Securing, Stabilizing, and Rebuilding Iraq: GAO Audit Approach	 
and Findings (18-JAN-07, GAO-07-385T).				 
                                                                 
GAO provided a strategic overview of GAO's work related to	 
securing, stabilizing, and rebuilding Iraq. In our statement	 
today, as requested, GAO highlighted (1) GAO's scope, authority, 
and coordination; (2) some of the insights stemming from our work
in Iraq; and (3) the rigorous quality assurance framework that	 
GAO uses to ensure relevant, reliable, and consistent results in 
all of our work. This testimony is based upon extensive work	 
spanning several years. Since 2003, we have issued 67		 
Iraq-related reports and testimonies. For example, GAO sent a	 
report to the Congress last week on a range of key issues for	 
congressional oversight of efforts to secure, stabilize, and	 
rebuild Iraq. Although many of our sources are classified, we	 
strive to report information to the Congress in a public format  
to promote greater transparency and accountability of U.S.	 
government policies, programs, and activities. As provided for in
our congressional protocols, most of our work in Iraq has been	 
performed under my authority to conduct evaluations on my own	 
initiative since it is a matter of broad interest to the entire  
Congress and numerous committees in both chambers. Our work also 
helped inform the deliberations of the Iraq Study Group; the	 
Comptroller General personally briefed this group on the results 
of our Iraq work in June 2006. GAO also provided significant	 
additional information to the Iraq Study Group for its use.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-385T					        
    ACCNO:   A64965						        
  TITLE:     Securing, Stabilizing, and Rebuilding Iraq: GAO Audit    
Approach and Findings						 
     DATE:   01/18/2007 
  SUBJECT:   Accountability					 
	     Contract administration				 
	     Foreign governments				 
	     Military forces					 
	     National policies					 
	     Policy evaluation					 
	     Quality assurance					 
	     Strategic planning 				 
	     Transparency					 
	     Global War on Terrorism				 
	     Iraq						 

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GAO-07-385T

   

     * [1]Summary
     * [2]GAO's Work in Iraq Is Broad and Coordinated with Other Audit
     * [3]Key Findings and Recommendations from GAO's Work in Iraq

          * [4]Assessment of the November 2005 National Strategy for Victor
          * [5]Limited Transparency on the Costs of the Global War on Terro
          * [6]Progress in Transferring Security Responsibilities to Iraq H
          * [7]DOD May be Unable to Ensure that U.S.-Funded Equipment Has R
          * [8]Challenges in Improving Governance and Spending Budgeted Cap
          * [9]Impact of the War on U.S. Military Readiness
          * [10]Problems in Securing Munitions Sites and Providing Force Pro
          * [11]Improving DOD Acquisition Outcomes

     * [12]GAO's Quality Assurance Framework
     * [13]Concluding Observations
     * [14]GAO Contacts and Acknowledgments
     * [15]GAO's Mission
     * [16]Obtaining Copies of GAO Reports and Testimony

          * [17]Order by Mail or Phone

     * [18]To Report Fraud, Waste, and Abuse in Federal Programs
     * [19]Congressional Relations
     * [20]Public Affairs

Testimony

Before the Committee on Armed Services, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EST

Thursday, January 18, 2007

SECURING, STABILIZING, AND REBUILDING IRAQ

GAO Audit Approach and Findings

Statement of David M. Walker Comptroller General of the United States

GAO-07-385T

Mr. Chairman and Members of the Committee:

I am pleased to be here today to provide a strategic overview of GAO's
work related to securing, stabilizing, and rebuilding Iraq. In my
statement today, as requested, I will highlight (1) GAO's scope,
authority, and coordination; (2) some of the insights stemming from our
work in Iraq; and (3) the rigorous quality assurance framework that GAO
uses to ensure relevant, reliable, and consistent results in all of our
work.

My statement today is based upon extensive work spanning several years.
Since 2003, we have issued 67 Iraq-related reports and testimonies. For
example, I sent a report to the Congress last week on a range of key
issues for congressional oversight of efforts to secure, stabilize, and
rebuild Iraq.^1 Although many of our sources are classified, we strive to
report information to the Congress in a public format to promote greater
transparency and accountability of U.S. government policies, programs, and
activities. As provided for in our congressional protocols, most of our
work in Iraq has been performed under my authority to conduct evaluations
on my own initiative since it is a matter of broad interest to the entire
Congress and numerous committees in both chambers. Our work also helped
inform the deliberations of the Iraq Study Group; I personally briefed
this group on the results of our Iraq work in June 2006. We also provided
significant additional information to the Iraq Study Group for its use.

The work supporting this statement is based on our analysis of agency
plans and documents and discussions with relevant senior officials from
the Departments of Defense (DOD), Energy, State, and the Treasury; the
U.S. Agency for International Development (USAID); the Army Corps of
Engineers; the multinational force; the Defense Intelligence Agency; and
the Central Intelligence Agency. We conducted our reviews in accordance
with generally accepted government auditing standards.

Summary

GAO and the Inspectors General (IG) of individual departments and agencies
have different roles and responsibilities. GAO's broad audit authority
allows us to support Congress through strategic analyses of issues that
cut across multiple federal agencies and sources of funding. Our work
spans the security, political, and economic prongs of the U.S. national
strategy in Iraq. The broad, cross-cutting nature of this work helps
minimize the possibility of overlap and duplication by any individual
Inspector General.

^1GAO, Securing, Stabilizing, and Rebuilding Iraq: Key Issues for
Congressional Oversight, [21]GAO-07-308SP (Washington, D.C.: Jan. 9,
2007).

Based on our work, we have made some unique contributions to Congress. Our
past and ongoing work has focused on the U.S. strategy and costs of
operating in Iraq, training and equipping the Iraqi security forces,
governance issues, the readiness of U.S. military forces, and acquisition
outcomes. Some highlights from our work follow:

           o Our analysis of the National Strategy for Victory in Iraq
           recommended that the National Security Council improve the
           strategy by articulating clearer roles and responsibilities,
           specifying future contributions, and identifying current costs and
           future resources.
           o In our examination of the cost of U.S. military operations
           abroad, we recommended that the Secretary of Defense improve the
           transparency and reliability of DOD's Global War on Terror (GWOT)
           obligation data. We also recommended that DOD build more funding
           into the baseline budget once an operation reaches a known level
           of effort and costs are more predictable.
           o In assessing the capabilities of Iraqi security forces, we found
           that overall security conditions in Iraq have deteriorated despite
           increases in the numbers of trained and equipped security forces.
           A complete assessment of Iraqi security forces' capabilities is
           dependent on DOD providing GAO with the readiness levels of each
           Iraqi unit.
           o We found that DOD faces significant challenges in maintaining
           U.S. military readiness for overseas and homeland missions and in
           sustaining rotational deployments of duty, especially if the
           duration and intensity of current operations continue at the
           present pace.
           o In assessing the impact of ongoing military operations in Iraq
           on military equipment, we found that the Army and the Marine Corps
           have initiated programs to reset (repair or replace) equipment and
           are likely to incur large expenditures in the future.
           o In reviewing efforts to secure munitions sites and provide force
           protection, we recommended that DOD conduct a theaterwide survey
           and risk assessment of unsecured conventional munitions in Iraq
           and incorporate storage site security into strategic planning
           efforts.
           o In assessing acquisition outcomes, we found that DOD often
           entered into contract arrangements with unclear requirements,
           which posed additional risks to the government. DOD also lacked
           the capacity to provide sufficient numbers of contracting,
           logistics, and other personnel, thereby hindering oversight
           efforts.

           In April 2005, an international peer review team gave our quality
           assurance system a clean opinion--only the second time a national
           audit institution has received such a rating from a multinational
           team. Thus, the Congress and the American people can have
           confidence that GAO's work is independent, objective, and
           reliable.
			  
			  GAOï¿½s Work in Iraq Is Broad and Coordinated with Other Audit
			  Authorities

           While the IGs are designed to focus primarily on exposing fraud,
           waste, and abuse in individual federal agency programs, GAO's
           broad audit authority allows us to support Congress through
           strategic analyses of issues that cut across multiple federal
           agencies and sources of funding. Although the IGs report to the
           heads of their respective departments and make periodic reports to
           Congress, GAO reports directly to Congress on a continuous basis.
           GAO consults regularly with its oversight committees and relevant
           committees of jurisdiction regarding key issues of national
           importance, such as U.S. fiscal solvency, emergency preparedness,
           DOD transformation, global competitiveness, and emerging health
           care and other challenges for the 21st century.

           The Congress established the GAO in 1921 to investigate all
           matters relating to the receipt, disbursement, and application of
           public funds. Since then, Congress has expanded GAO's statutory
           authorities and frequently calls upon it to examine federal
           programs and their performance, conduct financial and management
           audits, perform policy analysis, provide legal opinions,
           adjudicate bid protests, and conduct investigations. In 2006, the
           GAO issued more than 1,000 audit products and produced a $105
           return for each dollar invested in the agency.^2

           GAO has developed substantial expertise on security and
           reconstruction issues, as well as having long-term relationships
           with State, Defense, and USAID. Our work spans several decades and
           includes evaluations of U.S. military and diplomatic programs and
           activities, including those during and following contingency
           operations in Vietnam, the Persian Gulf (Operations Desert Shield
           and Storm), Bosnia, and Afghanistan.

           We also have many years of expertise in evaluating U.S. efforts to
           help stabilize regions or countries; we have, for example,
           monitored U.S. assistance programs in Asia, Central America, and
           Africa. The depth and breadth of our work and the expertise we
           have built has helped facilitate our ability to quickly gather
           facts and provide insights to the Congress as events unfold, such
           as the conflict in Iraq. Our current work draws on our past work
           and regular site visits to Iraq and the surrounding region, such
           as Jordan and Kuwait. Furthermore, we plan to establish a presence
           in Iraq beginning in March 2007 to provide additional oversight of
           issues deemed important to Congress. Our plans, however, are
           subject to adequate fiscal 2007 funding of GAO by the Congress.

           Our work in Iraq spans the three prongs of the U.S. national
           strategy in Iraq--security, political, and economic. The broad,
           cross-cutting nature of our work helps minimize the possibility of
           overlap and duplication by individual IGs. We and other
           accountability organizations take steps to coordinate our
           oversight with others to avoid duplication and leverage our
           resources. In that regard, the ability of the Special Inspector
           General for Iraq Reconstruction (SIGIR) to provide in-country
           oversight of specific projects and reconstruction challenges has
           enabled us to focus our work on more strategic and cross-cutting
           national, sector, and interagency issues.

           The expansion of SIGIR's authority underscores the need for close
           coordination. We coordinate our work in Iraq through various
           forums, including the Iraq Inspectors General Council (IIGC) and
           regular discussions with the IG community. Established by what is
           now SIGIR, IIGC provides a forum for discussion and collaboration
           among the IG and staff at the many agencies involved in Iraq
           reconstruction activities. Our work is coordinated through regular
           one-on-one meetings with SIGIR, DOD, State, and USAID. We also
           coordinate our work with other accountability organizations, such
           as the Federal Bureau of Investigation's (FBI) public corruption
           unit.
			  
			  Key Findings and Recommendations from GAOï¿½s Work in Iraq

           Let me highlight some of the key findings and recommendations we
           have made as a result of our continuing work in Iraq.
			  
			  Assessment of the November 2005 National Strategy for Victory in
			  Iraq and the U.S. Military Campaign Plan

           In November 2005, the National Security Council issued the
           National Strategy for Victory in Iraq (NSVI) to clarify the
           President's strategy for achieving U.S. political, security, and
           economic goals in Iraq. The U.S. goals included establishing a
           peaceful, stable, and secure Iraq. Our July 2006 report assessed
           the extent to which the NSVI and its supporting documents
           addressed the six characteristics of an effective national
           strategy.^3 While we reported that the NSVI was an improvement
           over previous U.S. planning efforts for stabilizing and rebuilding
           Iraq, we concluded that the strategy fell short in at least three
           key areas. First, it only partially identified the agencies
           responsible for implementing key aspects of the strategy. Second,
           it did not fully address how the United States will integrate its
           goals with those of the Iraqis and the international community,
           and it did not detail Iraq's anticipated contribution to its
           future needs. Third, it only partially identified the current and
           future costs of U.S. involvement in Iraq, including maintaining
           U.S. military operations, building Iraqi government capacity, and
           rebuilding critical infrastructure.

           We recommended that the NSC improve the current strategy by
           articulating clear roles and responsibilities, specifying future
           contributions, and identifying current costs and future resources.
           In addition, our report urged the United States, Iraq, and the
           international community to (1) enhance support capabilities of the
           Iraqi security forces, (2) improve the capabilities of the
           national and provincial governments, and (3) develop a
           comprehensive anti-corruption strategy. In our view, congressional
           review of the President's 2007 plan for Iraq should consider
           whether it addresses the key elements of a sound national strategy
           identified in our July 2006 report.

           In October 2005, we issued a classified report on the military's
           campaign plan for Iraq.^4 In that report, we discussed the
           military's counterinsurgency plan for Iraq and the conditions and
           phases in the plan. The report contained a recommendation to link
           economic, governance, and security indicators to conditions for
           stabilizing Iraq. Congress acted on our recommendation in the 2006
           National Defense Authorization Act and required DOD to report on
           progress toward meeting the conditions referred to in GAO's
           report. We have supplemented this work with a series of classified
           briefings to the Congress on changes to the campaign plan and U.S.
           efforts to train and equip Iraqi security forces and protect
           weapons caches throughout Iraq. We will continue to provide
           Congress these classified briefings.
			  
			  Limited Transparency on the Costs of the Global War on Terror

           Since 2001, Congress has appropriated about $495 billion to U.S.
           agencies for military and diplomatic efforts in support of the
           global war on terrorism; the majority of this amount has gone to
           stabilize and rebuild Iraq. Efforts in Iraq involve various
           activities such as combating insurgents, conducting civil affairs,
           building capacity, reconstructing infrastructure, and training
           Iraqi military forces. To date, the United States has reported
           substantial costs for Iraq and can expect to incur significant
           costs in the foreseeable future, requiring decision-makers to
           consider difficult trade-offs as the nation faces an increasing
           number of long-range fiscal challenges. Funding for these efforts
           has been provided through annual appropriations, as well as
           supplemental appropriations that are outside the annual budget
           process. In our view, moving more funding into baseline budgets,
           particularly for DOD, would enable decision-makers to better weigh
           priorities and assess trade-offs.

           As of September 30, 2006, DOD had reported costs of about $257.5
           billion for military operations in Iraq.^5 In addition, as of
           October 2006, about $29 billion had been obligated for Iraqi
           reconstruction and stabilization efforts. However, problems with
           the processes for recording and reporting GWOT costs raise
           concerns that these data may not accurately reflect the true
           dollar value of war-related costs.

           U.S. military and diplomatic commitments in Iraq will continue for
           the foreseeable future and are likely to involve hundreds of
           billions of additional dollars. The magnitude of future costs will
           depend on several direct and indirect variables and, in some
           cases, decisions that have not been made. DOD's future costs will
           likely be affected by the pace and duration of operations, the
           types of facilities needed to support troops overseas,
           redeployment plans, and the amount of military equipment to be
           repaired or replaced. Although reducing the number of troops would
           appear to lower costs, we have seen from previous operations in
           the Balkans and Kosovo that costs could rise--if, for example,
           increased numbers of contractors replace military personnel. With
           activities likely to continue into the foreseeable future,
           decision-makers will have to carefully weigh priorities and make
           difficult decisions when budgeting for future costs.

           Over the years, we have made a series of recommendations to the
           Secretary of Defense intended to improve the transparency and
           reliability of DOD's GWOT obligation data, including
           recommendations that DOD (1) revise the cost-reporting guidance so
           that large amounts of reported obligations are not shown in
           "miscellaneous" categories, and (2) take steps to ensure that
           reported GWOT obligations are reliable. We also have recommended
           that DOD build more funding into the baseline budget once an
           operation reaches a known level of effort and costs are more
           predictable. In response, the department has implemented many of
           our previous recommendations.
			  
			  Progress in Transferring Security Responsibilities to Iraq Has
			  Not Led to Improved Security Conditions

           Overall security conditions in Iraq continued to deteriorate in
           2006 and have grown more complex despite recent progress in
           transferring security responsibilities to Iraqi security forces
           and the Iraqi government. The number of trained and equipped Iraqi
           security forces has increased from about 174,000 in July 2005 to
           about 323,000 in December 2006, at the same time as more Iraqi
           army units have taken the lead for counterinsurgency operations in
           specific geographic areas. Despite this progress, attacks on
           coalition forces, Iraqi security forces, and civilians have all
           increased, reaching record highs in October 2006. Because of the
           poor security in Iraq, the United States could not draw down U.S.
           force levels in Iraq as planned in 2004 and 2006, and U.S. forces
           have continued to conduct combat operations in urban areas,
           especially Baghdad.

           Transferring security responsibilities to the Iraqi security
           forces and provincial governments is a critical part of the U.S.
           government's strategy in Iraq and key to allowing a drawdown of
           U.S. forces. Since 2003, the United States has provided about
           $15.4 billion to train, equip, and sustain Iraqi security forces
           and law enforcement. However, it is unclear whether U.S.
           expenditures and efforts are having their intended effect in
           developing capable forces and whether additional resources are
           needed. A key measure of the capabilities of Iraqi forces is the
           Transition Readiness Assessment (TRA) reports prepared by
           coalition advisors embedded in Iraqi units. These reports serve as
           the basis for the Multinational Force-Iraq (MNF-I) determination
           of when a unit is capable of leading counterinsurgency operations
           and can assume security responsibilities for a specific area.

           The TRA reports provide the coalition commander's professional
           judgment on an Iraqi unit's capabilities and are based on ratings
           in personnel, command and control, equipment, sustainment and
           logistics, training, and leadership. To conduct future work on
           this issue, GAO has made multiple requests for full access to the
           unit-level TRA reports over the last year. However, DOD has not
           yet complied with our requests. This serves to seriously and
           inappropriately limit congressional oversight over the progress
           achieved toward a critical U.S. objective.
			  
			  DOD May be Unable to Ensure that U.S.-Funded Equipment Has
			  Reached Iraqi Security Forces

           Since 2003, the United States has provided about $15.4 billion for
           Iraqi security forces and law enforcement. According to
           Multinational Security Transition Command-Iraq (MNSTC-I) records,
           MNF-I has issued about 480,000 weapons, 30,000 vehicles, and 1.65
           million pieces of gear (uniforms, body armor, helmets, and
           footwear), among other items, to the Iraqi security forces as of
           October 2006.

           Congress funded the train-and-equip program for Iraq outside
           traditional security assistance programs, which, according to DOD
           officials, provided DOD with a large degree of flexibility in
           managing the program. Since the funding did not go through
           traditional security assistance programs,^6 the accountability
           requirements normally applicable to these programs did not
           necessarily apply, according to DOD officials. It is currently
           unclear what accountability measures, if any, DOD has chosen to
           apply to the train-and-equip program for Iraq, as DOD officials
           have expressed differing opinions on this matter. As part of our
           ongoing work, we have asked DOD to clarify what accountability
           measures it has chosen to apply to the program.

           While it is unclear which regulations DOD has chosen to apply,
           beginning in early 2004, MNF-I established requirements to control
           and account for equipment provided to the Iraqi security forces by
           issuing orders that outlined procedures for its subordinate
           commands. These included obtaining signed records for equipment
           received by Iraqi units or individuals and recording weapons
           serial numbers. Although MNF-I took initial steps to establish
           property accountability procedures, limitations such as the
           initial lack of a fully operational equipment distribution
           network, staffing weaknesses, and the operational demands of
           equipping the Iraqi forces during war hindered its ability to
           fully execute critical tasks outlined in the property
           accountability orders. Since late 2005, MNSTC-I has taken
           additional steps to improve its property accountability
           procedures, including establishing property books^7 for equipment
           issued to Iraqi Ministry of Defense and Ministry of Interior
           forces. According to MNSTC-I officials, MNSTC-I also recovered
           existing documentation for equipment previously issued to Iraqi
           forces. However, according to our preliminary analysis, DOD and
           MNF-I may not be able to account for Iraqi security forces'
           receipt of about 90,000 rifles and about 80,000 pistols that were
           reported as issued before early October 2005. Thus, DOD and MNF-I
           may be unable to ensure that Iraqi military forces and police
           received all of the equipment that the coalition procured or
           obtained for them.

           In our ongoing review, we will continue to assess MNF-I records
           for Iraqi equipment distributed to Iraqi forces. We plan on
           issuing a final report on these and related intelligence matters
           by March 2007. Our work focuses on the accountability
           requirements^8 for the transportation and distribution of
           U.S.-funded equipment and did not review any requirements relevant
           to the procurement of this equipment.
			  
			  Challenges in Improving Governance and Spending Budgeted Capital
			  Project Funds

           The U.S. government faces significant challenges in improving the
           capabilities of Iraq's central and provincial governments so that
           they can provide security and deliver services to the Iraqi
           people. According to State, the Iraqi capacity for self-governance
           was decimated after nearly 30 years of autocratic rule. In
           addition, Iraq lacked competent existing Iraqi governmental
           organizations. Since 2003, the United States has provided the
           Iraqis with a variety of training and technical assistance to
           improve their capacity to govern. As of December 2006, we
           identified more than 50 capacity development efforts led by at
           least six U.S. agencies. However, it is unclear how these efforts
           are addressing core needs and Iraqi priorities in the absence of
           an integrated U.S. plan.

           Iraq also faces difficulties in spending budgeted funds for
           capital goods and projects in the security, oil, and electricity
           sectors. When the Iraqi government assumed control over its
           finances in 2004, it became responsible for determining how more
           than $25 billion annually in government revenues would be
           collected and spent to rebuild the country and operate the
           government. However, unclear budgeting and procurement rules have
           affected Iraq's efforts to spend capital budgets effectively and
           efficiently. Since most of the U.S. reconstruction funds provided
           between fiscal years 2003 and 2006 have been obligated, unexpended
           Iraqi funds represent an important source of additional financing.
           Iraq had more than $6 billion in unspent capital project funds as
           of August 2006. For example, Iraq's Oil Ministry spent only $4
           million of $3.6 billion in budgeted funds to repair Iraq's
           dilapidated oil infrastructure.

           The inability to spend this money raises serious questions for the
           government, which has to demonstrate to citizens who are skeptical
           that it can improve basic services and make a difference in their
           daily lives. The U.S. government has launched a series of
           initiatives in conjunction with other donors to address this issue
           and improve ministry budget execution.
			  
			  Impact of the War on U.S. Military Readiness

           Since September 11, 2001, U.S. military forces have experienced a
           high pace of operations to support homeland security missions,
           Operation Enduring Freedom in Afghanistan, and various combat and
           counterinsurgency operations in Iraq. These operations have
           required many units and personnel to deploy for multiple tours of
           duty and, in some cases, to remain for extended tours. DOD faces
           significant challenges in maintaining readiness for overseas and
           homeland missions and sustaining rotational deployments of duty,
           especially if the duration and intensity of current operations
           continue at the present pace.

           Ongoing military operations in Iraq are inflicting heavy wear and
           tear on military equipment. Some equipment items used by U.S.
           forces are more than 20 years old, and harsh combat and
           environmental conditions over time have further exacerbated
           equipment condition problems. The Army and the Marine Corps have
           initiated programs to reset (repair or replace) equipment and are
           likely to incur large expenditures in the future. We are currently
           assessing these programs, including the extent to which the
           military services are tracking reset costs and the extent to which
           their reset plans maintain unit equipment readiness while meeting
           ongoing operational requirements.
			  
			  Problems in Securing Munitions Sites and Providing Force Protection

           U.S. ground forces in Iraq have come under frequent and deadly
           attacks from insurgents using weapons such as improvised explosive
           devices (IED), mortars, and rocket launchers. IEDs, in particular,
           have emerged as the number one threat against U.S. forces. Because
           of the overwhelming size and number of conventional munitions
           storage sites in Iraq, combined with prewar planning assumptions
           that proved to be invalid, there were an insufficient number of
           U.S. and coalition troops on the ground to prevent the widespread
           looting of those sites. The human, strategic, and financial costs
           of the failure to provide sufficient troops on the ground have
           been high, since IEDs made from looted explosives have caused
           about half of all U.S. combat fatalities and casualties in Iraq
           and have killed hundreds of Iraqis. In addition, unsecured
           conventional munitions sites have helped sustain insurgent groups
           and threatened the achievement of the Operation Iraqi Freedom's
           (OIF) strategic goal of creating a stable Iraqi nation.^9

           DOD's actions to date have primarily focused on countering IEDs
           and not on the security of conventional munitions storage sites as
           a strategic planning and priority-setting consideration for future
           operations. Although good first steps, these actions do not
           address what we believe is a critical OIF lesson learned: If not
           secured during initial combat operations, an adversary's
           conventional munitions storage sites can represent an asymmetric
           threat to U.S. forces that remain in country.

           In December 2006, we recommended that the Chairman of the Joint
           Staff conduct a theaterwide survey and risk assessment regarding
           unsecured conventional munitions in Iraq and incorporate
           conventional munitions storage site security as a strategic
           planning factor into all levels of planning policy and guidance.
           DOD partially concurred with our recommendations.

           Efforts to protect U.S. ground forces with increased body and
           truck armor have been characterized by shortages and delays, which
           have reduced operational capabilities and forced combat commanders
           to accept additional risk in completing their missions.^10 We are
           currently reviewing force protection measures, including body
           armor, for current operations, as well as the organization and
           management of the Joint IED Defeat to counter the IED threat.

           In prior reports, we recommended that the process for identifying
           and funding urgent wartime requirements be improved and that
           funding decisions be based on risk and an assessment of the
           highest priority requirements. More recently, we have recommended
           actions to ensure that the services make informed and coordinated
           decisions about materiel solutions developed and procured to
           address common urgent wartime requirements. DOD generally agreed
           with these recommendations.
			  
			  Improving DOD Acquisition Outcomes

           DOD has relied extensively on contractors to undertake major
           reconstruction projects and provide logistical support to its
           troops in Iraq. Despite making significant investments through
           reconstruction and logistics support contracts, this investment
           has not always resulted in the desired outcomes. Many
           reconstruction projects have fallen short of expectations, and DOD
           has yet to resolve long-standing challenges in its management and
           oversight of contractors in deployed locations. These challenges
           often reflect shortcomings in DOD's capacity to manage contractor
           efforts, including having sufficiently focused leadership,
           guidance, a match between requirements and resources, sound
           acquisition approaches, and an adequate number of trained
           contracting and oversight personnel.

           The challenges encountered in Iraq are emblematic of the systemic
           issues that DOD faces. In fact, GAO designated DOD's contract
           management activities as a high-risk area more than a decade ago
           and have reported on DOD's long-standing problems with its
           management and oversight of support contractors since 1997.^11 For
           example, because information on the number of contractor employees
           and the services they provide is not aggregated within DOD or its
           components, DOD cannot develop a complete picture of the extent to
           which it relies on contractors to support its operations. DOD
           recently established an office to address contractor support
           issues, but the office's specific roles and responsibilities are
           still being defined.

           In assessing acquisition outcomes government-wide over many years,
           we have applied a framework of sound acquisition practices that
           recognizes that a prerequisite to having good outcomes is to match
           well-defined requirements and available resources. Shifts in
           priorities and funding invariably have a cascading effect on
           individual contracts. Further, to produce desired outcomes with
           available funding and within required time frames, DOD and its
           contractors need to clearly understand DOD's objectives and needs
           and how they translate into the contract's terms and conditions;
           they need to know the goods or services required, the level of
           performance or quality desired, the schedule, and the cost. When
           such requirements were not clear, DOD often entered into contract
           arrangements that posed additional risks. Managing risks when
           requirements are in flux requires effective oversight, but DOD
           lacked the capacity to provide sufficient numbers of contracting,
           logistics, and other personnel, thereby hindering oversight
           efforts. With a considerable amount of DOD's planned construction
           work remaining and the need for continued logistical support for
           deployed forces, it is essential to improve DOD's capacity to
           manage its contractors if the department is to increase its return
           on its investment.
			  
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			  Concluding Observations

           Our work highlights the critical challenges that the United States
           and its allies face in the ongoing struggle to help the Iraqis
           stabilize, secure, and rebuild their country. Forthright answers
           to the oversight questions we posed in our report of January 9,
           2007, are needed from the U.S. agencies responsible for executing
           the President's strategy. Congress and the American people need
           complete and transparent information on the progress made toward
           achieving U.S. security, economic, and diplomatic goals in Iraq to
           reasonably judge our past efforts and determine future directions.
           For future work, GAO will continue to provide this committee and
           Congress with independent analysis and evaluations and coordinate
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           appropriate oversight of federal programs and spending.

           Mr. Chairman, this concludes my statement. I would be pleased to
           answer any questions that you or other members may have at this
           time.
			  
			  GAO Contacts and Acknowledgments

           For questions regarding this testimony, please call Joseph A.
           Christoff at (202) 512-8979. Other key contributors to this
           statement were Nanette Barton, Donna Byers, David Bruno, Dan Cain,
           Lynn Cothern, Tim DiNapoli, Mike Ferren, Rich Geiger, Tom Gosling,
           Whitney Havens, Lisa Helmer, Patrick Hickey, Henry L. Hinton Jr.,
           John Hutton, Steve Lord, Judy McCloskey, Tet Miyabara, Mary
           Moutsos, Ken Patton, Sharon Pickup, Jason Pogacnik, Jim Reynolds,
           Donna Rogers, and William Solis.

^2GAO, Performance and Accountability Report: Fiscal Year 2006,
[28]GAO-07-2SP (Washington, D.C.: Nov. 15, 2006).

^3The six characteristics are (1) a clear purpose, scope, methodology; (2)
a detailed discussion of the problems, risks, and threats the strategy
intends to address; (3) the desired goals and objectives, and
outcome-related performance measures; (4) a description of the U.S.
resources needed to implement the strategy; (5) a clear delineation of the
U.S. government roles, responsibilities, and mechanisms for coordination;
and (6) a description of how the strategy is integrated internally among
U.S. agencies and externally with the Iraqi government and international
organizations. See Rebuilding Iraq: More Comprehensive National Strategy
Needed to Help Achieve U.S. Goals, GAO-06-788 (Washington, D.C.: July 11,
2006).

^4GAO, Rebuilding Iraq: DOD Reports Should Link Economic, Governance, and
Security Indicators to Conditions for Stabilizing Iraq. [29]GAO-06-217C
(title is unclassified, Washington D.C.: Oct. 31, 2005).

^5DOD's reported costs in Iraq do not include the costs of classified
activities.

^6Traditional security assistance programs operate under State authority
and are managed in country by DOD through security assistance
organizations under the direction and supervision of the Chief of the U.S.
Diplomatic Mission.

^7A property book is a formal set of property accounting records and
files.

^8DOD defines accountability as the obligation imposed by law, lawful
order, or regulation, accepted by an organization or person for keeping
accurate records, to ensure control of property, documents or funds, with
or without physical possession (DODI 5000.64, Accountability and
Management of DoD-Owned Equipment and Other Accountable Property, E2.2).

^9These issues are discussed in a classified GAO report, Operation Iraqi
Freedom: DOD Should Apply Lessons Learned Concerning the Need for Security
over Conventional Munitions Storage Sites to Future Operations Planning,
[30]GAO-07-71C (Washington, D.C.: Dec. 20, 2006). We plan to issue an
unclassified version of this report.

^10For further information on these issues, see GAO, Defense Logistics:
Actions Needed to Improve the Availability of Critical Items during
Current and Future Operations, [31]GAO-05-275 (Washington, D.C.: Apr. 8,
2005); Defense Logistics: Several Factors Limited the Production and
Installation of Army Truck Armor during Current Wartime Operations,
[32]GAO-06-160 (Washington, D.C.: Mar. 22, 2006); and Defense Logistics:
Lack of a Synchronized Approach between the Marine Corps and Army Affected
the Timely Production and Installation of Marine Corps Truck Armor,
[33]GAO-06-274 (Washington, D.C.: June 22, 2006).

^11GAO, Military Operations: High-Level DOD Action Needed to Address
Long-standing Problems with Management and Oversight of Contractors
Supporting Deployed Forces, [34]GAO-07-145 (Washington, D.C.: Dec. 18,
2006).
			  
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References

Visible links
  21. http://www.gao.gov/cgi-bin/getrpt?GAO-07-308SP
  28. http://www.gao.gov/cgi-bin/getrpt?GAO-07-2SP
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-06-217C
  30. http://www.gao.gov/cgi-bin/getrpt?GAO-07-71C
  31. http://www.gao.gov/cgi-bin/getrpt?GAO-05-275
  32. http://www.gao.gov/cgi-bin/getrpt?GAO-06-160
  33. http://www.gao.gov/cgi-bin/getrpt?GAO-06-274
  34. http://www.gao.gov/cgi-bin/getrpt?GAO-07-145
*** End of document. ***