[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









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                      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.]

                                 
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