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House Armed Services Committee Chairman Ike Skelton Opening Statement Hearing on Contingency Contracting: Implementing a Call for Urgent Reform

April 10, 2008

"Ladies and Gentlemen welcome to today's hearing on Contingency Contracting: Implementing a Call for Urgent Reform. We have with us the top acquisition official of the Department of Defense, the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Honorable John Young. We also have representing the Army the executive director of the new Army Contracting Command, Mr. Jeff Parsons. And finally, we have the distinguished former Under Secretary of Defense for Acquisition, Technology, and Logistics, Dr. Jacques Gansler, who chaired the Commission on Army Acquisition and Program Management for Expeditionary Operations.

"Let me begin by recognizing that we are here today to discuss serious problems with contracting and those problems are in part the result of actions taken by Congress and by this committee. In the late 1990s, we tried to cut the so-called 'tooth to tail' ratio in the Department of Defense, and in so doing we pushed you to significantly reduce the size of the acquisition workforce.

"It is now clear that, just as with the Army's combat force, the acquisition workforce was cut too much. When the wars in Afghanistan and Iraq began, the Army lacked the capacity to manage the explosion in contingency contracting that followed. The result has been disturbing mismanagement of contracts, unprecedented waste, and high levels of outright fraud.

"We here on this committee have been working to address these problems now for several years. In our Fiscal Year 2006 National Defense Authorization Act, we required DOD to develop and implement a joint contingency contracting policy, and urged you to establish a contingency contracting corps. In our FY2007 bill, we established the Panel on Contracting Integrity and directed you to expand the joint policy to areas of requirements and program management. In our FY2008 bill, with our Senate colleagues, we created an Acquisition Workforce Development Fund and we required you to work with the State Department and USAID to clarify interagency responsibilities for management of contractors and contracts. We also worked to address policies which have discouraged highly skilled civilians from deploying to combat theaters to assist our military personnel.

"I want to thank Dr. Gansler for his commission's report. Dr. Gansler, your commission told the Army what it needed to hear. That contracting, which has always been a core function of the Army, but is especially critical in this era where contractors outnumber soldiers on the battlefield, is simply not being organized, manned, or resourced properly. Your report calls for a cultural shift in the Army. I agree with your assessment.

"I give our former colleague Pete Geren a tremendous amount of credit for requesting your study. I believe, however, that it will also require great leadership on his part to achieve the cultural shift in the Army that is needed. Although he is not here with us today, Mr. Parsons, I hope you will take back this committee's continuing deep concern about getting contracting right. The single most compelling area of your recommendations for me came in your focus on reestablishing general officers within the chain of command for contracting. We look forward to hearing from all of the witnesses about how the Department will make its decision about this critical issue and whether legislation is needed.

"Last, let me also commend you, Dr. Gansler, for tackling the issue of contracting and DOD's interagency partners in your report. As I mentioned, we have required DOD, State, and USAID to address this issue in a Memorandum of Understanding that is due this summer, but I am also interested in your idea of an Integrated Expeditionary Command. I hope that all our witnesses will address the issue of how we manage contractors on the battlefield when those contractors work for and report to agencies across the federal government.

"Gentlemen, I look forward to your testimony, and now recognize my friend and colleague, Duncan Hunter of California for his opening statement."