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

       STATUS REPORT ON THE TRANSITION TO A CIVILIAN-LED MISSION IN IRAQ

    =======================================================================

                                    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

                                   __________

                                OCTOBER 12, 2011

                                   __________

                               Serial No. 112-108

                                   __________

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

             Available via the World Wide Web: http://www.fdsys.gov
                          http://www.house.gov/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 October 12, 2011.................................     1
    Statement of:
        Kennedy, Patrick F., Under Secretary for Management, U.S.
          Department of State; Alexander Vershbow, Assistant
          Secretary for International Security Affairs, U.S.
          Department of Defense; and Alan F. Estevez, Assistant
          Secretary for Logistics and Materiel Readiness, U.S.
          Department of Defense......................................     5
            Estevez, Alan F..........................................    24
            Kennedy, Patrick F.......................................     5
    Letters, statements, etc., submitted for the record by:
        Estevez, Alan F., Assistant Secretary for Logistics and
          Materiel Readiness, U.S. Department of Defense, prepared
          statement of...............................................    26
        Kennedy, Patrick F., Under Secretary for Management, U.S.
          Department of State, prepared statement of.................     8

       STATUS REPORT ON THE TRANSITION TO A CIVILIAN-LED MISSION IN IRAQ

                                  ----------

                          WEDNESDAY, OCTOBER 12, 2011

                      House of Representatives,
    Subcommittee on National Security, Homeland Defense
                                and Foreign Operations,
                  Committee on Oversight and Government Reform,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:01 a.m. in
    room 2154, Rayburn House Office Building, Hon. Jason Chaffetz
    (chairman of the subcommittee) presiding.
        Present: Representatives Chaffetz, Tierney, and Quigley.
        Staff present: Thomas Alexander and Richard A. Beutel,
    senior counsels; Brien A. Beattie, professional staff member;
    Molly Boyl, parliamentarian; Mark D. Marin, director of
    oversight; Rafael Maryahin, counsel; Cheyenne Steel, press
    assistant; Nadia A. Zahran, staff assistant; Ashley Etienne,
    minority director of communications; Carla Hultberg, minority
    chief clerk; Paul Kincaid, minority press secretary; Adam
    Koshkin, minority staff assistant; and Scott Lindsay and Carlos
    Uriarte, minority counsels.
        Mr. Chaffetz. Good morning. The committee will come to
    order.
        I would like to begin this hearing by stating the Oversight
    Committee's mission statement.
        We exist to secure two fundamental principles. First,
    Americans have the right to know the money Washington takes
    from them is well spent. Second, Americans deserve an efficient
    and effective government that works for them. Our duty on 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 the 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 would like to welcome everybody to this hearing. It is
    entitled, ``Status Report on the Transition to A Civilian-led
    Mission in Iraq.''
        I would like to welcome Ranking Member Tierney and other
    members of the subcommittee and thank members of the audience
    for their participation and attendance here today.
        Today's proceedings continue the subcommittee's effort to
    examine the challenges facing the Defense Department and the
    State Department as they transition from a military-led to a
    civilian-led effort in Iraq. This is the subcommittee's second
    hearing on this matter.
        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. To date, the Defense Department has
    redeployed thousands of troops and dramatically reduced its
    footprint. From all outward appearances, the Department seems
    to be hitting its benchmarks.
        As they draw down, the State Department is increasing its
    footprint. To fill the void left by the Defense Department, the
    State Department will hire thousands of private contractors to
    complete the mission. In all, the State Department's footprint
    will balloon to approximately 17,000 personnel. According to
    the Government Accountability Office, the GAO, nearly 14,000
    will be private contractors.
        These contractors will perform a wide range of tasks
    including life support services and logistics. They will also
    recover downed aircraft and personnel, dispose of ordinance and
    transport personnel. The State Department will also hire a
    private army of nearly 7,500 security contractors to do
    everything from guarding the walls and gates to guarding VIP
    convoys and flying UAVs.
        While they will have the ability of sense and warn of
    incoming ordinance, they will not have the ability to shoot it
    down. I find this puzzling and would like to discuss this
    further.
        As the Defense Department winds down, the State Department
    is ramping up in what may be more of a political shell game
    than a draw-down of forces. When President Obama tells the
    American people that forces will be out of Iraq, I am not sure
    the average American understands that the troops will be
    replaced with a private army of security contractors.
        Nevertheless, the State Department faces a daunting and
    unprecedented challenge. Many have expressed doubts as to
    whether the State Department will meet the December 31st
    deadline and whether it can oversee the administration's surge
    in private contracting. According to the GAO, the State
    Department ``has acknowledged that it does not have the
    capacity to independently acquire and oversee the scale and
    nature of contracted services needed.''
        The Commission on Wartime Contracting has also expressed
    tremendous concern. Last July, it wrote that despite
    interdepartmental efforts ``the current planning for the
    Defense to State transition of vital functions in Iraq is not
    yet adequate.'' On March 1st, Commissioners Grant Green and
    Michael Thibault testified before this subcommittee. When asked
    whether the State Department was ready, they answered no. They
    explained that it has neither the funds to pay nor the
    resources to manage the thousands of additional contractor
    employees.
        Last week, six of the eight Commissioners testified before
    the full committee about billions of waste, fraud and abuse in
    contracting, something in the range of $30-$60 billion. They
    warned that the State Department is struggling to prepare
    requirements for contractors and to effectively oversee them.
        In other words, it appears the State Department has not
    made enough progress to ensure a smooth transition. I hope it
    has a different message to convey this morning. A commitment
    from Ambassador Kennedy that the State Department will be fully
    capable on January 1st would be a great start.
        On a related matter, I would appreciate it if the Defense
    Department would clear up some confusion surrounding its draw-
    down. There have been numerous reports that President Obama may
    order thousands of combat troops to remain in Iraq at the Iraq
    Government's request to conduct training of the Iraqi military.
        While I understand negotiations are ongoing with the Iraqi
    government, I believe the American people have the right to
    additional clarity on how many troops will remain and what
    their mission and legal status will be. The Iraqi Government
    has said that it will strip away any U.S. troops that remain
    next year of the limited legal immunity that they currently
    enjoy. No one here wants to see brave American soldiers
    prosecuted in Iraqi courts for defending themselves from
    insurgent attacks. Our troops should have the same legal
    protections on January 1st as they did on December 31st. It is
    the President's obligation to see that they do. With only 2\1/
    2\ months, the administration must work quickly to get this
    done.
        We have a distinguished panel here today that has been very
    involved in this and I appreciate each of your gentlemen
    joining us here today. I look forward to hearing from this
    panel of witnesses.
        I would now like to recognize the distinguished ranking
    member, the gentleman from Massachusetts, Mr. Tierney, for his
    opening statement.
        Mr. Tierney. Thank you, Mr. Chairman.
        Our current military operations in Iraq, Operation Iraqi
    Freedom, as we all know, began on March 20, 2003 when President
    Bush ordered the invasion of Iraq. I can remember, as many of
    you probably do, watching it on television. I watched with
    great trepidation, based on the weaknesses of the
    administration's case for striking in the first place.
        Since then, our brave men and women in uniform have fought
    hard to help return the country to civilian rule. After heroic
    sacrifices over 8 years, that has cost over 4,000 American
    lives and nearly $1 trillion, the men and women of our armed
    forces can leave Iraq with their heads held high. I am not so
    sure about those policymakers who made the decision to put
    their lives and America's treasure at risk.
        We are now ready to enter the next stage of our efforts in
    Iraq. In 2008, the Bush administration agreed to withdraw all
    U.S. troops from Iraq by the end of 2011. The Obama
    administration has tried to stick to that agreement and
    indicates that it is on track to meet that deadline. I think
    that is what we will explore here today.
        The State Department has been charged with the
    responsibility for supporting the stability and development of
    Iraq once the military has left. Now the task is to make sure
    that our military's efforts are not squandered and that Iraq's
    fragile stability is not lost. Let me be clear, I strongly
    support the draw-down of military forces in Iraq and the
    transition to a civilian-led mission.
        I understand the extraordinary burden this will put on the
    State Department, particularly since some who seem to be
    complaining most about the transition and whether or not it
    will work are the ones who voted against reducing the State
    Department's budget which is sort of a contradiction in the
    situation.
        Our role today should not be to blame the State Department
    for the military to civilian transition that been in process
    for 3 years and is required by a bilateral agreement with the
    sovereign nation of Iraq. Rather, our committee's role should
    be to press for greater management and oversight of the
    resources that State will be deploying in the name of the
    United States.
        This is our third hearing on this topic in the last year
    under both the Democratic and Republican majorities in the
    House. By most accounts, State has made important progress and
    is now ready to assume the mission. I want to acknowledge State
    for its hard work in preparing for the transition.
        Still, today I would like to address one ongoing concern I
    have about the continuing use of private contractors in war
    zones. Just last week, the full committee held a hearing on the
    Commission on Wartime Contracting's final report to Congress.
    At that hearing, the Commission raised significant concerns
    about the future role of private security contractors who will
    be employed by the State Department after the military leaves
    Iraq.
        At the hearing, Commissioner Robert Henke highlighted a
    recently adopted Office of Management and Budget policy memo
    that for the first time addresses the proper role of security
    contractors in combat zones. The policy memo embraced a risk-
    based analysis to determine what functions are inherently
    governmental and what functions can properly be delegated to a
    contractor. It is an important step in the right direction.
        The memo continues by defining specific examples of
    inherently governmental functions that should never be
    performed by a private contractor. Notably it found, ``Security
    operations performed in environments where, in the judgment of
    the responsible Federal official, there is significant
    potential for the security operations to evolve into combat''
    should be considered an inherently governmental function.
        I would like to hear from our witnesses today, and
    specifically Ambassador Kennedy, about the intended role of
    security contractors in Iraq after the transition. I would like
    you to specifically address OMB's guidance that was cited by
    Commissioner Henke.
        In his written statement today, Ambassador Kennedy said the
    Department of State will employ approximately 5,000 private
    security contract employees in Iraq. I agree with his
    assessment but this is a significant number. Beyond the number
    of security contractors that will be employed in Iraq, I am
    concerned about the specific functions these contractors will
    be expected to perform.
        For example, I understand the Department will employ a
    number of contractors to be responsible for rapid response to
    security situations in the field in addition to the stationary
    security forces who will be responsible for protecting the
    Embassy. These rapid response forces will be responsible for
    emergency response including securing State Department
    employees in the case of an attack.
        To my mind, this situation will almost certainly require
    the private security contractor to engage in combat. I think
    any reasonable person would see that to be in direct conflict
    with the OMB policy memo and therefore an improper use of
    private security contractors under that guidance.
        Ambassador Kennedy, I look forward to hearing how the
    Department plans to deal with this issue and others. I want to
    thank all of our witnesses once more for showing your interest
    here today.
        Mr. Chaffetz. Thank you.
        Members will have 7 days to submit their opening statements
    for the record.
        I would now like to introduce our distinguished panel. We
    have Ambassador Patrick Kennedy, the Under Secretary for
    Management, at the Department of State. Ambassador Alexander
    Vershbow is the Assistant Secretary for International Security
    Affairs at the Department of Defense. Mr. Alan Estevez is the
    Assistant Secretary for Logistics and Materiel Readiness at the
    Department of Defense.
        Pursuant to committee rules, all witnesses are to be sworn
    before they testify, so I would ask you to please rise and
    raise your right hands.
        [Witnesses sworn.]
        Mr. Chaffetz. Thank you. Let the record reflect the
    witnesses answered in the affirmative.
        In order to allow time for the discussion, please try to
    limit your opening testimony to 5 minutes but we will be fairly
    generous with those 5 minutes. It is also my understanding that
    the Department of Defense will issue a joint verbal statement
    that will be given by Mr. Estevez.
        I would like to start with Ambassador Kennedy. You are now
    recognized for 5 minutes or little bit more if you need it.

         STATEMENT OF PATRICK F. KENNEDY, UNDER SECRETARY FOR
       MANAGEMENT, U.S. DEPARTMENT OF STATE; ALEXANDER VERSHBOW,
     ASSISTANT SECRETARY FOR INTERNATIONAL SECURITY AFFAIRS, U.S.
    DEPARTMENT OF DEFENSE; AND ALAN F. ESTEVEZ, ASSISTANT SECRETARY
       FOR LOGISTICS AND MATERIEL READINESS, U.S. DEPARTMENT OF
                                DEFENSE

                    STATEMENT OF PATRICK F. KENNEDY

        Mr. Kennedy. Thank you, Mr. Chairman and Ranking Member
    Tierney.
        Thank you for inviting me to update the State Department's
    progress in transitioning from a military-led to a civilian-led
    presence in Iraq, from DOD's mission to State's mission. I ask
    that I be permitted to submit my full testimony for the record.
        Mr. Chaffetz. So ordered.
        Mr. Kennedy. Continued U.S. engagement with Iraq is
    essential. A stable and self reliant Iraq is profoundly in the
    national security interest of the United States. Our diplomatic
    presence is designed to maximize influence in key locations,
    Erbil and Kirkuk in the north, Baghdad in the center and Basra
    in the south. State will continue the police development
    program, moving beyond basic policing skills to provide police
    forces with the capabilities to uphold the rule of law. The
    Office of Security Cooperation will help close gaps in Iraqi
    security forces capabilities through security assistance and
    cooperation.
        Turning now to our safe and secure management platforms, we
    have made much progress since March when I discussed eight key
    components to launching these platforms in Iraq. My written
    testimony details our progress in each area. I will focus here
    on contract oversight in security.
        First, with regard to our entire support platform, we are
    not struggling to award contracts. We have competitively
    awarded all contracts for facility construction fit out, for
    security and aviation support to stand up three diplomatic
    support hospitals and for life support. We are mindful of
    recent reports such as that by the Commission on Wartime
    Contracting regarding waste. We understand the extraordinarily
    difficult budget environment and have carefully assured prudent
    use of our funding.
        We have continued to work very closely with DOD every day
    at unprecedented levels. The Joint DOD Equipping Board has
    identified more than 3,200 pieces of equipment worth
    approximately $224 million to be transferred as excess, sold or
    loaned to State. In the area of contracting and contracting
    oversight, throughout our efforts, State is always cognizant of
    inherently governmental functions.
        We contract for services that are not inherently
    governmental. State personnel were actively engaged with the
    Office of Federal Procurement Policy in preparing its new
    policy letter. We continue to focus on effective transition
    contracting and deploying experienced contracting personnel.
    State can surge resources to address specific contingency needs
    through an internal funding mechanism which is a 1 percent fee
    charged on all contracting services.
        We have hired 102 additional contracting staff and support
    staff over the past several years and made improvements in the
    area of suspension debarment, increased competition and
    enhanced training.
        In the area of security, task orders for static and
    movement security have been competitively awarded for all State
    sites in Iraq on the basis of best value. In the past few
    years, State's Diplomatic Security Service has expanded its
    plan for oversight and operational control of private security
    contractor personnel. It will have more than 175 direct hire,
    State Department personnel to administer the contract and its
    task orders in Iraq ensuring contract compliance by
    approximately 5,000 security contract employees.
        These 5,000 will cover all of our sites in Iraq to protect
    U.S. Government staff, reflect State's continuous operation in
    locations where previously we had not been able to operate,
    guard forces in Iraq or like other local guards, serving as the
    first line of our defense for our facilities and staff.
        They differ, however, from our typical guard force in that
    they have higher recruiting, screening and training
    requirements, a higher percentage of American and third country
    national personnel and specialized weapons and equipment which
    are necessary to defend our personnel and facilities from
    attack.
        In contingency areas such as Iraq and Afghanistan, our
    security contractors are under the direct management and
    oversight of State Department Diplomatic Security Service
    direct hire personnel. Their function was illustrated last
    September 13th during the terrorist incident in Kabul where the
    Embassy security elements acted swiftly to protect Embassy
    staff and Afghan visitors and moved them to safe locations,
    took defensive actions as directed by the Chief of Mission and
    acted in concert with host nation security forces.
        We are staffed to achieve the operational measures and
    increase direct oversight to ensure professionalism and
    responsibility of security contractor personnel. Diplomatic
    security personnel at each post in Iraq and Afghanistan serve
    as managers for these security programs. They provide direct
    operational oversight of all protected motorcades in Iraq and
    Afghanistan. This is done for each and everyone.
        We fully realize the scope of our diplomatic activities in
    Iraq are beyond anything that we have done in the past.
    However, State has a history of embracing challenges. We have
    the competence and the personnel to mobilize in Iraq and we
    have DOD's full partnership at every level from Secretary
    Panetta and Chairman Dempsey to the excess property clerks on
    the ground.
        With the teams in place, our executive steering group, our
    Baghdad team, joint State/DOD teams and State's Iraq transition
    coordinator, we will deliver on this new State Department
    mission because it is in the U.S. national interest that we do
    so.
        Thank you very much, Mr. Chairman, for inviting me and for
    your continued support and that of Ranking Member Tierney for
    the Department of State. I will welcome any questions you may
    have.
        [The prepared statement of Mr. Kennedy follows:]

        Mr. Chaffetz. Thank you.
        I now recognize Mr. Estevez for 5 minutes.

                      STATEMENT OF ALAN F. ESTEVEZ

        Mr. Estevez. Chairman Chaffetz, Ranking Member Tierney,
    thank you for the opportunity to appear before you today.
        We have a written statement to include in the record that
    provides a more general overview of the situation in Iraq.
    However, in the interest of time, I would like to summarize the
    progress that the Department of Defense has made as it supports
    the Department of State during the transition to civilian
    control in Iraq.
        The Department of Defense remains fully engaged in support
    of Operation New Dawn and is committed to a smooth transition
    to the Department of Statement in support of the enduring
    diplomatic and security assistance missions in the region. We
    are in execution phase of this transition and are on track and
    in some cases, are ahead of schedule with all of the logistics
    functions associated with the draw-down of forces and support
    to the Department of State.
        Both the Department of Defense and the Department of State
    are committed to working together to achieve a successful
    transition. Although the Under Secretary of Defense for
    Acquisition, Technology and Logistics is not responsible for
    establishing policy in this area, we are responsible for many
    of the details associated with the transition, including
    contracting support, maintenance and supply support and other
    logistics components of the transition.
        As the principal Deputy Under Secretary of Defense
    Acquisition, Technology and Logistics testified on March 2,
    2011, we have established a temporary Senior Executive Steering
    Group focused on coordinating and synchronizing the materiel
    and support aspects of the transition. Our combined Office of
    Secretary of Defense Joint Staff Equipping Board has addressed
    the individual equipment items that the Department of State has
    requested which range from medical equipment to camera rocket
    protection.
        As Ambassador Kennedy noted, to date we have identified
    more than 3,200 end items that are being transferred, sold or
    loaned to the Department of State. These items represent 100
    percent fulfillment of the Department of State's request for
    equipment support. In addition to 60 Caiman plus mine resistant
    ambush protected vehicles that were approved for loan at the
    time of the last testimony, the Department of Defense has since
    agreed to loan to the Department of State two Giraffe Radar
    rocket systems and a suite of 164 biometric collection and
    identification systems.
        As of October 1, 2011, our force numbers are down to
    roughly 43,500. The contractor population also continues to
    decrease as the number of military personnel lay support
    diminishes. We have also made steady progress in executing the
    plan to retrograde and redistribute equipment.
        Over the last year in Iraq, joint Department of Defense and
    Department of State teams have executed well coordinated plans
    that have synchronized the handoff of responsibilities to the
    Department of State at those locations where the Department of
    State will be the lead agency. The transition of these sites is
    not a turn key operation and each site presents its own unique
    set of challenges.
        As we resize these sites to fit the diplomatic mission, new
    perimeters continue to be established. Containerized housing
    units are moved in accordance with mission requirements;
    utilities are being rerouted; and as required, additional site
    preparation and force protection materiels are being installed.
        The Department of Defense is also providing a number of
    specific functions on a reimbursable basis under the authority
    of the Economy Act. The LOGCAP IV Task Order was awarded to
    provide the Department of State with base life support and core
    logistics services. This contracting mechanism is scalable and
    can respond to changing conditions on the ground.
        Food distribution as well as fuel supply and disposition
    services will continue to be provided by the Defense Logistics
    Agency. The Army Sustainment Command recently modified its
    contract for maintenance of select equipment and is providing
    contract services for static and movement security. The Defense
    Contract Management Agency and Defense Contract Audit Agency
    will continue to provide administrative contract support and
    oversight. Again, the Department of State will reimburse the
    Department of Defense for all contracts and service support
    provided.
        In closing, let me reassure you that the Department of
    Defense is proactively partnering with the Department of State,
    is fully engaged in executing the draw-down of U.S. military
    forces and equipment in Iraq, and remains agile enough to
    respond to any potential changes in these requirements.
        Thank you for your time and I look forward to your
    questions.
        [The prepared statement of Mr. Estevez follows:]

        Mr. Chaffetz. Thank you. I assure you that your full
    written statements will be entered into the record. Without
    objection, so ordered.
        I would now like to recognize myself for 5 minutes.
    Ambassador Vershbow, I would like to start with you.
        An article came out yesterday in the Philadelphia Inquirer
    with the headline ``U.S. Military Trainers Can Stay, Leader
    Says.'' I am troubled by what President Talaboni said, ``We
    have agreed to retain more than 5,000 American trainers without
    giving them immunity. We have sent them our agreement to retain
    this number and are awaiting their response, yes or no.''
        I find it deeply troubling that there is the prospect of
    our troops being in Iraq without immunity. I think this is
    totally unacceptable. Can you please give us an update on the
    situation?
        Mr. Vershbow. Yes, Mr. Chairman. I would be happy to
    respond.
        Indeed there are some important issues raised by that
    article. First of all, Iraq's political leadership has
    indicated that they are interested in a training relationship
    with the United States after 2011. We very much want to have an
    enduring partnership with the Iraqi government and people and a
    relationship with the Iraqi security forces would be a very
    important part of that relationship.
        I think as you know we have long been planning to have the
    Office of Security Cooperation Iraq, OSCI, which would be under
    Chief of Mission Authority, serve as the cornerstone of a
    strategic security partnership and it would be the hub for a
    range of security assistance and security cooperation
    activities. That, of course, is the baseline.
        We have been reviewing the official statement issued by
    Iraqi leaders on training assistance on October 4th and
    discussing with them how this fits into the principle of
    security cooperation under the 2008 Strategic Framework
    Agreement. I should add that we appreciate the democratic
    spirit displayed by Iraqi leaders in debating this important
    subject and we will continue discussions with our Iraqi
    counterparts in the days ahead.
        These negotiations are ongoing and it is premature to
    discuss what any potential training relationship might look
    like.
        Mr. Chaffetz. Will our troops have immunity, yes or no?
        Mr. Vershbow. I will get to that issue, Mr. Chairman.
        As we work to define the parameters of what it will look
    like, the issues raised yet again in this article regarding
    status protections, of course, will be an important issue.
    Again, I don't want to get into the specifics of the
    negotiations but we will always ensure that our forces have the
    appropriate protections that they need when they are deployed
    overseas.
        Mr. Chaffetz. When you say appropriate protections, is that
    immunity?
        Mr. Vershbow. I think there is a difference terminology
    implied.
        Mr. Chaffetz. Yes. That is why I am seeking a little
    clarification here. I am not feeling too comfortable at the
    moment. Will our troops have immunity?
        Mr. Vershbow. They will have status protections which has
    been defined under the security agreement, the Status Forces
    Agreement, that now applies as indicating that our forces will
    be subject to U.S. law rather than Iraqi law. We will be
    looking for something going forward that provides a comparable
    level of protection. Exactly how that will be achieved, again,
    is the subject of ongoing negotiations.
        Some of the personnel, as I mentioned, under the OSCI will
    be covered under the Chief of Mission authority. The question
    that is still being discussed is whether any additional
    personnel would be involved and how they would be protected. We
    certainly take very seriously the concerns you have expressed.
        Mr. Chaffetz. Let me move on. I think this is a major,
    major point of concern. It is obviously a major point of
    difference. It is something that obviously must be resolved. It
    is totally unacceptable to think that our troops would be there
    without immunity as they enjoy currently.
        Ambassador Kennedy, let me go back to these lost
    functionalities. Last time we gathered together, we were
    referred to the July 12, 2010 Commission on Wartime Contracting
    Special Report. It talked about the lost functionalities--this
    is on page 4 of that report. There were 14 specific security-
    related tasks now performed by Department of Defense that State
    must provide as the military draws down.
        I know there has been progress on at least seven of those,
    but could you give me an update as to of those 14 specific
    ones, what are you not prepared to take care of?
        Mr. Kennedy. Mr. Chairman, as we outlined in my June 8th
    letter to the committee, we believe that we have covered the
    functions that are absolutely essential to our operations
    there.
        Mr. Chaffetz. Would that be all 14 of these?
        Mr. Kennedy. I think you can say we will have the ability
    to do everything except, for example, the recovery of downed
    aircraft. Should an aircraft go down, we will be able to move
    to recover the personnel from those aircraft but because we
    don't have quite the heavy lift of the Department of Defense,
    we may not be able to recover the airframe itself.
        Mr. Chaffetz. So of the 14, that is the only one that you
    are concerned about?
        Mr. Kennedy. I am concerned about everything possibly going
    wrong.
        Mr. Chaffetz. But functionality?
        Mr. Kennedy. Earlier in your opening statement, you asked
    about counter battery neutralization. We will have the ability,
    thanks to my colleagues in the Defense Department with a system
    which is called Giraffe, which is an early warning system that
    tracks incoming rockets or mortars and gives us sufficient
    warning to deal with that so that we will be able to sound the
    alarm.
        In the construction activities that we are undertaking at
    all the sites where our personnel will both work and live, we
    are constructing overhead cover that means should one of those
    missiles or mortars strike one of our facilities--this has
    happened in Baghdad and the construction techniques we have
    been using in Baghdad have proven very, very effective--there
    is no penetration of the building itself.
        Mr. Chaffetz. Can we or will we fire back?
        Mr. Kennedy. Sir, the State Department has no howitzers and
    no counter rockets. We will not fire back, that is not a
    diplomatic activity. We now have a diplomatic mission in Iraq,
    not a military mission, but if I might add, we are partnered
    extensively with the Iraqi military and the Iraqi police who
    have been assisting us during the last few months we have been
    without such a counter battery fire ability and the Iraqi
    police and Iraqi military has been of great assistance of
    disrupting the attempts of forces to attack our facilities via
    rockets and mortars.
        Mr. Chaffetz. God bless the men and women who are going to
    continue to be there because if it is the policy of the United
    States not to fire back, I have deep concerns. We will continue
    to discuss this.
        I have been very generous with my time. I now recognize the
    gentleman from Massachusetts, Mr. Tierney.
        Mr. Tierney. Thank you.
        Ambassador Kennedy, will you describe or compare for me
    what a normal State Department deployment to any particular
    country would be and how that stacks up against what you are
    going to be doing in Iraq. Take a non-conflict area and talk
    about size of operation for a comparably sized and populated
    country and how the missions are going to vary.
        Mr. Kennedy. I think, Mr. Tierney, that in terms of the
    personnel deployed to do what I will call substantive and basic
    administrative and logistic work, our Embassy and consulates in
    Iraq would be comparable to a similar country. What is
    different in Iraq is the additional layers of security, medical
    and life support that we have to provide there because our
    people cannot go shopping on the outside. There is an active
    and ongoing threat to life and limb.
        We have taken a package that is necessary to conduct the
    State Department's mission. There is obviously a police
    training component which does not exist in every country and
    then we have added security, medical, logistics and life
    support that is appropriate for the situation on the ground in
    Iraq but we very much believe, and we think we are seeing
    evidence, that supplement, so to speak, will be able to be
    withdrawn measure by measure over time as the security
    situation further stabilizes and as we are able to obtain more
    goods and services on the local economy.
        Mr. Tierney. In how many locales will State Department
    diplomatic personnel be located?
        Mr. Kennedy. Four, Mr. Tierney.
        Mr. Tierney. Widely disseminated around the country or
    closely knit?
        Mr. Kennedy. They will be in the north in Erbil where we
    have two closely linked sites; in Baghdad where we have our
    Embassy and two other compounds literally right across the
    street, a police training compound on the other side of the
    river and a logistics hub at Baghdad Airport. We will have a
    small consular presence co-located with the Office of Security
    Cooperation in Kirkuk and then we will have a Consular General
    in Basra in the south, sir.
        Mr. Tierney. There will be convoys, I assume, going from
    one to the other from time to time?
        Mr. Kennedy. There will be supply convoys. Our plan is to
    conduct those movements via air.
        Mr. Tierney. All to be via air?
        Mr. Kennedy. Obviously except the ones across the street
    and the road to the airport is very often safe. We have an
    aviation capability, thanks to Congress' assistance, that will
    enable us to move personnel via either fixed wing in from Amman
    or Kuwait and the long distances, Baghdad up to Erbil, Baghdad
    down south to Basra, and then we have distributed helicopter
    rotary wing capability in order to move our personnel should it
    be required between nearly placed locations.
        Mr. Tierney. You are essentially going to have no ground
    convoy security issues?
        Mr. Kennedy. Obviously there are some movements within
    Baghdad or outside of the compound in Basra where yes, there
    will be security issues which is why we have turned to our
    colleagues in the Department of Defense and they have been
    providing us on loan with mine resistant transport vehicles.
        Mr. Tierney. Who is going to provide the human security for
    those convoys?
        Mr. Kennedy. That security will be provided by contractor
    personnel but each one of those movements with contract
    security personnel, each and every one of those will have a
    State Department diplomatic security officer in the convoy who
    is the agent in charge, using security parlance. He or she is
    in charge, they give the orders. The contractors only respond
    to the orders given by the diplomatic security Federal
    employee.
        Mr. Tierney. Has there been any thought given to taking
    State personnel from other locations around the world and
    locating them in this conflict likely area and instead using
    the contactors elsewhere?
        Mr. Kennedy. We have analyzed that. I have a grand total of
    1,800 diplomatic security special agents and about another 100
    security professionals in my entire staff. I would have to
    strip the entire world, and given what we all know to be the
    threats against U.S. interests around the world, plus my
    requirement to protect the Secretary of State, distinguished
    foreign visitors to the United States and enforce the passport
    and visa laws of the United States, I simply do not have it. I
    have stripped to 175 to make sure that I have professionals
    overseeing the contracts as a whole and then a State Department
    direct hire professional in each one of those convoys.
        Mr. Tierney. The Secretary of State has written Members of
    Congress indicating a concern for proposed reductions in the
    State Department's budget. If those reductions are enforced,
    will that impact your ability to hire and train additional
    people to perform that function?
        Mr. Kennedy. It will, sir. We know that we have this
    mission. We have been, I think, as judicious as possible, as
    streamlined as possible, borrowing and receiving transfers of
    equipment from the Department of Defense, but if the
    President's budget request is not enacted, we will have a
    severe difficulty maintaining our tasked presence there in
    Iraq, Afghanistan, Pakistan and worldwide, for that matter.
        Mr. Tierney. I yield back for now. There will be another
    round, I assume.
        Mr. Chaffetz. Thank you.
        Ambassador Vershbow, let us talk about the number of U.S.
    troops. What are the Iraqis requesting or authorizing, how many
    is the President authorizing?
        Mr. Vershbow. Mr. Chairman, no decisions have been made.
    Discussions are still ongoing on the nature of the
    relationship, from which would be derived any number.
        Mr. Chaffetz. The number of 3,000 to 4,000 troops that we
    hear, is that accurate or inaccurate?
        Mr. Vershbow. As I said, there are a lot of things going on
    in these discussions which predates the announcement of October
    4th when the Iraqi leaders took the position they have taken
    regarding no immunities. Obviously the discussions now have
    taken on a different dimension. Beyond that, I really cannot
    say because nothing has been decided. The shape of the
    relationship will be determined in part by how this issue of
    status protections is addressed.
        It is a work in progress. Even as we speak, discussions are
    taking place between our Ambassador, the Commander, General
    Austin, and Iraqi leaders. It is really difficult to give you
    more than that today.
        Mr. Chaffetz. There was a report that General Austin had
    asked for between 14,000 and 18,000 troops. Is that true?
        Mr. Vershbow. Again, I cannot comment on internal
    deliberations. A lot of different ideas have been bounced
    around in the course of the last few months.
        Mr. Chaffetz. Do you know what the actual request was?
        Mr. Vershbow. The military leadership was asked to provide
    a range of options and they have done that. That was the basis
    on which we engaged the Iraqis.
        Mr. Chaffetz. Do you know what General Austin requested?
        Mr. Vershbow. I cannot talk about that in an open session,
    Mr. Chairman. It is classified.
        Mr. Chaffetz. Fair enough.
        When do we have to make this decision? I guess it is the
    end of the year, right? Is there a particular timetable to
    this?
        Mr. Vershbow. There is no absolute deadline. Right now we
    are on the trajectory that was established by the agreement by
    the previous administration in November 2008 to draw down all
    of our forces which are now around 43,000 and then move in 2012
    to the Office of Security Cooperation Iraq which would have 157
    U.S. military and DOD civilian personnel and additional
    security assistant team contractors supporting specific FMS
    cases.
        The discussions that are going on now relate to what
    potential additions to that presence would be agreed. Whether
    that would be before or after the end of the year remains to be
    seen. Obviously the discussions are ongoing. It might be
    simpler to reach the agreement before all of our forces have
    left, but we are talking about an entirely different
    relationship in either case. I cannot predict when these
    discussions will close.
        Mr. Chaffetz. Thank you.
        Ambassador Kennedy, let us talk about the hiring of all of
    these contractors. When we get to January 1st, based on where
    we are at here in October, where are we going to be on the
    staffing levels? Are we set to hit 100 percent of the goal, if
    you can clarify that a bit for me? There are obviously
    different categories. Security is may be a bit more important
    but food service is going to be equally as important. Where are
    we in that spectrum of being able to accomplish that goal?
        Mr. Kennedy. We have awarded contracts for all the services
    that we require in Iraq at all the installations and those
    contract task orders have been awarded. The contractors are in
    the process of mobilizing. The medical contractor, for example,
    is already mobilized. The aviation contractor is already
    mobilized. The life support contract has been awarded thanks to
    my colleagues at the Department of Defense, awarded on our
    behalf, and a contract that we will fund. That contractor is
    mobilizing and it is, in fact, a contractor that DOD has been
    using at all the sites that we will be engaged in except two
    and that is well on the way.
        We believe that we will have no problem in those support
    services areas being fully staffed and fully supportive of our
    personnel before December 31.
        Mr. Chaffetz. Can we talk about the hospital? You mentioned
    the hospital or medical needs. There has been some concern that
    there won't be the capacity to deal with a mass casualty event,
    that the medical facility at the Baghdad International Airport
    will have the capability to only handle six patients overnight.
    Do you have any concerns with that?
        Mr. Kennedy. Mr. Chairman, yes, I do have a concern, but I
    also have to operate in the realm of reality. We do also have a
    medical unit at the American Embassy compound downtown. It is
    not a hospital unit staffed with surgeons. Also because of our
    aviation capabilities, have the capability of quickly
    transporting personnel who have been stabilized but need
    further surgery to locations such as Jordan, Kuwait, Turkey or
    all the way to Europe should it be required.
        We believe we have put into place a layered system that
    would be able to deal with what we foresee as the facts on the
    ground.
        Mr. Chaffetz. Thank you. I will now recognize Mr. Tierney.
        Mr. Tierney. Ambassador Kennedy, the protection for the
    logistical contractors and various functions that they are
    doing whether it be kitchen help or people over the police
    training area, is that also going to be provided by private
    contractors?
        Mr. Kennedy. Yes, sir, that is within the number of 5,000
    which is approximately 3,500 static perimeter guards around our
    facilities and 1,500 movement personnel.
        Mr. Tierney. Will they be getting a similar type of State
    employee or security personnel supervision?
        Mr. Kennedy. Yes, sir. The Diplomatic Security Service will
    control both the static guards and the movement guards.
        Mr. Tierney. Who specifically is going to be training the
    police on that and under which program?
        Mr. Kennedy. That is under the Bureau of International
    Narcotics and Law Enforcement, the police training program
    under Assistant Secretary Brownfield's leadership.
        Mr. Tierney. It is a combination of State personnel?
        Mr. Kennedy. It is a combination of State Department
    personnel and some contract trainers for some activities.
        Mr. Tierney. Has there been any consideration given to
    doing out of country training of these police personnel?
        Mr. Kennedy. There has been some consideration of that. I
    will have to get back to you sir with more details. What we are
    trying to do is a large number of people with sort of second
    echelon. The Bureau of Narcotics and Law Enforcement and my DOD
    colleagues have done a great job in training the police on the
    beat. This training is, in effect, advanced training and we
    believe that one of the most important locations to do that is
    at the Baghdad Police College which adjoins the training center
    I mentioned.
        Mr. Tierney. If you have done an analysis of the possible
    benefits of out of country training of that nature by the U.S.
    personnel or by a combination of international personnel, I
    would like to see it if you could.
        Mr. Kennedy. I will ask Assistant Secretary Brownfield to
    get that to you.
        Mr. Tierney. Who has been vetting and training the private
    contractors that are going to be providing security?
        Mr. Kennedy. The State Department Diplomatic Security
    Service runs background investigations on every single one of
    these individuals. They are given sir, what are called public
    trust clearances which is the equivalent to a secret security
    clearance, although they do not have the need to know. It is
    the same rubric, police checks, national agency checks,
    interviews, vetting, records checks. We feel very, very
    comfortable that the individuals we are engaging to do this
    security work are of the highest standard.
        Mr. Tierney. The Wartime Contracting Commission basically
    indicated they thought there should be consideration given to
    the operational, the political and the financial aspects or
    risks of contracting functions on that. I am assuming you were
    precluded from doing that because of the limitations you have
    in personnel? You simply had to spread your people thin to
    manage and supervise contractors and really didn't have the
    opportunity to weigh it and those other factors of risk?
        Mr. Kennedy. There are two parts to that. Obviously there
    is personnel and resources. I only have 1,800 as I mentioned,
    but I try to take the holistic approach. What I see are
    requirements in both Iraq and Afghanistan, if I might add that.
    This is a surge; this is not a permanent requirement that I see
    the Bureau of Diplomatic Security having to rise to adding
    5,000 additional personnel for the long haul, the number we
    will have in Iraq.
        I see this as a surge. The State Department, other
    government agencies have always dealt with surge requirements
    by turning to contractors. To hire someone, to promise them a
    20, 25 or 30 year career when we do not see the need for their
    services beyond 3 to 5 years, just citing that as a factor,
    would saddle the State Department and the American taxpayer
    with a number of level of personnel that is not in the best
    interest.
        Mr. Tierney. That would be one of the considerations I
    assume they would want to measure. The other, of course, would
    be the potential of non-State Department or non-Defense
    Department people performing an act or taking on some activity
    that totally puts the country at risk or makes some political
    situation untenable.
        Mr. Kennedy. That is entirely possible, but that is why
    though, all of our personnel, whether static or movement, act
    under the direct supervision of diplomatic security special
    agents or security protective officers who are all direct hire.
        Mr. Tierney. What contingency plan does the State
    Department have if facts on the ground change substantially
    enough that it is no longer feasible to have private security
    contractors in use?
        Mr. Kennedy. I think that is an option I have thought
    about. I cannot speak for my colleagues. I think I would have
    to report to the Secretary that we would have to severely scale
    down our operations in Iraq. I have even done an analysis based
    upon an old General Accounting Office study on the number of
    Federal law enforcement personnel in the entire Federal
    Service. Even if I took 10 percent of the Bureau of Prisons
    guards, I would not have enough static officers there and the
    Bureau of Prisons might have some comment on that.
        I believe that these professionals that we engage that we
    vet, that we rewrite the syllabus for their training, we spot
    check their training, we direct their performance hands-on,
    eyes-on, I believe that is the way to go.
        Mr. Tierney. The plan is if it becomes untenable, then
    there is a scaled down operation as opposed to hiring more and
    more contractors?
        Mr. Kennedy. I am sorry?
        Mr. Tierney. So many things on the ground change and become
    so violent over there.
        Mr. Kennedy. I am sorry, I thought you meant I could no
    longer keep contractors there?
        Mr. Tierney. Right and that is my point if it comes to a
    point where the contractors are not feasible to operate where
    you have made the analysis on that, it is not to keep loading
    them in hoping things are going to change just to scale down
    operations?
        Mr. Kennedy. I think we have in our plan sufficient
    contractors to provide perimeter security in cooperation with
    the Iraqi police and military.
        Mr. Tierney. I know you do but contingency plans are for
    when that doesn't work. I think I heard you say you would
    recommend the Secretary scale back?
        Mr. Kennedy. Yes, sir.
        Mr. Tierney. Thank you. I yield back.
        Mr. Chaffetz. Mr. Estevez, do you have a dollar figure or
    estimate of what assets will be either turned over to the
    Iraqis or left behind?
        Mr. Estevez. There are a couple different programs we have
    for turning things over to the Iraqis, including foreign
    military sales. They are buying military equipment from us
    which is not left behind, basically new equipment. There are
    some things they have purchased from us.
        Mr. Chaffetz. What is the value? How much have they
    purchased?
        Mr. Estevez. I am trying to give you a couple different
    programs, under what we call foreign excess property is $321
    million to date. That will go up as we continue over the next 3
    months to draw down.
        Mr. Chaffetz. That is where the Iraqi government pays the
    United States.
        Mr. Estevez. No, that is we give it to them. That is
    because the cost benefit analysis is we don't need this stuff.
    It includes T-wall barriers and generators that don't work in
    the United States and vehicles that aren't up to U.S. vehicle
    code. The cost benefit analysis says we save $600 million by
    not transporting that equipment back to the United States where
    the military doesn't have programs to sustain that.
        Mr. Chaffetz. We didn't try to trade it for something? We
    are just handing it to them?
        Mr. Estevez. It is in our benefit to help them build their
    capability so that their military and security forces can
    sustain.
        Mr. Chaffetz. These are not all military assets?
        Mr. Estevez. Again, we are talking about generators,
    housing, air conditioners, TVs, things like that. Before it
    goes to the Iraqis, we have processes that are for the United
    States--States say the State of Utah wants that. They have
    capability to say we want that.
        Mr. Chaffetz. Sign us up.
        Mr. Estevez. Your plan, you just have to pay the
    transportation back to the United States for that piece of
    equipment.
        I don't think I have the dollar value of what we have given
    them under what was 1202 authority which was authorized by
    Congress to provide them with equipment they need to buildup
    their military capability so that we can depart and they can
    sustain themselves, for their internal security and eventually
    for external security for the nation.
        Mr. Chaffetz. Is there a way to look at the list of the
    assets and say the State of Utah, if they want it, come get it.
        Mr. Estevez. We have put that process in place.
        Mr. Chaffetz. Process in place?
        Mr. Estevez. Before we turn over something, we say here is
    the list of equipment, Base X, that we are turning over to the
    Iraqis and there is an organization called National Association
    of Surplus--it is NASAP--that screens that, the State of Utah
    says I am looking for a generator for a hospital, they say a
    there is a generator available. Here is how you get it back and
    that becomes available.
        Mr. Chaffetz. We don't have time in these few minutes, but
    if you could help clarify both the dollar value, the assets
    themselves and these programs if they are available to States
    or municipalities, wherever they might be, that would be
    helpful.
        Mr. Estevez. I would be happy to do that.
        Mr. Chaffetz. Is there a grand total number of the assets
    we are leaving behind?
        Mr. Estevez. That is that number. There is about 50,000
    other pieces of military equipment that we have provided to the
    Iraqis again under congressional authority.
        Mr. Chaffetz. Do we have a dollar value?
        Mr. Estevez. I do not have the dollar value on that but I
    can get you the dollar value on that for the record.
        Mr. Chaffetz. I would appreciate that.
        Mr. Estevez. Let me see if I can give you the number that
    we have given to the States. But I will give you that as well.
    Other than that, nothing else if being left behind. We are
    retrograding, other than those types of equipment that we
    really don't need anymore. The process is that if it is needed
    in Afghanistan, it goes to Afghanistan. If it is needed
    somewhere else in the U.S. Central Command, it goes there. Most
    of the equipment there belongs to the units that we deployed
    there and when they return, they carry that back with them to
    the United States.
        Mr. Chaffetz. The logistics of this must be amazing. If you
    could please keep looking for that number. Let me go back to
    Ambassador Kennedy.
        I want to talk about the $481 million is my understanding
    for the interim consular post. These are interim facilities,
    right? They are supposed to last 3 to 5 years. This would be in
    Erbil and Basra as opposed to building more permanent type
    structures? I know there was a congressional funding issue here
    in play. The concern is spending $481 million on what would be
    an interim facility that is only going to last a few years.
        Mr. Kennedy. Mr. Chairman, I will get you the specific
    breakdown of that figure. We are being as minimalist as
    possible. We are reusing T-walls, the sites we are using both
    in Basra, Erbil, Baghdad and Kirkuk are all former U.S.
    military troop sites, so we are using equipment they are
    transferring to us under another one of the programs you were
    just asking my colleague about.
        Mr. Chaffetz. Am I off on the number, the $481 million for
    two facilities?
        Mr. Kennedy. I think that number includes things that
    artificially inflate the number. I will give you a piece of
    paper on that.
        Mr. Chaffetz. Fair enough. I would appreciate that.
        The last thing I want to discuss here is what is happening
    with Iran and their presence there. We have had previous
    incidents with Iranian-made missiles being fired at us. What do
    you see happening right now? It appears they are just laying
    low waiting for January 1st to come about and the concern is
    they are going to step up these things and start to go after
    our 17,000 personnel there. What is your assessment of the
    situation?
        Mr. Kennedy. My assessment is that Iran does not wish to
    see a stable, democratic Iraq as a lynchpin of a new way of
    doing business in that part of the world and they will go to
    significant extremes to disrupt our efforts to assist the
    government and people of Iraq to achieve the democracy. They
    have a fledging democracy. It is building, it will take a while
    to build the democracy as I think we know from our own country.
    It is in the interest of the Iranians to disrupt our efforts
    and I believe that they will continue to do so.
        Mr. Chaffetz. How do we defend ourselves? Basically, we are
    taking a position that it is going to be our policy to just
    duck and cover without the ability and the opportunity to fire
    back. How capable do we think the Iraqis are going to be to
    actually go out and take out the threat of somebody actually
    continuing to fire upon an embassy, for instance?
        Mr. Kennedy. Because of the excellent training and joint
    operations that our military has been conducting with the
    Iraqis over the last few years, I believe, and I could ask my
    DOD colleagues to comment, that the Iraqi capabilities are
    growing significantly and continue to grow.
        Mr. Chaffetz. Are they adequate?
        Mr. Kennedy. They are certainly not up to U.S. military
    standards, no, sir, but it is an effort that is on the upswing.
    I believe they are cooperating with us. The Iraqi police are
    working with us and I believe we will be able to accomplish
    that over time.
        Mr. Chaffetz. I guess I am concerned about January 1st,
    which isn't too far around the corner. One of these letters
    from Joseph McManus, Acting Assistant Secretary, Legislative
    Affairs, Department of State, back in July 2011 said ``Although
    the competency and capabilities of the ISF have improved in
    recent years, they are generally capable of providing internal
    security for Iraq, they still face specific capability gaps and
    continue to operate in an uncertain security environment.''
    This is just an ongoing concern. We think we can expect the
    expansion of Iran's presence there to try to disrupt what is
    going on and I do not know how we would defend ourselves
    against it.
        Mr. Kennedy. I believe that our continued cooperation with
    Iraqi officials--the Iraqis want to have a democracy in Iraq.
    They do not want to be a satellite of Iran. There was a very,
    very bloody war that took place several years ago between Iraq
    and Iran. I believe we can count on the Iraqis to pursue their
    own self interest which is to maintain a free democratic and
    stable Iraq and we need to partner with them in that endeavor.
        Mr. Chaffetz. Thank you. I yield.
        Mr. Tierney. Ambassador, one of the tools, as a diplomat
    you will recognize we are not using with Iran in this situation
    is diplomacy. I think that might have some limiting effects on
    our ability to try and bring some order to what is going on in
    that part of the world and is something for us all to consider.
        I won't ask you to comment on it because you are a diplomat
    and I know what your answer will be. Certainly I think it is
    something we should think about because we have all these
    people so well trained as diplomats and then not use one of the
    tools in our arsenal on that.
        Mr. Estevez, can you tell me how much money the Department
    of Defense will no longer have to spend in Iraq once the
    transfer is made over to State on an annual basis?
        Mr. Estevez. I cannot. I will have to provide that for the
    record.
        Mr. Tierney. Ambassador Vershbow, do you have any
    information on that?
        Mr. Vershbow. I don't have the numbers in front of me. We
    will get back to you.
        Mr. Tierney. I know Ambassador Kennedy does, don't you?
        Mr. Kennedy. Figures I have seen, Mr. Tierney, say that the
    difference is approximately $50 billion a year by the
    Department of Defense versus an estimated $6 billion a year for
    the Department of State. I think that is a significant shift in
    mission; I think it is a significant reduction in funding.
        Mr. Tierney. I know we discussed it before. I thought these
    gentlemen had it. I wanted to make sure they had an opportunity
    to say if they knew it was otherwise.
        The $6 billion the Department of State has, are you now
    forced under the current budgetary situation to take that from
    other Department of State activities or have you received
    adequate funds to plus up that amount?
        Mr. Kennedy. In the President's budget request for fiscal
    year 2012, the State Department budget is presented in two
    segments, a regular budget and an overseas contingency
    operating budget which is a parallel to what the Department of
    Defense has used for many years. If the President's budget
    request is enacted as requested, meaning both the regular
    budget and the contingency operating budget, we would not have
    to draw funds from the regular to support the contingency
    operation.
        Mr. Tierney. What would happen if the House budget, as it
    passed the House, were the effective operating vehicle?
        Mr. Kennedy. At an 18 to 20 percent cut to State Department
    operations, I literally, even though it is my responsibility to
    plan for contingencies, my pencil can't get there, sir.
        Mr. Tierney. I think it is reasonable to assume if we want
    to fund the $6 billion for your operation in Iraq, it has to
    come from somewhere which means other areas that are already
    under funded will be drawn down.
        Mr. Kennedy. Absolutely.
        Mr. Tierney. Are you knowledgeable of any USAID activities
    that will be continuing on in Iraq?
        Mr. Kennedy. I know that AID will continue to operate in
    Iraq. There is funding requested in the Foreign Assistance
    Program for them. Frankly, I am not an expert on the AID
    programs. I know that we are making provisions, I and my
    colleagues, for the platform on which AID will have a presence
    in Iraq.
        Mr. Tierney. That is what I was getting at. The security
    for AID would be through you or directly on their own hires?
        Mr. Kennedy. Since they are under Chief of Mission
    authority, their security will be provided by the Diplomatic
    Security Service.
        Mr. Tierney. What steps have you taken at the State
    Department to deal with the issue of debarment and suspension?
    I know First Kuwait couldn't get debarred when there was little
    doubt it should have been, so how are we improving that
    situation so contractors will always know there is some bite
    when they violate?
        Mr. Kennedy. Working with the Procurement Executive at the
    Department, he has just issued a new State Department PIB that
    increases substantially our ability to follow up on the
    Commission on Wartime Contracting's recommendations, not in
    this report but in previous ones and we will be able to provide
    a greatly upgraded ability to suspend and debar under the
    program we have set forward. I would be glad to send a copy of
    our new program to you and your staff.
        Mr. Tierney. Last, what measures has State taken to ensure
    they will have adequate oversight of the LOGCAP IV when you
    take over the contract and how long do you think that is going
    to last? Will that be your vehicle after 2012?
        Mr. Kennedy. I think it will be a vehicle for more than 1
    year. We realize this is a major activity. Someone took a quote
    of mine or one of my colleagues totally out of context saying
    that the State Department does not have the resources to
    oversee the LOGCAP IV contact. That is entirely true but there
    was a semicolon there and that is why we, on a reimbursable
    basis, engaged the Defense Contract Audit Agency and the
    Defense Contract Management Agency as our partners in
    overseeing the LOGCAP contract. It will be fully overseen and
    fully audited.
        We are just using professionals from the Department of
    Defense who have the career specific talents and abilities to
    do that kind of life support contract which we don't. I would
    never have engaged in that route unless I had agreement with
    DCMA and DCAA to provide us on a reimbursable basis the
    oversight that is required.
        Mr. Tierney. Thank you. I yield back.
        Mr. Chaffetz. I would now recognize the gentleman from
    Illinois, Mr. Quigley.
        Mr. Quigley. Thank you, Mr. Chairman.
        Ambassador Kennedy, you just touched briefly on the
    debarment issue. We have years of frustration to counter a
    report that promises hope as we finish our activities, the
    report you just referenced to Mr. Tierney. Just to use a few
    examples of the frustrations we might face here, the First
    Kuwaiti General Trading and Contacting Co. as an example.
        Do you recall being here 4 years ago in 2007 before this
    same committee and we were talking about the construction and
    they were the prime contractor to build the State Department
    Embassy in Iraq. There were cost overruns of $144 million,
    labor abuses and from what we now know, a kickback scheme
    involving hundreds of millions of U.S. taxpayer dollars.
    Despite all these problems, the State Department has allowed
    First Kuwaiti to continue to operate around the world,
    including in Saudi Arabia and other countries.
        If you cannot deal with that after all these years, what
    gives us any hope that debarment and suspension will have some
    sort of effect because there is a new plan?
        Mr. Kennedy. I don't want to debate specific numbers with
    you because I would like to sit with you and discuss them, but
    there were not cost overruns of $146 million, nor am I aware of
    a huge kickback scheme for First Kuwaiti related to State
    Department activities amounting to hundreds of millions of
    dollars.
        We monitored that. I will admit in building the American
    Embassy in Kuwait, the then Director of Overseas Buildings used
    a construction oversight model which did not deliver everything
    that I would have wanted if I had been the Under Secretary at
    that time. That model has been changed.
        The State Department outside of the contract in Baghdad has
    never awarded a contract to First Kuwaiti. The references you
    made to Saudi Arabia and also one in Indonesia were awarded to
    an American company registered and operating in the State of
    Maryland named Grunley Walsh. They subsequently sold to another
    American company called Aurora who utilized First Kuwaiti as a
    subsidiary of theirs.
        Mr. Quigley. Doesn't that seem like an obvious way to get
    around?
        Mr. Kennedy. I am not a lawyer.
        Mr. Quigley. The fact they can actually use them anyway, it
    is semantics that you are getting into at this point. We didn't
    actually do it, somebody else did. The fact that they are
    allowed to gets to the point. I would love to have the private
    debate that you encourage about the problems that existed with
    First Kuwaiti.
        Mr. Kennedy. I would be glad to call upon you and I will
    seek an appointment. We have no plans to use First Kuwaiti ever
    again. The problems that arose in Baghdad were, in effect,
    almost parallel to the awarding of the original contracts for
    Surabaya and for Jeddah and the problems were unearthed along
    the way. The contract was already in place with the American
    company and we put additional monitoring personnel on those.
        Because of the potential cost to the American taxpayer of
    stopping a contract in the middle and breaking it and then
    trying to restart it, we have been moving very, very
    expeditiously. The contract in Jeddah, in fact, is suspended.
    There is no work. I have halted work on that. They are at 99
    percent complete.
        Mr. Quigley. Were there problems or not? Why would you
    think about stopping a contract in the middle if there weren't
    any problems? What were the problems?
        Mr. Kennedy. The problems came out in Baghdad and in
    Surabaya and Jeddah in effect simultaneously.
        Mr. Quigley. What were the problems? If I had it all wrong,
    what were the problems more specifically?
        Mr. Kennedy. Poor management onsite, on-scene.
        Mr. Quigley. Poor management created what problems?
        Mr. Kennedy. Time delays. We have State Department
    construction engineers and architects onsite. I think in the
    building trades it is called the owner's representative on-
    scene in Jeddah and in Surabaya. Those representatives were
    constantly requiring work to be stopped and work to be redone
    at the contractor's expense, not at ours.
        That is the poor performance leading to seeing a product
    that was not headed in the direction that we wanted. That is
    why we have representatives onsite who can tell the contractor
    that wiring, that wall is not built according to the
    specifications, the contract and the bid documents. You tear it
    out, you get no additional funds for correcting your errors.
        Mr. Quigley. I have run out of time. Can you quickly tell
    us how many contractors has the State Department suspended or
    debarred in Iraq?
        Mr. Kennedy. Suspended or debarred in Iraq, I don't have
    that number at the tip of my tongue. I will get that for you.
        Mr. Quigley. Can you get it to the full committee?
        Mr. Kennedy. Absolutely. We will address it to the
    chairman.
        Mr. Quigley. Thank you, Mr. Chairman.
        Mr. Chaffetz. The gentleman yields back. I recognize Mr.
    Tierney.
        Mr. Tierney. Ambassador Kennedy, have you taken advantage
    of the good offices of the Special Inspector General for Iraq
    or the Government Accountability Office, or both at the outset
    of your venture for what advice and counsel they may give you
    and lessons learned on past contracting situations?
        Mr. Kennedy. Yes, sir. The Special Inspector General for
    Iraq, the Government Accountability Office, the State
    Department's Inspector General, have been engaged in an
    incredible number of inspections and oversights. I have a long
    list that I won't bother to read off to you of all the work
    they are doing. There are multiple audits and inspections going
    on. I believe two of them, as we speak.
        Mr. Tierney. That is one argument. The other is using them
    for advice and counsel as you startup.
        Mr. Kennedy. We read every single one of their reports and
    use those as lessons learned for the future.
        Mr. Tierney. But you have not engaged directly with them at
    any point in time?
        Mr. Kennedy. The Inspectors General do not like to give
    advice because if they give advice, in effect they feel it is a
    pass they have given me. I would say you have told me to do X,
    I did X, it didn't work.
        Mr. Tierney. I had a different impression from talking to
    folks over there but I understand that aspect of it but I do
    think it is important to glean all the lessons learned that we
    can.
        Mr. Kennedy. I read every single one of the reports they
    have done on the platform that I have built, my predecessors
    built and we plan to continue.
        Mr. Tierney. Thank you.
        Mr. Chaffetz. I have one last question and will give you
    each an opportunity to cite your biggest concern moving
    forward, but before we get to that, I am still concerned about
    the capability for medical type situations with only six beds
    overnight. Does the State Department have a plan for evacuation
    should that need to occur? We are talking about 17,000 people.
    How do you address that?
        Mr. Kennedy. We have been working with the Department of
    Defense and with our embassies in Inman and Baghdad on mass
    casualty scenarios using both our assets and assets that we
    might be able to call upon from DOD. There is such a plan being
    developed.
        I might point out the number is not 17,000; it is much
    closer to 16,000.
        Mr. Chaffetz. I feel so much better.
        Mr. Kennedy. If you take just the State Department
    component there, it is actually closer to maybe 10,000 plus my
    Department of Defense colleagues.
        Mr. Chaffetz. When you say 10,000, 10,000 what?
        Mr. Kennedy. I would say 10,500-11,000 State Department
    government employees and contractor support. As my colleagues
    from Defense discussed, there is the Office of Security
    Cooperation which is part of the Chief of Mission's
    responsibilities but they have their own personnel.
        Mr. Chaffetz. As we move forward, would it be reasonable by
    the end of the month you could provide me a specific number and
    how that breaks down so there is no confusion moving forward?
        Mr. Kennedy. Today, if I tote up everything, the answer for
    State and OSCI is 16,009. We track this very, very closely
    because we have no intention of over building and I do not wish
    to under build either.
        Mr. Chaffetz. Thank you.
        Let me start with Mr. Estevez. I want to wrap up here. We
    need to be brief. Your biggest concern moving forward, the
    thing we have to achieve and tackle by the end of the year?
        Mr. Estevez. Under the current scenario of drawing down to
    zero, aside from the OSCI presence in Iraq, it is a massive
    logistical move, 43,000 folks in about 2\1/2\ months, about
    800,000 pieces of equipment to come out--actually closer to
    850,000, so from the standpoint of logistics, that is a
    phenomenal piece of work.
        We have done that and we have been doing this for the last
    2 years really, the draw-down. We are confident we can do it
    but there are always hitches in this type of operation. Should
    there be successful negotiations, turning some of that around
    is also complicated but absolutely executable.
        Mr. Chaffetz. Thank you. Ambassador Vershbow.
        Mr. Vershbow. I think that from a policy point of view,
    between now and the end of the year, we hope that we can come
    to an agreement with the Iraqis on the full dimensions of a
    long term security relationship with that country that meets
    their needs and which also serves our long term strategic
    interest.
        I think the long term success of Iraq's efforts to
    consolidate its sovereignty, its democracy, its stability has
    become even more important in the wake of the Arab spring. The
    Iraqis face many threats, some internal, some external. I share
    your concern, Mr. Chairman, about Iran. As Ambassador Kennedy
    said, they don't necessarily have an interest in stability in
    Iraq or in seeing Iraq become a sovereign state that determines
    its down destiny. Indeed, Iranian militias are likely to
    continue to pose a threat to security.
        That makes it all the more important that we develop a
    strong and robust security partnership with the Iraqis that
    helps them improve their abilities which have improved
    significantly since we basically handed over the principal
    responsibility to them more than a year ago. They recognize
    that they need additional support going forward and I think it
    is in our strategic interest to develop a relationship that
    meets their needs so we can help them counter these threats and
    become an anchor of stability in a turbulent and fast changing
    Middle East.
        Mr. Chaffetz. Thank you. Ambassador Kennedy.
        Mr. Kennedy. When we started this transition process, my
    great fear was that we would not be mission capable to take
    over the responsibilities given to the Secretary of State under
    the new system. I believe that today we are mission capable.
    The remaining task is to complete the physical plant build out.
    We have the aviation in place, we have the security personnel
    in place, we have the logistics in place, we have the life
    support in place. All our building projects are under way.
        There have been the normal delays operating in a war zone
    from delays getting steel into the country to we thinking the
    U.S. military would be offsite X on day one and they were
    offsite on day 27. That is not pointing at them in any way,
    they have been absolutely fabulous in their cooperation. We
    could not have asked for anything more.
        We are now mission capable but I still have to complete
    internal and some external build-out of facilities within our
    compounds.
        Mr. Chaffetz. Very good.
        Thank you all for your commitment to our Nation and our
    country, the hard work and dedication and your patriotism. I
    appreciate the staff that does so much of the work here in
    helping us along the way. I thank Mr. Tierney.
        I would also appreciate that if there are additional
    updates you feel need to be brought before the committee, we
    would certainly appreciate that.
        The committee now stands adjourned.
        [Whereupon, at 11:20 a.m., the subcommittee was adjourned.]