[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
       U.S. MILITARY LEAVING IRAQ: IS THE STATE DEPARTMENT READY?
=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                HOMELAND DEFENSE AND FOREIGN OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 2, 2011

                               __________

                            Serial No. 112-8

                               __________

Printed for the use of the Committee on Oversight and Government Reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

    Subcommittee on National Security, Homeland Defense and Foreign 
                               Operations

                     JASON CHAFFETZ, Utah, Chairman
RAUL R. LABRADOR, Idaho, Vice        JOHN F. TIERNEY, Massachusetts, 
    Chairman                             Ranking Minority Member
DAN BURTON, Indiana                  BRUCE L. BRALEY, Iowa
JOHN L. MICA, Florida                PETER WELCH, Vermont
TODD RUSSELL PLATTS, Pennsylvania    JOHN A. YARMUTH, Kentucky
MICHAEL R. TURNER, Ohio              STEPHEN F. LYNCH, Massachusetts
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
BLAKE FARENTHOLD, Texas
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 2, 2011....................................     1
Statement of:
    Green, Grant S., Commissioner, Commission on Wartime 
      Contracting, accompanied by Michael Thibault, co-chair, 
      Commission on Wartime Contracting; Stuart Bowen, Jr., 
      Special Inspector General, Office of the Special Inspector 
      General for Iraq Reconstruction; Ambassador Patrick 
      Kennedy, Under Secretary of State for Management, U.S. 
      Department of State; Ambassador Alexander Vershbow, 
      Assistant Secretary of Defense for International Security 
      Affairs, U.S. Department of Defense; and Frank Kendall, 
      Principal Deputy Under Secretary of Defense for 
      Acquisition, Technology and Logistics, U.S. Department of 
      Defense....................................................     8
        Bowen, Stuart, Jr........................................    16
        Green, Grant S...........................................     8
        Kendall, Frank...........................................    37
        Kennedy, Patrick.........................................    27
Letters, statements, etc., submitted for the record by:
    Bowen, Stuart, Jr., Special Inspector General, Office of the 
      Special Inspector General for Iraq Reconstruction, prepared 
      statement of...............................................    18
    Chaffetz, Hon. Jason, a Representative in Congress from the 
      State of Utah, prepared statement of.......................     4
    Green, Grant S., Commissioner, Commission on Wartime 
      Contracting, prepared statement of.........................    11
    Kendall, Frank, Principal Deputy Under Secretary of Defense 
      for Acquisition, Technology and Logistics, U.S. Department 
      of Defense, prepared statement of..........................    40
    Kennedy, Ambassador Patrick, Under Secretary of State for 
      Management, U.S. Department of State, prepared statement of    29


       U.S. MILITARY LEAVING IRAQ: IS THE STATE DEPARTMENT READY?

                              ----------                              


                        WEDNESDAY, MARCH 2, 2011

                  House of Representatives,
Subcommittee on National Security, Homeland Defense 
                            and Foreign Operations,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. Jason Chaffetz 
(chairman of the committee) presiding.
    Present: Representatives Chaffetz, Labrador, Platts, 
Turner, Gosar, Farenthold, Tierney, Braley, Welch, Yarmuth, 
Lynch, Quigley.
    Also present: Representative Cummings.
    Staff present: Ali Ahmad, Deputy Press Secretary; Thomas A. 
Alexander, Senior Counsel; Brien A. Beattie, Professional Staff 
Member; Michael R. Bebeau, Assistant Clerk; Robert Borden, 
General Counsel; Molly Boyl, Parliamentarian; John Cuaderes, 
Deputy Staff Director; Gwen D'Luzansky, Assistant Clerk; Kate 
Dunbar, Staff Assistant; Adam P. Fromm, Director of Member 
Liaison and floor Operations; Linda Good, Chief Clerk; Justin 
LoFranco, Press Assistant; Erin Alexander, Fellow; Carla 
Hultberg, minority Chief Clerk; Scott Lindsay, minority 
Counsel; Dave Rapallo, minority Staff Director; Cecelia Thomas, 
minority Counsel/Deputy Clerk.
    Mr. Chaffetz. The committee will come to order.
    I would like to begin this hearing by stating the Oversight 
Committee mission statement. We exist to secure two fundamental 
principles. First, Americans have a right to know that the 
money Washington takes from them is well spent. And second, 
Americans deserve an efficient, effective government that works 
for them. Our duty in the Oversight and Government Reform 
Committee is to protect these rights.
    Our solemn responsibility is to hold government accountable 
to taxpayers, because taxpayers have a right to know what they 
get from their government. We will work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    This is the mission of the Oversight and Government Reform 
Committee.
    I want to welcome everybody here today. This is an exciting 
time, an exciting time for me, on a personal note. I appreciate 
the opportunity to serve in the U.S. Congress and to serve as 
the chairman of this subcommittee. It is truly a thrill and an 
honor, and I hope to live up to the high expectations that I 
think people have in the roles and the duties in this seat.
    This is the first meeting of the National Security, 
Homeland Defense and Foreign Operations Subcommittee. I would 
also like to welcome Ranking Member Tierney. I look forward to 
working with him. I have a good personal relationship with him. 
While we may disagree on some things, I think we can be united 
in our love of country and the need and the function of this 
committee.
    I want to also welcome those that are here for the very 
first time, and all the new Members that have joined in this 
112th Congress. I am looking forward to a very active year.
    Today we are examining the challenges facing the Defense 
Department and the State Department as they transition from a 
military to civilian-led effort in Iraq. On November 17, 2008, 
the Bush administration and the government of Iraq signed a 
status of forces agreement which set a December 31, 2011 
deadline for the departure of all U.S. military forces from 
Iraq. As agreed, the United States has withdrawn over 90,000 
personnel, 40,000 vehicles and 1\1/2\ million pieces of 
equipment. Today there are fewer than 50,000 U.S. forces in 
Iraq.
    As the military draws down, the State Department is ramping 
up. According to Ambassador Kennedy, the Department ``will 
continue to have a large civilian mission in Baghdad'' to 
``meet the President's goal for an Iraq that is sovereign, 
stable and self-reliant.'' In support of this effort, the State 
Department will help train the Iraqi police, operate an office 
of security cooperation to manage foreign military sales, train 
and equip the Iraqi military and ensure that ongoing 
reconstruction projects are properly transferred to Iraqi 
control.
    To do this, it will dispatch hundreds of employees to Iraq. 
Yet each of these employees will be supported by roughly 16 
contractors. It is estimated that the State Department will 
employ nearly 17,000 personnel as contractors. The rough cost 
to the U.S. taxpayer will be in the range of $6.27 billion in 
fiscal year 2012 alone. The State Department will rely on these 
contractors for services ranging from the simple food supply to 
counter mortar and rocket fire. Many in the Oversight Committee 
have expressed concern about the State Department's ability to 
meet this daunting challenge, and rightly so. The State 
Department's core mission is diplomacy, not combat.
    In its July 2010 report, the Commission on Wartime 
Contracting stated that, ``There is not enough evidence of a 
thorough, timely and disciplined planning approach to the 
coming transition.'' In its written testimony today, the 
Commission still maintains that the State Department is not 
necessarily ready to carry out this mission.
    Stuart Bowen's written testimony today also questions the 
State Department's capacity ``to execute program elements in 
the post-DoD setting to ensure adequate oversight and simply to 
function in the unpredictable security situations that will 
exist after troop withdrawal.'' These concerns are echoed by 
Ambassador Patrick Kennedy. In an April 7, 2010 letter to Under 
Secretary of Defense Ashton Carter, he stressed that the State 
Department would have to ``duplicate the capabilities of the 
U.S. military'' in order to fulfill its security mission.
    In a plea to the Pentagon, Ambassador Kennedy warned that 
personnel would suffer ``increased casualties'' without the 
transfer of military hardware, including Blackhawk helicopters 
and MRAP armored vehicles to State. As best we can tell, the 
Defense Department has yet to provide the necessary equipment, 
or even necessarily formally respond to this letter.
    While cooperation between the top military officer and to 
diplomat on the ground in Iraq has been generally praised, it 
seems like the senior leadership of the relevant departments in 
Washington may be playing off on a different sheet of music. I 
am also concerned that State and Defense have been less than 
transparent with the Oversight Committee. It has come to my 
attention that personnel within each department have begun 
restricting the Oversight Committee's access to critical 
information and personnel. If this is the practice, it must 
end. This administration must be transparent and forthcoming 
with SIGIR, GAO, the Inspectors General, that they may fulfill 
their obligations to oversee this transition.
    The central issue before us today is whether the State 
Department is ready to assume the mission in Iraq. From all 
outward appearances, the answer appears to be no. At least a 
huge question mark. With only 10 months left, the 
administration must work quickly to get this right, if for no 
other reason than over 4,400 Americans, service members, have 
given their lives for it.
    I look forward to hearing from our panel of witnesses 
today.
    And now I would like to recognize the distinguished ranking 
member, the gentleman from Massachusetts, Mr. Tierney, for his 
opening statement.
    [The prepared statement of Hon. Jason Chaffetz follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
        
    Mr. Tierney. Thank you, Mr. Chairman, and congratulations 
on your new role. I think we will have an easy time working 
together on this. Oversight is not a partisan matter. I think 
you can tell that from the work we have done over the last 4 
years, and the number of projects that you and I have discussed 
and participated in. So this is one of the functions of 
Congress, you are right, we legislate, and then we try to make 
sure that legislative intent is carried out and the moneys are 
spent in the most efficient and effective way possible.
    With that in mind, I want to thank all of our witnesses 
here today. Some of us are becoming old friends. This is a 
topic that has been much discussed, but I think it is well worth continuing that examination, particularly in light of the 
2011-2012 budget discussions that are going on right now.
    We did agree to withdraw all of our troops from Iraq by the 
end of 2011. We have been sticking to that agreement, and we 
are on track to meet that deadline. There has been a heroic 
sacrifice over 8 years, that cost over 4,000 American lives and 
nearly $1 trillion. The men and women of our armed forces are 
going to leave Iraq with their heads held high.
    But now the task is to make sure that all that hard work 
that was done by the military, the gains are not squandered and 
Iraq's fragile stability is not lost. So the President has 
charged the State Department with the responsibility for 
supporting the stability and development of Iraq once the 
military has left. That transition of operations to the State 
Department marks a whole new role for State. It has been asked 
to oversee functions traditionally under the purview of the 
Department of Defense.
    Of particular concern are the State Department's 
capabilities, both operationally and financially, to undertake 
activities traditionally managed by the Defense Department and 
to oversee the expected increase in contractors operating in 
theater. All on a budget that is many orders of magnitude 
smaller than what the Department of Defense has been working 
with.
    Simply because the State Department is taking on these new 
functions, we can't expect that contractors will entirely fill 
the void. One of the primary objectives in establishing the 
Wartime Contracting Commission, when Jim Leach and I put the 
legislation together, and when Congress passed the bill, I 
believe, was to ensure that contractors were not performing 
functions that were properly reserved for government personnel.
    During previous Oversight Committee hearings on this 
subject, I discussed at length with Mr. Thibault the 
fundamental necessity of identifying inherently governmental 
functions leading up to this transition. In spite of those 
concerns, in many respects, we are no closer to identifying and 
staffing inherently governmental positions than we were when 
the hostilities in Iraq began 8 years ago. And the transition 
in Iraq is an effort led by the State Department that threatens 
to make the situation even worse.
    So not only do we have inherently governmental functions 
that haven't been clearly defined, but according to reports, 
contracting has often become the default option out of 
necessity for the State Department. That doesn't give me much 
comfort that the State Department is aware of the oversight and 
capacity problems, if it does not have the time and financial 
resources to properly address them.
    As Mr. Green and Mr. Thibault state in their written 
testimony, ``An expanded U.S. diplomatic presence in Iraq will 
require State to take on thousands of additional contract 
employees that it has neither the funds to pay nor the 
resources to manage.'' So yesterday, the Commission on Wartime 
Contracting issued a report entitled Iraq: A Forgotten Mission? 
The report states that without a substantial increase in 
budgetary support from Congress, the post-2011 prospects for 
Iraq and for the U.S. interest in that region will be bleak.
    It continues, ``Without increases to sustain operations for 
fiscal year 2011 and beyond, it is inevitable that some 
missions and capabilities will be degraded or sacrificed 
altogether, and that large outlays of taxpayer funds will have 
been wasted.'' In fact, the Commission's No. 1 recommendation 
is that Congress ensure adequate funding to sustain State 
Department operations in critical areas in Iraq. Unfortunately, 
today, Congress' willingness to ensure adequate funding for the 
State Department's mission in Iraq is very much in doubt.
    H.R. 1, the Republican-led appropriations bill that passed 
the House in February, dramatically cuts State Department 
funding overall and makes specific cuts to the major programs 
that are critical to the mission in Iraq. According to 
Secretary Clinton, who testified yesterday in front of the 
House Foreign Affairs Committee, ``The 16 percent for State and 
USAID that passed the House last month would be devastating to 
our national security, and it would force us to scale back 
dramatically on critical missions in Iraq, Afghanistan and 
Pakistan.''
    This is the definition of penny-wise and pound-foolish. 
After investing so much blood and nearly a trillion dollars in 
Iraq, we must give the State Department the basic resources 
they need in order to successfully relieve the military of 
their mission there, and help ensure Iraq's stability and 
future prosperity.
    Indeed, the State Department effort in Iraq is vastly more 
affordable than the operation led by the Defense Department. As 
Ambassador Kennedy notes in his testimony, withdrawing the U.S. 
military from Iraq will save $51 billion in fiscal year 2012, 
while the State Department is only seeking a roughly $2\1/2\ 
billion increase in its budget to take over many of the same 
responsibilities. So for about 4 percent of the funds that were 
being spent on the Department of Defense, State believes it 
would be able to carry out its mission.
    It is important to this subcommittee to continue to 
scrutinize this transition. But we must also look at the 
context of proposed budget cuts that would fundamentally 
undermine the State Department's ability to successfully 
achieve its new responsibilities. Mr. Chairman, we certainly 
have to watch every penny and where it goes, and we have to 
make sure that money is wisely and efficiently spent. On the 
other hand, we shouldn't be guaranteeing success by so 
undermining their responsibility that we won't give them at 
least enough resources to get the job done, to move as many 
people in State itself to the inherently governmental functions 
and have at least enough people to manage and maintain the 
contracts that it does have to give out.
    Thank you.
    Mr. Chaffetz. Thank you. Welcome again to the Members here 
from both sides of the aisle. Particularly I want to recognize 
Ranking Member Cummings for being here with us today.
    Members will have 7 days to submit opening statements for 
the record. We would now like to recognize our panel, with very 
brief intros. A very distinguished and accomplished group. I 
appreciate you all being here with us today.
    The panel includes Mr. Grant Green, who is a Commissioner 
on the Commission on Wartime Contracting. Mr. Michael Thibault 
co-chairs the Commission on Wartime Contracting. Mr. Stuart 
Bowen, who is the Special Inspector General for Iraq 
Reconstruction. Ambassador Patrick Kennedy, who is the Under 
Secretary of State for Management. Ambassador Alexander 
Vershbow is Assistant Secretary of Defense for International 
Security Affairs. And Mr. Frank Kendall, who is the Principal 
Deputy Under Secretary of Defense for Acquisition, Technology 
and Logistics.
    Pursuant to committee rules, all witnesses will be sworn in 
before the testify. Please rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Chaffetz. Thank you. You may be seated.
    Let the record reflect that all witnesses answered in the 
affirmative.
    Now we are going to move to opening statements. I would 
appreciate it if you could keep your verbal comments to 5 
minutes. We have a large panel, and Members would like to ask 
some questions. You should have a light there, when it turns 
red, I would appreciate it if you could wrap up your comments. 
Also, if you could make sure, we have this nice, new, beautiful 
room, just make sure that the button is pushed when you start 
the mic and move it close so that we can all hear you.
    We will start with Mr. Green. Thank you.

   STATEMENTS OF GRANT S. GREEN, COMMISSIONER, COMMISSION ON 
WARTIME CONTRACTING, ACCOMPANIED BY MICHAEL THIBAULT, CO-CHAIR, 
 COMMISSION ON WARTIME CONTRACTING; STUART BOWEN, JR., SPECIAL 
INSPECTOR GENERAL, OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR 
    IRAQ RECONSTRUCTION; AMBASSADOR PATRICK KENNEDY, UNDER 
 SECRETARY OF STATE FOR MANAGEMENT, U.S. DEPARTMENT OF STATE; 
 AMBASSADOR ALEXANDER VERSHBOW, ASSISTANT SECRETARY OF DEFENSE 
FOR INTERNATIONAL SECURITY AFFAIRS, U.S. DEPARTMENT OF DEFENSE; 
AND FRANK KENDALL, PRINCIPAL DEPUTY UNDER SECRETARY OF DEFENSE 
 FOR ACQUISITION, TECHNOLOGY AND LOGISTICS, U.S. DEPARTMENT OF 
                            DEFENSE

                  STATEMENT OF GRANT S. GREEN

    Mr. Green. Good morning, Chairman Chaffetz and Ranking 
Member Tierney, members of the subcommittee.
    I am Grant Green, a member and former acting co-chair of 
the independent and bipartisan Commission on Wartime 
Contracting in Iraq and Afghanistan. Participating with me in 
this joint statement is Commission co-chairman, Michael 
Thibault. Our biographies are on the Commission Web site, so I 
will note just a few points that bear on today's issues. I am a 
retired U.S. Army officer, have served as Assistant Secretary 
of Defense, Under Secretary of State for Management and 
Executive Secretary of the National Security Council.
    Mr. Thibault, who is also a U.S. Army veteran, served more 
than 35 years in the Department of Defense, the last 11 as 
Deputy Director of the Defense Contract Audit Agency. He has 
also worked in the private sector as a consultant and as an 
executive for a Fortune 500 company.
    We are here on behalf of all eight commissioners, who 
yesterday approved release of a fourth special report to the 
Congress, which we have titled Iraq: A Forgotten Mission? We 
have brought printed copies with us today and have also posted 
the report on the Commission's Web site.
    As with our appearance today, the report reflects 
bipartisan consensus. We respectfully request that it be 
included in the committee's hearing record.
    This hearing poses the question, U.S. military leaving 
Iraq, is the State Department ready? I think the short reason 
is no, and the short reason for that answer is that 
establishing and sustaining an expanded U.S. diplomatic 
presence in Iraq will require State to take on thousands of 
additional contractor employees that it has neither funds to 
pay for nor the resources to manage. We base our findings and 
recommendations on the Commission's research hearings, as well 
as two trips to theater to probe specifically the transition 
process.
    Mr. Thibault and I led the first trip, which prompted our 
July 12, 2010 special report, entitled, ``Better Planning for 
Defense to State Transition in Iraq is Needed to Avoid Mistakes 
and Waste.'' Commission co-chair Christopher Shays and I led 
the second trip to Iraq on this issue in December. We observed 
significant progress, but our observations and subsequent 
research have led to our follow-on special report, the one I 
brought with us today, ``Iraq: A Forgotten Mission?''
    Teams at State and Department of Defense have been working 
hard on identifying transition needs and dealing with hundreds 
of tasks ranging from logistical support and medical care to 
air movement and security. State's plan to establish two 
permanent and two temporary locations in parts of Iraq away 
from Baghdad will also require reconfiguring some property 
still occupied by the U.S. military and undertaking some new 
construction.
    All of these activities will require increased contracting 
as well as additional funding and increased staffing for 
contract management and oversight. This is particularly 
problematic, when you consider that the State Department's 
recent quadrennial diplomacy and development review 
acknowledges that, No. 1, contracts are often State's default 
option, rather than an optimized choice; contracts are often 
well into the performance phase before strategies and resources 
for managing them is identified; third, its contract Management 
and oversight capability has languished, even as contracting 
has grown; and finally, State has a need to restore government 
capacity in mission critical areas.
    State deserves credit for recognizing these problems, which 
we would note also occur in many other Federal departments and 
agencies.
    Besides the collaboration and contract Management 
challenges, other looming problems for the DoD to State 
transition is time. As you mentioned, Mr. Chairman, 10 months 
from today, all but a handful of U.S. military personnel will 
be gone from Iraq. State needs to have many new contracts in 
place with contractors at work by October or even sooner to 
ensure a smooth transition. And that means many contracts must 
be launched quickly, in fact, should have already been 
launched.
    As concerned citizens, we can all agree that the stakes in 
Iraq and the region are high. We can all agree that as members 
of this Commission, however, that we are confining our 
observation to the implications of the contracting required for 
State's planned presence in Iraq after 2011. We are not opining 
on the merits of State's plan or urging that Congress provide 
everything that the State Department has requested. If 
anything, considering the extent of contracting waste, fraud 
and abuse we have seen in Iraq and Afghanistan, we would 
encourage the Department and lawmakers to examine that plan 
closely to seek, where appropriate, more economies and 
safeguards for taxpayer dollars.
    We are simply pointing out here that the declared, 
coordinated policy of our government to expand the Department 
of State's role and visibility in Iraq after the U.S. military 
departs has large and unavoidable consequences for contingency 
contracting, and must be recognized and resolved. Our new 
special report, ``Iraq: A Forgotten Mission?,'' spells out our 
concerns in more detail. We will close by quoting the three 
recommendations in that report that the Commission recommends.
    No. 1, that Congress ensure adequate funding to sustain 
State Department operations in critical areas of Iraq, 
including its greatly increased need for operational contract 
support. No. 2, the Department of State expand its organic 
capability to meet heightened needs for acquisition personnel, 
contract Management and contractor oversight. And three, the 
Secretaries of State and Defense extend and intensify their 
collaborative planning for the transition, including execution 
of an agreement to establish a single senior level coordinator 
and decisionmaker to guide progress and promptly address major 
issues whose resolution may exceed the authorities of 
departmental working groups.
    [The prepared statement of Mr. Green follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Chaffetz. Thank you. Mr. Green and other members of the 
panel, you can submit the balance of any testimony into the 
record. But given that we have gone over 7 minutes at this 
point, I would like to transition to the next speaker, if I 
could.
    Mr. Green. Fine. Thank you, Mr. Chairman.
    Mr. Chaffetz. I believe we are going to go to Mr. Bowen, 
then. It was a joint statement, so I appreciate it.

                 STATEMENT OF STUART BOWEN, JR.

    Mr. Bowen. Thank you, Chairman Chaffetz, Mr. Tierney, 
members of the committee, for this opportunity to testify on 
the crucial question before you today, before the country 
today. And that is, is the State Department prepared to sustain 
and engage in the significant programs necessary to support 
Iraq over the next year, and frankly, over the next 5 years.
    This is not a perennial issue, this is a significant 
national security issue. So before I answer that question, let 
me provide three premises that put my answers in context. One, 
the United States will continue to support Iraq next year and 
for the next 5 years, because we have crucial national security 
interests at play there. Two, the State Department will be in 
the lead there, and will need to implement programs that it can 
execute so that those national security interests are 
protected.
    And three, to meet that mission, next year, over the next 5 
years, it will require substantial resources to do so. Much 
less than the resources expended over the last 8 years 
annually. As General Austin testified a few weeks ago before 
the Senate Foreign Relations Committee, DoD was spending $75 
billion last year on maintaining its mission in Iraq. The State 
Department, as Secretary Clinton testified yesterday, will 
spend a fraction of that next year, over the next 5 years.
    Is the State Department ready today to manage the DoD 
programs that are at play in Iraq? No. Self-evidently, no. 
Because there is a significant planning and execution program 
underway regarding transition. Will they be ready on January 
1st of 2012? That time will tell. Do they have the capacity to 
execute the programs that they are shaping and scoping? Yes, 
but there are concerns that we have raised over time about 
contract management. There is obviously no doubt about the 
truth, that the contracts the State Department had to take on 
in Iraq over the last 8 years were the largest in its history. 
And SIGIR has issued a number of audits that raised, frankly, 
core concerns about its capacity, its acquisition Management, 
its ability to keep track of money, to break it right down to 
the core matter, in Iraq.
    Has it made improvements? Yes. Does it need to do more? 
Yes. Ambassador Kennedy in his statement acknowledges that, and 
also points to important steps that the State Department 
intends to take, notably the evaluation of results about its 
programs that it will implement.
    I think one of the things that the most need to do, and I 
told Paco Palmieri this 2 weeks ago when I was in Iraq, the 
head of INL, the INL program there, is to ensure they have 
sufficient number of in-country contracting officer 
representatives that are keeping track of taxpayer dollars. 
Yes, we have to spend substantial resources. Yes, it is crucial 
to sustain the fledgling democracy in Iraq. But yet we must 
steward that money, that money for those programs, in an 
effective way to assure the taxpayers that their money is being 
well spent and it has a salutary effect of improving the 
execution and performance of those policy initiatives.
    I just returned from trip 29 and met with General Austin, 
met with Ambassador Jeffrey, I met with the Iraqi leadership 
and they are collectively concerned about what Iraq will be 
like after the troops withdraw. And those concerns stem from 
capacity to execute programs, but also security. One thing that 
is predictable about security in Iraq, it is unpredictable. And 
it is going to be very difficult to judge today what the 
environment will be like in 2012. So the State Department is 
planning, worst case scenario, as it should, so its capacity to 
operate will be limited by that security environment.
    SIGIR is on the ground today, carrying out audits of the 
transition programs, specifically of quick response fund, which 
we will soon release, private security contractors, a rule of 
law, crucial elements that must be improved. Corruption is as 
bad as it has ever been. That is what Judge Rahim, the Director 
of Corruption Fighting for the Iraqis, told me just 2 weeks 
ago. He cannot convict a senior official. They can still 
immunize any employee by fiat. These are unacceptable standards 
within the system that frankly we are going to have to continue 
to engage heavily with Iraq on all fronts, and we, I am talking 
about the State Department, to improve their fledgling 
democracy.
    We recommend two things in our statement that the committee 
might consider regarding the use of the substantial funds over 
the next year, and one is that for any of these large 
contracts, that State might submit a plan for review, so that 
you see what the strategic intentions and tactical uses of 
those billions will be. You have transparency, the transparency 
that you expressed a need for in your statement, Mr. Chairman.
    And second, that they certify to the Congress that they 
have the resources in place and that they are committed to the 
oversight, to the contractor and officer representatives, so 
that you have the capacity to do your job, and that it manage 
the taxpayers' dollars effectively.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Bowen follows:]
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    Mr. Chaffetz. Ambassador Kennedy.

                  STATEMENT OF PATRICK KENNEDY

    Mr. Kennedy. Mr. Chairman, Ranking Member Tierney, members 
of the committee, thank you for inviting me today to discuss 
the State Department's preparations for the U.S.' transition 
from a military to a civilian-led presence in Iraq.
    Our efforts in Iraq are critical in supporting an Iraq that 
is sovereign, stable and self-reliant, and to achieve a 
strategic long-term partnership between the United States and 
Iraq. The administration's request will provide resources for 
the diplomatic platform that will allow U.S. interests in Iraq 
to be advanced.
    As Secretary Clinton, Secretary Gates and Admiral Mullen 
have emphasized, shortchanging our civilian presence now would 
undercut our enduring national interest in Iraq. Between 2010 
and 2012, the U.S. military drawdown will save the U.S. 
taxpayers $51 billion, while State's total operating budget 
request for Iraq will only increase by $2\1/2\ billion. State's 
2012 funding needs will increase because of the military to 
civilian transition. But the overall cost to the U.S. taxpayer 
will decrease dramatically.
    In short, a stable Iraq is in the U.S. national interest, 
and anything less than full funding would severely affect the 
transition.
    This is an overview of the larger Iraq policy issues. Today 
I would like to address the safe and secure management 
platforms needed to support successful implementation of our 
Iraq policy, which are my responsibilities. There are eight key 
components to launching those platforms. Security. In addition 
to our embassy in Baghdad, we are planing consulates general in 
Erbil and Basrah, and embassy branch offices in Mosul and 
Kirkuk. All U.S. personnel and contractors will be under chief 
of mission authority. Security will be shared with the State 
Department's Bureau of Diplomatic Security, responsible for all 
State Department sites, and DoD responsible for Offices of 
Security Cooperation personnel.
    At locations where State and OSC-I co-locate, diplomatic 
security and DoD security will coordinate movements, but 
diplomatic security will have sole responsibility for 
facilities. Contracts for static movement and security movement 
have already been awarded or are about to be, thanks to 
assistance from our friends at DoD. We are finalizing and 
agreement with DoD to loan us 60 MRAP vehicles, and we will use 
a U.S. Army existing contract for vehicle maintenance. An 
unmanned aerial vehicle reconnaissance program is being 
established. We are coordinating with DoD on a sense and warn 
system for indirect fire. And we will have tactical radio 
communications in our vehicles and tactical operations centers 
at all our sites.
    Medical. We will establish robust medical units in Basrah, 
Baghdad, Kirkuk and Mosul and smaller medical units in seven 
other locations. These units will stabilize trauma cases that 
will then be moved to nearby first-world medical facilities in 
Jordan and Kuwait. We expect to award that contract by the 20th 
of May.
    Contracting and contract oversight. Our success in Iraq 
depends on effective contracting efforts. Unlike other U.S. 
embassies, Iraq is a non-permissive environment, which means we 
cannot hire local staff as static guards or as cleaning crew, 
nor can we visit markets, gas stations or pharmacies. We are 
heavily dependent on contractors until security improves, and 
have developed a contracting strategy for life support, 
security, transportation, communications and facilities.
    While it is most effective for State to use its own 
competitive process to award contracts, we also will leverage 
DoD resources where DOD has superior contracting capabilities 
in theater. One example, the Logistics Civil Augmentation 
Program [LOGCAP], is a proven support mechanism with strong 
mandatory contract Management requirements. Interim use of 
LOGCAP will give us time to put our own into place, and we will 
also be using the Defense Logistics Agency for food and fuel.
    I take our contracting oversight responsibility seriously. 
I led the 2007 Nisour Square Review Team, in that regard. I can 
assure you that we will engage heavily.
    Our contracting team in Washington draws on headquarters 
expertise, and while in Iraq, there are multiple levels of 
technical oversight. Since 2008, when I reorganized the funding 
stream for the Office of Logistics Acquisition Management, we 
have hired 102 additional staff for contract administration, 
and for security contracting oversight in Iraq, we will have 
over 200 direct State Department security professionals 
engaged. That is a 1 to 35 ratio, which is very, very good.
    We are not using contractors by default. It is a 
deliberately chosen strategy to address a transitory need. It 
makes no sense to hire that many individuals to become 
permanent U.S. Government employees when the need for those 
numbers will decrease over time.
    Let me be clear: we will transition. In Erbil, in the 
north, already 92 percent of our guard force is locally engaged 
staff. And we have robust efforts underway in real property, 
aviation facilities, information technology and life support.
    Finally, on February 14th, Secretary Clinton announced 
Patricia Haslach as the coordinator for Iraqi transition 
assistance. This is the largest effort underway in the State 
Department since the Marshal plan in the 1940's. We will be 
ready.
    [The prepared statement of Mr. Kennedy follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Chaffetz. Thank you, Ambassador Kennedy.
    Ambassador Vershbow.
    Mr. Vershbow. Sir, Mr. Kendall will give the main statement 
for the Department of Defense.
    Mr. Chaffetz. Thank you. Mr. Kendall.

                   STATEMENT OF FRANK KENDALL

    Mr. Kendall. Thank you, Mr. Chairman.
    Chairman Chaffetz, Representative Tierney, members of the 
committee, thank you for the opportunity for Ambassador 
Vershbow and me to appear before you today to discuss the 
challenges associated with the transition from the Department 
of Defense to Department of State in Iraq. I ask that you 
include my written statement in the record.
    The DoD is fully engaged in support of Operation New Dawn, 
ensuring a smooth transition of DOD functions to State in 
support of the enduring U.S. Government diplomatic and security 
assistance missions, while providing oversight of logistical 
functions associated with the orderly withdrawal of the Title 
10 military forces by the end of December 2011. We are already 
in th execution phase of this transition.
    DoD recognizes the importance of the transition in Iraq, 
that there are significant material and support issues. We are 
fully committed to executing our role within the boundaries set 
out in the security agreement between the U.S. Government and 
the government of Iraq.
    We have undertaken a whole of government approach to 
support State as relations normalize in Iraq. While ultimately 
the role State will play in Iraq is not in itself unusual, the 
scale and complexity of the transition presents a huge 
undertaking, and DoD is doing everything it can to make this 
transition successful.
    While the Under Secretary of Defense for Acquisition 
Technology and Logistics is not responsible for establishing 
policy in this area, we are responsible for the success of the 
material, contracts, supply and selected construction 
components of the transition.
    DoD and State have established a temporary senior executive 
steering committee, our group, for coordination and 
synchronization. The group is co-chaired at the Deputy 
Assistant Secretary level and meets biweekly to review status 
and progress of eight subordinate functional areas. Those areas 
are: supply chain, equipment, contracting, medical facilities 
and construction, information technology, security and 
aviation.
    The twelfth meeting of the steering committee was held 
yesterday with direct participation from the embassy and U.S. 
forces in Iraq, as well as other key players.
    To facilitate the whole of government coordination, in 
November 2010, DoD embedded a staff officer within the 
transition team in State to serve as a liaison and work day to 
day issues. Additionally, to expeditiously respond to requests 
for equipment, a joint combined OSC and joint staff equipping 
board was established early January 2011. These activities have 
been overseen by Ambassador Kennedy and myself, with assistance 
from the Under Secretary of Defense for Policy and the joint 
staff, among others.
    Currently in Iraq, joint State and DoD teams have been 
established in each of the remaining locations to develop 
practical solutions to issues resulting from the downsizing of 
a site footprint. These transition of these sites is not a 
turn-key operation and each presents unique challenges. For 
example, each site team is establishing new perimeters and 
moving T-walls, re-site containerized housing units, rerouting 
utilities and where needed, undertaking general site 
preparation. These actions are occurring at varying degrees at 
all the enduring sites.
    To enable secure communications at these sites, DoD is 
restructuring its secured network infrastructure to accommodate 
the changing footprint. I visited Iraq in October and met with 
Ambassadors Jeffrey and Jackson, as well as General Austin, to 
discuss plans for transition. The chairs of the senior 
executive steering group recently returned from Iraq, where 
they conducted site visits to future State Department enduring 
presence posts, to assure that transition plans are proceeding.
    State does not have the management and oversight capacity 
in-theater to immediately handle the large scale support 
requirements for all the remaining sites. Therefore, the 
Department of Defense will provide a number of specific 
functions in accordance with the Economy Act. The LOGCAP4 
contract will provide base life support and co-logistic 
services. Requests for proposals were released in January 2011. 
   Proposals are due in 5 days, and we expect to make the award 
in July.
    Food distribution and fuel distribution and supply will 
continue to be provided by the Defense Logistics Agency, as 
Ambassador Kennedy mentioned. The Army Sustainment Command will 
provide maintenance contract support for those items not 
maintained under existing site contracts or LOGCAP, such as the 
sense and warn systems and mine-resistant ambush protection 
vehicles that we are providing to the State Department.
    The Army Sustainment Command will also provide selected 
security contract support. DoD will provide fixed-site contract 
security under combat and commander rules for the independent 
sites operating through the Office of Security Cooperation in 
Iraq.
    The synchronized information systems. The synchronized pre-
deployment and operational tracker response and the total 
operational picture of support systems had been designated by 
State as a personal management tool that they will use, and 
those will transition directly from DoD. State will reimburse 
DoD for all these contracts and services provided.
    DoD has received and continues to address State requests 
for approximately 23,000 individual equipment items, ranging 
from medical equipment to counter-rocket protection. As 
mentioned above, a joint equipping board has been established 
to streamline and centralize the request process. There have 
already been a number of success stories with respect to the 
transfer of equipment. For example, we are loaning 60 Caiman 
Plus MRAPs in place of the basic model Caimans to provide a 
greater level of protection to State Department personnel. We 
took State's initial requirement for three CT scan systems for 
their medical equipment, which would have cost in excess of $9 
million, and found a solution that would provide the scanners 
for less than $1 million total. We have found two excess CH46 
helicopters that were being provided to State, with a potential 
of four more to be made available to meet the immediate need in 
State's worldwide air fleet, and free up other assets.
    The rules of engagement for fulfilling the equipment needs 
have been established. Excess items are being transferred at no 
cost. State is to provide funding for Defense services 
associated with these transfers, including transportation and 
maintenance. Non-excess items are being provided on a 
reimbursable basis, most through sales from stock.
    In instances where funding is not available, those items 
will be addressed on a case by case basis by the equipping 
board cited above. DoD will consider loaning non-excess 
equipment on a case by case basis, based on radius impacts. All 
equipment transfers are being completed in accordance with the 
Economy Act.
    I just want to close by saying that we are very well aware 
of the challenges. Our greatest challenge is probably time. And 
Ambassador Kennedy and I are working together, as is our entire 
team, to assure that we do the things that are needed to 
successfully execute this transition.
    Another challenge, of course, is funding. We are working 
also with the Iraqi government on several agreements which are 
not finalized. But we are beyond the planning phase, though 
some planning continues. We are executing at this time, and we 
believe we are on track to meet the schedule that has been set 
out.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr Kendall follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Chaffetz. Thank you, Mr. Kendall. Thank you all.
    Your entire statement will be submitted for the record.
    We are going to now move to the portion where Members will 
be each allowed 5 minutes for questioning. We will alternate, 
obviously, on different sides of the aisle. I would ask that 
Members try to maintain the 5-minute rule, in deference to 
their colleagues, in moving forward.
    I would like to start, if I could, please. Through some 
discussions with the Special Inspector General, some written 
testimony from the Special Inspector, conversations that 
Members have had in Iraq, staff and what-not, it is our 
understanding that both the State Department and Department of 
Defense have actually been tightening up and not have been as 
forthcoming in providing the Special Inspector access to both 
the information and personnel that they have in the past.
    There are two memos in particular, one dated October 7, 
2010, another one January 8, 2011, that have restricted this 
access. I would appreciate a comment, starting perhaps with 
you, Ambassador Kennedy, about the State Department's granting 
of access to document and information. Is that something you 
are going to be forthcoming with, or is it something that we 
need to dive into a little deeper?
    Mr. Kennedy. Mr. Chairman, we deal with the Inspector 
General for Iraq, we provide him information. We provide 
information to the General Accountability Office. We provide 
information to the State Department's Inspector General. We 
provide information to the Agency for International 
Development's Inspector General. Each one of those individual 
entities has defined lanes of the road that have been worked 
out in response to congressional mandates, and we provide each 
one of those offices with all material that they are entitled 
to.
    Mr. Chaffetz. Ambassador Vershbow, or Mr. Kendall, either 
one? I guess what I am concerned about with the Department of 
Defense is this new operating procedure that you have 
instituted, that creates this delay of 15 days, having to fill 
this four or five page document out, instead of this unfettered 
access that they have had previously.
    Mr. Kendall. Mr. Chairman, I have to apologize, I am 
unaware of any attempts to withhold information. And I am not 
familiar with the memos. Our policy is to be, I believe, the 
same as State Department, to be open in those regards. I would 
be happy to take this for the record and get back to you on the 
specific----
    Mr. Chaffetz. Perhaps, Mr. Bowen, you can express the 
concern.
    Mr. Bowen. Yes, sir. On the DoD front, I addressed this 
with General Austin, my staff has worked with his chief of 
staff over the last weeks, and we have resolved, I believe, 
satisfactorily, the concerns that we have had regarding access. 
At least it appears so, in practice.
    On the State Department front, yes, we get substantial 
information from the embassy. I have to say, Ambassador Jeffrey 
has been forthcoming, as have his deputies. So it is clear, we 
are responsible for reporting on any contract ``to build or 
rebuild physical infrastructure in Iraq, to establish or re-
establish a political or societal institution in Iraq, or to 
provide products or services to the people of Iraq.'' That is 
about as broad as it gets. That is the congressional mandate 
that you all have given us.
    We have had some problems over the last 6 months regarding 
getting information about provincial reconstruction team 
transition, transitions to the new embassy offices, support, 
logistical contracts that are going to help the State 
Department continue its mission in overseeing contracts that 
fall under these rubrics.
    Mr. Chaffetz. My time is short as well. My concern is that 
the access has not been growing, it has been shrinking. And the 
timing of that access is critical, not only for the Special 
Inspector, but for your own inspectors general to do their 
jobs.
    We will continue to followup, but this is of upmost 
importance. I am trying to signal that here today. Any attempt 
to try to slow that process down or to hold back information I 
don't think will be met with, it won't be met very well.
    Very quickly, in July, for the State Department, if I 
could, Ambassador Kennedy, in July 2010, the State Department 
identified 14 core lost functionalities, as they called them, 
everything from recovering killed and wounded personnel, 
recovering damaged vehicles, counter-battery notification, 
counter-battery fire, things that traditionally Department of 
Defense has operated, but now is going to the State Department.
    The core question is, are you prepared to actually do this 
in the next 10 months? How are you going to gear up to actually 
do that? We are very concerned that these are some very 
difficult things to do. How prepared are you to actually 
fulfill those duties?
    Mr. Kennedy. Mr. Chairman, of the 14, I think we have 
resolved about 7 of them. On the other hand, there are another 
seven that simply make no sense for the state Department or are 
simply not applicable. They disappear when DoD disappears.
    For example, the DoD has been assisting the Iraqi 
government in policing the green zone. That is not a function 
the State Department should take on in another nation. Counter-
battery fire, the State Department engages in defensive 
activities of its personnel. We are never going to be launching 
155 millimeter artillery rounds back at the opposition. That is 
a function of the government of Iraq. I would be glad to submit 
something for the record, Mr. Chairman. But we will do 
everything that is necessary for us to do. However, there are 
simply functions that do dissolve and disappear when the 
Department of Defense leaves, because they are military 
functions.
    Mr. Chaffetz. Thank you, Ambassador.
    I will now recognize the ranking member, Mr. Tierney, for 5 
minutes.
    Mr. Tierney. Thank you very much.
    Ambassador Kennedy, I think Mr. Bowen gave us a pretty good 
idea here to help us with our work. So I want to put it to you 
for as close to a yes or no answer as you can reasonably do 
here. Will you and the State Department submit to this 
subcommittee sufficiently in advance of implementation for our 
review and comment each plan for carrying out your 
responsibilities, including the strategic and the tactical 
aspects?
    Mr. Kennedy. I think, sir, the answer is yes. But I do not 
have the kind of written plans, for example, I can provide a 
copy of our contract for the maintenance of the MRAPs. That is 
my plan.
    Mr. Tierney. Well, when you have a plan for strategy and 
tactical, carrying out any of the responsibilities that you 
have, I take it as a yes that you will submit that to us 
sufficiently in advance for our review. And I appreciate that.
    Mr. Kennedy. We will certainly submit them to the 
committee. However, everything is ongoing. Every day, we make 
decisions, Mr. Tierney.
    Mr. Tierney. But you don't make a plan every day. Every day 
you carry out aspects of a plan.
    Mr. Kennedy. Exactly.
    Mr. Tierney. Every so often, you make a plan. When every so 
often you make that plan, the tactical and strategic aspects, I 
am taking it as a yes that you will submit it to this 
subcommittee and Congress so that we can have enough time to 
look at it. I think it was a good idea.
    Mr. Kennedy. It is an excellent idea, but we may have to 
implement it immediately.
    Mr. Tierney. We will work with you on that. And will you 
certify to Congress and this subcommittee that for each plan 
that you have the actual resources that you need to implement 
it, and that you are committed to the oversight and management 
of that plan?
    Mr. Kennedy. We will certainly certify we are committed to 
the Management and oversight. However, we have plans that are 
dependent upon appropriations. So I cannot certify----
    Mr. Tierney. You can certify the condition that you have 
the resources, subject to certain appropriations?
    Mr. Kennedy. I can certify that we have things subject to 
appropriations.
    Mr. Tierney. And in that line, let me just go on with that. 
On February 17th, Secretary of Defense Robert Gates testified 
before the Senate Armed Services Committee. He was pretty 
passionate about his call to support the State Department's 
budget request for fiscal year 2011 and 2012. Here is what he 
said: ``The budget request is a critically urgent concern, 
because if the State Department does not get the money that 
they have requested for transition in Iraq, we are really going 
to be in the soup.''
    Further, he went on, he said without this funding, ``much 
of the investment that was made in trying to get the Iraqis to 
the place they are is at risk.'' Admiral Mullen also added that 
sufficient investment in State's capabilities was critical, 
otherwise, we are going back for a lot more investment and a 
lot more casualties. So despite these pleas from Defense and 
military leadership, last month the House passed an 
appropriations bill that seeks to dramatically cut State's 
budget request for fiscal year 2011. Secretary Clinton, as I 
said in my opening remarks, testified yesterday that cuts would 
severely inhibit State's ability to perform its mission. 
Ambassador Kennedy, if H.R. 1 became law, with that 16 percent 
cut in there, how would the cuts impact your ability to perform 
your mission in Iraq?
    Mr. Kennedy. Mr. Tierney, we would not be able to perform 
the mission that has been tasked to the State Department.
    Mr. Tierney. And Ambassador Vershbow and Mr. Kendall, am I 
correct in assuming that you agree with Secretary Gates that 
full support for State's budget request is essential to the 
success of the mission in Iraq?
    Mr. Vershbow. Absolutely, Congressman Tierney.
    Mr. Tierney. Mr. Thibault, the Commission's recent report 
on the Iraqi transition makes its No. 1 recommendation that 
Congress adequately fund State to perform its duties in Iraq. 
In your view, what would happen to the mission if Congress 
dramatically slashed State's top line program budgets, as 
proposed?
    Mr. Thibault. Mr. Congressman, the mission would not be 
accomplished. It would be mission failure.
    Mr. Tierney. In the Commission on Wartime Contracting 
report that you released yesterday, the recommendation was made 
that the State Department expand its organic capability to meet 
heightened needs for acquisition personnel, contract management 
and contract oversight. The report goes on to say that shorter 
funding and program Management staff to adequately conduct 
oversight of the thousands of contractors we will need to hire 
in order to successfully take the reins of U.S. operations in 
Iraq from the Department of Defense, some of these contracts 
will be for highly critical or sensitive missions, such as 
handling unexploded ordnance.
    In addition, the Commission warns that if the scope of 
State's contracts in Iraq increases, failure to provide for 
expanded oversight and implementation of contract 
administration strategies will lead to instances of waste, 
fraud and abuse in contracting. So Mr. Thibault, do you think 
that spending money now to ensure that State can conduct 
effective oversight of the contractors necessary to implement 
the transition will ultimately prevent waste, fraud and abuse 
in contracting, and save the American people money?
    Mr. Thibault. Yes, Mr. Congressman, and we also believe 
that part of that process or plan includes both the pre-award 
costs, evaluation and analysis, and as previously mentioned, 
oversight. Because they not only need the money, but they need 
the ability to implement the program.
    Mr. Tierney. Exactly so. Thank you. I yield back, Mr. 
Chairman.
    Mr. Chaffetz. Thank you. It is now my pleasure to recognize 
the gentleman from Idaho, Mr. Labrador, who is going to serve 
as the vice chairman, a new Member of the 112th Congress, and 
somebody who just recently returned from a visit to Iraq. Mr. 
Labrador, you are recognized for 5 minutes.
    Mr. Labrador. Thank you.
    Being new to Congress, I sometimes question some of the 
things that are happening here in Washington, DC. It seems like 
we make some assumptions.
    Mr. Ambassador Kennedy, explain to the American people, 
really, there are going to be 17,000 new workers, people 
employed in Iraq. Yet 16,000 of them are contractors. That 
doesn't make any sense to me, especially when we pay 
contractors a lot more money than we pay government employees. 
Can you explain how you justify that?
    Mr. Kennedy. On two grounds, Mr. Vice Chairman. First of 
all, the General Accounting Office did a study, which I would 
be glad to make sure that you receive, that actually shows that 
the State Department use of contractors in protective security 
operations actually saves the U.S. Government money in the long 
term.
    Second, we have a surge issue here in Iraq. We need 
aviation support. We need medical support. We need logistical 
support. We need that effort in Iraq and in Afghanistan. I do 
not need that effort in the other 163 American embassies that 
we have.
    Hiring permanent U.S. Government employees for a 20 or 30 
year career for a need in Iraq for aviation or particular 
security or explosive ordnance disposal, etc., is not good 
government. It is not good for the American taxpayer to saddle 
them with a long-term 30-year bill for employees, when I need 
them for a surge capability, for a brief period of time.
    Therefore, if I need them for a long period of time, they 
become government employees. If I don't need them for a long 
period of time, that surge capability is best done and least 
expensively done for the long haul with the use of contractors, 
sir.
    Mr. Labrador. According to the GAO, for the past 3 years, 
the State, DoD and USAID have been unable to determine the 
exact number of contractors you employ in Iraq. Without having 
reliable data on the number of contractor personnel it is 
currently relying on in Iraq, how has State developed 
projections regarding the number of additional contractor 
personnel after the drawdown of U.S. forces?
    Mr. Kennedy. Two points, Mr. Vice Chairman. One, I believe 
that I know exactly how many contract employees I have on any 
given day in Iraq, and I would be glad to meet with you or your 
staff to discuss that.
    But second, what we do is we have analyzed each of those 
major functions that I have referred to: aviation, medical, 
etc. And we have done a table of organization, I need so many 
pilots, I need so many bomb disposal personnel, I need so many 
static guards. We have a table of organization and that is 
actually what we give to the contractor. You must fill each one 
of those billets. And then when they provide us personnel, we 
use a data base that we borrowed within the Department of 
Defense that is called SPOT, and we register every single one 
of those contractors in that data base.
    Mr. Labrador. So you claim that GAO is wrong? You do have a 
number? What is that number of contractors that we have?
    Mr. Kennedy. Today? Let me submit that for the record, 
because that number does change every day.
    Mr. Labrador. But GAO was wrong when they said you couldn't 
account for them?
    Mr. Kennedy. That is correct. I believe that I can account 
for every single contractor I have in Iraq, yes, sir.
    Mr. Labrador. But you don't know right now what that number 
is?
    Mr. Kennedy. I brought our planning numbers for the 
transition. I didn't bring with me my charts which show exactly 
how many I have on board today. My apologies.
    Mr. Labrador. OK. Now, Mr. Green, in his testimony Under 
Secretary Kennedy disputes your finding that the State 
Department did not arrive at its decision to use contractors by 
default. He points to the fact that State has hired an 
additional 102 staff for contract administration, 200 managers 
for oversight of private security contractors, and is 
supplementing its oversight of the LOGCAP with subject matter 
experts from DoD. Is this sufficient, in your view?
    Mr. Green. Well, it may be sufficient today. But if you 
look at, and I don't disagree with Secretary Kennedy, if you 
look at the number of contractors that the State Department 
will require post-2011, they do not have enough oversight today 
to oversee and manage those contractors in the way they should 
be.
    One of the things that this Commission has found in the 
last 2 years is a huge difference in the number of contracting, 
procurement, acquisition personnel on board, not just in State, 
but in every agency we have looked at, and the number of 
contracts that are being awarded. So we have this lack of 
oversight generally. And with State, with the huge increase in 
the number of contractors that they are going to experience, 
they need a lot more oversight, and they need it on the ground.
    Mr. Labrador. Thank you, Mr. Chairman.
    Mr. Chaffetz. Thank you. The gentleman's time has expired.
    We will now recognize the ranking member of the full 
committee, Mr. Cummings of Maryland, for 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Chairman, as I have listened to this testimony, I want 
to thank you, gentlemen, for your testimony. It is very 
enlightening. I can conclude that we all understand that we 
need to tighten our belts, no doubt about it. But we have 
already spent 8 years, $1 trillion and lost, unfortunately and 
tragically, 4,000 American lives in trying to help Iraq. 
Certainly we applaud our military for all they are doing to 
slash the State Department's budget in this way at this time is 
not only irresponsible, but it is a clear and present danger to 
our national security. And as I listened to you, Mr. Ambassador 
Kennedy, you were asked some questions about, if you had to 
take the cuts that now seem to be coming down the pike, we 
would be in deep trouble, wouldn't we?
    Mr. Kennedy. Sir, we would not be able to execute the 
mission that we have been given without the funding that is 
both in the fiscal year 2011 President's budget and the fiscal 
year 2012 budget, yes, sir.
    Mr. Cummings. And another term for that would be mission 
failure, is that not correct?
    Mr. Kennedy. Yes, sir.
    Mr. Cummings. Now, on February 24th, the Commission on 
Wartime Contracting released a report entitled At What Risk, 
Correcting Our Over-Reliance on Contractors in the Contingency 
Operations. In the report, the Commission identified several 
policies and practices that hamper competition for contingency 
contracts. Ambassador Kennedy, you testified that State is 
considering bids for several functionalities that are vital to 
a successful transition in Iraq, including the police 
development program, security operations and life support 
services.
    As State begins the process of significantly expanding its 
contracting and oversight functions in Iraq, what steps are you 
taking to expand competition?
    Mr. Kennedy. Sir, we believe in competition. For example, 
on our security, for both static and movement security, we are 
engaged in competitive bids for all those contracts. For the 
construction of our facilities in Iraq, our Office of Overseas 
Buildings Operations is using competitive competition. For our 
medical contract, competitive competition. Our aviation 
contract was awarded by competitive competition. We are using 
competitive competition ourselves, or we are riding DoD 
contracts that were awarded already by competitive competition, 
and we access them through the Economy Act, sir. We are using 
competitive competition.
    Mr. Cummings. And do we have appropriate oversight over 
those contracts? Because we had some testimony a few days ago 
from GAO that we have contractors overseeing contractors.
    Mr. Kennedy. Sir, we do not have contractors overseeing 
contractors.
    Mr. Cummings. Good.
    Mr. Kennedy. We are doing three things. We have increased 
significantly the staff of our contracting operation at 
headquarters. We are deploying, and will deploy, 200 U.S. 
Government diplomatic security personnel to oversee the 
contracting operations. We will have State Department medical 
personnel overseeing the medical contract, and we will have 
State Department logistics people, etc., overseeing those 
contracts.
    We are deploying additional contracting officers' 
representatives, i.e., U.S. Government employees, to oversee 
every single one of our contractors.
    Mr. Cummings. You understand why I am saying that, because 
we want the American taxpayers' dollars to be spent effectively 
and efficiently. I think it is very difficult when you have a 
contractor overseeing a contractor, and we lose control over 
the billions of dollars that we are spending.
    Let me just get to this last question. The Commission on 
Wartime Contracting and SIGIR testified that State does not 
have adequate resources in place for contract Management and 
oversight. In its July 2010 report, CWC found that planning for 
moving vital functions in Iraq was not adequate for effective 
coordination of billions of dollars in new contracting, and 
risked both financial waste and undermining U.S. policy 
objectives. Today, Inspector General Bowen testified that he 
continues to have some concern about whether State's current 
structure and resources provide a sufficient basis for managing 
very large continuing contracts and programs.
    Ambassador Kennedy, do you believe that State has the 
current structure and resources necessary to manage and oversee 
the very large contracts and programs that State will be 
responsible for? And I assume your answer is yes, based upon 
what you just said?
    Mr. Kennedy. It is, sir. We have the plans, we have the 
program in place. My only codicil to that is, carrying out the 
full program in Iraq depends on the President's budget request 
for the State Department for fiscal year 2011 and fiscal year 
2012 being enacted.
    Mr. Cummings. I see my time has expired. Thank you, Mr. 
Chairman.
    Mr. Chaffetz. Thank you.
    The chair will now recognize Mr. Farenthold of Texas, a new 
member to this committee. Welcome, and you are recognized for 5 
minutes.
    Mr. Farenthold. Thank you. As a new member of this 
committee, and not an expert in foreign affairs or the 
situation, and never having been to Iraq, I am troubled by what 
I am hearing here. My impression of Iraq comes from what I see 
on television and read in the newspapers, which might in and of 
itself be a mistake.
    But we are talking about an unprecedented logistical 
situation for the State Department going in there. We are 
talking about unmanned aerial vehicles, we are talking about 
recovering bodies, we are talking about trauma medical 
facilities. We are talking about pretty hefty defenses against 
attacks. We are talking about not being able to get gasoline or 
groceries within the country.
    This kind of troubles me. I realize the Bush administration 
set a hard deadline of the end of this year for getting out of 
Iraq on a military basis. I guess I will address this to the 
DoD, or Ambassador Kennedy, you are welcome to jump in on this. 
It doesn't sound like we are ready for the military to get out 
of there, if the situation requires this level of logistical 
support. Has anybody in the Obama administration or the DoD 
talked to the Iraqi government and said, hey, you think maybe 
it might be a good idea for us to stay a little bit longer 
until this is more stable?
    Mr. Vershbow. Congressman, that is a very good question. 
First of all, the decision to draw down our forces by the end 
of this year was a mutual decision with the government of Iraq. 
We honor the commitments that we made in the security agreement 
to carry out the drawdown in a responsible way.
    We do think that the Iraqi security forces have become 
increasingly capable of managing security for the country as we 
go forward. They have taken responsibility step by step. We 
transitioned to full Iraqi lead responsibility on September 1st 
of last year. And the security conditions, in our view, are 
improving.
    That is not to say that everything is perfect in Iraq, and 
there have been very dramatic and tragic spikes of violence in 
recent weeks. But I think that we have seen the Iraqis respond 
in a professional way.
    So we will depend more and more on the Iraqis for our 
security. But I think that with the effort that has been 
described here by Under Secretary Kennedy and by Mr. Kendall, 
we are aiming to equip our State Department colleagues for 
success. It is, indeed, going to be an unprecedented effort in 
its scale. That is all the more reason why Secretary Gates 
emphasized the need for providing the State Department with the 
resources that it needs to succeed.
    I would also emphasize the strategic importance of Iraq, in 
light of the recent dramatic upheavals in the region. With all 
the popular pressures around the Middle East and North Africa 
for reform and democratization, Iraq is now serving as an 
example.
    Mr. Farenthold. I am excited that we have achieved the 
success that I think the Bush administration, Iraq being a 
shining example. But if they can't provide even groceries for 
us, I am not sure we are there yet.
    And maybe I will address the question to Mr. Bowen. You 
spent some time over there. Are you aware of any requests from 
anybody within the Iraqi government that maybe our military 
presence, that we reevaluate our time lines?
    Mr. Bowen. Yes, I am. I was in Iraq 2 weeks ago, and I met 
with a number of senior officials, specifically a deputy prime 
minister who indicated that there is openness at the very least 
to renegotiating a security agreement. And I think Secretary 
Gates has spoken openly about that possibility as well.
    But as Ambassador Vershbow noted, this is really something 
that the Iraqis secured from us originally in security 
agreements, and that they would really need to publicly reopen. 
That matter, of course, doesn't have much time. December 31st 
will be here soon.
    Mr. Farenthold. Are you aware of anybody within the 
administration who is actually pursuing these discussions? Or 
is this something they just came up with over coffee somewhere, 
or I guess tea?
    Mr. Bowen. I am not involved in the policy matters related 
to this issue.
    Mr. Farenthold. I am just about out of time, so I will 
yield back my remaining 20 seconds.
    Mr. Chaffetz. The gentleman yields back. We will now 
recognize the gentleman from Illinois, Mr. Quigley, for 5 
minutes.
    Mr. Quigley. Thank you, Mr. Chairman, and welcome to your 
new position.
    I guess I am struck with something I heard someone from 
State say when I was visiting Iraq. We were being briefed, and 
they kept saying, we want to make sure we have this right, so 
we don't have to come back. Finally, after about an hour of 
that, a few of the Members said, we are not coming back.
    But there was a sense within the people there at State, and 
some of what I hear here, that we have to make things perfect. 
Let's name a Middle East country that isn't at least facing 
some possibility of extraordinary instability. Are we going to 
embed ourselves to that degree you are talking about in Iraq to 
maintain the stability we would love for our own national 
security?
    I just think perhaps we are talking about a bridge too far. 
Someone mentioned the corruption is as bad as it has ever been. 
I don't know that the people of Iraq will ever get along to the 
extent that you are talking about, or that corruption is going 
to change, or that all the efforts that we have already done or 
that you have planned for the next infinite number of years 
will achieve what you would like it to do. It is almost, from 
my point of view, impossible.
    So it is what stuck in my mind since I went there, and 
nothing has changed, that I heard today. But let me ask 
Ambassador Kennedy a question on this specific issue.
    You wrote a letter, I believe, April 7, 2010, to DoD, the 
problems that State Department will face in implementing the 
new life support system, any number of other agencies, entities 
have expressed concerns as well. There are related issues.
    Could you elaborate and make us feel a little better about 
how that situation is going to play out?
    Mr. Kennedy. Yes, sir. We have been receiving absolutely 
stellar cooperation, both in Iraq and the United States, from 
the Department of Defense. They are providing us surplus 
equipment, they are providing us equipment on loan. They are 
permitting us, under the Economy Act, to ride, utilize their 
contracts, for example, for food, for fuel, for logistical 
activities.
    So we have now crossed that barrier. We now have a way 
forward in those activities. Thanks to the cooperation from the 
Department of Defense, the contract is on the street for that, 
using the superior buying power, so to speak, of the Department 
of Defense. As you know, the Department of Defense has 
facilities all over the Middle East and Southwest Asia. 
Therefore, our ability to partner with DoD on these gives us 
greater economies of scale, to save money for the American 
taxpayer, and also permits us to use the contracting 
capabilities and the contract oversight for DoD.
    So I am very, very pleased with the progress we have made, 
and we are on track, sir.
    Mr. Quigley. What still needs to be done?
    Mr. Kennedy. The contract has to be executed. It is now out 
for bid. We will get the bids back in, they will be evaluated 
by DoD, and it will be awarded. But there is plenty of time to 
meet the half October 1st, half December 31st deadline, sir.
    Mr. Quigley. Thank you. I yield back, Mr. Chairman.
    Mr. Chaffetz. Thank you, the gentleman yields back.
    Now we will recognize Mr. Yarmuth of Kentucky for 5 
minutes.
    Mr. Yarmuth. Thank you very much, Mr. Chairman.
    Thank you for your testimony, all of you. Mr. Tierney 
inquired earlier about the impact of the top line cuts proposed 
in H.R. 1, and on the ability to carry out your mission. You 
may not have reviewed all of the provisions of H.R. 1, but are 
there perhaps other provisions in H.R. 1 that concern you about 
your ability to either, in Defense or State, in carrying out 
the mission, things that may not relate to just the top line 
cut in State's budget?
    Mr. Kennedy. My review, sir, is that the major issue at 
hand here is the funding levels. The State Department has both 
a core mission in 165 countries in the world to advance our 
economic security, to provide life and safety for the thousands 
and millions of American citizens who travel, to be the first 
agency in terms of our border security, in terms of passport 
issuance, in terms of these issues overseas.
    Cuts of that magnitude are devastating not only to the 
State Department's special missions in Iraq, Afghanistan and 
Pakistan, but they are also devastating to our core mission to 
advance our national security through diplomatic means.
    Mr. Yarmuth. Were there any other cuts in any other budget 
besides State at Defense? Were you concerned about any of the 
provisions in H.R. 1 that relate to these areas of operations?
    Mr. Kendall. As far as I know, it is the State Department 
cuts that are the gravest concern. We have requests before the 
Congress for both fiscal year 2011 and fiscal year 2012 which I 
think are still under consideration. But I think any 
substantial cut, as Secretary Gates mentioned, I think, when he 
testified just a couple of weeks ago, this is a dominant 
concern for us right now, State Department's funding.
    Mr. Yarmuth. Thank you for those answers.
    During the Oversight Committee's last hearing on this 
subject, there was some concern expressed about whether 
contractors were being asked to perform inherently governmental 
functions. Ambassador Kennedy, you mentioned before some of the 
functions that would disappear when the military the military 
operations ceased.
    But Mr. Thibault and Mr. Green, do you believe that tasks 
such as IED clearance and hostage rescue are inherently 
governmental functions?
    Mr. Thibault. Mr. Congressman, yes, I do. In the sense that 
absent, there are two parts that have been discussed today. Are 
the Iraqis ready to assume responsibilities, and then second, 
absent a military solution, are contractors the right solution. 
I have seen no indication that on the highly technical areas we 
are discussing here, such as IED removal, such as counter-
battery, and when I say highly technical, I mean competence 
also, UAV, that is something that we would transfer to the 
Iraqis.
    So that leaves it to, the military is doing an exceptional 
job. And I might use counter-battery, and I try to visualize 
things. But what I have seen is, if the enemy, and I think 
everyone has seen it, they will bring a small pickup truck, 
throw down one rocket, pop the rocket and leave. That is 
because the objective, DoD is so exceptional at putting 
counter-battery on them within 8 seconds. They know that.
    If that degraded, and we are talking about safety to all 
government and contractor personnel, that are within an area of 
risk, if that degraded, the real question then becomes, would 
that knowledge be available. And then at that point, would 
there be the normal process of a military where you have a 
forward observer, you redirect fire, and you really can do 
damage to target areas.
    Those are areas where, from an inherently governmental 
viewpoint, the U.S. Army is exceptional. And there are several 
areas such as that quite frankly, I am very uncomfortable 
personally, and we have discussed as a commission transferring 
those kinds of functions to the contractor world.
    Mr. Yarmuth. Thank you very much. Mr. Green, did you want 
to add anything to that?
    Mr. Green. No. I would certainly agree. Some of these, as 
we call them, functional areas that will be taken over by State 
are very close, if not inherently governmental. I guess the 
basic question is, today, in the next 10 months, what is the 
option? State is not going to hire and bring in-house DoD 
personnel. And DoD is going away.
    So it leaves us very little wiggle room when it comes to 
performing many of these functions. Hopefully, State uses 
contractors now in other locations for, I will call it bomb 
disposal, if you will. Do they need to build that capability 
within their organization? And how often would you use it?
    So I think as ill-defined as inherently governmental is 
today, I think when you talk about the time, there are many of 
these functions, or certainly a good number of them, that are 
appropriately done by contractors.
    Mr. Thibault. And I might add, though, in building upon 
Commissioner Green, if I might, in about 10 seconds, the key 
for State, if they go contractor, is to have and bring in 
government employees, because State has said it is not their 
objective to have contractors looking at contractors, that are 
experts in the proper way to do these types of examples we have 
seen. I don't believe that capability exists presently. I think 
that is something they would have to grow into, in order to do 
the oversight.
    Mr. Yarmuth. Thank you for your response.
    Thank you, Mr. Chairman.
    Mr. Chaffetz. The gentleman's time is expired.
    We are actually going to go to a second round of 
questioning, if the number of Members here would like to ask 
some questions. I am going to recognize myself for 5 minutes.
    Ambassador Kennedy, I was struck here, actually, as we 
thought more about your answer to the 14 lost functionalities, 
that there were 7, and I would be interested in your followup 
on which 7 stay and which 7 don't, I was really struck by your 
comment, and I hope I heard you right, we will have to go back 
and look at the record, you said that State wasn't going to 
fire back. We may be actually taking mortar rounds, we may be 
taking rocket fire, but you don't plan to fire back. Is that 
right?
    Mr. Kennedy. Yes, Mr. Chairman, we have no intention of 
using 155 millimeter howitzers from the American embassy 
compound to fire back into Iraq.
    Mr. Chaffetz. So we are just going to keep taking the 
shells, and just keep taking it?
    Mr. Kennedy. No, sir. We are already working very, very 
well with the government of Iraq, providing them with the 
locations that the material has been fired at us, and the Iraqi 
government has been successful, not to the degree that I wish 
they were, in disrupting those who would fire on our diplomatic 
and consular positions.
    But it is not the function of a diplomatic entity to engage 
in a defense engagement.
    Mr. Chaffetz. Well, that is the concern, at the end of the 
day, that is the concern that on January 1st, we don't expect 
that suddenly it is going to be safe, safe place.
    Mr. Kennedy. Yes.
    Mr. Chaffetz. We will have to continue to explore this.
    Mr. Kennedy. Could I finish?
    Mr. Chaffetz. Yes.
    Mr. Kennedy. There are two parts to the counter-battery, 
sir. There is the return fire. But the prelude to that is 
called sense and warn, which we are retaining, which is a radar 
system that tracks the incoming fire, then sounds a warning for 
our people to take cover. And that we are retaining.
    Mr. Chaffetz. I am familiar with it. This will obviously 
need to be further explored.
    In a Senate Foreign Relations report issued by Senator 
Kerry on January 31st, of this year, he maintains that of 
December, land use agreements had not been signed and 
construction had not begun on satellite sites. With less than 
10 months to go before the deadline, could you please give us 
an update on this? It seems like a very short amount of time in 
order to build a fairly significant facility. You haven't even 
acquired the land, is that correct?
    Mr. Kennedy. We are very, very close to signing agreements 
with the government.
    Mr. Chaffetz. What is that going to do to the time line?
    Mr. Kennedy. We believe at the moment, we are still within 
the time line, because what we have done as part of our 
planning process in coordination with our Defense Department 
colleagues, we have identified the plots of land that we need. 
We have surveyed them, we have engaged the architectural and 
engineering work. And the contracts for the construction have 
been sent out for bids and the bids are back in.
    Mr. Chaffetz. OK, if you are telling me you are still going 
to hit the time lines----
    Mr. Kennedy. At the moment, today, I am telling you I am 
still going to hit the time lines, yes.
    Mr. Chaffetz. Mr. Kendall, briefly, briefly.
    Mr. Kendall. Mr. Chairman, I just want to mention, so the 
committee understands, that the land we will be using is land 
we are currently generally in possession of. So we are 
shrinking our bases to provide compounds, if you will.
    Mr. Chaffetz. Thank you. I do appreciate it.
    I need to move on. In April 2010, Ambassador Kennedy, you 
sent a fairly direct statement out, a letter saying that 
without the equipment that you needed, for instance, Blackhawk 
helicopters and what-not, that there would be ``increased 
casualties.'' I get a sense that some of that list has been to 
your satisfaction. But where are we on the list that you issued 
in April 2010?
    Mr. Kennedy. Thanks to the good work of the Department of 
Defense, I believe that we are on track to receive everything 
from DoD that I need, or, because for example, DoD's own 
shortage of Blackhawk helicopters, we are either acquiring 
other helicopters from Sikorsky.
    Mr. Chaffetz. But you are confident that you are going to 
get 100 percent of that?
    Mr. Kennedy. I am confident that we will have 100 percent 
of what we need from multiple sources, including directly from 
the Department of Defense, yes, sir.
    Mr. Chaffetz. And then for the Department of Defense, the 
question is, how many troops, how many American military will 
be in-country on January 2nd?
    Mr. Kendall. Those numbers are still a little bit in flux. 
But the entire OSC-I, Office of Security Cooperation in Iraq, 
DoD presence will be under 4,000. The most recent number was 
about 3,900. We think we are going to come down 10 or 15 
percent from that.
    Mr. Chaffetz. And that is of January 2nd?
    Mr. Kendall. No, that is at the end of--yes, January 2, 
2012, next year.
    Mr. Chaffetz. But we will still have close to 4,000 troops?
    Mr. Kendall. Four thousand total DoD personnel, of which 
roughly 1,000 will be government personnel. A subset of those 
will be military. The rest will be contractors.
    Mr. Chaffetz. And what will the military personnel be doing 
there?
    Mr. Kendall. Various types of security assistance, 
training, missions such as that.
    Mr. Chaffetz. I would appreciate some further clarification 
of that as we move forward.
    My time has expired, so I will now recognize for 5 minutes 
the ranking member, Mr. Tierney.
    Mr. Tierney. Thank you.
    Ambassador, you started to get engaged in the issue on 
inherently governmental functions there beforehand. Is there 
something you want to add to that conversation? I think it is 
an important topic.
    Mr. Kennedy. Yes, thank you very much, sir.
    The State Department believes that the functions that we 
are being contracted out for are not inherently governmental. 
We would never violate the law and contract out for something, 
these are complex functions, however. So our predicate for 
handling this is to ensure, and I will use security as the 
example here, is to have very, very robust oversight by 200 
diplomatic security, State Department career, government 
professionals, over that contract body. It is about a 1 to 35 
ratio, which we believe will fully ensure that the contractors 
perform the non-inherently governmental functions under robust 
diplomatic security supervision.
    Mr. Tierney. Describe for me, if you would, a security 
mission that isn't inherently governmental.
    Mr. Kennedy. For example, if you look at many, many Federal 
installations or even State and local government installations 
in the United States, static guards, fixed guards around many 
Federal buildings in Washington are carried out by contract 
security personnel. It is widely accepted in the U.S. 
Government that static security personnel are not inherently 
governmental. Because they do not have arrest authority and 
they do not engage in law enforcement activities, sir.
    Mr. Tierney. Don't you draw a distinction between the 
properties that we might be trying to protect and the people we 
might be trying to protect in a contingency zone, like Iraq, 
make a distinction there between a building in downtown 
Washington?
    Mr. Kennedy. No, sir, because I think the predicate of it 
is the same. But second, I have 1,800 diplomatic security 
personnel sworn worldwide. It makes no sense for me at all to 
move that number from 1,800 to 1,800 plus 7,000 for a period of 
time. The surge capability is, in my mind, what contracting is 
for, is to be able to grow the work when you have a particular 
need, and then to be able to shrink that work back for the 
benefit of the mission and the American taxpayer at the same 
time.
    Mr. Tierney. How many Marines are going to be protecting 
our embassy in Iraq?
    Mr. Kennedy. There will be, probably, I would say a couple 
of dozen.
    Mr. Tierney. That entire compound?
    Mr. Kennedy. Yes, sir.
    Mr. Tierney. Will they be supervising any contract security 
people?
    Mr. Kennedy. No, sir, the Marines do not supervise the 
contractors. The regional security officer supervises both the 
Marines and the contract personnel.
    Mr. Tierney. Would you say that a hostage rescue mission is 
an inherently governmental function?
    Mr. Kennedy. I think that a hostage rescue mission in a war 
zone like Iraq, led by diplomatic security personnel and 
supported by contractors stays within the boundaries of what is 
legal and what is not legal, sir.
    Mr. Tierney. Why would you have that supported by contract 
personnel and not be strictly U.S. personnel?
    Mr. Kennedy. Because I do not have enough diplomatic 
security personnel to do the mission, and I do not have a 
permanent need for that many personnel to hire individuals for 
a 20 or 30 year career.
    Mr. Tierney. All right. So the first part I don't accept. 
The idea on that is because you don't have enough people 
doesn't mean it is no inherently governmental, it means 
basically you want to get to that point some time and you are 
going to bring those people on, you just can't do it right now. 
I think we can have a debate about the surge capacity on that, 
whether it makes sense for us to have enough capacity worldwide 
that we can bring people and have people in areas where that is 
a likely situation and work on that. I would like you to take 
another look at that, if you would.
    Mr. Kennedy. And when you say a hostage situation, 
obviously, if I had the exactly definition of what the 
individual situation was, I might very, very well use just 
diplomatic security's sworn personnel, special agents that I 
have on the ground. I might use those exclusively, given the 
situation. They might need support, however, from the 
contractor personnel they supervise.
    Mr. Tierney. I would like to think that we would have some 
capacity worldwide, as I say, that wouldn't mean kicking that 
sensitive type of operation out to contractors on that. I hope 
you will take another look at that at some point.
    Inspector Bowen, just quickly, in your experience, what is 
a rough ratio of management and oversight personnel to 
contractors and contracting dollars? What would be the 
appropriate ratio?
    Mr. Bowen. Within the State Department spending?
    Mr. Tierney. Yes.
    Mr. Bowen. It varies on location. I mean, the number of 
contractors to government personnel can range up to 60 to 1 
down to 20 to 1, 15 to 1. But I think that the Senate Foreign 
Relations report of January 31st makes an important point that 
the committee ought to take under consideration and advisement. 
That is, allow the regional security officer flexibility on how 
he or she spends that money across the country.
    For example, Erbil. One bomb in 8 years. It is a safe 
place. No Americans killed up in Kurdistan. But there are very 
high ratios and standards of security protection that seem 
inconsistent with the real security situation. Allowing more 
creative flexibility, I think is the phrase that the report 
uses, will save taxpayer dollars.
    Mr. Tierney. Thank you. Thank you, Mr. Chairman.
    Mr. Chaffetz. The gentleman yields back. We will now 
recognize Mr. Turner of Ohio for 5 minutes.
    Mr. Turner. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing, and certainly the importance of this 
issue.
    Gentlemen, I am going to apologize to the extent that my 
question may overlap with other questions. I am on the Armed 
Service Committee and just came from the Army budget hearing 
where General Casey and Secretary McHugh are testifying. I 
stepped away from that hearing to come and ask my question 
today. I think certainly what we have seen in the materials 
that are available from this hearing, there is a great deal of 
concern as to how this transition would occur. I am going to 
follow on the questions about the contractors.
    In looking at the materials, I think it is pretty startling 
to everyone that upwards of 17,000 contractors may be relied 
upon. If you look at your plans, we are all concerned that you 
are going to rely heavily on contractors for security. Given 
the problems that the Department of Defense had in providing 
oversight of contractor operations, I would like to express 
certainly my concerns and get your thoughts on the State 
Department's reliance on contractors, and particularly, the 
impact it might have on our relationship with Iraq and the 
Iraqi people.
    I have been to Iraq five times, and Afghanistan five times. 
Certainly we are all aware of the issues that we have had when 
we have looked to contracted security. General Caldwell was 
just before the NATO Parliamentary Assembly, and he voiced his 
concerns in the contracting process where he was looking at 
services for training Afghanistan military police and its 
military, saying that frequently, the contracting process 
limited the scope and the ability to manage what functions were 
occurring.
    We certainly also had concerns of how contractors relate to 
the Iraqi people, or the government itself, questions have 
arisen concerning status of forces agreement, what is the 
status of contractors. I would like you to address that issue 
as to while they are in Iraq, how they will be treated, the 
contractors themselves, what is their legal status.
    And then also the issue of the oversight of dollars, 
because there is obviously a significant amount of dollars that 
will be applied toward the contracts themselves. Could you 
speak about that for a moment, please?
    Mr. Kennedy. Yes, sir. If I could divide it into three 
pieces, I think it would be responsive to you.
    The first is, I think when you talk about contractors in 
the security arena, in gross terms you talk about either fixed, 
static security on the one hand and movement security on the 
other. The fixed, static people stay within the walls or in the 
perimeter of the U.S. embassy in Baghdad or our post outside. 
So their interaction with the Iraqi people is very, very 
limited, because their mission is within the walls.
    On movement security, where we are escorting Members of 
Congress, other distinguished visitors or our own personnel out 
into the city, every one of those movements which is staffed by 
contractors, the agent in charge of that movement is a State 
Department, U.S. Government security professional who gives 
direction to the contractors and is on control of that 
operation at all times. So we think we have oversight, and that 
is my second point. We have oversight both in the sense of the 
contract, we have oversight in terms of the control of the 
contractors' activities when they are engaged in their 
missions.
    The third point, sir, you asked about the status. The 
contractors are not covered by any type of diplomatic or 
consular immunity under either of the two Vienna conventions. 
If they engage in any inappropriate conduct, they are subject 
to both potentially U.S. law, but also they would be subject to 
Iraqi law.
    Mr. Turner. That takes me to my point, and I appreciate 
your use of the word inappropriate. But it also places them at 
risk for appropriate actions, does it not, as they go, set 
about providing security, if there should be a security issue 
that is addressed? You have significant issues that need to be 
addressed with respect to what their relationship is to what 
has occurred. And I think we have certainly seen probably 
dozens of news stories that we have all read of issues where 
there has been a security issue that has arisen, and a concern 
with the security forces having been contract forces.
    Do you have thoughts as to how you will be addressing that?
    Mr. Kennedy. Yes, sir. There is a joint U.S.-Iraq security 
group that is led by the regional security officer from the 
U.S. embassy, with senior Iraqi military and police officials. 
That process has been successful to date in resolving any issue 
that may have arisen. We believe we have a process in place, we 
believe it will be a successful one, because there is a track 
record of it having been successful.
    Mr. Chaffetz. The gentleman's time has expired. We will now 
recognize the vice chairman, Mr. Labrador from Idaho, for 5 
minutes.
    Mr. Labrador. Thank you, Mr. Chairman.
    Ambassador Kennedy, actually, Mr. Bowen, you said that we 
are spending $75 billion in Iraq currently. Do you know how 
much we are going to spend in fiscal year 2012?
    Mr. Bowen. The State Department proposal is around $6 
billion.
    Mr. Labrador. Six billion. There has been a lot of 
testimony here that if we decrease the spending levels, we are 
not going to be able to do the mission in Iraq. So $75 billion, 
$6 billion, we are a looking at a $69 billion savings, yet we 
are asking for more money for the State Department. Ambassador 
Kennedy, what is the State Department's budget this year?
    Mr. Kennedy. Overall, the State Department budget request 
for fiscal year 2012 that the President has just submitted, 
sir, is $14.9 billion, for State Department.
    Mr. Labrador. For the entire State Department?
    Mr. Kennedy. Yes, the entire State Department, excluding 
our expenses in Iraq and Afghanistan.
    Mr. Labrador. Fourteen point?
    Mr. Kennedy. Fourteen point nine, for Iraq, $4.3 billion 
for Iraq, Afghanistan, Pakistan, and $14.9 for our core 
diplomatic mission.
    Mr. Labrador. Mr. Kendall, what is the Department of 
Defense budget for next year? What is the request?
    Mr. Kendall. I would hesitate to give you a number off the 
top of my head. I believe it is about $550 billion for the base 
budget. Here it is, I have it, I think. No, wrong answer. Let 
me give you that for the record. I am sorry. I should have it 
in my head, but I don't. Five twenty-four, base budget.
    Mr. Labrador. Five twenty-four billion. So we are talking 
about $524 billion for the Department of Defense, the 
Department of State is going to have $14.9 billion. We are 
talking about a significant amount of money that is out there, 
and we are going to be saving a significant amount of money by 
drawing down. I am just not really clear why we need additional 
money and why any cuts are going to be hurting us.
    Are there no savings out there that we can do? Is the 
Department of Defense, for example, since we are saving that 
money in the Department of Defense, can we just transfer some 
money? Explain this to me, Mr. Kendall.
    Mr. Kendall. The Department has been under an intense 
effort to find savings ever since last spring, when Secretary 
Gates made a speech in Abilene that you may be aware of. We 
have worked very, very hard. The services were all tasked 
collectively to try to find $100 billion in money they could 
save in efficiencies and move into other, more value-added 
activities. We are cutting general officer slots, we are 
cutting senior executive slots. It has been an extremely 
intense effort to get rid of every ounce of fat we possibly can 
in our budget.
    As the Secretary has said, if we are going to sustain our 
force structure and modernize it as we need to, we absolutely 
have to find savings. So there is an intense effort there. 
There is not an ounce of extra fat, as far as I can tell, left 
in the Defense Department's budget.
    Mr. Labrador. And I applaud, actually, what the Secretary 
is doing. But it just seems to me that if we are going to be 
saving money in Iraq, and now for everyone here to testify that 
we can't save any money in our budgets, it just doesn't make 
any sense.
    There are some savings. For example, in your letter, 
Ambassador Kennedy, of April 7th, you clearly asked for the 
equipment to be transferred to the Department of State. How 
much would that save us, if instead of purchasing the 
equipment, it was just transferred?
    Mr. Kennedy. I don't have that figure in front of me, Mr. 
Vice Chairman. But our budget request for 2012 was put together 
after that was taken into consideration. So I would have had to 
request additional funds for the armored vehicles or the other 
equipment DOD was transferring to us. In other words, my 
request is net of the transfers that DoD is making to us. My 
request would have been higher if I was having to buy the 
equipment. Instead, I am receiving it from DoD. So I did not 
request that as part of my Iraq budget.
    Mr. Labrador. So is DoD transferring all the equipment that 
you need, or just transferring some of the equipment?
    Mr. Kennedy. They are transferring everything that they 
have available in surplus.
    Mr. Labrador. OK, thank you. I have no further questions.
    Mr. Chaffetz. The gentleman yields back. We will now 
recognize Mr. Farenthold of Texas for 5 minutes.
    Mr. Farenthold. Thank you.
    As I have been sitting here, I wanted to talk a little bit 
more about some of my concerns I brought up in my earlier 
question about whether really this is the appropriate time and 
whether or not we have reevaluated the drawdown deadline of the 
Bush administration, in light of the amount of extraordinary 
efforts that the State Department is going to have to put into 
security.
    I guess I would like to start off asking Ambassador 
Kennedy, in light of everything you are asking, and the 
situation as you see on the ground, would you feel comfortable 
taking your wife and kids to serve with you in a facility in 
Iraq come next year?
    Mr. Kennedy. Sir, we permit working spouses to accompany 
the State Department employees to Iraq now, and we will 
continue to do that. The answer is, I would not inject children 
into Iraq now or later or any time in the near future. But that 
is only one of a number of countries where pat of my job is to 
decide where family members are permitted to go.
    Mr. Farenthold. All right. My earlier question to Mr. Bowen 
was, are you aware of any negotiations on behalf of the Obama 
administration with high level Iraqis about possibly extending 
or renegotiating the number of troops that will be in Iraq 
after the end of the year. And I probably asked that question 
to the wrong folks. I would like to address that to you, 
Ambassador Kennedy, and our two folks from the DoD. If you 
would each take a second and let me know if you all know 
anything along those lines.
    Mr. Vershbow. Congressman, as Secretary Gates has said, the 
initiative for any discussion on any possible follow-on 
military presence would have to come from the Iraqis. We have 
an agreement whereby we have mutually agreed to draw down our 
forces by the end of this year, and will honor that agreement. 
In his testimony, Secretary Gates identified some concerns he 
has about areas where the Iraqis will need additional 
capability.
    But I want to say that drawing down doesn't mean we are 
disengaging. The Office of Security Cooperation in Iraq and the 
State Department's FMS programs are going to be important tools 
for helping to continue to increase the capacity and the 
effectiveness of the Iraqi security forces. And the police 
development program, of course, will be very important as a 
complement in improving the professionalism of the Iraqi 
police.
    So we are preparing for that outcome. And we do believe 
that the Iraqis, who have had the lead responsibility for 
security now for more than a year, are doing an increasingly 
effective job. The question was asked earlier, is this going to 
be perfection. No, the Iraqis, I think, understand that they 
have a long way to go in terms of building the institutions of 
a stable state. I think it is in our strategic interest to help 
them, and that is what we intend to do, and the State 
Department's programs and the Department of Defense's continued 
engagement will be critically important in doing that.
    Mr. Farenthold. I appreciate that. But I am troubled by 
your statement that any request would have to come publicly 
from the Iraqis. There are two parties to this agreement. If I 
am unhappy with a contract, I am going to live up to it, but if 
I think there are some things that need to be renegotiated, I 
think it is open for either side to open it up and renegotiate. 
I just make that point.
    And finally, again, I am going to ask the direct question. 
Is anybody on the panel aware of any request from the Iraqi 
government for us to up those numbers?
    Mr. Kennedy. Sir, I think we will have to get back to you 
on that question.
    Mr. Farenthold. All right. I would appreciate it if you 
did. Thank you very much. I yield back.
    Mr. Chaffetz. Thank you.
    I am going to recognize myself for 5 minutes as we wrap up 
the questioning here, starting with Ambassador Kennedy. I want 
to be crystal clear, I want to go back to the very first thing 
we started with. Will the State Department give unfettered 
access, complete and total access, to the Special Inspector 
General to do their job?
    Mr. Kennedy. The----
    Mr. Chaffetz. All right, now, that says a lot right there. 
That is my concern, is the hesitation.
    Mr. Kennedy. The Special Inspector General for Iraq has a 
mandate. We will provide him with all the material that is 
relevant to his mandate.
    There are other inspectors general with other mandates that 
we provide information to. So if the Inspector General for Iraq 
asks me for something within his mandate, he will receive it. 
If the Inspector General of the State Department asks me----
    Mr. Chaffetz. I am not understanding what would be outside 
of that scope. Mr. Bowen, be as direct and succinct as you can. 
I only have a few minutes here.
    Mr. Bowen. That question is properly placed at this table 
between Ambassador Kennedy and me. You have raised an important 
issue regarding that Congress has all the information it has 
come to expect from SIGIR about what is going on in Iraq, and 
specifically about what is going on with regard to transition.
    We have an expanded mandate over and above what is usually 
the case for IGs. It requires quarterly reporting, it is cross-
jurisdictional. As we pointed out in our last quarterly report, 
and as is very specifically detailed in that October 7th memo 
you cited, the State Department has stopped giving us 
information that it was giving us before. That question is now 
before Ambassador Kennedy, and I am confident that they will 
resume giving us the information. We need to ensure that you 
have the information about what is going on in Iraq.
    Mr. Chaffetz. Ambassador Kennedy, do you care to further 
comment?
    Mr. Kennedy. Mr. Chairman, I could only repeat my position. 
We provide----
    Mr. Chaffetz. No need to repeat your position. I find it a 
troubling position, quite frankly. It is something we will 
continue to have to further explore, as we will with the 
Department of Defense.
    There are other questions that Members would like to 
submit. We would appreciate your prompt response to those 
questions.
    As we wrap up here, I would appreciate maybe if we could 
start with Mr. Green and just go down the table. What is your 
No. 1 concern? This is a mammoth, massive task that is before 
us. I cannot thank the men and women who are scrambling every 
day, putting their lives on the line making this happen. I hope 
they understand the appreciation of the American people, those 
of us in Congress and others, for their good, hard work and 
dedication.
    But as we move forward, it is also imperative that we 
highlight the concerns that you all have. You are the closest 
to it. If we could just go down the line and cite, what is your 
biggest concern moving forward?
    Mr. Green. We have discussed many of them here today. I 
think to name one or two, it is to ensure that we have the 
adequate oversight. The fact is that we are going to have a 
heck of a lot of contractors in-country. But we have to 
increase the oversight, because that is where we leave 
ourselves open to waste and fraud.
    Mr. Chaffetz. Thank you. Mr. Thibault.
    Mr. Thibault. Thank you, Mr. Chairman.
    Probably my No. 1 in the context of these discussions is, 
it is explained in our charter, we get bound up sometimes in 
inherently governmental, and our charter by Congress said, 
those functions that should be best performed by the government 
versus contractors. And in that context, and in our discussions 
here, we talked about these 14 items. I really think it 
warrants an analysis, because the U.S. Army has built an 
exceptional capability over time. And to even think about 
transferring that capability to me introduces the potential for 
safety of government and contractor employees who reside in 
those locations that are protected.
    Mr. Chaffetz. Thank you. Mr. Bowen.
    Mr. Bowen. Accountability for outcomes. As Mr. Tierney 
pointed out, this committee and the Congress needs to know what 
the State Department plans to achieve. What are the specific 
outcomes that $6 billion will be spent, if you include the 
program money, not just the operating money that the State 
Department, if it gets it all, will receive this year. Knowing 
what the police development program will achieve with the 190 
trainers across the country that are going out to help the 
Iraqis improve, what outcomes will they achieve.
    Mr. Chaffetz. Thank you. Ambassador Kennedy.
    Mr. Kennedy. Achieving the adequate funding levels in order 
to carry out the mission that I have been tasked to do.
    Mr. Chaffetz. Thank you. Ambassador Vershbow.
    Mr. Vershbow. I share Ambassador Kennedy's concern. 
Secretary Gates said, ensuring that the State Department has 
the resources it needs to stand up this very ambitious and 
complex mission is critically important. And it is very urgent, 
because as the Secretary said, there are facilities to be 
built, there are people to be hired. So we need to get them the 
resources that they need as quickly as possible.
    Mr. Chaffetz. Thank you. Mr. Kendall.
    Mr. Kendall. Mr. Chairman, let me first correct a statement 
I made earlier. The numbers I gave you were not quite accurate 
for the DoD presence in the future in Iraq. The total number is 
approximately less than 4,000. But of that 4,000, about 1,000 
total are security assistance. And within that total of 1,000, 
approximately 200 or less are actually DoD or government 
personnel.
    The answer to your question, from my perspective, is time. 
Time is a big factor here. And we have a great deal to do in a 
relatively short period of time. In the fall, the U.S. forces 
will start to transition very much to exiting from Iraq. We 
have to accomplish a great deal before then. Along with that, 
of course, I would add the funding concerns that were expressed 
earlier.
    Mr. Chaffetz. Thank you. I thank you all for your 
participation and your great work and service to the United 
States of America. I thank you for the interaction and look 
forward to interacting with you in the future.
    Thank you. This committee is now adjourned.
    [Whereupon, at 11:18 a.m., the committee was adjourned.]

                                 
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