[Senate Hearing 113-424]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-424

 
             IMPLEMENTATION OF WARTIME CONTRACTING REFORMS

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


                                HEARING

                               before the

                     SUBCOMMITTEE ON FINANCIAL AND

                         CONTRACTING OVERSIGHT

                                 of the

                              COMMITTEE ON

                         HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE


                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 16, 2013

                               __________

         Available via the World Wide Web: http://www.fdsys.gov

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                        and Governmental Affairs



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                  Gabrielle A. Batkin, Staff Director
               John P. Kilvington, Deputy Staff Director
               Keith B. Ashdown, Minority Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Lauren M. Corcoran, Hearing Clerk


          SUBCOMMITTEE ON FINANCIAL AND CONTRACTING OVERSIGHT

                       CLAIRE McCASKILL, Chairman
CARL LEVIN, Michigan                 RON JOHNSON, Wisconsin
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          MICHAEL B. ENZI, Wyoming
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
TAMMY BALDWIN, Wisconsin

                 Margaret Daum, Majority Staff Director
                 Rachel Weaver, Minority Staff Director
                       Kelsey Stroud, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator McCaskill............................................     1
    Senator Johnson..............................................     2

                               WITNESSES
                         Tuesday, July 16, 2013

Richard T. Ginman, Director, Defense Procurement and Acquisition 
  Policy, U.S. Department of Defense.............................     4
Hon. Patrick F. Kennedy, Under Secretary of State for Management, 
  U.S. Department of State.......................................     5
Aman S. Djahanbani, Senior Procurement Executive and Director, 
  Office of Acquisition and Assistance, U.S. Agency for 
  International Development......................................     7

                     Alphabetical List of Witnesses

Djahanbani, Aman S.:
    Testimony....................................................     7
    Prepared statement...........................................    65
Ginman, Richard T.:
    Testimony....................................................     4
    Prepared statement...........................................    35
Kennedy, Hon. Patrick F.:
    Testimony....................................................     5
    Prepared statement...........................................    57

                                APPENDIX

    Information from Mr. Kennedy to Senator McCaskill............    73
    Information from Mr. Ginman to Senator Johnson...............    74
    Executive Office of the President, prepared statement........    75
    Information submitted by Senator Johnson.....................    79
    SIGAR Report, prepared statement.............................    85
    POGO Report, prepared statement..............................    91
Responses to post-hearing questions for the Record:
    Mr. Ginman...................................................    93
    Mr. Kennedy..................................................   120
    Mr. Djahanbani...............................................   146


             IMPLEMENTATION OF WARTIME CONTRACTING REFORMS

                              ----------                              


                         TUESDAY, JULY 16, 2013

                                 U.S. Senate,      
        Subcommittee on Financial and Contracting Oversight
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:33 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Claire 
McCaskill, Chairman of the Subcommittee, presiding.
    Present: Senators McCaskill, Johnson, Ayotte, and Coburn.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Good morning. Thank you all for being 
here. I thank Senator Johnson for attending this morning.
    It is hard to believe that I have been at this for over 6 
years working on wartime contracting. It has been in many ways 
a roller coaster ride.
    There have been days that I thought there was no hope and 
then there are other days when we were able to get so many of 
these provisions finally into law that I thought we were really 
rounding the corner; and today we are here to examine if, in 
fact, we have turned a corner or if we still have a lot of work 
to do.
    We are going to today review the implementation of the 
wartime contracting reforms mandated in last year's National 
Defense Authorization Act (NDAA) and to address a couple of 
current contracting issues that have come up.
    On August 31, 2011, the Commission on Wartime Contracting 
(CWC) in Iraq and Afghanistan presented its final report to 
Congress. On February 29, 2012, Senator Webb and I introduced 
S. 2139, the Comprehensive Contingency Contract and Reform Act 
of 2012, which was based on the findings and recommendations of 
the Commission.
    Just so everyone remembers, Senator Webb and I began in 
2007 when we arrived in the Senate as new freshman working on 
getting a War Contracting Commission that could look 
extensively at issues of how we contract during times of war.
    The provisions of the Comprehensive Contingency Contracting 
Reform Act, which were based on the findings of that 
Commission, were incorporated in the fiscal year (FY) 2013 NDAA 
that was signed into law January 2 of this year.
    A few of the provisions had reporting requirements that 
were due earlier this month and several of those provisions 
have targets to be met by the end of this year.
    This morning we have representatives of the Defense 
Department (DOD), State Department, and the United States 
Agency for International Development (USAID) here to testify 
about how their respective agencies are complying with the 
wartime contracting provisions.
    Based on the reports that these agencies have made to 
Congress, they are working to implement these provisions. I am 
encouraged by their progress. However, there is still a long 
way to go.
    The majority of the provisions in the law passed last year 
apply only to future contingencies. Unfortunately, they do not 
apply to Afghanistan now where we are continuing to hear about 
contracting problems.
    I learned just this week that the Defense Department spent 
millions to construct a building in Afghanistan that has never 
been used. This facility was built despite the fact that the 
forward commanders said they neither needed nor wanted this 
facility in May 2010, almost a full year before construction 
began.
    We now have a brand-new state-of-the-art building that cost 
the taxpayers $34 million to build. The worst part is that all 
indications are they are going to tear it down. We cannot even 
give it away to the Afghanistan government for free because 
they do not want a building that they will have to spend 
millions to rewire because it was built to U.S. electrical 
code.
    I also recently learned that more than $13 million may have 
been wasted on a USAID agricultural development contract with a 
company called Chemonics. The waste alone is bad enough but the 
Special Inspector General (SIG) also found that the contractor 
failed to cooperate with the audit. Frankly, that is just 
unacceptable.
    I will also ask questions about the security of our embassy 
in Kabul. The Subcommittee first held a hearing on this topic 
in 2009 and I continue to have serious concerns regarding that 
contract.
    These examples illustrate why it is so important that 
contracting reforms passed this year are fully implemented and 
our government has learned the lessons finally once and for all 
of Kosovo, Iraq, and Afghanistan. I plan to continue to hold 
hearings like this one until that time comes.
    The Office of Federal Procurement Policy (OFPP) has 
provided a letter regarding their implementation of the war 
contracting provisions. I ask unanimous consent that this be 
included in the hearing record.
    I thank the witnesses for being here today and I look 
forward to their testimony. Senator Johnson.

             OPENING STATEMENT OF SENATOR JOHNSON.

    Senator Johnson. Thank you, Madam Chairman.
    It is interesting, the couple of examples you did bring out 
that I would like to reinforce a little bit. The $34 million 
building, 64,000 square feet, what is just depressing about 
that is the commanders tried to stop its construction.
    It was originally proposed in February 2010. By May 2010, 
they said they really do not want it, but in February 2011 it 
was contracted out and we went ahead and produced it or 
constructed it at a cost of $531 per square foot.
    Now, I have done a lot of construction for, plants, pretty 
complex manufacturing structures. We have never had anything 
that cost $531. We checked with the National Association of 
Home Builders (NAHB). The average cost of a home is about $80 
per square foot. So, there are so many problems with that 
example you raised. We will certainly have questions on that.
    You also talked about the security situation in the embassy 
in Kabul. There is a pretty interesting article that I would 
like to submit for the Record by the Project on Government 
Oversight (POGO). It was actually a report issued in January 
2013.
    And, as you are reading that report, again this is 
contractor security and whistleblowers from that contract that 
are being fired for raising alarms about the lack of security.
    And, what is alarming to me is, as I am hearing in this 
report, the response of the State Department saying that it 
takes very seriously the concerns of the Aegis personnel but at 
the same time those people are being fired.
    It is eerily similar to what we heard in terms of the 
security around the embassy or the consulate in Benghazi and 
the resulting tragedy of that. So, I am going to have a number 
of questions about that situation as well.
    Madam Chairman, I really commend your efforts in holding 
hearings like this. Our hearing yesterday, we just hear the 
same problems time and time again, the lack of accountability, 
the lack of incentives to do things in a cost efficient manner; 
and when it comes to talking about protecting our personnel in 
very dangerous places, it seems like we are going to make the 
same mistakes time and time again.
    So, this is a very timely airing. I am looking forward to 
the testimony of the witnesses and I certainly appreciate you 
coming here to testify. Thank you.
    Senator McCaskill. Thank you, and let me introduce the 
witnesses. Richard Ginman serves as Director of Defense 
Procurement and Acquisition Policy (DPAP). He retired as a rear 
admiral from the U.S. Navy after 30 years of service in 2000. 
Prior to assuming his current position, he served as Principal 
Deputy to the Director from 2008 until 2010 and Deputy Director 
of Contingency Contracting and Acquisition Policy from 2010 
until becoming the Director in June 2011.
    Patrick Kennedy has served as Under Secretary for 
Management in the U.S. State Department since 2007. He has been 
with the Department of State for 39 years and has held 
positions including Director of the Office Management Policy, 
rightsizing innovation, Assistant Secretary for Administration, 
U.S. Representative to the U.N. for Management and Reform, 
Chief of Staff of the Coalition Provisional Authority in Iraq 
and Deputy Director of National Intelligence for Management.
    Aman Djahanbani is the Senior Procurement Executive, Chief 
Acquisition Officer and Director of the Office of Acquisition 
and assistance at USAID. Before assuming his current position, 
Mr. Djahanbani worked overseas as a supervisory contracting 
officer for USAID. He began his procurement career with the 
U.S. Department of Defense where he worked for more than a 
decade at the Naval Regional Contracting Center in Saudi Arabia 
and Singapore.
    It is the custom of the Subcommittee to swear all witnesses 
that appear. I would ask you to stand and do you swear the 
testimony that you give before this Subcommittee will be the 
truth, the whole truth, and nothing but the truth, so help you, 
God?
    Mr. Ginman. I do.
    Mr. Kennedy. I do.
    Mr. Djahanbani. I do.
    Senator McCaskill. Let the record reflect that the 
witnesses have all answered in the affirmative.
    We will be using a timing system. Five minutes give or 
take. Mr. Ginman, if you would go ahead with your testimony. 
Thank you very much.

     TESTIMONY OF RICHARD T. GINMAN,\1\ DIRECTOR, DEFENSE 
 PROCUREMENT AND ACQUISITION POLICY, U.S. DEPARTMENT OF DEFENSE

    Mr. Ginman. Chairman McCaskill, Senator Johnson, 
distinguished Members of the Subcommittee. I welcome this 
opportunity to discuss the Department of Defense's 
``Implementation of Wartime Contracting Reforms.'' You asked me 
to address 14 provisions in the National Defense Authorization 
Act for fiscal year 2013. Each provision is covered in my 
written testimony and I asked that it be submitted for the 
record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ginman appears in the Appendix on 
page 35.
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    Senator McCaskill. It will.
    Mr. Ginman. The Department has made a number of 
improvements to operational contract support (OCS) for short, 
based on independent reviews such as the Commission on Wartime 
Contracting, the Gansler Commission, and various Inspector 
General reports as well as the Department's own analysis.
    From the top down, the Department is committed to ensuring 
support for our warfighters through contracts that are 
carefully planned for, executed, and monitored. This applies to 
the current mission in Afghanistan as well as to future 
conflicts.
    The Department established a permanent board to oversee our 
progress in improving OCS capability. The board identified 10 
capability areas requiring improvement and more than 140 
individual actions. I provided your staff the entire action 
plan last week for your review.
    Also, the Department is engaged in Better Buying Power 
Initiatives to obtain greater efficiency and productivity in 
our spending. We take seriously our charge to protect public 
funds.
    In addition, the Department works with its civilian agency 
colleagues on Federal-wide initiatives, interagency topics, and 
ensuring lessons learned. This includes working with the 
Department of State and USAID, who are here with me today.
    Some improvements in contingency and conventional 
contracting have required congressional assistance. We 
appreciate this Subcommittee's continued strong support not 
only for necessary legislation but also for our deployed forces 
both military and civilian.
    The Department is focused on meeting the warfighters 
current and future needs while judiciously managing the 
Department's resources and balancing risk. Much has been 
accomplished but, of course, challenges remain.
    Thank you for the opportunity to appear before you today to 
discuss the Department's implementation of wartime contracting 
legislation and I welcome your questions.
    Senator McCaskill. Yes.

TESTIMONY OF THE HON. PATRICK F. KENNEDY,\1\ UNDER SECRETARY OF 
         STATE FOR MANAGEMENT, U.S. DEPARTMENT OF STATE

    Mr. Kennedy. Good morning, Madam Chairman, Senator Johnson, 
Senator Ayotte. Thank you for inviting me here today to discuss 
the Department of State's implementation of contingency 
contracting provisions in the fiscal year 2013 National Defense 
Authorization Act, a matter that I know is of particular 
interest to the Chair.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Kennedy appears in the Appendix 
on page 57.
---------------------------------------------------------------------------
    State takes this contracting responsibility seriously and 
is always seeking improvements. Directly after the enactment of 
the 2013 NDAA, State formed three working groups to focus on 
risk assessment for contingency contracting, contracting 
management, and our acquisitions and contracts management 
workforce.
    The results were incorporated into our Section 850 report 
which was sent to the Congress last month. The working groups 
found that State's structure and processes support our national 
security mission and that our centralized acquisitions office, 
based in Washington, D.C., and our two Regional Procurement 
Support Offices support our contingency contracting 
requirements.
    The working groups continue meeting to advance the 
implementation of the NDAA provisions, and we are working with 
Government Accountability Office (GAO) on their Section 850 
engagement.
    The Department continues making improvements to its 
contracting program. The Office of Acquisitions Management 
continues to hire contracting staff. We have emphasized 
increasing the number of Contracting Officer Representatives 
(COR) in our regional and functional bureaus for the day-to-day 
contract oversight.
    We have improved COR training and established a COR 
Advisory Board to share best practices.
    State is establishing a Contract Management Office in 
Kuwait to support our Iraq operations and this could be a model 
for future contingencies.
    The State will examine using human resources flexibilities 
such as recruitment, retention, and relocation incentives to 
ensure expedient hiring for contract oversight functions. As 
flagged by GAO, State issues guidance to strengthen management 
of interagency acquisition agreements as working with DOD on 
overall coordinating arrangements.
    Regarding our NDAA sections, State examined its use of 
Synchronized Pre-Deployment Operational Tracker (SPOT) under 
Section 844. We believe SPOT is the preferred system for 
tracking personnel under contingency contracts and are working 
to improve data quality.
    We are also working with DOD to integrate data from the 
Federal Procurement Data System (FPDS) automatically into SPOT. 
We continue using SPOT reporting to Congress with DOD and USAID 
per Section 847.
    We are evaluating our risk management processes under 
Section 846 and are looking at more formally establishing a 
centralized risk management unit at State.
    The new responsibilities of the Chief Acquisition Officer 
(CAO) under Section 849 have been specifically incorporated 
into those of State's Chief Information Officer (CIO).
    Per Section 861, we have designated a Suspension and 
Debarment Official (SDO) who is not part of either the Office 
of the Inspector General (OIG) or the Office of Acquisitions. 
This SDO is supported by a newly added suspension and debarment 
program manager who works only on S and D matters. Per the GAO, 
successful S and D programs have dedicated resources, detailed 
policies, and a referral process.
    State has all three and we have gone from zero suspensions 
and two debarments in fiscal year 2008 to three suspensions and 
31 debarments to date in fiscal year 2013.
    Several sections of the bill, namely 802, 852, and 853 
promote governmentwide changes and need incorporation into the 
Federal Acquisition Regulations (FAR). State is an active 
member of the Civilian Agency Acquisition Council (CAAC) and is 
working on these matters as detailed in my written statement 
which I hope would be entered into the Record.
    Senator McCaskill. Without objection it will be.
    Mr. Kennedy. Under Section 862, the State is working with 
the Office of Federal Procurement Policy and the interagency in 
developing standards to ensure continued alignment of our 
existing contract writing system with any new governmentwide 
data standards that might be developed.
    Under Section 1273, the Department of State will undertake 
assessments to ensure that a capital project that is both 
requested by the host government and can be sustained by it. 
Since NDAA enactment, State has not undertaken any capital 
projects that would trigger the need for an assessment.
    With regard to private security contractors (PSCs), I know 
that the Chair has concerns PSCs providing security at posts 
such as Kabul, and I will be glad to answer any questions.
    The State Department has used the guards for the protection 
of our facilities and personnel since the 1970s. PSCs are 
critical to our readiness and capability to carry out American 
foreign policy under dangerous and uncertain security 
conditions.
    We fully appreciate the need for robust oversight of PSCs. 
Particularly in conflict areas, contractors are operationally 
overseeing and contractually managed by direct hire State 
personnel. My written testimony describes our oversight 
message.
    Currently in Kabul, we have a well managed, effectively 
functioning contract that provides security to protect our 
people and facilities.
    In conclusion, while we recognize that State's contracting 
organization is organized effectively to undertake both routine 
and contingency contracting, we know and we believe that we 
must strive to learn from past practices and to better align 
contingency contracting especially with the guidance of the 
2013 NDAA provisions.
    The Department will continue to refine its processes, 
procedures and strategies to ensure that adequate resources and 
oversight mechanisms are in place for future contingencies.
    I stand ready to answer any questions that you might have, 
Madam Chairman.
    Senator McCaskill. Thank you, Secretary Kennedy.
    Yes, Mr. Djahanbani.

    TESTIMONY OF AMAN S. DJAHANBANI,\1\ SENIOR PROCUREMENT 
 EXECUTIVE AND DIRECTOR, OFFICE OF ACQUISITION AND ASSISTANCE, 
           U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

    Mr. Djahanbani. Chairman McCaskill, Ranking Member Johnson, 
thank you for the opportunity to discuss the actions the U.S. 
Agency for International Development has taken to implement the 
contracting reform provisions passed into law in the fiscal 
year 2013 National Defense Authorization Act. I will briefly 
summarize my remarks and asked that my full statement be 
entered into the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Djahanbani appears in the 
Appendix on page 65.
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    USAID welcomes the Subcommittee's continued interest in 
these matters. Our agency has thousands of personnel working in 
more than 80 missions worldwide to improve the economic 
environment, global health, food security, and overall 
development of these nations in support of U.S. foreign policy.
    This means that we are often operating in areas of conflict 
and contingencies. So, we as an agency and I personally 
recognize and support the emphasis on greater accountability, 
sustainable results, and compliance that the provisions have 
brought forth.
    I came into my current position with more than 25 years of 
interagency contracting experience including in contingency 
operations. I started my career with the Department of Defense; 
and since joining the foreign service in 1998, I have served in 
missions from Ghana to Peru to Jordan and recently spent 2 
years as the supervisory contracting officer in Pakistan.
    I have personal experience with many of the real issues 
facing our program offices today and fully support the intent 
and spirit of this legislation.
    Over the last several years, USAID has undertaken an 
aggressive series of reforms called USAID Forward. I am proud 
and honored to say that many of our USAID Forward efforts are 
in line with your legislation. The provision provide solutions 
to some of the most important issues that we continue to face 
in our engagements in Afghanistan and Iraq and foster a better 
environment for contingency contracting in the future. In fact, 
we have proactively implemented many of these reforms over the 
last few years.
    The last time USAID appeared before you we told the 
Subcommittee we were exploring ways in which we could 
strengthen the independent authority of our agency suspension 
and debarment official. While our current structure meets the 
requirements of the provisions, USAID is transferring the 
duties out of the procurement office to a senior official 
within the Bureau for Management.
    Additionally in 2011, Administrator Shah issued the USAID 
sustainable guidance for Afghanistan aimed at ensuring programs 
are sustainable and closely aligned with the United States and 
Afghan national priorities.
    We are conducting regular reviews of our projects and have 
taken actions to cancel projects where necessary including some 
infrastructure road programs like the Bamyan-Dushi Road in 
Afghanistan.
    We also have modified some projects midway to increase 
their sustainable results while preserving the existing 
investment of American taxpayer dollars.
    The bottom line is that we are learning from the past and 
leveraging lessons from Iraq and Afghanistan to build a 
stronger foundation for effective, accountable contracting 
practices.
    Sustainability is undoubtedly one of the greatest 
challenges we face during a time of war or conflict. However, 
we as an agency have a core belief that it is imperative for 
not only contingency operations but for all of our operations. 
It is one of the key pillars of USAID Forward.
    It is also a focus area of the agency's new senior 
management accountability review process in which all new 
awards at the $25 million level will be validated by an 
Assistant Administrator to ensure the project meets Federal 
accountability criteria including a demonstrated commitment to 
sustainable results. Additionally, the Administrator himself 
will provide the final authorization to make an award at or 
above $75 million.
    USAID has also developed for the first time ever a 
corporate level acquisition and assistance plan that allows us 
to see all procurements across the agencies worldwide 
operations. This plan has helped create transparency throughout 
the agency and has contributed significantly to streamline, 
more effective implementing mechanisms.
    USAID continues to be a world-class development agency and 
is proudly taking actions to implement reforms to strengthen 
our contracting practices.
    With regard to your specific legislation, my written 
statement details the actions we are taking as an agency to 
implement them, and I am happy to address any particular 
section you like.
    I want to thank you for this opportunity to discuss these 
actions and to receive input from you and your staff. We are 
all working toward the same goals to increasing accountability, 
sustainable results, and compliance across the spectrum of not 
only contingency contracting but all government contracting.
    Thank you again and I look forward to our discussion.
    Senator McCaskill. Thank you very much. Let me start before 
I begin asking questions and acknowledge that everyone is 
making progress. I mean, these hearings, as you all are 
painfully aware from my perspective, are all about making a 
point and holding your feet to the fire and so my questions, 
some of them are going to be tough but I did want to 
acknowledge at the beginning of the questioning that we are 
making progress.
    It is much better than it was in 2007 in every single one 
of your agencies but I have to start with obviously the awkward 
situation that I find myself in that, having been reassured by 
the Defense Department over and over and over again that 
sustainability is always considered in, I mean, when we argued 
with them about what kind of sustainability analysis, oh, I was 
reassured, oh, we always do sustainability.
    Well, clearly we have a brand-new building that the right-
hand did not know what the left-hand was doing or, even worse, 
the right-hand ignored the left-hand which were the commanders 
on the ground.
    Let me give you an opportunity, Mr. Ginman, to explain how 
in the world this thing got built when the people on the ground 
were saying stop, do not do this, we do not need it, and it 
will not be used.
    Mr. Ginman. I do not have an explanation and it is very 
difficult to sit here and say that at least as it is reported 
and clearly we now have a building that is not needed and I do 
not know how it will be finally disposed of.
    I do know the Army has initiated, it is called an Army 
Regulation 15-6 Investigation to go through all of the analysis 
and what it is; and until those facts are actually reported 
out, and that investigation is done, I do not think the 
Department is in a position to be able to state unequivocally 
what actually occurred and why and who was accountable.
    But certainly in the face of being told we do not need this 
and then proceeding, that just does not make sense.
    Senator McCaskill. Especially when you look at the time 
period that passed before the contract was given and if you get 
a heads-up in May 2010 that the building is not needed and the 
contracts are not executed until the following year, it really 
shows a systemic issue on this and it is what I said about the 
Commander's Emergency Response Program (CERP) and the son of 
CERP and, as you know, the Afghanistan infrastructure fund 
where are we are doing this and frankly we have the same thing 
when we look at the Chemonics audit at AID.
    I think you probably know this without me saying it that I 
am not going to stop on this until I know who it was that 
failed to read the file or who it was that said go ahead and 
let the contract without doing due diligence about the 
necessity of the building.
    And, by the way, the sad thing here is to most Americans 
$34 million sounds like a lot of money. You know what I am 
worried about? I am worried about the people who are making 
these decisions, this is chump change.
    Mr. Ginman. Yes, ma'am.
    Senator McCaskill. Who cares about the $34 million; it is 
only $34 million.
    Mr. Ginman. What I do know is over the course of the last 
18 months, the theater has done four separate reviews of the 
MILCON budget, and has taken either descoped or canceled $1.4 
billion worth of MILCON projects. That is somewhere in excess 
of a hundred separate projects.
    I also know that to NATO Training Mission Afghanistan/
Combined Security Transition Command Afghanistan (NTM-A CSTC-
A), the group that does the procurements for Afghanistan, has 
done a series of reviews and has taken $2.5 billion dollars out 
of that project, excuse me, totally out of that project, and 
that General Dunford has kicked off a fifth review once again 
in MILCON just to ensure that we are not doing this.
    So, how this one went through, I just cannot sit here and 
give you an explanation.
    Senator McCaskill. I am on the edge of my seat----
    Mr. Ginman. Yes, ma'am.
    Senator McCaskill [continuing]. To get this information. 
Please explain to everyone that the more quickly we can do this 
I think it is pretty important that we come up with an answer 
to the question, how did this happen sooner rather than later 
because of every day that passes that we do not know the 
answer, it makes me very nervous that it is happening in other 
places.
    Mr. Ginman. I am told that the expected due date for the 
report with completed analysis is somewhere in the next 30 to 
60 days.
    Senator McCaskill. Let me move over to Mr. Djahanbani. I 
have read the Chemonics audit. Have you read it?
    Mr. Djahanbani. Yes, ma'am.
    Senator McCaskill. Do you think all the people that work 
for you have read it?
    Mr. Djahanbani. Yes, Madam Chairman, I am pretty sure.
    Senator McCaskill. I worry that these audits do not get 
read. That was always something that bugged me when I was doing 
audits that we worked very hard and one of the performance 
goals I had when I was an auditor is how do we get people to 
read them.
    When I read this audit, first of all, what actions have 
been taken against this contractor for their failure to 
cooperate with an audit?
    Mr. Djahanbani. Madam Chairman, we are taking the Special 
Inspector General for Afghanistan Reconstruction (SIGAR's) 
concerns very seriously and we have recently received this 
audit. The mission is reviewing it very carefully because again 
it is an odd situation that Chemonics that we do business with 
would not want to cooperate with the auditors.
    So, Madam Chairman, if you could, if I could get back to 
you, our offices with your office, to understand the case, to 
read it, and assess it, and understand the situation because we 
are very concerned about this. If I may, it does not pass the 
commonsense test at this point.
    Senator McCaskill. Well, and I want to make sure that, as 
we look at and I will spend more time on this in the second 
round about the systems that we are trying to put in place in 
terms of bad performance by contractors, debarment and 
suspension, that a failure to cooperate with an audit needs to 
be part of a bad performance. It needs to be taken into 
consideration as to their future eligibility for contracts.
    The other thing I want to drill down on in this particular 
contract is really the $64 question about that contract and 
that is, I would like to know from your agency how much money 
have we spent trying to get the Afghanistan people to quit 
growing poppy over the last 20 years?
    How many billions of dollars have we spent trying to move 
them off of poppy and what are the performance metrics in that 
regard? How much success have we really had?
    And, I am not really sure how building public parks gets 
them off growing poppy which was part of this contract. I get 
distributing wheat seed and fertilizer is. I get building an 
agricultural center and teaching them ways to make money off of 
an agricultural economy other than poppy.
    But, at what point do we throw in the towel? I bet if we 
take a look at the amount of money we have spent trying to get 
them off poppy over the last 20 years, I think probably if we 
look at the numbers, I hope I will be surprised that we had 
success but I think this may go under the headline of how long 
we will hit our head against the brick wall much to the 
detriment of the American taxpayer.
    Mr. Djahanbani. Madam Chairman, I would like to get you the 
right numbers and if I may get those numbers for you for the 
record I would like to do that.
    Senator McCaskill. OK. We will followup on that. Senator 
Johnson.
    Mr. Djahanbani. Thank you.
    Senator Johnson. Thank you, Madam Chairman.
    Mr. Ginman, you did realize that we were going to be asking 
about that $34 million building, correct?
    Mr. Ginman. Yes, sir.
    Senator Johnson. Did you make any phone calls prior to this 
hearing to get prepared to answer the question?
    Mr. Ginman. Yes, I did.
    Senator Johnson. What did you learn other than you are just 
going to take another 30 to 60 days?
    Mr. Ginman. Well, so, I did learn there was an 
investigation ongoing, and the findings of what is in that 
investigation I do not yet have. They have not been published.
    Senator Johnson. Why does it take so long to get to the 
bottom of something that in industry, trust me, if somebody 
built a $34 million building and I told them not to build it 
and it still got built, I would know who made that decision 
very quickly. I would know within a day. I would know within a 
few hours. Why is it so impossible to get the questions 
answered in the government?
    Mr. Ginman. I guess I will step way back. Having been a 
part of a Navy JAG manual investigation for a $400,000 
embezzlement in the dispersing office, it took us about 30 to 
60 days to go through and actually find the individuals, many 
whom had left the ship and to be able to go back through the 
whole thing, and get all of that. So, many of the people I am 
sure that they are now trying to figure out where are they now, 
who are they----
    Senator Johnson. There is a chain of command for this, 
correct?
    Mr. Ginman. Yes.
    Senator Johnson. OK. We will get into that later. What we 
have is a basic lack of accountability in government, and that 
is why it is so out of control. I think, quite obviously David 
Axelrod was right. It is too vast, and that is a problem.
    Mr. Kennedy, talk about accountability. Prior to September 
11, 2012 terrorist attacks in Benghazi, did you at any time 
review the March 28, 2012 or July 9, 2012 cables from 
Ambassadors Cretz and Stevens requesting additional security? 
Did you review those cables?
    Mr. Kennedy. I believe I did, Senator, I do not have my 
Benghazi documents here with me what I can check----
    Senator Johnson. You read those. OK. Did you discuss those 
requests with anyone, particularly did you discuss those with 
Secretary Clinton, Cheryl Mills, Deputy Secretary Nides or 
Deputy Secretary Burns?
    Mr. Kennedy. No, sir.
    Senator Johnson. So, those cables and that information, 
those requests for security stopped with you?
    Mr. Kennedy. I guess.
    Senator Johnson. They went no further?
    Mr. Kennedy. We review them, Senator. I always have 
extensive discussions with my colleagues in the diplomatic 
security service. If matters rise to the point where we feel 
that we cannot mitigate and the risk based upon the 
intelligence that is available to us, we act. For example----
    Senator Johnson. You took that responsibility on yourself 
then to deny those requests for additional security even though 
we knew those security situations were deteriorating.
    Mr. Kennedy. First of all, Senator, the request in several 
of those cases in those cables, if my recollection is correct, 
and again I do not have them in front of me, were talking about 
security in Tripoli, in Tripoli, not in Benghazi.
    We reviewed the situation very carefully and, as I said, if 
we cannot mitigate the risk, just as we did in Damascus, Syria, 
we will close the post and move on.
    I will be glad to pull those cables as soon as I get back 
to my office and----
    Senator Johnson. We have them and we will submit them for 
the Record.
    Senator Johnson. On April 19, 2012, the State Department 
responded to those requests. This cable informed embassy 
Tripoli that the Department would continue to withdraw security 
despite the Ambassador's request.
    Did you at any time review or approve that cable, the April 
19 cable that, by the way, bore Secretary Clinton signature?
    Mr. Kennedy. Again, Senator, that cable, if my recollection 
is correct, regards Tripoli, sir, our embassy in Tripoli not 
the temporary mission facility in Benghazi.
    Senator Johnson. In addition to the September 11 memo which 
basically said that the State Department did want to maintain a 
presence in Benghazi, did you at any time review, authorize, or 
direct the deployment or redeployment of diplomatic security 
agents in Libya prior to the September 11 terrorist attack?
    Mr. Kennedy. Did I? No, sir, I did not withdraw any 
diplomatic, I never directed the withdrawal of any diplomatic 
security agents.
    Senator Johnson. Did you at any time communicate or confirm 
to the Defense Department that State Department would not be 
needing the site security team (SST) after August 2012, and if 
so, when?
    Mr. Kennedy. I did, sir. The SST was a Tripoli-based 
detachment that had been sent into Tripoli when we went into 
Tripoli. It consisted of eight shooters in effect plus 
explosive ordnance detection people, aviation experts, 
communications experts, medical experts, over the course of our 
standing up the embassy in Tripoli. No relation at all to 
Benghazi.
    In the process of standing up our embassy in Tripoli, the 
State Department replaced those individuals with State 
Department personnel. We had sent our own medical personnel. We 
sent in our own communications----
    Senator Johnson. We will talk about why we are using State 
Department rather than military personnel for those types of 
situations.
    What is the current status of the employees named in the 
Accountability Review Board reports, specifically Eric Boswell, 
Scott Bultrowicz, Charlene Lamb and Raymond Maxwell?
    Mr. Kennedy. They are on administrative leave.
    Senator Johnson. And being paid?
    Mr. Kennedy. Yes, sir.
    Senator Johnson. Do we know what their next assignments are 
going to be?
    Mr. Kennedy. No, sir, we do not.
    Senator Johnson. Were you fully aware of the deteriorating 
security situation in Benghazi?
    Mr. Kennedy. I read the material, Senator, but there was no 
intelligence generated by either the State Department or by any 
other of our partners in the U.S. Government agency, DOD or the 
Intelligence Community (IC), that direct a threat of that 
nature that appeared in Benghazi. There was a rocket attack. 
There was a car bomb.
    Senator Johnson. Why would we actually ramped down the 
security in Benghazi when the people on the ground were asking 
for additional security? Why would we do that?
    Mr. Kennedy. Senator, we did not ramp down the security in 
Benghazi. The examples you referred to earlier, particularly 
the SST, were personnel assigned to the embassy in Tripoli, not 
to the temporary mission facility in Benghazi. So, we did not 
remove people from Benghazi.
    Senator Johnson. What is the criteria the State Department 
uses in contracting out security versus using U.S. military?
    Mr. Kennedy. It depends upon the host nation approvals. It 
depends upon funds availability. It depends upon the mission 
sets that are required.
    Senator Johnson. During the Foreign Relations Committee 
hearing when we were questioning Secretary Clinton, there were 
certainly accusations that one of the problems in Benghazi is 
the funds just simply were not available. I mean, it is true 
that if the State Department requests security from the 
military, they will provide that security and it does not cost 
the State Department a dime, correct?
    Mr. Kennedy. That depends, Senator. Some military support 
is provided on a reimbursable basis and some support is 
provided on a non-reimbursable basis. It depends on the 
situation. Sometimes we pay; sometimes we do not.
    Senator Johnson. What would have been the case in Benghazi?
    Mr. Kennedy. I do not know because there was no request.
    Senator Johnson. You never requested it even though the 
security situation was----
    Mr. Kennedy. There was no request for military personnel in 
Benghazi.
    Senator Johnson. Thank you, Mr. Secretary.
    Senator McCaskill. Senator Ayotte.
    Senator Ayotte. I want to thank the Chairman and the 
Ranking Member for holding this important meeting. I want to 
thank very much the witnesses for being here today.
    Mr. Ginman, let me just start with particularly contracting 
in Afghanistan and Section 841 provisions. Senator Brown and I 
know you have worked on this issue very closely--pushed to get 
the no contracting with the enemy provisions in because one of 
the issues we have had in Afghanistan, as I understand it, has 
been that some of the money was flowing into the hands of 
insurgents. Is that right?
    Can you describe for me how 841 has been used effectively 
to cutoff funds to insurgents? And then again Senator 
Blumenthal and I now have after a meeting I had with Major 
General Longo in Afghanistan in July now have provisions that 
will extend these authorities to the Department of State and 
USAID.
    So, I certainly will be asking both of you about that and 
also making sure that we can drop the amount from the threshold 
from 100,000 to 20,000.
    So, can you talk to me about this issue, and I know that 
this is a very important issue to me and I am hoping that we 
will pass this legislation to further enhance these 
authorities.
    Mr. Ginman. So, it was getting the legislation I think 2 
years ago now was important to us.
    Senator Ayotte. Right.
    Mr. Ginman. It has been used 11 times. Ten times with 
subcontractors and one time with a prime to a total of 
currently I believe $31 million.
    We have looked at both the legislation, your bill that was 
submitted and then the revised Senate bill that was put out and 
provided view statements. We are basically in agreement with 
the legislation. We did offer and we have worked with your 
staff to improve it.
    I would say I have now read through the current Senate 
provision and again from my personal perspective, since we have 
not provided a Department view statement, I am in agreement 
with what it says and where it goes. I would like to continue 
to work with your staff.
    I think there is one particular phraseology that limits our 
ability to, in fact, void. It deals with head of contracting 
activity and who has the authority.
    But, other than that, the Department submitted legislative 
proposals asking for 841, and 842 authorities I would also add 
is important to us to be able to make it work, to have the 
access to records. The Task Force 2010, in order to be able to 
do the analysis and the forensic work they do has to be able to 
get to the subcontractor records, and Section 842 gives us that 
authority.
    Senator Ayotte. Right.
    Mr. Ginman. So not only do we need your bill but we also 
need Section 842 extended as well.
    Senator Ayotte. So, let me just ask certainly Secretary 
Kennedy as well as Mr. Djahanbani, I apologize in pronouncing 
your last name. These provisions that Senator Blumenthal and I 
have introduced, essentially what they flow from is that 
understanding that money, taxpayer dollars are flowing to 
insurgents and our enemies and that the traditional contracting 
rules that may work well in Washington, that you need greater 
authorities to cutoff these funds sooner particularly in areas 
where there are obviously wartime situations but also other 
contingency situations around the world.
    So, Mr. Kennedy, have you, I would like to ask you what 
your position would be on extending these authorities to the 
State Department because it seems to me when I look at what the 
SIGAR has said, they have said it is important as well as the 
Commission on Wartime Contracting has identified this as an 
area where you also should have this authority to cutoff funds 
sooner.
    So, what is the State Department's position on this?
    Mr. Kennedy. I have not seen the exact nature of the 
legislation. I know my colleagues are meeting with your staff, 
Senator. But, I do not want one penny of U.S. Government money 
to go to any terrorist; and therefore, an independent grant of 
authority to the Secretary of State to be able to cutoff a 
contract of ours where it is determined that money is going to 
terrorists, I totally and completely support that.
    I cannot add, since a year ago because of parallel 
legislation coming, that came in one of our appropriations 
bills and in one of the titles on that, we have been running 
pilot vetting programs of this nature both in five countries 
and a separate program in Afghanistan.
    So, we are on this, but as you say, the ability to cutoff a 
contract immediately, if you gave me that authority I would 
gladly take it.
    Senator Ayotte. And, would you also like to comment with 
regard to USAID what their position is? I do not remember the 
individual I met with but when I met with Major General Longo 
in Afghanistan in January there was also a representative of 
USAID there, and I apologize for not having his name right now 
but he said to me that this was just as much an issue for 
USAID, particularly of making sure that taxpayer dollars did 
not get in the wrong hands.
    Mr. Djahanbani. Thank you, Senator. USAID agrees that 
preventing funds from going to terrorists is, of course, the 
highest priority for us, and that is the reason we have such a 
robust vetting system in Afghanistan.
    The Administration is still reviewing your legislation and 
does not have a formal position on it yet.
    We believe that we do have strong authorities in place 
currently and we would like to examine that legislation more to 
be able to understand the differences between the authorities 
that we currently have. However, we are looking forward to 
working with your staff on the legislation, Senator Ayotte.
    Senator Ayotte. Well, do you vet existing contractors and 
existing subcontractors, USAID?
    Mr. Djahanbani. We do in Afghanistan.
    Senator Ayotte. And do you compare it to known intelligence 
with insurgents?
    Mr. Djahanbani. There is a very rigorous process, Senator, 
that we go through.
    Senator Ayotte. Well, if it is so rigorous and you think 
you have the authorities you have now, then why did the 
Commission on Wartime Contracting find that Afghan 
subcontractors on a USAID community development program in 
Kunar province were paying up to 20 percent of the total 
subcontract value to the insurgents for, quote, protection and 
that USAID Inspector General estimated that over $5 million of 
program funding was at risk for falling into the insurgents 
hands.
    In fact, one of the recommendations that comes from the 
Wartime Commission on Contracting is that there be greater 
authorities given not only that DOD has requested but this also 
apply across the State Department and USAID.
    So, I find it hard to believe that you have the authorities 
you need right now to address this problem.
    Mr. Djahanbani. Senator, we would like to know particularly 
what kind of impact this will have on what we are currently 
doing; and if it is and additional tools that we will be able 
to use and we do not have those authorities, we would gladly go 
along with it. But we would like to look at the differences 
between the authorities right now.
    Senator Ayotte. I just want to correct. It was the SIGAR 
who said that not the Commission on Wartime Contracting but the 
principle is the same.
    Mr. Djahanbani. Yes.
    Senator Ayotte. There seems to be a real urgency. I know my 
time is up but the fact that you come to this hearing and not 
be able to have reviewed this legislation which has already 
been incorporated and defense authorization has been pending 
for a while, we have been communicating with your staff about, 
this very much concerns me that you would not want the 
authority to cutoff funds to our enemies.
    So, I just feel like to not come to this hearing and have 
an answer for me that you have a viewpoint on this it really 
bothers me. So, I will be following up on this and I expect an 
answer. I will be submitting a question for the record and I 
would be shocked if you did not want this authority.
    Mr. Djahanbani. Senator, I would like to say again that we 
do have a wide variety of authorities at our disposal right 
now. We have been using them quite considerably for many years 
and we may want this in our toolbox. It is just that we are 
looking at it and we will work with your staff.
    Thank you very much.
    Senator McCaskill. Senator Coburn.
    Senator Coburn. Thank you for having this hearing.
    Mr. Ginman, explain to me how we got in the problems with 
Camp Leatherneck. Would you kind of walk me through how we 
built a base that the Marines did not want; and they, 3 years 
prior to its completion, had communicated that and yet we 
continue to do it. I want to be taught please so I can 
understand what happened.
    Mr. Ginman. So, Senator, as I said before, I do not know 
all of the details. I do know that an investigation has started 
at least as the SIGAR letter to the Defense Department reads.
    Certainly in 2010, a Marine general said I do not need this 
building. As Senator McCaskill said in her opening remarks, 
construction started in 2011. I believe it was completed in 
2012.
    At least on the face of it, I have no ability to sit here 
and give you an answer on how that occurred or why it occurred. 
I do know that I need to let the investigation run its course 
and understand all of the details so that we can determine, as 
Senator Johnson said, who, in fact, made the decision and why 
did it occur. At least from my perspective at the moment, it 
defies logic.
    Senator Coburn. OK. One of my observations, having done 
this for a number of years now, is we get hung up on process 
which is important but we do not look at outcomes.
    Do people in the Pentagon or at USAID or at the State 
Department, is there someone in any of those three 
organizations when something is obviously going in the wrong 
direction that has the authority to say stop? Maybe not a 
permanent stop but stop. Let us stop. Where is that in the 
Pentagon? Where is that in the Department of State and where is 
that at USAID?
    Mr. Ginman. I will at least take a shot from a DOD 
prospective.
    Senator Coburn. Thank you.
    Mr. Ginman. I would like to think that from the chain of 
command that anybody who is in that particular chain of command 
and any decisions made if they think it is wrong has the 
ability to say stop, do not do that.
    I can tell you at least from a contracting perspective in 
the areas for which I am expressly responsible or the person 
who held my job before Mr. Assad and who is now the director of 
defense pricing, when we find it contracts that clearly are 
inappropriate, we do say stop.
    I believe Mr. Kendall in his role as Acquisition, 
Technology, and Logistics (AT&L), the Under Secretary of 
Defense for AT&L has said stop on a variety of occasions.
    Again, it is a leadership issue. Do we make mistakes, oh, 
certainly.
    Senator Coburn. I am not critical of mistakes being made. 
Everybody does that.
    Mr. Ginman. Well, some of them you have to wonder.
    It is much like fraud. We have the recent newspaper 
articles where we just sentenced the individual to 20 years. At 
the end of the day, we attempt to have separation of powers so 
the person who has the requirement, the person who places the 
contract, the person who oversees the contract, and the person 
who pays it are, in fact, separate.
    From time to time in any number of areas that we wind up 
collapsing those and it increases the risk when we do so. When 
people do not follow an ethical compass, bad things are going 
to happen, and hopefully we catch it.
    I think the IG, the SIGAR, the DOD IG certainly have helped 
us find those; and when they do, I do think we take action. 
But, from my standpoint, sir, it is a question of leadership 
and the people that are in those positions when they find the 
things, if they had the power to say stop or at least take a 
pause and say that I believe that we, in fact, do that.
    Senator Coburn. Any comments from you?
    Mr. Kennedy. If I could, Senator, we also have multiple 
points in the State Department. If you look at our command 
structure overseas, an ambassador, a deputy chief of mission, 
the management officer which is the senior operating officer, 
if any of them see something that is going wrong, they 
certainly have the authority to pause the situation and then 
refer it and refer it to Washington and in Washington there is 
the executive director, the Chief Administrative Officer, the 
Bureau Deputy Assistant and Assistant Secretary and me.
    We get all the time material that comes in from an 
ambassador saying we were going on a direction, the situation 
has changed politically, economically, structurally, we need to 
not do something that is proposed. And, they send in a 
justification and unless there is some overarching argument 
that they are not aware of, we stop them. We make changes in 
our program plans all the time when the circumstances that 
hopefully said that this is the right decision in the first 
place then we make changes, sir.
    Mr. Djahanbani. Sir, I am very passionate about this. When 
I was in Pakistan the 2-years that I was posted there, the 
Inspector General came to me and they mentioned they had a 
situation. All I did was I looked at the information and there 
was no doubt in my mind that the project had to be ended and I 
ended it right there. I went to the mission director. I told 
him the reasoning behind it and it was terminated.
    That is how serious we take this situation, sir.
    Senator Coburn. Let me followup. We have built a couple 
hospitals in Afghanistan through USAID and the whole goal is so 
that they will be able to sustain them. But, the cost to run 
these hospitals is about four or five times what the cost is to 
run what they are replacing.
    How does that fit with the model of sustainment when they 
are not going to have the funds to continue to run those 
hospitals?
    Mr. Djahanbani. Dr. Coburn, regarding these two hospitals, 
I have been briefed on them and my understanding is that the 
Ministry of Health has, in writing, have told us that they are 
going to fund these two hospitals for them to be sustainable. 
That is the information that we have.
    Senator Coburn. All right. So, let us assume that is right. 
The question I would have in terms of health care for Afghans 
is, not making the same mistakes we make in our country. And 
so, if we add sophistication, one of the things that Dr. Shah 
has been so great at is downgrading requirements so that we 
meet needs but we do not necessarily meet them the same way we 
meet them here, whether it is resuscitating babies or whatever 
it is.
    So, we have designed infrastructure for the Afghans at a 
level that kind of goes against what he talked about in terms 
of philosophy there. So, we are building two new institutions 
there that from somewhere in the Afghan government they are 
going to be stealing the money from somewhere else to maintain 
a hospital at our level of expertise rather than at the level 
of expertise that they need.
    How did we get so crosswise with what Dr. Shah wants to do 
in terms of meeting needs but not doing it under the level of 
sophistication that we do?
    [Pause.]
    Mr. Djahanbani. Dr. Coburn----
    Senator Coburn. I mean, that is the reason why these are 
going to cost that much.
    Mr. Djahanbani. Sure. Again, our project design process 
that we go through is rigorous and we make sure that all of the 
criterias necessary in the project designs are incorporated 
from sustainability to cost effectiveness, and all of our 
projects go through that process.
    So, I will be glad to look into this matter and get you 
more information for the record. But, I would stand by the 
project design process we go through which is very robust and 
incorporates all the necessaries like sustainability and risk 
assessments and all that is being done throughout that process.
    Senator Coburn. I know I am over time and I apologize, but 
there is a problem in terms of sustaining these two hospitals, 
is there not? There is going to be a problem. Even though they 
may have committed to pay for it for the first year or two, the 
fact is there is going to be a problem.
    So, if we have a rigorous standard in terms of 
sustainability and yet there is a problem with sustainability, 
either there is not a problem with sustainability or there is 
not a rigorous standard, and that is my point because I think 
one of the great things Dr. Shah brings to the USAID is 
practical common sense on trying to accomplish outcomes rather 
than get tied up in the mess of requirements, let us treat 
people's illness and prevent disease rather than transfer our 
cost structure to them.
    So, I yield back.
    Mr. Djahanbani. Dr. Coburn, in fact, just to followup on 
what you mention about Dr. Shah, what we implemented just last 
week is an accountability policy whereby all assistant 
administrators have to review all requirements that go above 
$25 million to make sure that the seven qualifying factors 
which sustainability is one major part of it is included in 
those requirements.
    And, Dr. Shah himself will be reviewing anything above the 
$75 million. As you said, this is very important to us.
    Thank you, sir.
    Senator McCaskill. I am going to try to go through 
hopefully in a fairly quick fashion, and I will take another 
round if I need to on various sections of the war contracting 
reforms that have enacted into law and asked some questions 
about them.
    I will start with Section 844. All of you are using the 
SPOT database, and I try to always not speak in acronyms but 
bear with me when I talk about that acronym. We have done 
hearings on SPOT and the other, I forget the acronym, it is 
five letters and ends with next-generation. What is it?
    Mr. Ginman. Federal Procurement Data System Next Generation 
(FPDSN).
    Senator McCaskill. There you go. I knew you could speak the 
language. It is required of you at the Pentagon.
    When we have looked at this, the SPOT has really been 
underutilized and very inaccurate. So, let me ask all of you 
some very quick questions.
    Do you believe you have the capability now to collect and 
report on personnel and contracts on any given date? Mr. 
Ginman.
    Mr. Ginman. Yes.
    Senator McCaskill. Mr. Kennedy.
    Mr. Kennedy. Yes.
    Mr. Djahanbani. Yes.
    Senator McCaskill. What is the total number of contracts 
you have entered into. Mr. Ginman.
    Mr. Ginman. So, from October 12 through May 13, we have 
done 207.1 thousand actions in Afghanistan and Iraq to a total 
of $7 billion. It was 1,000,293 transactions in fiscal year 
2012 to a total of 18.2 billion.
    Senator McCaskill. I would like to have that document. It 
looks like you got it laminated for me. Thank you.
    Mr. Ginman. I am happy to share it with you.
    Senator McCaskill. So, you can also give me the value of 
those contracts. Can you give me the total number of contractor 
personnel you have right now?
    Mr. Ginman. I think the actual personnel I have was through 
April.
    Senator McCaskill. What is that number right now?
    Mr. Ginman. Today in Afghanistan, this is through April, 
107,796.
    Senator McCaskill. Do you have total number of security 
personnel?
    Mr. Ginman. 17,993.
    Senator McCaskill. How about contractor casualties?
    Mr. Ginman. I do not have that on this list. We have, in 
fact, modified spots so that it can count for casualties, both 
wounded and killed. That particular part of the database is 
probably the area that we still need the most, the most work to 
get its quality and its state of capability up.
    Senator McCaskill. I do not think anybody realizes that 
your testimony just now in my world, balloons should have 
dropped from the ceiling, because when I started in this, no 
one knew any of that. So, that is a really good sign.
    Now, what we do with that becomes even more important. Once 
we get reliable data, then all the excuses about failure to 
oversee kind of become even more lame.
    Secretary Kennedy, do you have the same kind of data 
available to you?
    Mr. Kennedy. I brought our fiscal year 2011 and fiscal year 
2012 totals with me, Senator.
    Senator McCaskill. OK.
    Mr. Kennedy. I can easily gin up an fiscal year 2013 to 
date and send you but I did not bring a snapshot today. We can 
hit the machine and make it talk to us but I can give you 
fiscal year 2011 and fiscal year 2012----
    Senator McCaskill. Broken out by security personnel versus 
contractors?
    Mr. Kennedy. For example, in fiscal year 2012, the total 
number of contractor personnel for the Department of State in 
Afghanistan was 1,878, and 809 were performing security 
functions. I also have those for Iraq.\1\
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    \1\ Information from Mr. Kennedy appears in the Appendix on page 
73.
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    Senator McCaskill. And AID?
    Mr. Djahanbani. Madam Chairman, the Global Acquisition 
Assistance System, this is how we award all of our requirements 
in the agency. Eighty percent of all the funding goes through 
this mechanism and it has direct interface with FPDSNG and the 
Federal Aid Data System (FADS). The FADS collect all the 
assistance data.
    Madam Chairman, we will be glad to provide you all those 
numbers including the number of personnel, for the record.
    Senator McCaskill. Section 846. This is the requirement you 
do risk assessments and risk mitigation for contractor support 
including those functions closely associated with inherently 
governmental functions.
    Even though it is not required at this time, have you 
perform risk assessments for Afghanistan? Mr. Ginman.
    Mr. Ginman. So, at least as you asked that question, I do 
not think we can tell you we have done a risk assessment. We do 
routine risk assessments with the plans on going forward when 
people are looking at do I do this through contract, do I do it 
with civil servants, or do I with military. As those plans are 
being put together in theater, yes, they review for risk.
    Senator McCaskill. And, are you all in the process of 
preparing for Section 846 where you will have that risk 
assessment?
    Mr. Ginman. The two sections of 846, at least as I 
understand them, the first piece is as we are doing planning to 
consider risk and we do that today--I cannot do this off the 
top of my head.
    It is covered in, the Chairman of the Joint Chiefs of Staff 
Manual (CJCSM) 4301 is an instruction that talks to how we do 
planning and put in those plans. In it, risk assessment is 
covered.
    The second half is when we go in--so, that is one just in 
the plan. The other is when we go into a agency operation 
within the 60 days to have done a risk assessment, and we will 
do that as well.
    Senator McCaskill. And this is really a kissing cousin to 
Senator Ayotte's legislation and language that we have tried to 
adopt in the NDAA this year moving forward based off your 
legislation because if you do the right risk assessment, you do 
not end up having to pay off the bad guys because you make a 
determination that we are going to be, in fact, enhancing our 
enemy if we tried to do this particular project in this 
security environment.
    I mean time after time if you look at the failures, it has 
been because they have, and by the way the can-do attitude of 
the military and AID and the State Department is something that 
we are all proud of as Americans. There is nothing that we, 
cannot do.
    On the other hand if we think we can build a highway 
through the middle of the territory where everything is 
controlled by the bad guys and we think we are going to do that 
without getting contractors shot, without paying off the 
Taliban, that is a dumb mistake, and we have done that with a 
highway in Afghanistan.
    So let me ask you, Secretary Kennedy. What about the risk 
assessment from your perspective? I think that highway, I 
cannot remember if that is Defense or State. Which one is it? 
It is State.
    Mr. Kennedy. I will have to go back and check.
    Senator McCaskill. AID. Not you; it is him. [Laughter.]
    Mr. Kennedy. All right. I miss a lot of things. I have not 
missed a highway recently.
    Senator McCaskill. Neither has anyone else by the way.
    Mr. Kennedy. Three points, ma'am. Vetting. We have been 
engaged in a pilot program both in Afghanistan and in five 
other countries in an extensive vetting operation so we are 
piloting that right now. It has been in place about a year now. 
We have an office that does vetting in six countries including 
Afghanistan.
    We have put into place a programmatic request for 
contracting services, a template that people must do which I 
think goes to your point, coupled with when the NDAA passed, 
one of the working groups we did is set up a contracting risk 
assessment organizational briefing structure, and we are 
working through that right now.
    So that should we be faced with the State Department having 
to go into a contingency operation in Xanadu or Shangri-La, we 
would use a structure like this. My plan is to set up a small 
unit responsible for this.
    Senator McCaskill. Mr. Djahanbani.
    Mr. Djahanbani. In 2010, we basically had the A-3 
initiative which was implemented in Afghanistan. It is broken 
down into three different areas.
    In terms of award mechanisms, we are utilizing awards that 
provided the most visibility on project costs. For example, 
cost reimbursable contracts and we are limiting the 
subcontracting to two levels only.
    We are conducting the partner vetting. We have a very 
robust partner vetting system in Afghanistan. In addition to 
that, regarding the financial controls which are very 
important, we aim to audit 100 percent of all locally incurred 
costs as extra measures to identify fraud, waste, and abuse.
    Senator McCaskill. I do not mean to cut you off because I 
have gone over my time and I want to give my colleagues a 
second round and we are going to have to start votes here in 20 
or 25 minutes. Here is what I would like for all of you.
    I do not quarrel that you all are beginning to put into 
place the systems that would try to embrace what we are trying 
to get at in the war contracting reforms. I get it that we are 
doing councils and we are doing working groups and we are doing 
regs and we are doing, all of that and, I know it is important 
but sometimes it feels blah blah blah blah blah.
    And so, what I would like to hear from all of you is I need 
you to try to find a project you have stopped because of risk 
assessment. I need you to bring to me someplace where somebody 
was going to build something or do something, not because of 
sequestration, not because we cut your money, but because based 
on a risk assessment you decide, we are going to have to pay 
off the bad guys to do this or there is no way they can sustain 
this or this is a bad idea because, a water park in Iraq, which 
is now crumbling or the power grid in an area that is going to 
get blown up, I need some success stories here.
    I need you to tell me some places you have done that, and I 
will promise you this. If you can bring me some success stories 
where you have cutoff projects because you appropriately 
evaluated both risk and sustainability, I will make you the 
stars of my website for as long as you want to be up there. I 
will herald you. I will actually send balloon bouquets. They 
will not drop from the ceiling but that is what we are looking 
for here.
    We are looking for a sense that all of this work is 
resulting in a change of culture; and if we do not get that 
change of culture, I mean, I have to tell you guys you are 
going to be here every 6 months until Missourians kick me out 
of this place or I decide I have had enough, and at this point 
I am not sure which is going to come first.
    So, I will now turn it over to Senator Johnson.
    Senator Johnson. Thank you, Madam Chairman. I would like to 
go back to security contracting because I have to admit 
particularly in war zones it has always really puzzled me why 
we would not use the finest military force in the world in 
those individuals.
    So, both for Mr. Djahanbani and Secretary Kennedy, do you 
have a metric in terms of what the cost is for using U.S. 
military personnel versus contracting those security forces. I 
mean cost per person, is there some metric?
    Mr. Ginman. I do not have that off the top of my head to be 
able to say a cost per metric. The combatant commander makes 
his decisions on when do I want, do I want somebody, do I want 
to use a soldier, sailor, airman, or marine standing in a post 
at gate that is interior or do I want to do that with a 
contractor. But the actual number is associated with that I do 
not know.
    Senator Johnson. But would we not really take a look at the 
cost of that though? I mean, from the Defense Department 
standpoint in terms of us having to deal with all these 
deficits and the cost of these things, would we not make the 
decision based on, this is costing us two or three times to 
contract that service versus using the finest among us, the 
U.S. military personnel? We do not even look at that?
    Mr. Ginman. Sir, I guess I do not honestly know the answer 
to the question. I will have to get it for the record.\1\
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    \1\ Information from Mr. Ginman appears in the Appendix on page 74.
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    Senator Johnson. Secretary Kennedy, how does the State 
Department evaluate that?
    Mr. Kennedy. Well, first of all, Senator, I did run some 
numbers. These are, I will admit I am not going----
    Senator Johnson. That is fine. I like ballparks.
    Mr. Kennedy. They are ballparks. We are currently at a 
number of the high threat posts that the State Department has 
designated a principal concern, we are spending about $87 
million on contracted security, and that includes American and 
local staff.
    If we replaced that $87 million entirely with contractors, 
it would be $4.8 billion, if we went from a mix of Americans 
and contractors, 4.8 billion.
    If we used the military--and I have not had a chance, this 
is data that is publicly available--the cost is either $3 
billion or $9 billion; and the distinction is the military has 
a planning structure, and I defer to my colleagues, that for 
every soldier who is engaged there is also two other soldiers 
who are coming off of mission and going into retraining or in 
prep to take the mission. So that in effect you have three 
divisions, one just come out of Iraq, one in Iraq, and one 
getting ready.
    So, you can see the difference between $86 million and $3 
billion for the military is a serious fiscal consideration.
    Senator Johnson. I have to admit this does not make much 
sense to me, and then both Dr. Coburn and I have an accounting 
background. So we really, I would suggest we really need a 
pretty detailed evaluation studying in terms of the cost of 
contracting versus using military personnel.
    Mr. Kennedy. Senator, could I add just one thing? There is 
a General Accountability report on this matter which I did not 
bring with me.
    Senator Johnson. OK.
    Mr. Kennedy. But I will be glad to get to you----
    Senator Johnson. I would appreciate that.
    Mr. Kennedy [continuing]. And the committee staff the 
citation for the General Accountability report.
    Senator Johnson. Secretary Kennedy, have you seen this 
January 2013 report from the Project on Government Oversight on 
Kabul embassy security?
    Mr. Kennedy. Sir, I have.
    Senator Johnson. Were you disturbed by the report, as 
disturbed as I was?
    Mr. Kennedy. I am disturbed by anything that I read and 
then I go and check the facts, and I am much less disturbed 
than I was because the material that they reported I find to be 
sensationalized, if I might use that word, and I would be glad 
now or at your convenience or with your staff to go through, in 
effect paragraph by paragraph----
    Senator Johnson. Well, we do not have time here. I would 
appreciate your coming on over to my office and I would like to 
walk through because I ran operations continuing shift and I am 
very sensitive to how you can work individuals so they are 
effective.
    And, in this report they are talking about the contractor, 
their guards working 72 hours per week when the State 
Department guidelines would be 36 to 42 hours per week. Right 
there that concerns me if that is true. Would you dispute that?
    Mr. Kennedy. I absolutely dispute that.
    Senator Johnson. OK.
    Mr. Kennedy. And if I could add one just contextual matter 
with your permission, Senator.
    Senator Johnson. Sure.
    Mr. Kennedy. Our embassy in Kabul, as you correctly state, 
is under very high threat. There have been to direct attacks on 
our embassy compound in Kabul during the tenure of this current 
contractor. Both of those attacks were rebuffed and the 
contractor, along with the diplomatic security colleagues there 
performed superbly.
    Senator Johnson. OK.
    Mr. Kennedy. And so part of it is the proof is in the 
pudding. We were attacked and rewarded off those attacked with 
no injuries to U.S. Government personnel on our compound.
    Senator Johnson. OK. Well, again I would appreciate sitting 
down talking with you because this is very disturbing, 
particularly in light of Benghazi.
    By the way, I recognize you were not ready to talk about 
those cables but just to correct the record all three of those 
cables do mention specifically Benghazi. They are not just 
about Tripoli. It is about the temporary duty diplomatic 
security corps.
    Mr. Kennedy. I will be glad to come up and again, Senator, 
go over those with you or your staff because the cables have 
both Tripoli and Benghazi in them. Tripoli asked for certain 
things. Benghazi asked for certain things, and we met those 
requirements.
    Senator Johnson. Who did make the decision to ramp down 
security in Benghazi, though? Where was that decision made?
    Mr. Kennedy. There was no decision, Senator, to ramp down 
security in Benghazi.
    Senator Johnson. Certainly not to keep the security support 
team (SST) that was withdrawn.
    Mr. Kennedy. That was a Tripoli-based outfit that was never 
assigned to Benghazi. Nor was it ever proposed to the State 
Department or any one else that that unit be shifted from 
Tripoli to Benghazi.
    Senator Johnson. Who made the decision never to fully ramp 
up the five requested temporary duty diplomatic security 
personnel?
    Mr. Kennedy. There was a request for five in Benghazi. The 
request from the Department was give us your needs assessment. 
What would those five individuals do?
    The needs assessment came back. We would like three 
diplomatic security special agents. We want one driver, and we 
want one which is we called Cryptoguard. We sent, for the 
Cryptoguard we sent out an information technology (IT) 
professional and we got drivers.
    So, what they wanted was three security officers plus two 
others, and we had three security officers there to meet their 
request, Senator.
    Senator Johnson. Just one final question because I have 
heard this rumored. Is it true that Secretary Clintons 
certainly had a goal of setting up a permanent presence in 
Benghazi, and that was one of the things she talked to 
Ambassador Stevens about before giving him the job? Did you 
ever talk to her about that?
    Mr. Kennedy. I had one or more conversations with the 
secretary and there was no decision, no decision had been made. 
I saw that same report that you did, Senator.
    Senator Johnson. Maybe not a decision but was there a 
desire to do so?
    Mr. Kennedy. No decision had been made but the point is 
when Chris Stephens was there, the fiscal year was ending in 19 
days. There is no way in the bureaucracy both of the State 
Department and our requirements for Congressional notification 
when you establish a permanent post or reprogram money, there 
was no way that was going to be done in 19 days.
    Senator Johnson. But again, no decision was made but did 
you ever talk to Secretary Clinton about setting up a permanent 
presence in Benghazi?
    Mr. Kennedy. That was obviously an option but no decision 
had been made.
    Senator Johnson. OK. But you did discuss that with 
Secretary Clinton?
    Mr. Kennedy. I had one discussion about this is whether to 
continue the temporary operation there and we continued the 
temporary operation. That was the decision made at that time.
    Senator Johnson. OK. Thank you, Mr. Secretary.
    Mr. Kennedy. Certainly.
    Senator McCaskill. Senator Ayotte.
    Senator Ayotte. Thank you, Madam Chairman. I really 
appreciate your passion for these issues of contracting in 
Afghanistan and elsewhere, and I would be happy to post things 
on my website as well praising them for stopping projects.
    I wanted to followup, first of all, particularly with 
Secretary Kennedy and Mr. Djahanbani. Can you pronounce it for 
me? I apologize. I want to make sure I get it right.
    Mr. Djahanbani. Mr. Djahanbani. Silent in ``D''.
    Senator Ayotte. Thank you, Mr. Djahanbani.
    General Dunford when he testified before the Senate Armed 
Services Committee in April has said that he believes it is 
critical that the State Department and USAID have the same 
authorities to cancel contracts as the Department of Defense, 
and he also said that expanding that authority to include non-
DOD organizations makes a lot of sense.
    So, word from the ground and I am hoping that you will look 
at that very carefully. Also, I know Mr. Ginman has a lot of 
opinions and experience with this issue. So, I hope that we can 
have this consistency across agencies when we are all working 
together, and it is obviously the three agencies are working 
together on some of these projects in Afghanistan that you have 
already been questioned about.
    Mr. Kennedy. Senator, as I said, I like the Secretary of 
State to have all the same authorities as the Secretary of 
Defense.
    Senator Ayotte. Great. Thank you very much; and by the way, 
as Mr. Ginman talked about, this authority in its initial 
inception as allowed the Department to stop contracting with 
certain contractors and subcontractors.
    So, while I think we can do a lot more, the initial run of 
it has been effective and certainly there is more we can do if 
we give you greater authority.
    I wanted to followup, Secretary Kennedy, on some of Senator 
Johnson's questions. Here is what is bothering me about the 
attack on our consulate and the prior cable.
    So, I also serve on the Senate Armed Services Committee; 
and in February of this past year, General Dempsey as well as 
Secretary Panetta testified about the attack on the consulate 
in Benghazi before that committee; and both of them testified 
that they were aware of the prior cables, particularly the 
cable of August 16 coming from Ambassador Stevens which 
described the concerns about the adequacy of the security at 
the consulate in Benghazi. I believe you have testified that 
you were familiar with that cable, is that right?
    Mr. Kennedy. That is correct.
    Senator Ayotte. They say they receive that information from 
a report from General Ham that went up to the Chairman of the 
Joint Chiefs of Staff (CJCS) and then also went to the 
Secretary of Defense as well; and as a result of that, in fact, 
General Ham approached, according to the testimony before the 
Armed Services Committee, actually approached the State 
Department asking whether the site security team from Tripoli 
should be extended in Benghazi; and according to the testimony 
before the Armed Services Committee of General Dempsey, he was 
told no.
    Are you familiar with that testimony?
    Mr. Kennedy. My recollection was, and I just read it I 
believe, I thought it was that General Ham approached 
Ambassador Stevens about whether the SST should be extended in 
Tripoli. That is my recollection but I would need to refresh 
myself by looking at the papers before----
    Senator Ayotte. They had called the embassy. It is not 
clear who they spoke to according to the testimony, and they 
were told no. I guess the question according to the testimony 
before the Armed Services Committee, it is not clear who said 
no for the extension of the site security team. Do you know 
that?
    Mr. Kennedy. What I am aware of, Senator, is that there 
were 16 people on SST. Eight security people, two medical, two 
communications, two helicopter landing zone people, two EOD, 
that is eight; and then eight security.
    That latter eight had worked themselves out of a job 
because the State Department had replaced them. The eight who 
were security had been replaced by a combination of State 
Department personnel and, if I may make clear, six of those 
eight stayed on in Tripoli which is not report----
    Senator Ayotte. Right. But my question just so I am clear, 
I just want to understand.
    Mr. Kennedy. Yes.
    Senator Ayotte. General Ham knew about this. Reported it up 
his chain of command.
    Mr. Kennedy. Right.
    Senator Ayotte. Do you know, he said that according to 
Dempsey, Ham called the embassy and said, because of obviously 
the cable receipt, and said do you want to expand the site 
security team, were you aware of that and who made the decision 
there?
    Mr. Kennedy. No, I was not aware the General Ham had 
contacted the embassy. I do not know who----
    Senator Ayotte. Well, I will give you a copy of that 
testimony because I will have a followup question, and here is 
my question to you.
    What troubled me was that if General Ham, the commander of 
AFRICOM reported up his chain of command a cable from the State 
Department about security, involving security and other issues 
in Benghazi, and that went to the Chairman of the Joint Chiefs 
of Staff, went to the Secretary of Defense, how is it that you, 
with your responsibilities, given that this was a State 
Department, obviously our Ambassador and the personnel that 
were State Department personnel here would not have reported 
that up your chain of command?
    Mr. Kennedy. Because we had replaced those individuals with 
State Department personnel. Six of them had remained.
    Senator Ayotte. It was important enough for the AFRICOM 
general on the ground who it was not his area of 
responsibility, it was not a DOD facility, that they thought a 
Secretary of State, a State cable should be reported up to the 
Chairman of the Joint Chiefs of Staff, reported up to the 
Secretary of Defense, and even though State Department 
personnel were involved, you did not report it to the Secretary 
of State?
    Mr. Kennedy. Because we had replaced those individuals 
with----
    Senator Ayotte. But that cable said that security was not 
adequate there from your Ambassador. You did not think that was 
important enough to report to the Secretary of State?
    Mr. Kennedy. Because we were repairing or fixing the 
shortfalls that were outlined. I----
    Senator Ayotte. I just am shocked that the general----
    Mr. Kennedy. Let me give you----
    Senator Ayotte [continuing]. In AFRICOM thought it was 
important enough to report it up his chain of command even 
though it did not involve his personnel directly and you did 
not.
    Mr. Kennedy. But again, Senator, two things. One, we are 
talking about Tripoli, not Benghazi. The tragedy took place in 
Benghazi. The SST was a Tripoli-based unit. So, they are two 
separate things.
    Senator Ayotte. OK. My time is up, but the August cable 
clearly involved in Benghazi not Tripoli.
    Mr. Kennedy. No question. But there was no offer, there was 
no offer or request from the post to keep the SST and shift 
them to Benghazi.
    Senator Ayotte. But we are talking about reporting up on a 
cable on the security of State Department personnel so that is 
my issue with it, but my time is up and I appreciate your being 
here.
    Senator McCaskill. I am going to try to get back to 
contracting.
    Let us go to Section 853, past performance. I know that the 
Office of Management and Budget (OMB) has set a 100 percent 
reporting all for 2015. As you all know, this is a section that 
requires the FAR Council, chaired by the Administrator of 
Federal Procurements Policy, to have a strategy on past 
performance indicators which has really been a problem in this 
area.
    What is the current level of past performance reporting for 
each of you? Let us start with AID. What is your current level 
of past performing, at what percentage do you that you are 
reaching right now and what is your goal for this year and next 
year?
    Mr. Djahanbani. Madam Chairman, this is a No. 1 priority 
for myself. Back in 2010, the percentage was 7 percent. Since 
2011, we put a very aggressive strategy in place which has 
doubled the number to close to 30 percent. We are about 27 
percent right now. As the end of the fiscal year comes to a 
close, a lot of those reports will be coming in.
    So, that percentage will go up and we do have, we have set 
aside November for the past performance month and we will have 
another standdown day to make sure we achieve the 65 percent 
well on our way to the 100 percent in calendar year 2015.
    Senator McCaskill. I appreciate the effort you are making 
with your standdown days and it is going to take some of that.
    Mr. Ginman and Mr. Kennedy, are either one of you 
scheduling the same kind of standdown days or using any other 
techniques to get us up to snuff on past performance reporting?
    Mr. Kennedy. We are not using standdown days. We are using 
directed orders to the people to get this in. We have also 
started out, and I will fully admit from a pathetic base, we 
have doubled that.
    The last snapshot we took just is about 17 percent; but 
just as my colleague from AID said, the data flows it at the 
end of the fiscal year as you are closing out contracts.
    We believe that we will be 45 or 50 percent at the end of 
this fiscal year.
    Senator McCaskill. Well, I hope that all of you can get to 
50 percent and you guys have better news, right? Mr. Ginman.
    Mr. Ginman. We are closer to 80 percent.
    Senator McCaskill. I know. You are doing really well.
    Mr. Ginman. Well, to get 100, that is still a challenge.
    Senator McCaskill. It is a challenge.
    Mr. Ginman. I issue a quarterly letter to all of the 
services and agencies that reported. We discussed it. Mr. 
Kendall hosts about a once a month business SIG and we report 
progress there as well.
    Each of the Service Acquisition Executives, Mr. Stackley, 
now Mr. LaPlante, and Ms. Shyu, all understand where they are 
at and to push it. I am embarrassed to say that I discovered 
yesterday my own office is delinquent on four Contractor 
Performance Assessment Reporting System (CPARS).
    Senator McCaskill. That is embarrassing.
    Mr. Ginman. Well----
    Senator McCaskill. Good for you for admitting it. Points 
for that.
    Let us go to noncompliance, Section 862. Mr. Ginman, have 
you completed your report under 862 on implementing uniform 
contract writing systems which was due earlier this month.
    Mr. Ginman. The report is written. I believe it was 
released out of the building. I am just not certain.
    Senator McCaskill. OK. I want to make sure we get that for 
the record for this hearing.
    Let me ask about 802, pass-through contracts. This is 
obviously a big problem. We all know it is a big problem. And, 
what basically we are trying to do is we are trying to make 
sure that we do not have somebody who is passing through more 
than 70 percent of the work they have contracted to do. There 
is a pending FAR rule that the agency will put forth.
    Do any of you have anything you want to put in the record 
about the pending rule and whether or not there are problems 
with it and anything that you want to address on pass-through 
contracts today?
    Mr. Djahanbani. Madam Chairman, if I may, I would like to 
just mention that I have gone ahead and issued a new policy 
directive to all of our contracting officers implementing this 
right now. Once the rule is effective, we will rescind that 
and, of course, follow the FAR rule.
    Senator McCaskill. OK. What about Section 843. This 
requires the Secretary of the Navy (SECNAV) to establish a 
chain of authority for policy planning, execution of contract 
support. Part of this is that when I began realizing how bad 
this was, there was no way you could find somebody who was 
responsible, I mean, it was so disparate and there were so many 
tentacles of all of this based on, and I know we have CSTC-A 
now and other things.
    Do you feel like that you are getting at the operational 
contract support, do you think you are getting there?
    Mr. Ginman. Yes, ma'am. So, if I could just for your last 
question, I am told it is still in coordination. So, the report 
has not left the building.
    Senator McCaskill. OK. Well, we have 30 days so that means 
somebody needs to just hurry up and review it and get it done 
and get it out.
    Mr. Ginman. Yes.
    I refer to this, and I have heard you in earlier hearings, 
I refer to this as the who is in charge question.
    Senator McCaskill. Exactly.
    Mr. Ginman. I believe, one, DOD Directive 3020.49, this is 
a mouthful, entitled, ``Orchestrating, Synchronizing and 
Integrating Program Management of Contingency Acquisition 
Planning and Operational Execution'' lays out clearly who is in 
charge and what each of the individual roles are and what it is 
that they do.
    Senator McCaskill. Who is in charge at the top? Who is the 
person at the top?
    Mr. Ginman. So, at the end of the day within the 
Department, the one person is Secretary Hagel.
    Senator McCaskill. I know he is at the top.
    Mr. Ginman. I understand. But you have the Under Secretary 
of Personnel and Readiness who has very distinct 
responsibilities when it comes to managing the force of which 
contractors are a piece. The Under Secretary of Defense for 
Acquisition, Technology, and Logistics, very clear 
responsibilities.
    Senator McCaskill. Kendall.
    Mr. Ginman. Mr. Kendall.
    When it comes expressly to those issues associated with 
acquisition and contracting and the management of contractors 
on the battlefield, we have the Comptroller who has very clear 
responsibilities associated with the money and funding and what 
are we doing with it. The Under Secretary of Defense for Policy 
has very clear responsibilities, again, with how we do this.
    So, to the question with risk assessments analysis, we are 
all engaged in the that. The joint staff plays a significant 
role in how we do all of this.
    Senator McCaskill. Well, this investigation is going to be 
really interesting on this building in Leatherneck because what 
is going to do is maybe it is going to answer that question.
    Mr. Ginman. It may in fact.
    Senator McCaskill. Because it does not appear that, I mean, 
I get what you are saying. I know you cannot just say, OK, this 
is the contracting puba over here; and if anything goes wrong, 
it is his head, or her head.
    But what I do not want to get to is just a new bunch of 
jargon replacing the old jargon that was very not much not 
clear so----
    Mr. Ginman. So, if I could, I mentioned the action plans, 
the OCS Functional Capability Integration Board (FCIB) that was 
put together that is cochaired by Mr. Motsek, who is the Deputy 
Assistant Secretary of Defense Program Support, Office of the 
Assistant Secretary of Defense Logistics and Material Readiness 
(L&MR) and by Brigadier General Crenshaw, who is the Vice 
Deputy for Logistics Joint Staff, J-4.
    The 10 capability areas that are addressed, the first one 
and from my standpoint the most important one, is not the 
policy; it is the doctrine and getting it so that the people, 
everybody understands what it is. When you go back to the 
Gansler Commission in 2007, it is the professional training. It 
is in the execution. It is the exercises.
    Senator McCaskill. And I know you have a joint exercise 
scheduled for?
    Mr. Ginman. January.
    Senator McCaskill. January, and I know you have gone from 
48 people being trained for years ago to over 400 trained now. 
I mean, I am aware that we have really, and the corps now, I 
mean, when I started this, the low man on the totem pole was 
handed a clipboard and said it does not really matter, this is 
your job. I know we have done a lot of good work on this.
    Mr. Ginman. Yes. So, the magnitude and the size and the 
number of personnel, both civilian and military, from second 
lieutenants and first lieutenants to senior enlisted, all the 
way up through general officers, getting that inculcated in, I 
mean, we were encouraged when both General Petraesus and 
General Allen signed letters out that say contracting is the 
commander's business.
    I mean, for 100,000 people on the battlefield and who is 
managing them and overseeing where this goes, it is getting so 
that it is understood is by far and away the largest gap that 
we have.
    Senator McCaskill. Right.
    Mr. Ginman. It is one that we are actively working, but it 
is not one that we are going to solve today or tomorrow. I 
mean, I think, as you say, we have made significant strides. 
Ma'am, we have a long ways to go.
    Senator McCaskill. Yes, you do and I will be here making 
sure that we get it done and I am sure Senator Johnson joins me 
in that.
    I am way over time. I did not get a chance to get to, and 
we are going to have to go to a vote here, and certainly we can 
hold the panel for as long as you like it if you want to do 
more questions.
    I have some specific questions for you on your remote 
monitoring project. I mean, this is all kinds of bells and 
whistles going off. The notion that we are hiring contractors 
to oversee the contractors is just always a really dicey 
proposition, and I know it is a dangerous area.
    But, I have some specific questions about the fact that MSI 
Worldwide is hiring people on this when the request for 
proposal (RFP) has not even been completed. That seems weird to 
me, and I need to have some specific answers to that.
    So, if the RFP is not out and a contractor is already 
hiring people under it, that means something is rotten. Senator 
Johnson.
    Senator Johnson. I just have one quick question, maybe not 
quick but it is just one. We are looking at the Afghan special 
mission wing, some reports on that. My concern is this is going 
to be the aircraft version of the $34 million building.
    We already spent $122 million. I guess projected spending 
is about $772 million. It is looking like an aircraft that 
Afghans are not going to be able to operate effectively. 
Contracts being let out to a Russian contractor who has been 
actually barred from providing that but they were able to 
continue the contract because it was 2012 spending versus 2013.
    Mr. Ginman, can you please address the Afghan special 
mission wing?
    Mr. Ginman. Well, it is outside of my area, but I believe, 
that the Deputy Secretary sent over a letter that acknowledged 
the MI-17s were being bought with fiscal year 2012 funds but 
also went on to say if they would be bought with fiscal year 
2013 funds, Deputy Secretary Carter would have determined that 
a waiver of Section 1277 of the NDAA for fiscal year 2013 would 
be in the national security interest of the United States. I 
think that is what the Deputy Secretary said in his letter that 
came over identifying it.
    Senator Johnson. Is this being actively reviewed? Is this 
project being actively reviewed and is there any chance of 
stopping it? And who is actively reviewing it, under whose 
command is this?
    Mr. Ginman. Well, so the MI-17, the requirement for MI-17s 
comes through the Nato Training Mission Afghanistan/Combined 
Security Transition Command Afghanistan from the theater. It 
has been thoroughly reviewed inside the Department. The 
decision clearly was made and went up to the Deputy Secretary 
and I think his letter articulates this is exactly what I found 
and what I did. I mean, significant time and effort was put 
into the decision associated with MI-17s.
    Senator Johnson. So, has the decision already been made or 
does it continue to be reviewed?
    Mr. Ginman. Well, I mean, I think we----
    Senator Johnson. Are we going to spend $772 million?
    Mr. Ginman. So I mean they are continuing to review. The 
Department continues to spend significant time ensuring that we 
will have an adequate throughput of pilots to be able to fly 
the MI-17s, that we have the skill set. I mean, it gets 
reviewed regularly at the warfighter SIG, that is led by the 
Deputy Secretary.
    Senator Johnson. OK. Thank you. That is all I have, Madam 
Chairman.
    Senator McCaskill. I thank all of you for being here. I 
appreciate it very much. I know everyone is working hard on 
this and that there is a difference in attitude about it. I 
think everyone now recognizes that contracting has to be a core 
competency for all of you because of the reliance we have on 
them.
    We will look forward to some of the specific answers we 
have asked for. I will look forward to hearing those projects 
that have been stopped based on sustainability and risk, and 
congratulating you on my website once I get those great stories 
of success.
    Thank you, and this hearing is adjourned.

    [Whereupon, at 11:13 a.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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