to us, I was forced to
commandeer the water and use it to supply my soldiers. And then
I put all their soldiers on guard duty. All this happened while
supplies designated for my unit and supposedly delivered by KBR
sat elsewhere in Iraq and went undelivered.
Our soldiers had to add the mission of re-supply to their
other activities just to ensure our survival. For example, the
logistics officer from our Forward Support Element organized
convoys to go to Baghdad and other places looking for supplies.
In one case, they drove all the way back to Kuwait City to get
hydraulic oil that we needed for our tanks. These were soldiers
whose time was already accounted for since KBR was supposed to
be providing these deliveries.
We felt other effects when contractors and subcontractors
not only did not provide the required deliverables to the
government, and my unit had to provide these or accomplish the
task that these companies had been contracted to do.
In late July, the trainers for the new Iraqi Army reported
to our forward operating base at Camp Caldwell. Instead of
relieving us from non-mission-essential tasks, they added to
them.
We had to provide food and water to the contractors. There
was pressure on us to provide hot meals to these contractors
even when we could not deliver them to all of our soldiers.
Once again, we had to restrict the amounts of water
provided to American soldiers to two bottles a day so that we
could provide the new Iraqi Army trainees four bottles of water
a day. We had to cover gaps in their contractor security and
training. Meanwhile, our other military missions continued,
and, in some cases, multiplied because of while we were out.
One day at Camp Caldwell, I spent a day escorting a
contract officer from General Sanchez's office and several KBR
contractors around while they discussed services they were
supposed to provide to us. That was the first time I heard the
words ``statement of work.''
While I was in Iraq, these people never followed through on
work we discussed or other support that I only found out about
once I had returned to the United States.
Part of the problem with contingency contracts is that
there is only a very remote connection between the people
managing the contract and those receiving the service. Contract
oversight personnels are assigned to the higher levels of
leadership, not generally to the tactical levels supposed to
receive these services.
We were certainly not set up to monitor the terms and
conditions of most contracts and receive services or had no
idea of the scope of work, the conditions, or terms, we were
responsible for, and we did not have a 1-800 contact number
that we could call and find out about the contracting.
I understand that the Army is creating a new type of
contracting non-commissioned officer to help monitor contracts,
but they are not deployed where the rubber meets the road, at
least not yet.
Worse, to me, it seems like a self-defeating proposition.
If we have to add all these additional structures for oversight
to the contracts in the front of the battlefield, then why
don't we just let those people execute the mission to start
with?
Just have them do the job the contractor is doing. The best
way to prepare for tactical logistics, I feel, is to allow
commanders to plan them and execute them with their own proper
resources.
There were a lot of other issues while I was in Iraq, but a
lot of people worked very hard and eventually to good effect to
correct a lot of the problems. But that in itself is a problem.
During the invasion, during the crucial tactical phase,
when units are contending for battle space and fighting for
position, that is a bad time to be figuring it out. That needs
to be done ahead of time, and then trained to as near
perfection as possible, because plans will go wrong when they
are executed. They are going to go wrong. That is the nature of
war. But if you have a good plan at least you have got a good
basis for change.
Hoping that your beans, bullets, and Band-Aids show up
magically on time and in the right place, that is no kind of a
plan. It is only a recipe for disaster. The best way to prepare
for tactical logistics is to allow commanders to plan them.
In my opinion, the Department of Defense should reduce its
dependence on contractors and rebuild a self-sustaining
logistics capability into its units. It should never again find
itself in a position where it can only accomplish the mission
with the permission of a civilian company unless the
Administration is prepared to immediately nationalize these
companies in time of war.
And what I am talking about is delivery--trucks, security,
the people to move supplies, all this must be under military
control from the combatant commander on down at least until
security is established and the kinetic part of the fight has
ended.
Thank you for the opportunity to appear before you, and I
would be pleased to answer any questions you have.
Senator Carper. Mr. Jefferies, thank you very much for your
excellent testimony. It went on little bit, but that was worth
waiting for.
The point that you make and your testimony, Mr. Jefferies
is we sometimes focus understandably on the amount of money
that is wasted, or the amount of money, tax dollars that are
used ineffectively or inappropriately.
We do not always focus on the consequences for the war
fighter.
Mr. Jefferies. Yes, sir.
Senator Carper. And what you have done is to just give us
very graphically what the consequences are for the people that
are out there fighting. Their lives are on the line, and trying
to do their job, and how they need better support than in too
many cases they have gotten in the last 4 years.
Mr. Jefferies. Hooah.
Senator Carper. For those of you who do not know, that is
an Army term, ``hooah.'' We do not have those in the Navy, but
maybe we should. It is a good one.
I sort of thought about this question as you all testified,
I was born 2 years after World War II ended. I do not remember
much about the Korean War except from my uncle, who has told me
about it who served over there as a Marine. My dad, along with
my uncle, served in World War II, so I know something of that.
And I served in the Vietnam War myself, and was involved as
the Governor and Commander-in-Chief of our National Guard in
Delaware, and was in Congress during the Persian Gulf War, so I
have some idea what was going on in those wars.
I do not ever recall in the war that I served in or that my
uncles and my father served in, where we had this kind of
reliance on contractors. I just do not remember anything like
this. I know we had some reliance in the Vietnam War, but
nothing of this magnitude.
How did this happen? My recollection is that our Secretary
of Defense, Secretary Rumsfeld, wanted us to sort of redesign
our defense and to have a smaller force, and I suppose a
smaller uniformed force, and maybe the flip-side of that is by
having a smaller uniformed force, we end up with a larger
civilian force and private sector force that we use as
contractors.
Now, maybe that is the genesis of this. But how did we go
down this road in the first place? What started us down there?
Anyone?
Ms. Rasor. Well, I felt really compelled to tell Perry
Jefferies' story in my book, because, I, like I said it never
dawned on me that troop cap meant logistics. And it also never
dawned on me that they would actually believe that you could
rely on contractors not to leave.
And so, I think that is the start of it, but I think it was
sort of the perfect storm. There was a lack of oversight
already. There was already a problem. There was a rush to go to
war. And this set up a situation where the troops and troop set
all the way up--amazing, and one of our people we talk about in
the book is now at West Point, and a brilliant captain. They
just did not know what the logistics situation was because it
got changed. It got changed while they were on the way to the
war. And I think that people are kind of lost on that--because
people say well, now contractors are there, and we rely on
them, but we cannot change it.
No, this was an unusual circumstance. And so, I am really
hoping that the Army and the Congress look at this and say we
do not have to do this again.
Senator Carper. All right. Mr. Solis and then Mr. Bowen?
Mr. Solis. Yes, I was going to say part of it has to start
with if you go back to the early 1990's, when after the first
Gulf War, we downsized the forces.
I think also, which is maybe a beginning of a more recent
phenomenon and General Casey even talked about it yesterday, is
that one of the core missions that the Army is going to take on
now is stability operations. And so, the missions are changing.
And not only are we using more folks like in the logistics
area, we have linguists in Iraq. We have interrogators that we
are now using as contractors or intel analysts. So, we are
expanding----
Senator Carper. We even have sociologists and----
Mr. Solis. That's right.
Senator Carper [continuing]. And anthropologists----
Mr. Solis. That's correct.
Senator Carper [continuing]. Who, I am told, are doing
pretty good work for you.
Mr. Solis. Right. I mean, in addition, private security
contractors. A number of different fields are being used. But I
think part of the genesis is the downsizing of the force, the
increase in different types of missions.
So, I think there is--and part of that, also, I would
mention that there is a requirement. There is a lot of
requirements on the books for guidance in terms of preparing
for the types of missions you are going to have into the future
for the military, what are going to be your needs, not only for
the military and civilians, but for contractors.
And so, there is a lot on the books already. So, this
necessarily should not be a surprise that we have these
problems because there has been planning and there is planning
guidance on the books already.
Senator Carper. All right. Mr. Bowen, please.
Mr. Bowen. A policy decision was made in the Department of
Defense in 1991 to outsource primary logistical support for the
Army and for military members in contingency operations. That
resulted in the issuance of the first LOGCAP contract. It was a
multi-year contract. It went to Kellogg, Brown, and Root. They
retained it; it was annually renewed until 1995 or 1996, when
it was recompeted and awarded to DynCorp.
DynCorp held that contract for five more years. It was
recompeted again in 2000, and Kellogg, Brown, and Root earned
that contract. And it was recompeted last year, and it was
divided up for the first time among three different
contractors--Fluor; Kellogg, Brown, and Root; and a third one.
It has been challenged, so it is still--the issuance is still
pending.
The point being is the outsourcing of providing food, fuel,
and billeting, or shelter, to troops in the field through
contractors was made in the late 1980s, early 1990s--that was a
policy decision. It resulted in the LOGCAP series of contracts,
and it was a philosophical reflection, I think, of the trend
towards outsourcing of many previously governmental functions
within the U.S. Government as they evolved and also, perhaps,
was part of the peace dividend process as well.
Senator Carper. All right. Thank you.
Ms. Coffey. Senator, if I may?
Senator Carper. Please.
Ms. Coffey. Some of these decisions are actually the result
of unintended consequences. For example, when an acquisition
person decides not to buy the technical data package for a
weapons system, then they have to depend on contractors to
support that weapons system because they do not own the
technical data.
Decisions that have been made to buy a limited number of
aircraft or some kind of weapons system and then does not--is
no longer economically feasible for the Department to train
people to fix these weapon systems, then makes us rely on
contractors.
So, it is not--no one made a decision to bring 120,000
contractors into Iraq. Many, many people make a decision to
bring one or two based on decisions that have been made maybe
20 or 25 years ago.
Senator Carper. All right. That was a helpful insight.
Thank you.
My time has expired. I am going to yield to our co-chair
here, Senator Akaka, and, if you would, Mr. Chairman, I ask
each of us to keep ourselves to about 7 minutes. And then we
will have time for a second round, maybe a little shorter
second round. Mr. Chairman, thanks very much again.
Senator Akaka. Thank you very much, Mr. Chairman. Mr.
Bowen, you recommend that any civilian agency contracting in a
contingency environment should conduct Gansler-type studies of
their contracting practices.
Mr. Bowen. That's right.
Senator Akaka. This is a useful proposal, I feel. However,
it seems that there are several cross-cutting issues affecting
all agencies with contracts in Iraq that can be identified now.
What are the most pressing contracting problems that you
have identified that agencies should address in the short term?
Mr. Bowen. First, with respect to contingency operations,
tracking the number of contracts and contracting actions going
on in theater through a single database is essential.
Second, developing a single point, a one-stop shop, if you
will, where theater contingency contracting is carried out
would help achieve better insight and oversight to what
contracting actions are going on.
Third, ensuring that there is an effective continuity or
process for continuity of contracting officers in theater. One
thing that we have uncovered over and over again in Iraq is
that a contract sometimes will not have a contracting officer
on it, while the previous one has departed, and the next one is
waiting to arrive.
The Joint Contracting Command-Iraq, with respect to DOD
contracts, has done a good job addressing that problem we
identified early on, but it, nevertheless, continues to be an
issue.
And finally, we recommended in our contracting lessons
learned, our first recommendation, was the development of a
contingency Federal Acquisition Regulation--in other words, one
set of regulations that all contractors will know are the rules
of the game in contingency environments for contracting. That
is not the case today.
Senator Carper. Chairman Akaka, can I interrupt for just a
moment? We are in a situation where Senator McCaskill needs to
go preside at four o'clock. And Senator Collins is required to
be at another hearing of equal importance, and what I would
like to do, if it is all right, is just maybe to yield to
Senator McCaskill for, say, 5 minutes, and then she could slip
off to preside and then back to you. Is that all right?
Senator McCaskill. I think that you should yield to Senator
Collins for 5 minutes and then back to me, because then I would
have time for 5 minutes to get there.
Senator Collins. Thank you.
Senator Carper. All right. Fair enough. Senator Collins.
Senator McCaskill. Because you were here before I was, and,
besides that, you are more senior. See I am figuring it out.
Senator Collins. You are a quick study. Thank you very
much.
Senator Carper. Thanks for helping us work this out.
Senator McCaskill. And thank you very much, Senator Akaka.
Senator Collins. Yes, first, let me thank you both. I have
a classified briefing from the Intelligence Officer that I am
15 minutes late for already, so I very much appreciate that.
I wanted to follow up on the issue that Chairman Carper
raised, because it really is a central issue, and that is when
is it appropriate to use contractors and when is it not?
And that is not an easy issue to resolve. I was struck,
however, Mr. Solis, by your written statement, which pointed
out that in Desert Storm, the Department of Defense used some
9,200 contract employees, but in the current war, the
Department is now using 129,000 contract employees.
We have heard eloquent testimony from Sergeant Jefferies of
an appalling situation in which rather than the contractor
taking care of the soldiers, the soldiers were taking care of
the contractors.
We heard Mr. Bauman refer to contractors overseeing other
contractors. That was a real problem with the Coast Guard
Deepwater contract.
So, I would ask you, Mr. Solis, when is it appropriate,
what criteria would you suggest that the Pentagon should be
using to determine when a function should be contracted out and
when it should not be. And specifically, in a war zone should
logistics be contracted out?
Mr. Solis. One of the things I am suggesting that the
Department needs to go back and look at exactly what are going
to be the requirements for operations into the future? What is
the mix of people that they are going to need based on those
requirements? What is the risk of having military--civilians
and/or contractors do those particular functions?
I will say that, notwithstanding all the problems that we
have talked about with LOGCAP, in our conversations, too, with
military members, when there has been proper oversight, proper
planning, the contract has worked.
So, I am not necessarily opposed to necessarily using
contractors in a hostile zone. I think even if, if you recall
recently, there were five contractors that were killed in the
Green Zone. So, I do not know that there is any particular safe
place.
But again, I think the Department needs to go back, figure
out what its core requirements are, then who's going to fulfill
those requirements? Who's the best at doing it and what are the
risks? And that is not going to be easy, but I think there
needs to be some sort of, as we suggest, a QDR type review, a
Goldwater-Nichols Review of exactly what are my requirements,
who needs to do it, and how is it going to get done.
Senator Collins. Mr. Inspector General, in order to have
accountability, you have to have clear lines of responsibility.
In order to do what Senator McCaskill correctly suggests should
be done about holding individuals accountable, it has to be
clear who is responsible.
One of your major recommendations--or one of your major
findings--has been that there is no single agency in charge of
post-conflict situations. You have the Department of Defense
prior to the war. You have the Department of Defense in the
midst of the war. Right now, you have State, Justice, AID,
Department of Defense, and you have done audits that show that
they do not necessarily work well together.
How important is it for us to tackle the issue of making
sure that there is a single point of responsibility after the--
in the post-conflict situation, though I would argue we are
still in a conflict situation, too.
Mr. Bowen. I would say that you have identified the most
important area for a forum in addressing the structural
challenges of managing post-conflict contingency operations.
In Iraq, as a practical matter, in fact, there have been
three different agencies that have effectively been in charge
of the relief and reconstruction process. Iraq Relief and
Reconstruction Fund I was allocated primarily to the U.S.
Agency for International Development because that was all that
was deemed at the time necessary to invest in Iraq.
That quickly changed in the course of 2003 when the
Department of Defense effectively took over most of the
contracting, the $13 billion of IRRF II.
And then in 2004, the Department of State took over. So,
simply, the experience of Iraq exposes, I think, the challenge
of identifying who's in charge. And, thus, our lessons learned
program, which will produce its next report later this year,
focuses on exactly this issue and will make some
recommendations to Congress for reform.
Senator Collins. Thank you. And thank you, Mr. Chairman.
And I thank my colleagues.
Senator Carper. You bet. Thank you so much for coming, and
again thank you for your leadership on these issues.
Senator McCaskill, thank you.
Senator McCaskill. Thank you, and I really appreciate
Senator Akaka giving me just a couple of minutes before I go
preside.
As you can imagine, this is really painful for me that I
only have 5 minutes, and I am like a kid in a candy store right
now. I do not know where to start.
Let me ask you this, Inspector General, are you aware of
anyone who has been fired or demoted because of their failure
to oversee a contract appropriately in Iraq?
Mr. Bowen. Off the top of my head, no. I would have to get
to back to you with information. We may have that in our files,
but I cannot name one now.
Senator McCaskill. Can anyone on the panel name anyone who
has been fired or demoted because of problems with the way they
oversaw contracts in Iraq?
Mr. Jefferies. Ma'am, I cannot name them, but they put a
major from the Reserves from Texas in jail for it. They have
had a couple go to jail.
Senator McCaskill. And I am not talking about somebody who
we caught stealing.
Mr. Jefferies. Right.
Senator McCaskill. We had active military, a number of
active military, that have been caught stealing, and obviously
this was mostly Army contracting oversight that failed. And we
know that our weapons, frankly, probably have been used against
us, because we failed to even do the basics of marking a weapon
and inventorying a weapon when we brought it into the country
of even keeping track of where the weapons were, and obviously
we know. I have seen the myriad arrows and charts with all the
problems in terms of fraud.
I am talking about just not thinking it is important
whether or not something cost a dollar or $10,000, the kind of
failure to oversee. Anybody that anybody knows has ever been
fired or demoted for that?
Ms. Rasor. I have an example of an opposite situation. One
of the main characters in our book, Major Rick Lambert, was a
LOGCAP planner and then when he went to the LOGCAP contracting
office, he said you have no idea what is going on in Iraq. This
is ridiculous. The troops are not getting what they need. There
is a lot of waste in time. And he was told by his senior--the
senior authorities--I will not tell you because it is too
identifying--but one of them said I want to get my next star.
Keep your mouth shut. And Major Lambert has been retaliated
against.
So, unfortunately, he was very disillusioned because he
thought, surely, if I go and tell the top-level people in this
office----
Senator McCaskill. Something will happen.
Ms. Rasor [continuing]. Something will happen. So, we have
not run into anyone. Quite frankly, I have to tell you,
Senator, having done this for 25 years, I have rarely seen
anyone fired in 25 years for doing a lot of this kind of stuff.
Senator McCaskill. Let me ask you also, Inspector General,
I was really concerned when I read the Center for Public
Integrity's recent report about the $20 billion in contracts
that have gone to foreign companies that we do not know who
they are; that it is impossible to determine who these
companies are. They are just listed as foreign companies.
Are you aware of unidentified foreign entities that are
actually contractors in Iraq that we do not have the
documentation or the available documentation as to who these
companies actually are?
Mr. Bowen. Not within my jurisdiction. I have not uncovered
that, but we will look into it.
Senator McCaskill. Well, that is obviously a concern----
Mr. Bowen. Yes.
Senator McCaskill [continuing]. That we would have. In
fact, their key finding from their analysis at the Center for
Public Integrity is that the number one contractor from 2004 to
2006 is, in fact, unidentified foreign entities. They actually
are at $20 billion, and KBR is at $16 billion.
Mr. Bowen. Are these DOD funds?
Senator McCaskill. I am assuming they are DOD funds. Then
on top of that, if you look at that, along with the foreign
contractors that are identified, 45 percent of all the funds
obligated in the top 100 contractors in Iraq from 2004 to 2006,
in fact, are foreign companies.
Mr. Bowen. That is not true with respect to the Iraq Relief
and Reconstruction Fund----
Senator McCaskill. Correct.
Mr. Bowen [continuing]. Or the Iraq Security Forces Fund.
There has been over the last 2 years an Iraqi First Program
that the embassy and the Joint Contracting Command in Iraq have
pushed aggressively forward and, so, about 60 to 70 percent of
the contracting actions done now are done with Iraqi firms. And
that also applies to the Commanders' Emergency Response
Program.
Senator McCaskill. And I think that is good. That is
strategic. I am worried. I mean, some of the ones they
identified a large contractor was Turkey and other countries,
and I just--it goes back to the point that Ms. Rasor was making
is if we are going to contract with foreign entities, they--if
they are going to be in the hostile zone and they are going to
be in a situation where they need to be focused on protecting
the men and women who are there for us, even if they are
getting less water than the Iraqi folks are getting, we need to
make sure we know who they are, and we need to make sure we
know what kind of oversight they have of the men and women that
are working in the conflict, particularly in an area of the
world where sometimes it is difficult to figure out who is on
our side and who is not.
I would love your follow up on that problem of foreign
contractors and our ability to oversee them.
Mr. Bowen. We will get back to you on it.
Senator McCaskill. Hopefully, you guys will still be going
when I finish presiding. If you are not, you know we will begin
hopefully working with the contracting commission next year,
and I look forward to seeing all of you there. Thank you.
Mr. Bowen. Thank you.
Senator Carper. Senator McCaskill, thank you. We will be
here for a while, I assure you. Thank you for your good work on
these fronts. Senator Akaka, thank you for your willingness to
yield. We appreciate that very much.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Solis, you testified about the extraordinary growth in
contract employees serving the Armed Services, and stated that
DOD does not have an adequate number of contract oversight and
management personnel.
In particular, your written testimony provides staggering
statistics that Army contracting personnel experienced a 600
percent increase in their workload and are performing more
complex tasks, while the Army, civilian, and military
contracting workforce has remained stagnant or declined.
What can be done in both the short term and long term to
address this shortage of contracting personnel? Is DOD taking
any positive steps in this regard?
Mr. Solis. Well, I believe they are taking some steps for
the short term.
But nonetheless, again I keep jumping back to what is going
to be needed for the future, and I think, as you think about
growing the force, as you think about your requirements for the
future, how many of those, for example, the 70,000 in terms of
growing the Army and the Marine Corps I believe, how much of
that is going to be devoted to this kind of activity in terms
of contract oversight?
I think there needs to be a look at those kinds of things
before the Department moves along to make sure that if we are
going to continue to contract at the level that we are at, that
there is some insurance that there is adequate contractor
oversight personnel to do the kinds of things that we are doing
either like Iraq or for future stability operations.
Senator Akaka. Has the GAO looked at how many acquisition
specialists the Federal Government has compared to their
counterparts at the contracting firms, such as KBR?
Mr. Solis. I do not think we have. I know we have reported
on many problems with the acquisition workforce in general and
some of the things that you alluded to--the number of people
who are eligible to retire. But I do not know that we have
looked specifically at that issue.
Senator Akaka. Mr. Bowen, your office's October 2007
quarterly report states that, to date, your office's cases have
resulted in 13 arrests and five convictions.
Could you provide any update to those numbers and tell us
how many cases your office has referred for prosecution and how
you make that determination?
Mr. Bowen. Yes, sir. We have 52 open cases; 36 are at the
Department of Justice for prosecutorial management and review;
14 persons have been arrested; 14 indicted; 5 convicted; 5 in
prisons; and we've recovered over $17 million in forfeiture or
simple direct recovery of stolen funds.
The process for deciding how a case gets prosecuted is
carried out through a joint effort between the Department of
Justice attorneys and my investigators, as well as several task
forces, of which SIGIR is a part.
Senator Akaka. Have these cases come about because of
complaints or reports?
Mr. Bowen. Yes, they have. The largest case we have
uncovered to date involved a corruption scheme in Hillah, South
Central Baghdad, resulting in the imprisonment of four
individuals. Five more are going to trial in March.
That case arose from a whistleblower. And, of note, the
National Defense Authorization Act strengthened protections for
whistleblowers who report to SIGIR.
Senator Akaka. Yes. Thank you very much, Mr. Chairman.
Senator Carper. You bet. Thank you, my friend.
GAO and SIGIR have made several suggestions for
congressional action. If you can think out of all those
suggestions that have been made, what are one or two of the
most important actions that Congress should take to ensure that
the problems experienced in Iraq are not experienced in the
future?
Mr. Solis. Again, I would come back. I think there needs to
be some kind of Goldwater-Nichols, some sort of QDR Review,
within DOD that need to be done. But I think the Congress needs
to get a report back on where the Department stands in terms of
that particular action.
Until they decide what the core requirements for its future
missions are and who is going to do that, I think that is the
kind of thing that needs to be done and what is the role of the
contractor not only for combat zones, but it can be a wide
sweeping contractor look not only again for deployed locations,
but also for maintenance and weapon systems and things of that
nature.
Senator Carper. All right. Ms. Coffey.
Ms. Coffey. I would just add that I believe and GAO
continues to believe that all of the recommendations that we
have made in the past continue to be valid and should be
implemented as soon as possible.
Senator Carper. Which one or two would you say are the most
important?
Ms. Coffey. Well, in several reports, we have made
recommendations that the Department establish teams of experts
to go in and review the services of contracts like LOGCAP
because the need for service and the appropriate level of
service can change. So, periodically, experts should go in and
determine whether the service is the right amount at the right
time.
We have found that when the government looks for savings,
the government finds savings. And in several of our reports, we
have noted that even small little changes can result in big
savings.
For example, the Marines, when they took over the activity
in Djibouti, changed from commercial laundry detergent to
laundry detergent that is available in the military supply
system, and was able to save a considerable amount of money.
So those kind of little things can add up, and that kind of
process should take place regularly.
Senator Carper. Good. Mr. Bauman.
Mr. Bauman. One of the GAO recommendations I thought was
very noteworthy going all the way back to about 1996 in the
Balkans, but it certainly is appropriate today because it has
not been acted on and that is determining level of service.
When we deal with the labor issues, a lot of labor costs are
going to be probably the overwhelming largest costs of the
contract.
Back in Bosnia, there was a real concern about the fact
that the LOGCAP acquisition people did not have a handle at all
on what the level of service should be, and relied on KBR--
relied on their estimates and their level of service that they
recommended. And they went with that without really determining
on their own whether it was appropriate or not.
And now, we see in Iraq that this issue has been raised
time and time again, because we have received many reports
about the fact that there are a lot of workers over there,
especially on the bases, who only work a few hours a day, but
charge 12 hours a day. And it goes on 7 days a week.
We had on a radio show, a truck--former KBR truck driver
that called in and said yes, he made an awful lot of money,
$100,000 or whatever it was. It was great money. All I had to
do is to work 3 hours. Then I just worked 3 days and sat around
for 4 days, but still had to charge 12 hours a day, 7 days a
week. And that would seem to be the routine.
So, this is an issue that I think is very important for
someone to pick up, whether it is--it could be DCAA. It could
be the Army Audit Agency. It could be GAO. It could be anybody
or even SIGIR, but it is an issue that I think cries out for a
real hard look, because of the costs that are spiraling out of
control. And I would put labor costs into that category.
Senator Carper. All right. Thank you. Ms. Rasor.
Ms. Rasor. I have been looking at this in the last 25
years, and you certainly understand having to deal with this,
it seems like every new weapon system is exponentially more
expensive than the last until finally we only have one plane
for all three services.
This war is starting the same thing. The way you game a
system on a cost-plus, cost-reimbursement contract is not the
little margin of profit you are going to get calculated. You
make sure, especially when there is no auditors, investigators
around, you run up your charges--and labor charges are one of
them. You run up your costs to the max as much as you can, as
fast as you can. That increases your overhead rate. Then the
next time, when you are ready for the next statement of work,
that becomes the baseline. And that baseline and then you say
OK, now, we are going to do this, and we are going to do a
little more. And then you run that one up. And then that
becomes the new baseline. And then you run that one up.
And so, what happens is this new normal. This has happened
now in Iraq, and now we have this incredibly unscrubbed,
loaded, historical cost of what it costs to use contractors and
fight a war using contractors in the battlefield or outside the
battlefield.
What I think needs to be done is all these contract costs
need to be scrubbed back down to reality, and looked at and
scrubbed--labor costs, overhead costs, and everything else.
That is how you game the system. You get well on the next
contract. It is called contract nourishment. It is old as the
hills.
But in this situation, it is worse because there were very
few governors on it.
So, if we accept these historic costs as what it is going
to cost to go to war, we will not be able to afford to go to
war with contractors no matter how much money you pour in.
Now, it took weapon systems many generations of weapon
systems of fraud and fat to get to where we are now. This new
industry, the war service industry, has already run their
historic costs up to astronomical numbers, and that has to be
scaled back.
Senator Carper. Thank you. Senator Akaka, any other
questions of this panel? Please proceed.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Solis, one issue that Ms. Rasor and Mr. Bauman have
raised in their book is that the media, and, therefore the
public, generally sees conditions at large bases in Iraq, where
top military officials are often stationed. They went on to
observe that at these bases contractors took very good care of
our troops, while at more remote bases, soldiers had to use
duct tape and take care of their boots in that way, and drink
shower water because there was no clean drinking water
available.
So, based on your work in military operations in hostile
zones, have you observed similar differences in conditions at
large bases compared to remote bases?
Mr. Solis. Yes. Let me go back to, I think, as I have
testified before you, too, there have been longstanding
problems with DOD's and the Services' supply chains.
I would offer, though, that I think the further you go out
to a forward operating base--not that they should not get a
certain level of supply and service--the more difficult it does
become in a hostile zone. But nonetheless, there have been
problems with the distribution and management and movement of
supplies within the theater.
Ms. Coffey. Well, and recently, we have been speaking to
units who have recently returned from Iraq within 30 days of
their return, and we have spoken to them about these kinds of
situations. And I will say that generally at this point,
military members we speak to are very happy and generally very
appreciative of the services they have received, and they
generally, or at this point in time, seem to be happy with what
they are getting.
Ms. Rasor. Can I make a point on this? These are the
statements of work for KBR, of where they are supposed to
deliver food, supplies, and water. Now, this is true this is
earlier in the war and maybe it is better now, although I just
heard a story today that shows the opposite.
In the first statement of work, they were supposed to go
100 kilometers around main bases. Perry was within that 100
kilometers. It did not happen. And the second statement of work
has to do with different supplies. KBR was supposed to go 250
to 400 kilometers among that bases.
And I know that people come back and say well, it is
getting better. It is getting better. We are 5 years into this
war. And the fact is that KBR refused when it got hostile to go
out there, and do that perimeter run.
And so, it was in their statement of work to do it, to get
the water to Perry, get the food and water to him and others.
But they just did not--would not do it. They would tell the
commander and the LOGCAP planner we are not doing it. They even
went so far and what we illustrate in our book at one point
saying we are not going to have our guys come out of our
trailers and feed the troops at this base because you have not
paid the bills, which, by the way, was legal for them to do.
The bottom line is that you--when these outlying areas,
when it gets dicey and they do not go, the troops do not get
the food. But it was in their statement of work that they were
supposed to do this. And they just chose not to do it.
Ms. Coffey. Senator, if I could add one more thing?
Senator Akaka. Ms. Coffey.
Ms. Coffey. When we looked at the use--the activities in
Bosnia, we found that the U.S. Army in Europe had developed
very strict standards for what each base should have. And that
was a lesson learned that was not necessarily taken forward to
Iraq. And so, the size of the housing, the number of
facilities, the size of the gym, that was all laid out, and
that is what each base commander had to have depending on the
personnel at his base.
And so it made making these decisions much easier, and it
also was an opportunity to sort of use those standards to limit
contract growth, because these were the standards everyone had
agreed to. This is an important lesson learned, as I say, that
was not taken forward.
Senator Akaka. Ms. Rasor, you noted that the Military
Extraterritorial Jurisdiction Act can be used to prosecute
crimes committed by contractors.
I have been distressed by media accounts that contract
employees in Iraq may have committed serious offenses,
including rape, without punishment. Do you know of any case of
MEJA being used to prosecute any contract employee for
wrongdoing committed in Iraq or Afghanistan?
Ms. Rasor. Well, since I am not a legal expert on this, I
would defer to Scott Horton, whom we spent a lot of time
talking to, and he has been testifying in Congress. He is
writing a book right now, on the law in Iraq.
I do not know of any specific cases. I do know that we have
talked an awful lot about KBR employees who came back. As an
investigator, it is actually amazingly easy to find people who
are former KBR employees because there are so many people who
came back.
And there was a fear of lack of--there was sort of a whole
attitude, and not just KBR, with contractors, that you could
pretty much get away with whatever you wanted out there; when
they had the immunity thing, that set a mindset that the
contractors were not under any umbrella.
Now, we saw it very graphically with Blackwater, but I am
sure there were lots and lots of other instances like that. But
when I talked to Scott Horton about--for this hearing to write
my testimony, he said to me you can use it for the most
egregious type of criminal stuff, and it will probably work.
And he does not think that the UCMJ will work because a
civilian has not given up their constitutional rights. But he
said you cannot use it administratively. You cannot use it
because a contractor says I quit and go home. You cannot use it
because a contractor or employee, refuses to do a job.
He said only for the most egregious crimes.--we do cover a
lot of the security contractors in our book, too. And almost
all of them told us that when they got there, they felt that
they had no law over them.
Senator Akaka. Well, Mr. Chairman, my time has expired, and
I will submit my questions.
Senator Carper. Fair enough. I have just one last question
for this panel. And then we will excuse you, thank you, and
bring forth our second panel. Then we will break for dinner--
no, no. [Laughter.]
This last question would be for Mr. Bowen, if you would,
please. And I believe that you said to us that there ought to
be what we call a one-stop shop for contractors in Iraq, and I
guess in Afghanistan as well.
And let me just ask whose responsibility do you think that
ultimately should be? And what can my colleagues and I do to
make sure that happens?
Mr. Bowen. I think developing such a resource would be part
of the reform of contingency relief and reconstruction
operations writ large, namely that once you identify an entity,
be it new or an existing agency, that will be charged with
managing contingency ops, then that entity will be in charge of
developing human capital management policies, contracting
policies, and program management policies that would be
applicable to all the contracting in-theater.
So, I think to take it piecemeal would be a challenge--and
would perhaps Balkanize the solution to a Balkanized problem.
I think that the larger and more ambitious reform would
empower whomever is put in charge of contingency operations
with the authority of effectively coordinating these important
functions.
Senator Carper. Who should that entity be?
Mr. Bowen. Well, there are several ways that the Congress
could choose to go. One would be a USTR-like entity, a new
entity where a director of contingency operations reports to
the President and has charge of managing the interagency issues
and develops the civilian reserve corps, the contingency
contracting corps--all of the elements that would go into
deploying a ready team to carry out contingency operations.
Alternatively, it would involve the Congress directing the
various departments that play the largest role in contingency
operations to work better together through more effective
coordinated systems.
Senator Carper. All right. Well, all of you have been very
generous with your time, and we are grateful to you for that.
We are grateful to you for your testimony, your responses to
our questions, and for your service to our country.
Several of my colleagues were unable to join us who had to
leave and will probably want to submit questions for the
record, and I would just ask that you do your best to respond
promptly to those.
But our thanks to each of you for joining us today, and you
are excused at this time, and we will welcome our second panel
to take your seats. Thank you so much.
Mr. Bowen. Thank you, Mr. Chairman.
Senator Carper. All right. I am going to ask all of our
witnesses to try to keep your comments to 5 minutes. But we
appreciate your patience. I will quickly introduce our
witnesses on panel two.
Jack Bell, Deputy Under Secretary of Defense for Logistics
and Materiel Readiness. And prior to this appointment, Mr. Bell
was the Deputy Under Secretary for the Army, and earlier as the
First Chief of Staff of the State Department's Afghanistan
Reconstruction Group in Kabul. I understand you are a highly
decorated officer, having served in the Marine Corps. Semper
Fi. Thank you for your service, my friend.
Next we have General David Maddox, U.S. Army, Retired.
General Maddox is the former Commanding General, U.S. Army,
Europe, and Seventh Army. He led the reduction of armed forces
in Europe from 213,000 to 75,000 troops and restructured the
force footprint and training of the U.S. Army forces in Europe.
Our third witness is Ambassador John Herbst. He is the
Coordinator for Reconstruction and Stabilization in the U.S.
Department of State. Ambassador Herbst was the U.S. Ambassador
to Ukraine and Uzbekistan. Are you currently the U.S.
ambassador there?
Mr. Herbst. No, I left there 18 months ago.
Senator Carper. All right. Thank you. He also served our
embassies in Israel, Russia, and Saudi Arabia.
Next, William Moser is Deputy Assistant Secretary for
Logistics Management at the Department of State and one time a
basketball referee in the State of Delaware. [Laughter.]
No, there is another Bill Moser.
Mr. Moser. Even though I love basketball, I will not claim
that.
Senator Carper. All right. Another Bill Moser. Mr. Moser, I
understand, has served in the Foreign Service since 1984 across
many disciplines, including financial management, political-
military affairs, and energy affairs. We are glad you are here.
And finally, James Kunder, Acting Deputy Administrator of
the U.S. Agency for International Development is joining us
today.
Mr. Kunder has served with USAID in numerous leadership
roles in Afghanistan as well as Asia and the Near East. Mr.
Kunder was also an infantry platoon commander in the U.S.
Marine Corps from 1970 to 1973. That is when I was on active
duty, as well. Thank you for your service. We have got a couple
of Marines here, and an Army fellow, we are delighted that you
are all here.
I am going to ask Mr. Bell, if you do not mind, just
kicking it off, and we will again try to hold it to 5 minutes,
and we will go through all of our witnesses and ask some
questions. Thank you.
STATEMENT OF THE HON. P. JACKSON BELL,\1\ DEPUTY UNDER
SECRETARY OF DEFENSE FOR LOGISTICS AND MATERIEL READINESS, U.S.
DEPARTMENT OF DEFENSE
Mr. Bell. Thank you, Chairman Carper, Chairman Akaka.
Thanks for this opportunity first of all to discuss the
Department of Defense's initiatives to improve the management
and oversight of contingency contracting.
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\1\ The prepared statement of Mr. Bell appears in the Appendix on
page 123.
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As has been discussed here today, contractors supporting
our military forces, both at home and deployed, are performing
critical support functions that are integral to the success of
our military operations. They have become part of our total
force that DOD must manage on an integrated basis with our
military forces.
At the end of Fiscal Year 2007, CENTCOM reported 196,000
contractor personnel working for DOD in Iraq and Afghanistan,
and the 160,000 figure that is reported in the Gansler Report
was the one up to date for Iraq.
Faced with the unprecedented scale of deployed contractor
operations I have just identified, the Department of Defense
obviously has confronted major challenges associated with the
visibility of contractors, their integration, their oversight,
and the management of such a large contractor force working
along side our deployed military personnel, a challenge that,
frankly, DOD was not adequately prepared to address.
At DOD, we have launched a series of major initiatives to
strengthen the management and contractor personnel accompanying
our forces. This does include the DOD follow up to the
recommendations on the Gansler Report.
However, a work still in progress, the Gansler Report
follow up will not be covered in my testimony today, with the
Army having the lead.
In the limited time that I have available for oral
testimony, I do want to identify three other major DOD
initiatives that are discussed in more detail in my written
testimony, and I would be happy to discuss those initiatives in
more detail during the discussion period.
In the first area, as mentioned earlier by Mr. Solis, my
office has led a DOD effort since 2006 to establish a
comprehensive framework for managing contractors deployed with
our military forces.
We provided a preliminary report to Congress last October
identifying the major elements of this framework. We will be
providing the final report to Congress in April.
However, many of the elements of this framework are already
being implemented in our current contracting management
operations in Iraq and Afghanistan.
The second major initiative was launched in September 2007,
when Secretary Gates directed that an assessment be made of
improvements needed in strengthening the management of
contractor operations for DOD in Iraq.
To this end, I led an OSD Team to Iraq, where we consulted
with our military and civilian leaders and recommended five
initiatives. These recommendations were endorsed by General
Petraeus and were approved for implementation by Secretary
Gates.
Implementation of these initiatives is already underway.
Among them, two of note that have been discussed earlier in the
hearing today, one of them was to strengthen further the
authority of the Joint Contracting Command for Iraq and
Afghanistan to give it overall authority to review and clear
contracts and task orders being implemented in Iraq and
Afghanistan.
The JCCIA, as we call it, is adding up to 48 additional
personnel in theater as we speak to provide this additional
oversight.
We also recommended the strengthening of the Defense
Contract Management Agency, or DCMA's, post-award contract
administration and oversight for contracting in Iraq and
Afghanistan. In response to that recommendation, DCMA has
already deployed 100 additional personnel to theater in
December and is preparing to deploy up to an additional 150
DCMA personnel in March to the theater as needed.
The third area I would like to highlight was identified
earlier, which is the development of an MOA, which has been
implemented by DOD and the State Department. Both DOD and the
State Department recognize the need to improve the coordination
of personnel security contractor operations in Iraq.
We executed the MOA on December 5, 2007. It covers a broad
range of management policies and procedures to achieve a more
effective coordination of PSC operations in Iraq. Again, I will
refer you to my written testimony for a listing of the key
elements in this MOA.
Many aspects of it have already been implemented, and
others are in implementation.
Taken together, these three initiatives substantially
strengthen DOD's capabilities and performance in managing our
contractors and contractor personnel.
And with that introduction as an index of my written
testimony, I will be happy to answer your questions. Thank you
again for the opportunity.
Senator Carper. Mr. Bell, thank you so much. General
Maddox, welcome.
STATEMENT OF GENERAL DAVID M. MADDOX,\1\ U.S. ARMY (RET.),
FORMER COMMANDER IN CHIEF, U.S. ARMY EUROPE; AND MEMBER OF THE
GANSLER COMMISSION
General Maddox. Senator Carper, Senator Akaka. I was a
member of the Gansler Commission, and----
---------------------------------------------------------------------------
\1\ The prepared statement of General Maddox appears in the
Appendix on page 131.
---------------------------------------------------------------------------
Senator Carper. Roughly how many people served on the
Gansler Commission? And for what period of time were you
operating?
General Maddox. The Chairman, of course, was Jacques
Gansler, who had been the Under Secretary of Defense for
Acquisition Technology and Logistics from 1997 to 2001. We had
five additional commissioners to cover a broad range of
aspects. I was one of the five. I represented the Army's
operational community. The four others were Retired General Lee
Solomon, who represented Army Acquisition; Retired Rear Admiral
Dave Oliver, who provided alternative service perspective, but
also the experience in Iraq when he served with the Coalition
Provisional Authority; and Dave Barteau and George Singley, who
are very senior experienced Department of Defense civilians.
Senator Carper. And who appointed you? Were you appointed
by Secretary Geren?
General Maddox. We were appointed by Secretary Geren, and
because of the criticality of the issue, when we were
appointed, we were given 45 days to do our work.
Senator Carper. All right. Pretty quick turnaround. OK.
Thanks very much. I am sorry for interrupting.
General Maddox. Our charter was forward looking. That is,
we were tasked to ensure that institutionally the Army is best
positioned for future operations, which we view will be
expeditionary, joint, and most likely multi-agency.
It is important to recognize that we did not address
current fraud, equipment accountability, and private security
contracts because there were actions going on in each of those
three areas.
In looking at our charter, in September and October, we
conducted 122 interviews. We talked to people across the board
in the United States and deployed.
We did one thing, and that was when we looked at the word
expeditionary in the dictionary, it relates to overseas. We
broadened that definition to include CONUS for emergency
conditions like Hurricane Katrina, because the responsiveness
requirements are very similar.
Despite the broad spectrum of our interviews--122 people in
Iraq, in Afghanistan, in Kuwait, in the United States--we
received almost universal agreement on what the issues are,
what changes are required, and the absolute need for change.
The Commission crafted a broad strategy for addressing the
shortcomes, which we published as an independent report dated
October 31, 2007, entitled ``Urgent Reform Required: Army
Expeditionary Contracting.''\1\
---------------------------------------------------------------------------
\1\ The report entitled ``Urgent Reform Required: Army
Expeditionary Contracting'' appears in the Appendix on page 142.
---------------------------------------------------------------------------
I would request, Mr. Chairman, that the executive summary
from that report be included in the record of today's
proceeding.
Senator Carper. Without objection.
General Maddox. One thing hit us very quickly and that was
an understanding that the Army, and more broadly DOD, did not
have a problem with a single organization or a group of
individuals, but had, in fact, a very systemic problem.
The operational Army is clearly expeditionary and it is on
a war footing. Yet, it has not fully recognized the impact of
the large number of contractors involved in expeditionary
operations and their potential impact on mission success.
In fact, with our number of 160,000, half of the total
force are contractors. And that aspect on both sides needs to
be understood. I, in fact, in looking at your goals, would
suggest that the third goal, the one on who gets trained, is
not limited to contracting personnel; that the role of the
operational people, that is, the contract requirement is not
done by a contracting officer. It is done by the customer, who
is in the operational side. Source selection is not done by the
contracting officer. It is done by the operational side. And
the majority of the people supervising what is going on are
contracting officer representatives, which come from the
operational force.
Senator Carper. Mr. Bell, did I see you nodding your head
vigorously when General Maddox made that statement?
Mr. Bell. Yes, sir. You did.
Senator Carper. All right. Thanks very much. Just want to
get that head nod in for the record. [Laughter.]
General Maddox. But it is important because it is a
cultural issue, and culture does not change quickly. But it is
not just the contracting officers that need to be helped. It is
the whole force that recognizes the role of the operational
aspect of the force and the contracting part.
Based on the problems we discovered and the valuable
information that we learned, we developed recommendations that
address the gravity of the situation and the urgent need for
reform.
In short, we identified four areas for our future success.
One was contracting personnel--increase the stature, quantity,
and career development of contracting personnel--military and
civilian--especially for expeditionary operations.
Second, organization and responsibility. Restructure the
Army Contracting Organization and restore its overall
responsibility to facilitate high quality contracting and
contract management in both expeditionary and peace time
operations.
Third, training and tools. Provide training and tools for
overall contracting activities in expeditionary operations.
And fourth, legislative, regulatory, and policy. Obtain
legislative, regulatory, and policy assistance to enable
contracting effectiveness in expeditionary operations.
Our report covers the details of the first three. So,
today, I would like to focus on this fourth category and ask
for congressional assistance with the legislative aspects of
the Commission's recommendations.
First, we recommend that Congress authorize general officer
billets for Army contracting and joint contracting.
Specifically, this Commission recommends that five new Army
general officers, as well as one senior executive service
billet, be established and fenced for the Secretary to assign
to meet this urgent need.
We have identified a requirement for five general officers.
The five additional joint officers be established and
include a three-star for the expanded scope of the Defense
Contract Management Agency, which we strongly recommend and
would service backfill authorizations for joint positions.
These military billets should not be created at the expense
of existing civilian senior executive service contracting
authorizations with the Army workforce. These need to be
maintained.
In the past decade and a half, we have witnessed the
elimination of general officers in the contracting field. In
1990, there were five Army contracting general officers. Today,
there are none.
In joint commands, there were four contracting flag and
general officer positions, and they have similarly disappeared.
When the question was raised what general officer has been
fired, there is none to fire.
Today, all that remains is one temporary position, the
Joint Contracting Command Iraq-Afghanistan, which at the time
of the report was being filled by an Air Force officer.
The Commission believes that this backslide needs to be
remedied, and we must get back at least to where we were in
1990.
We need general officers to lead the Army transformation.
We need some general officers so when you look in the career
field, there might be a place that you would aspire to be.
We need those general officers to be advocates to
understand what is going on and provide the right leadership
that is needed for this effort.
Second, the Commission recommended an increase in Army
contracting personnel authorizations by 1,983. That includes
increasing Army military by 400; civilians by 1,000, as well as
providing 583 billets, military and civilian, for Army support
to the Defense Contract Management Agency.
In the DOD Authorization Act for Fiscal Year 1996, DOD was
required to reduce the acquisition force by 25 percent by the
year 2000. They did it.
But after September 11, 2001, we have had a seven-fold
increase and greater complexity in the contracting environment,
and yet, the workforce has not grown.
On top of that, of those that remain, only 56 percent of
the military officers and 53 percent of the civilians in the
contracting career field are certified for their current
positions.
Senator Carper. General Maddox, I am going to ask you to go
ahead and try to wrap up. You are about 5 minutes over.
General Maddox. OK.
Senator Carper. It is very interesting testimony, but I
just want to make sure everyone has a chance to testify. Thank
you.
General Maddox. We need enough people to fill the billets
that are in theater, and they are not being filled.
With regard to DCMA, they are the contract management
agency for Defense. They are not doing the job across the
board, and they need the additional resources to do that.
If DCMA does not do that, and that is where the 583 for the
Army were identified, then the Services need to pick up that
responsibility by service and be resourced accordingly.
Third is the incentives for our civilian personnel. We
order uniformed military people to go to war. We do not order
civilians. They volunteer. And yet, the authorizations for our
civilians who are doing the contracting do not compare with the
force that they support nor the people that are being
contracted.
Specifically, they do not get a tax write-off for their pay
while they are in country. While they are cared for if they are
hurt there, they have no sustainment if they need long-term
care. And if they have civilian life insurance with a war
clause and are killed, they are not covered.
Fourth, we believe that the Congress should enable
flexibility of funding through a contingency operation transfer
fund, without color of money and fiscal year. We picked up that
recommendation from the Overseas Contingency Operation Transfer
Fund, which was approved by Congress and is currently in
existence for AID. But it needs to be created on a standby
basis.
Fifth, and lastly, we recommend standby legislation to
waive small business and U.S. labor provisions, Buy America,
Berry Amendments, especially medical and other such provisions
to allow rapid local buying, if required, in expeditionary
operations. In Iraq, Buy America has been waived, but it is
currently tied to this operation.
We have a lot of other recommendations that do not involve
the Congress. They are in the report, and they are to be
observed.
Sometimes it takes a crisis to bring out major change. We
have got the crisis. We have got the opportunity to fix this
and not go through this problem again. We hope we can have
congressional assistance, and I am ready for your questions
later.
Senator Carper. You bet. I know you will have that
assistance and thank you for your testimony today. Thank you
for serving as a commissioner as well, and for your service to
our country.
Ambassador Herbst.
STATEMENT OF THE HON. JOHN HERBST,\1\ AMBASSADOR OF UKRAINE
(2003-2006) AND UZBEKISTAN (2000-2006), COORDINATOR FOR
RECONSTRUCTION AND STABILIZATION, U.S. DEPARTMENT OF STATE
Mr. Herbst. Mr. Chairman, thank you very much for the
opportunity to testify today.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Herbst appears in the Appendix on
page 155.
---------------------------------------------------------------------------
I am going to be a little bit bolder than I had planned to
be. The last two plus hours have explored in some depths the
problems of running stabilization operations.
I am here before you to say that we, my organization, the
Coordinator for Reconstruction and Stabilization, has a well
conceived answer to many of the problems that we have discussed
and specifically to help you to achieve the goal you have at
the top of that sheet over there--planning a U.S. Government-
wide reconstruction and stabilization crisis in conflict and
post-conflict areas, and knowing how to implement interagency
precisely on that operation.
My office was created to do two things. I work directly for
the Secretary of State, and the Secretary of State was asked by
the President to ensure that we could mobilize all resources of
the civilian agency of the U.S. Government to deal with a
stabilization crisis, and to coordinate what they do with the
military; and to ensure that we have the civilians we need with
the right skills, the right equipment, and the right training
to deploy to crises in the golden hour, the first hours after
we deal with that crisis.
SCRS in the State Department--that is what my office is
known as--has had real success, although not enough, in
achieving those two objectives. Specifically, we have done the
following to deal with the first of those challenges--to
coordinate the U.S. Government.
The Administration has agreed at senior levels to the
creation of something called the Interagency Management System,
which would be used in the next stabilization and
reconstruction crisis.
This interagency management system has the following
elements.
The first is the least interesting. It is something called
the Country Reconstruction and Stabilization Group. It is an
assistant secretary-level group, which involve every single
agency which has some contribution to make to deal with the
crisis.
This group, the CRSG, would both define policy options for
the leadership of our government, as well as oversee
implementation.
The CRSG would be assisted in this by a secretariat. The
secretariat would be also interagency, run by my office. It
would have the critical function of writing a plan of civilian
operations that includes all the assets that every single
civilian agency can bring to bear on this.
Since the Department of Defense would be represented in
this secretariat, it would link up at the highest level defense
and civilian planning for a military operation.
The third part of this interagency management system is
called an integrated planning cell. If, in fact, there is a
military operation alongside a civilian operation, this
integration planning cell, which is interagency and led by
SCRS, would deploy to the military headquarters which is
conducting military operations.
If it is an American-led operation, say, in Latin America,
it means it would be deployed to SOUTHCOM. If it was an
international operation led by the United Nations, we would
deploy to U.N. headquarters.
The purpose of this integration planning cell is to make
sure that at the theater level, military and civilian plans are
completely linked.
The last part of this integration, the Interagency
Management System (IMS), is called advance civilian teams. This
is another word for PRTs. This would be an interagency group
led in many cases by my office, but not exclusively. There
might be cases where AID would be in charge of this
interagency--this active advanced civilian team. They would
deploy to the country in crisis. They would have all the
civilians you need with the right skill sets to deal with
civilian side of operations. If there is an American embassy
there, they would be under the command of the Chief of Mission,
the ambassador; if there is none, it would be the senior U.S.
Government civilian presence in the country.
This system, again, is now part of the Administration's
policy. It is there to be employed in the next stabilization
crisis. That is our first task.
The second task is making sure we have the civilians with
the right skills needed to deploy to these places. We also have
agreement in the Administration on creating three pools of
civilians who would have all of the skills you need to deal
with a stabilization crisis.
The skills we are talking about are not those normally
found in the State Department. We are talking about engineers
of all kinds. We are talking about all the people involved in
the rule of law--policemen, judges, corrections officials. We
are talking about city planners. We are talking about health
officials, public administrators, port officials, and so on.
We will find people with the right skill sets, and we will
create first, an active response corps. These will be people
whose job it will be--civilians in the U.S. Government--to
deploy to countries in crisis. These people will be in the
State Department, in USAID, in Justice, in Treasury, in
Commerce, etc.
They will be folks who will train substantially, including
with the military, and within 48 hours of a decision to deploy,
they will be on their way. They will be able to arrive, if
circumstances require, with the 82 Airborne at the beginning of
an operation. They could also go in lieu of the 82 Airborne.
But they will be ready to deploy immediately.
Backing them up will be something we call the Standby
Response Corps. These are folks who will be sitting in the same
civilian agencies as the Active Response Corps. They will have
full-time day jobs. But they will be training several weeks a
year for deployment in a crisis.
We feel that these people will be--we should be able to
deploy a minimum of 10 percent of them once we need them; a
maximum of 25 percent.
For every one Active Response Corps member, there will be
eight Standby Response Corps members. So we have a large pool
to draw from. That is the second part of the civilian response
capability.
The third is something called the Civilian Reserve Corps.
Senator Carper. Actually, I am going to ask you to go ahead
and try to wrap it up, and I want to make sure we have time to
hear from Mr. Moser and Mr. Kunder----
Mr. Herbst. OK. By my count----
Senator Carper [continuing]. Before we start our votes.
Thank you.
Mr. Herbst. OK. The Civilian Reserve Corps is going to be
like our military reserves, people in the private sector. They
will have day jobs, but they will be training like our military
reserves for several weeks a year. They will sign up for 4
years. They will be able to deploy for--they will have an
obligation to deploy for 1 year in that 4-year period.
If these things are funded, we have received appropriations
for a 500-person Civilian Reserve Corps. We are waiting for
authorizing legislation. S. 613 or H.R. 1084 could provide the
authorization we need. If we had these various capabilities, we
will have a command and control structure with the trained
civilian talent we need to oversee any stabilization operation.
Thank you. I think I was about 4\1/2\ minutes.
Senator Carper. That was great. Thank you very much. Mr.
Moser.
STATEMENT OF WILLIAM H. MOSER,\1\ DEPUTY ASSISTANT SECRETARY
FOR LOGISTICS MANAGEMENT, U.S. DEPARTMENT OF STATE
Mr. Moser. Chairman Carper, Chairman Akaka, thank you for
the opportunity to appear here, and I would ask that my full
written statement be a part of the record.
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\1\ The prepared statement of Mr. Moser appears in the Appendix on
page 162.
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Senator Carper. Yes. In fact, your full written statement
and the full statement of everyone else will be entered in the
record.
Mr. Moser. Thank you very much.
Senator Carper. Please proceed.
Mr. Moser. And I will keep this as brief as possible.
The Department of State has extensive experience with
contracting in crisis situations. Diplomatic activity is ever
changing, and to meet the needs of our diplomatic activity and
our country amid evolving world events, we have to do effective
contracting.
Contracts were needed to evacuate staff, protect property,
and close missions in the 1990s in Pakistan, Somalia, Sudan,
Liberia, and the country formerly known as Zaire.
During the Bosnian War, we contracted for vehicles,
equipment, and supplies for the Sanctions Assistance Mission,
and as hostilities decreased in the Balkans, we provided
contracting support for supplies, services, and equipment, to
embassies in the region, and set up new embassies in Skopje,
Sarajevo, Zagreb, and Ljubljana.
One of my other duties besides contracting--the contracting
activity is also the transportation activity, and I would like
to note here that our contingency transportation contract
successfully aided in the evacuation of 13,000 American
citizens from Lebanon in 2006, and I think many would applaud
the State Department for having--for mounting a very successful
effort at that time, and contracting was there at the core of
that activity.
Just after the Al Qaeda bombings in Nairobi and Dar es
Salaam, we further refined our strategy for dealing with
contingency contracting support. Our Office of Acquisition
Management partners with various State Department offices both
at headquarters and around the world to determine the type of
contracts that would best support their emergency requirements.
And we have identified first responders in our contracting
corps who will go with those program offices in crisis
situations.
That is not to say, though, that our experience in Iraq and
Afghanistan has not shown us that there are areas where we need
to improve our contingency capabilities.
We have learned that we need more resources on site that we
can improve planning, price analysis, contract formation, and
oversight. And I think that all of these areas are things that
have been highlighted in the discussion today.
However the State Department's resource limitations have
prevented us from expanding the resources as rapidly as the
growth in our contract requirements.
Since 2001, the workload of the State Department's Office
of Acquisitions has grown dramatically, with no commensurate
increase in staffing. The volume of transactions grew from $2
billion in 2001 to $6.1 billion in 2007. And we kept
approximately--we gained three full-time equivalent employees
during this period.
To rectify this situation and to gain the flexibility
required in a rapidly-changing geopolitical environment, the
Under Secretary for Management directed the transformation of
the Office of Acquisition Management, our contracting activity,
to a working capital funded organization. A 1 percent fee for
service, based on the amount of contract award, will hopefully,
with the approval of our appropriations and authorizing
committees, cover the expenses of the acquisition activity.
The working capital fund structure will permit the State
Department to significantly increase the amount of cost and
price analysis, legal review, and contract oversight performed.
We want to ensure that our contracts meet the standard of
integrity demanded by this committee, the rest of Congress, and
the American people.
The contracting operation needs to be more agile and
responsive to all future contracting needs, including
contingency contracting. We want to be able to rapidly increase
the resources devoted to such contract action, whether the
contract performance is in Iraq, Darfur, or Haiti.
Successful contracting depends on close partnership with
program offices. The Department's Office of Acquisitions
Management is working closely with Ambassador Herbst's office,
the Coordinator for Reconstruction and Stabilization, to
improve contingency contracting.
And I have also had the pleasure of working with Mr. Bell
on our joint--on the MOU that John Negroponte, our Deputy
Secretary, and Gordon England, the Deputy Secretary of Defense,
signed in December 2007 to improve management and oversight of
private security contractors in hostile zones.
We look forward to the further cooperation with the
Department of Defense and to provide the best contract support
possible to our diplomatic and military forces around the
globe. And we hope that we can, through these things that we
are discussing today, offer solutions to the problems that you
have so admirably highlighted.
Thank you for your testimony--and I welcome your questions.
Senator Carper. You bet. Mr. Moser, thank you so much. Mr.
Kunder, you are going to wrap it up for us. And then we will
ask some questions and call it a day.
STATEMENT OF JAMES R. KUNDER,\1\ ACTING DEPUTY ASSISTANT
ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
Mr. Kunder. Thank you, Chairman Akaka. You are very kind to
hear out 11 witnesses on a long Thursday afternoon. I am number
11. I realize that.
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\1\ The prepared statement of Mr. Kunder appears in the Appendix on
page 166.
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We took seriously your request to look at lessons learned.
And we have five bullet point lessons that we tried to distill
from our experience that I would like to share with you.
First, is to get the IG involved early and often. We
decided early on in both Afghanistan and Iraq to seek
concurrent audits from our Inspector General, and we invited
them to join our team on the ground in both Kabul and Baghdad.
That has paid dividends. We are also fans of Stuart Bowen, but
we brought our own Inspector General on and I think that has
helped to add a layer of accountability that was important to
us.
Second, we need to increase civilian military training,
because the civilian military teams lash up during these kinds
of contingency operations, and we have to bring the contracting
culture and the broader culture together ahead of time. Sitting
five rows behind me are two of our colleagues in town from
Kabul, Jim Hope and Fareed Ahmed Payan. They are on their way
to Fort Bragg, North Carolina----
Senator Carper. Would both of you just raise your hands?
Thank you. Thanks for joining us.
Mr. Kunder. They are on their way to Fort Bragg for Joint
Provincial Reconstruction Team training. We have been trying to
do that kind of thing, but we need to invest more resources so
that when we lash up out in the field, we are talking the same
language and working with the same kind of contracting
procedures.
Third--and I have listened very intensely--I know there is
a lot of interest in the Subcommittees, which we appreciate.
I have listened intently to all the discussion about sole
source contracting and full and open competition. And I would
just appeal to the Subcommittees to think carefully about
maintaining in the Federal Acquisition Regulations sufficient
authority to handle the kind of flexibility, and the changing
environment that we encounter in these kinds of contingency
operations. Almost by definition, the circumstances on the
ground are going to change very rapidly in Afghanistan and
Iraq.
I plead guilty. I have waived full and open competition
requirements. And when I did that, I did it because I was
saving--thought I was saving lives of U.S. troops by acting
quickly to turn on a dime so that we could get roads built or
schools built or health clinics built. And I am a strong
believer in full and open competition, but we have got to
preserve the authority we currently have under law to do less
than full and open competition when it is essential to
accomplish the mission in these complex and changing
environments.
The fourth point, the next to last point, I just want to
add USAID's endorsement for what Ambassador John Herbst said. A
year and a half ago, or 2 years ago now, the U.S. Interagency,
Department of Defense, the Joint Chiefs of Staff, USAID, the
State Department got together at the NSC, and we thought we
came up with the comprehensive fix for getting everybody on the
same page in contingency operations, both in contracting, but
beyond contracting. That was by creating the Coordinator for
Reconstruction and Stabilization. And that is an important
initiative which I hope in the category of Congress playing an
effective role we would appeal that more resources be put
behind that operation.
And fifth, and finally, I provided for the Subcommittees
this page of analysis on our staffing levels. We have reduced
our oversight capability under both Republican and Democratic
Administrations and Republican and Democratic Congresses. Over
the last 25 years, we have reduced our USAID staffing
overseas--our technical experts in engineering, health care,
education--by 80 percent. \1\
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\1\ The chart referred to appears in the Appendix on page 175.
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So now that we are grappling with these oversight and
accountability issues, as General Maddox said, it comes back to
having bodies on the ground who can go out and look at these
projects. And we simply are running on fumes when it comes to
accountability issues, and, again, that is something that we
would like to talk to the Congress about.
Thank you very much for the opportunity to testify.
Senator Carper. Thank you. Very nice to have you
summarizing those recommendations. Thanks so much.
Let me start off with a question for Mr. Bell. And the
Department's October, I think it was 2007, Interim Report to
Congress outlines a significant list of initiatives that the
Department plans to take to help improve its oversight of
contractors supporting deploying forces.
Just explain for us, if you will, specifically how will you
manage and oversee contractors during the next contingency
operation?
How will you sustain this effort during the transition to a
new Administration? Again, how will you sustain this effort
during the transition to a new Administration?
I understand from my staff that your position is being
downgraded from a level three to a level four? I do not know if
that is correct or not. But what implications, if that is true,
does this have for the important work that you and your office
is directing?
Mr. Bell. OK. Thank you. Let me address those questions. In
the proposal we gave to Congress outlining the new framework
for managing this, we have identified the requirement to
empower a joint contracting command to be deployed into the AOR
with the military forces. We have, in fact, done that in Iraq
and Afghanistan.
At the time we originally deployed them, we did not enable
them to have the necessary authority we thought was necessary.
We have since corrected that, and in the trip the Secretary
sent us on in September, we went ahead and empowered the joint
contracting command to have authority over all contracts to be
implemented within Iraq and Afghanistan.
So our intent in the future is to give that same sort of a
joint contracting command authority to oversee all contracts
that are going to be implemented in theater to ensure they have
all of the necessary provisions regarding compliance with rules
and laws to make sure that we standardize the approach to life
support and essential services, and that will all be
accomplished through a joint contracting command.
To enable us to deploy that sort of a command, we are also
creating a launch agency, which we have called different names,
but essentially, it is a contract acquisition support office,
and that organization has a standing joint contracting command
ready to deploy. And each time it deploys one, if we deployed
one, for example, to an operation in Africa or South America,
it then creates another standing joint contracting command to
be able to deploy to the next operation.
That is the answer to your first question.
The second question is how do we plan to sustain the effort
we have underway for the Administration change?
What we have done is we have embedded within DOD policies,
instructions, directives, and regulations, the provisions about
how this will function. The framework that you see there is
actually pursuant to and will be documented in a DOD
instruction called 3020.41. It is also specifically responsive
to legislation in Section 854 of the 2007 NDAA, and so, for
that reason, it is not subject to change with Administrations.
Your third comment: In the 2007 NDAA, a provision was put
in that when I leave my position here, the position is to be
downgraded from a level three to a level four.
That was done I think in advance of the decision made for
us--for my office to take on the total contracting oversight
policy responsibility for the Department of Defense.
My personal experience has been that it takes all of the
standing and status of a level three, four-star equivalent
officer, if you will, to have the access to get into theater
and into the field that you need in order to provide this
effective oversight. My personal recommendation is that is a
decision that we would like to see Congress reverse.
Senator Carper. OK. Anybody on the panel want to comment in
response to anything that Mr. Bell has said?
I am going to yield to Senator Akaka. I want to make sure
if the bell goes off for the next vote, that we both have a
chance to ask questions. But, Mr. Chairman, feel free to engage
right now if you want.
Senator Akaka. Thank you. Thank you, Mr. Chairman.
Mr. Kunder, first, let me thank you for your testimony. I
would like to note that your nomination to be Deputy
Administrator of USAID has been pending for some time now, and
I hope the Senate will be able to move it soon.
You have an impressive resume. And I thank you for your
willingness to continue serving our country.
Presidential Directive 44 designated Ambassador Herbst's
office as Coordinator for Reconstruction and Stabilization in
Iraq.
The Directive explicitly spells out that the Secretary of
State and Defense are to coordinate through this office.
In addition, USAID already takes policy guidance from the
Secretary of State. What extent have you worked directly with
the Office of the Coordinator for Reconstruction and
Stabilization?
Mr. Kunder. Sir, as I mentioned, we believe very strongly
that the civilian side of the U.S. Government needs to be a
better partner for the military side of the U.S. Government
when it comes to contingency operations, and we believe
strongly that the Coordinator for Reconstruction and
Stabilization should be the overall coordinator of that
function.
We have detailed a number of staff from the U.S. Agency for
International Development to Ambassador Herbst's operation, and
we are also beginning to organize our internal staffing so that
we can be part of the team that he described.
I am not here to lobby about dollars today, but the
legislation that would provide the funding for Ambassador
Herbst's operation is also hung up. And so we have not yet been
able fully to move forward.
But at USAID, we strongly endorse the concept. We have been
providing staff, and we stand ready once we stand up this
interagency team to play our role in that operation.
Senator Akaka. Thank you. Ambassador Herbst, I would like
to follow up with you on that same Presidential Directive which
made your office the Coordinator for Reconstruction and
Stabilization.
According to your office's Web site, you have a budget of
about $20 million, 15 permanent staff, and a dozen interagency
detailees. Is that about correct?
Mr. Herbst. Our budget in Fiscal Year 2007 was a little bit
over $7 million. And with that budget, we have a staff right
now of approximately 88, but only 24 of our staff are permanent
FTE positions. We have detailees from other agencies. We have
something called Y Tours, which are 1-year assignments that are
given to us by the main complement at the State Department. And
we also have some contractors.
Senator Akaka. The Department of Defense, on the other
hand, gets billions of dollars of reconstruction funds for Iraq
and has thousands more people tasked to reconstruction.
Do you have any authority or influence over reconstruction
contracts entered into at any of the various agencies discussed
in the Directive?
Mr. Herbst. Our office was created to make sure that we are
prepared to deal with the stabilization crises that come up
next.
So we have played a very small, tiny role, in Iraq. We have
played a somewhat larger, but still not large, role in
Afghanistan.
So we have not been involved in these sorts of issues that
you have described in current operations.
Senator Akaka. All right. Thank you. Thank you, Mr.
Chairman.
Senator Carper. You bet. We have been joined by the
Chairman of the Armed Services Committee and the Chairman of
the Investigations Subcommittee of the Homeland Security
Government Affairs Committee, and it is just great to see you.
We appreciate very much working with your staff in anticipation
of this hearing, and you are welcome to speak, ask questions
for as long as you wish. Thank you for coming.
OPENING STATEMENT OF SENATOR LEVIN
Senator Levin. Mr. Chairman, thank you very much for all
the work you are doing on this, and our staffs have, indeed,
cooperated. We thank you and Senator Akaka for delving into
this issue the way you have. We have been into it, too, and it
is going to take all the work of many committees and
subcommittees, I think, to try to straighten this out.
Section 1088 of the 2005 Defense Authorization Act extended
criminal jurisdiction of the U.S. civilian courts to personnel
whose employment relates to supporting the mission of the
Department of Defense overseas regardless of whether those
personnel are contracting with the Department of Defense or a
civilian agency.
Section 552 of the National Defense Authorization Act for
Fiscal Year 2007 extended criminal jurisdiction of the military
courts under the Uniform Code of Military Justice to persons
serving with or accompanying an armed force in the field during
a time of declared war or a contingency operation, such as our
current operations in Iraq and Afghanistan.
Now, despite the enactment of these provisions and the
presence of those provisions on the books, we continue to hear
questions raised about the jurisdiction of U.S. military and
civilian courts over criminal misconduct by contractor
employees on the battlefield in Iraq and Afghanistan.
Do you believe that there is a gap in the jurisdiction over
criminal misconduct by contractor employees in Iraq and
Afghanistan or do you believe that all such conduct is subject
to jurisdiction of either the military or the civilian courts?
Mr. Bell, you want to start off?
Mr. Bell. Yes, sir. First of all, I would be the last one
at the table to attempt to make a legal interpretation, but if
you will grant me the liberty of a layman's----
Senator Levin. Well, what is your understanding? Is there a
gap?
Mr. Bell. We believe there is a gap. And with regard to
MEJA and the application of Section 1088 from 2005, the
provision was I believe the term of art was supporting DOD
regardless of whether they were contractors of DOD. I think
there has been some question about whether contractors who were
supporting the operations of the State Department in a country,
for example, in Iraq, were supporting DOD or were supporting
the diplomatic mission, and that has caused some questions
about the applicability of MEJA to those forces that are not
associated with the term supporting DOD.
I think that has been the question. We have consulted with
the State Department. Our general counsel's offices have
consulted with the State Department's general counsel's office.
We believe that the provisions need to be clarified to ensure
that gap, to the extent it represents a serious gap, is closed.
Senator Levin. Does anyone else want to add anything to
that?
Mr. Moser. Well, as the State Department official that has
actually been most--closely involved in with this, Jack has
essentially stated what the joint position that we have. And in
the Memorandum of Understanding signed between Mr. Negroponte
and Mr. England that is very much clear that we want to seek--
that we are seeking a legislative remedy.
Senator Levin. You support a legislative remedy?
Mr. Moser. Yes, we do.
Senator Levin. I assume you do, Secretary Bell?
Mr. Bell. We do, sir.
Senator Levin. OK. Now, the Department of Defense has not
yet issued a guidance implementing the expanded jurisdiction of
the military courts under Section 552 of the National Defense
Authorization Act. When are we going to get that guidance?
Mr. Bell. Well, first of all, sir, we have issued a
memorandum to the military forces indicating that the
provisions of the UCMJ are in effect and, in fact, they are
being followed in Iraq and Afghanistan today. The wording of
the implementing guidance is in its final stages, and the
Secretary has been consulting with the OGC. We expect him to
issue that sometime in the very near term.
Senator Levin. Does that mean within a month?
Mr. Bell. Yes, sir.
Senator Levin. Thank you. The Gansler Commission Report
states that ``the number and expertise of the military
contracting professionals must be significantly increased.'' To
address the problems which have been experienced in theater,
the Commission recommends that the Army hire 2,000 new
contracting personnel.
So, Secretary Bell, does the Department of Defense plan to
implement that recommendation?
Mr. Bell. Sir, as I have said at the beginning of my
testimony, the provisions for my testimony here were not to
include responses to the Gansler Report, for which the Army has
the lead responsibility. That is being reviewed at this time,
and they will have a response soon.
Senator Levin. I am wondering, Mr. Chairman, if we can then
ask the Army, for the record, if they would answer that
question.
Senator Carper. Yes, we can.
Senator Levin. Thanks. Now, the Gansler Commission also
says that the Army's difficulty in adjusting to the singular
problems of Kuwait, Iraq, and Afghanistan is, in large part,
due to the fact there are no generals assigned to contracting
responsibilities.
The Commission recommends Congress authorize a core set of
10 additional general officers for contracting positions.
Is your answer to the intent of the Department on that
point the same as before?
Mr. Bell. It is, sir, although I would say in the work we
have done on developing a strategic framework, we have
identified the same problem, which is the need to create
significant and meaningful career paths up through the general
officer rank for contracting officers.
Senator Levin. OK. Mr. Chairman, then, if we could--these
Subcommittees could ask the Army the question.
Senator Carper. And we will.
Senator Levin. Thank you.
Section 862 of the National Defense Authorization Act for
Fiscal Year 2008, which is going to be sent to the President
for signature today, requires for the first time that private
security contractors hired by the State Department and other
Federal agencies to work in a war zone comply with directives
and orders issued by our military commanders, as well as with
DOD regulations.
Mr. Bell, Mr. Herbst, Mr. Kunder, will this provision be
promptly implemented?
Mr. Bell. Let me take that answer. Sir, as I indicated
earlier before you arrived here, we have already reached a
Memorandum of Agreement with the State Department on
implementing exactly those provisions in Iraq, and that has
been implemented. We are now in process of working with the
State Department, and USAID. Our intention is to fully
implement those provisions.
Senator Levin. Well, the agreement did not have this law in
front of it, nor did it, as I remember, the language go as far
as this law does?
Mr. Bell. That's correct. And we intend to.
Senator Levin. It was a consultation or coordination rather
than under the direction of; is that correct?
Mr. Bell. We understand the implication of the difference.
Senator Levin. OK. Then let me re-ask my question.
Mr. Bell. Yes, sir.
Senator Levin. Are you going to fully implement the new
law?
Mr. Bell. It is our intention to do so.
Senator Levin. I will take that as a yes.
What about State Department folks? Are you familiar with
what we have done?
Mr. Moser. Yes, sir. We have had serious discussions,
particularly with Mr. Bell and his group, and we have expected
the enactment of the legislation. But I am really not--this is
not something that I am really allowed to make a comment on.
Thank you.
Senator Levin. Not allowed to?
Mr. Moser. Well, I am head of contracting. I cannot give
you a policy position on a piece of----
Senator Levin. OK.
Mr. Moser [continuing]. Legislation that hasn't been signed
by the President.
Senator Levin. All right. If it had been signed this
morning, could you---- [Laughter.]
So if it is reported to you it has now been signed, could
you comment on it?
Mr. Moser. Well, something our intention is, it is just
like the Federal Acquisition Regulations. If it is law, we are
going to comply with it.
Senator Levin. OK. There is a new commission on wartime
contracting that has been adopted as part of the Defense
Authorization Act, which we hope has been signed this afternoon
or tomorrow. Will there be full cooperation with the operations
of the new commission, Secretary Bell?
Mr. Bell. Senator Levin, we actually welcome that
opportunity. We think the focus that the Congress has provided
with Section 854 and with the follow-up legislation that
Sections 861 and 862 ares very helpful to this cause. We are
very mindful of the urgency of improving and strengthening our
contractor management, so we would welcome that.
Senator Levin. OK. And, Mr. Herbst, Ambassador Herbst, and
I think, Mr. Kunder, you would be the ones to answer that for
the State Department and USAID? Are you familiar with what we
did? And are you going to fully cooperate?
Mr. Herbst. This is not my area of responsibility. Sorry,
Senator.
Senator Levin. Mr. Kunder? Either one. Mr. Moser?
Mr. Kunder. You pass the law, sir. We will obey the law.
Senator Levin. Are you familiar with what is in it?
Mr. Kunder. We generally are familiar with the
authorization, sir.
Senator Levin. All right.
Mr. Moser. Yes, and I would say that is true for the State
Department as well, Senator Levin.
Senator Levin. OK. Secretary Bell, more than a year ago,
senior Army officials told the Senate Armed Services Committee
that the Army's $20 billion LOGCAP contract, which until now
has been performed by a single contractor, was going to be
broken up into multiple contracts so that we would have
competition for individual task orders awarded under the
contract.
Now, the Armed Services Committee feels so strongly that
this is the right approach that in our 2008 authorization bill,
soon to be an act, there is a strong new requirement to award
contracts of this type to multiple companies.
So far, the Army has been unable to live up to the
commitment to split up the LOGCAP contract among multiple
companies because the award of the new contracts was held up by
a successful bid protest.
Can you give us a idea as to how soon the Department will
determine how to proceed in light of this successful bid
protest? And how soon we can expect to have new contracts in
place so that we can have competition for those tasks orders?
Mr. Bell. Sir, we certainly agree with the intent of the
Congress on that. I would like to take that as a question for
the record for the Army if we may.
Senator Levin. All right. Will you give us a timetable on
that?
Mr. Bell. Yes, sir, we will.
Senator Levin. Thank you. Mr. Chairman, I appreciate your
courtesies as always.
Senator Carper. You bet. Thank you so much for coming here
and for letting us work with you and vice versa.
I have a series of three questions that I am going to ask
both Mr. Bell and General Maddox to comment on.
How does our military capture contracting lessons learned
and incorporate them into operational planning?
Mr. Bell. We have several mechanisms within DOD to do that.
One is that JFCOM has an overall DOD responsibility to do
lessons learned on all of our contingency operations.
In addition to that, within the contracting framework that
we have established and reported to Congress on, we have a
specific module requirement to do lessons learned on
contracting management and to input that both to our own
operations as well as to the JFCOM overall operation.
Senator Carper. All right. General Maddox, would you like
to add or take away?
General Maddox. We have got an organization that is charged
with lessons learned. They are collecting them. We are not
convinced that they get passed as well as they could. One of
the suggestions that came out of our interacting within the
Army during the Commission was in addition to the lessons
learned to establish a blog on the Web, where contracting
personnel can exchange their lessons back and forth with each
other.
Senator Carper. All right.
General Maddox. And I think that is going to be
implemented.
Senator Carper. OK. Thanks.
The second question for both of you is how is feedback
circulated back to each of the forces to ensure continued
improvement?
Mr. Bell. We think in terms of the continuity of military
operations, which is the one of greatest concerns because of
the rotation of troops, one of the things we have done is
extended the overlap of command transitions. For example, we
have just had a succession and change of command of the head of
the Joint Contracting Command for Iraq and Afghanistan. And
that overlap between the succeeding commanding officer and the
outgoing commanding officer was spread out over a full 2\1/2\-
month period to ensure that we got continuity in that
operation.
In addition, the departing commander is going be available
for ongoing consultations, both here in the States and back in
Iraq.
Senator Carper. All right. General Maddox.
General Maddox. I do not think that is adequate. I think
that is necessary. But it gets to the issue that this problem
is not limited to the contracting people. And while we do
overlaps from an operational point of view between units coming
in and out of Iraq, I am not convinced that we do enough in
recognition of the relationship of their operation and
contracting.
One specific is contracting officer representatives. They
are people who go and watch the execution of a contract. If it
is the dining facility operation, it is somebody that operates
with mess halls. If it is fuel resupply, it is somebody that
has been in the fuel business. During our investigation, we
found out that many of the contracting officer representatives
did not know that they were going to have that function until
they got in country.
And then, in some cases--and I actually experienced this in
my career, I became a contracting officer representative, and I
did not know what the term meant.
There is some education going on, but I think we need to
make sure that while the operational units are switching that
we do a better job of the new unit comes in, knows what the
unit going had in responsibility for contracting officer
representatives and other aspects of it, and that gets
overlapped, too.
Mr. Bell. If I could amplify on that, Senator Carper.
Senator Carper. Sure. Go ahead.
Mr. Bell. We certainly agree within DOD and certainly
within my organization working on the strategic framework that
one of the great difficulties we have been confronted with is
the significant downsizing of contracting personnel as well as
contracting oversight personnel.
It is clear that in order to do an effective job on the
scale that we need to do it for a deployed operation, we are
going to have to have a significantly larger force of qualified
individuals so that they can do the job as well as have orderly
transitions.
Senator Carper. My third and final question of each of you
is should these lessons be considered and/or implemented in the
development of curricula and be institutionalized in the Center
for Army Lessons Learned?
Mr. Bell. With regard to our efforts, one of the parts of
the strategic framework that we are developing at this point in
time is a training program not only for contracting and
acquisition personnel, but for line commanders and NCOs who
increasingly are dependent on contracting support in the field
of operation.
We have that program in place now at the Duke Defense
Acquisition University. We are in the process of getting it in
actually at the Service Academies as well as places like ICAF
and NDU.
Senator Carper. General Maddox.
General Maddox. And I know in the Army that they are
putting it into their own curriculum. There is an effort
ongoing right now by the Chief in trying to do a better job of
bringing his new two stars on board. And in the next month they
have already put together a program to do that, and I know that
the contracting part is an integral part of that.
Senator Carper. All right. Thank you.
In closing, I am going to ask each of our witnesses--I am
just going to start with you, Mr. Kunder, if I could--and if
you just want to leave us with a closing thought as to
something you think is just extremely important for us to keep
in mind, for us to keep in mind as Members of the Senate
relevant Subcommittees that we should particularly focus on and
be mindful of.
Mr. Kunder. Thank you, sir. I just wanted to emphasize the
criticality of what General Maddox has been talking about----
Senator Carper. OK.
Mr. Kunder [continuing]. That we need to pay attention to
staffing both on the contract officers side, and then on the
technical officers side.
I will not take time to cite the numbers--grotesquely short
on the contract officer side. We are relying on contractors at
USAID not just for logistic support, but to do our core work of
building schools, building hospitals, building roads. And so
what we also need is engineers, education specialists,
healthcare specialists out there looking at that.
I just got a great note the other day from General John
Allen, the Marine Commander in Anbar Province, citing the role
of our men at the Provincial Reconstruction Teams. He called
them heroes. The problem is there are only three heroes out
there.
So we have the staffing issues that General Maddox has
emphasized both on the contract officers' side and then on the
technical officers side to go out and make sure that school is
being built right or that road is being built right.
I would emphasize that we have got to focus on these
staffing issues that are so critical to the oversight that I
know the Subcommittees cares about. Thank you, sir.
Senator Carper. All right. Thank you. Mr. Moser, any
closing thoughts that you would like to emphasize?
Mr. Moser. Yes. Thank you very much, Senator Carper.
I would like to emphasize as well what my colleague, Mr.
Kunder, has emphasized is that if you look at our contracting
operation, if you look at USAID's contracting operation, we do
not have the contracting personnel that we need to guarantee
that the taxpayer dollar is being protected.
We think that if we come up--we have a reasonable proposal
on the table that we think could modify that. We are going to
work with USAID to work through some of their problems, but we
are very concerned about the integrity in the contracting
process. We do not feel that we have had major scandals up to
now, but we do not feel like that we can continue in the same
situation.
And then we also want to put in--make sure that we are
ready to do the contracting support that we can take care of
Ambassador Herbst and make sure that his operation in our next
crisis gets off to the right start.
Senator Carper. All right. Thank you.
Mr. Herbst, a closing thought?
Mr. Herbst. We have created the means to deal effectively
with the next stabilization crisis. There is an Administration
position on this, supported across the interagency. We request
the support of the Congress to both authorize and support it.
Thank you.
Senator Carper. Thank you.
Senator Carper. General Maddox.
General Maddox. I think the majority of the recommendations
that the Gansler Commission put together can be implemented
within the DOD.
Senator Carper. But without the congressional involvement?
General Maddox. The majority of them can be done within
DOD. The critical piece is we are not going to solve this
problem if we do not put leaders in place and enough people to
get the job done.
Senator Carper. Leaders at what level?
General Maddox. I am talking about the five general
officers for the Army.
Senator Carper. OK.
General Maddox. If we do not put them in place and increase
the number of people that are charged to do this job, this
problem is going to continue.
Senator Carper. Thank you, sir.
Mr. Bell, the last word?
Mr. Bell. Yes, sir. We believe at DOD that the execution of
our national military strategy with the military forces that
were authorized by Congress will continue to make us dependent
on significant contractor support for our deployed forces.
We recognize it is a complex challenge. We recognize now we
must manage our contracting force as part of an integrated
effort with our military forces. We believe that we are making
significant strides forward, notwithstanding the problems that
have been identified. We appreciate the congressional support.
The provisions of Section 854 and 552 with regard to
application of UCMJ are very important steps forward in helping
us integrate our management of the total force, and so we look
forward to being able to report to you the actual results and
benefits of what we are doing.
Senator Carper. Thank you.
Let me say in conclusion, I was first drawn to this issue
as a former State Treasurer and one who was mindful of spending
my State's money judiciously and squeezing every dime as much
as we could. And I feel like we had an obligation to the
State's taxpayers to do that.
And I thought about the contracting work and some of the
horror stories that we have all heard, but my first thought
really focused on the waste of money, money that we do not
have, money that we are borrowing around the world as it turns
out, and the fraud and it just rubs me the wrong way, annoys
the heck out of me. I know it does for other folks, too, that
are trying to put food on the table, a roof over their heads,
and send their kids to school and all.
But sometimes we get lost in all this--when we let this
kind of behavior occur and reoccur again and again, we
undermine our troops, and we make their difficult tasks even
more so.
None of this is good. All of this is bad. And they deserve
better. And frankly so do the people who pay my salary and the
salary of all those who work around here. I am encouraged that
over 4 years into this war, we are starting to figure this one
out. It is a little bit like closing the barn door when the
horses have escaped. But it is better than never closing it,
and we have to make sure that we follow through on the good
intentions that have been outlined. I know some good work has
been done. But we want to make sure that we follow through and
finish this job.
And finally, when we do and we get it right this time, the
key is when we find ourselves in another episode along these
lines in the future, and we probably will, that we will not
make the mistake that we did with respect to the Balkans where
we kind of had learned those lessons, wrote them down, and when
this one rolled around in Iraq and Afghanistan we frankly have
had to learn those lessons over again. It is tragic. It is not
necessary. We have got to not let that happen again.
That having been said, I thank you all for your testimony
here today and for preparing for this and for helping us to
focus on these issues.
I think the questions that my colleagues have asked are
important ones, and we want you to know as you leave here that
we stand prepared to be supportive, to work with you, and to be
supportive of getting us on the right track and making sure
that we stay there.
I hope to join my colleagues in pushing for the Gansler
Commission recommendations, for their implementation, and as
well as to ensure that we have the military and civilian
workforce on hand, trained and prepared to do their jobs. And
we are going to continue to look forward to you for some
guidance in that regard.
The hearing record is going to be open for 2 more weeks for
the submission of some additional statements and questions. I
would ask of each of you and our previous panel of witnesses
for your cooperation in trying to get prompt responses to the
questions that you might receive and that are going to be
submitted for the record.
With that having been said, again, our thanks to each of
you, and this hearing is adjourned. Thanks so much.
[Whereupon, at 5:35 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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