[Senate Hearing 111-792]
[From the U.S. Government Printing Office]
S. Hrg. 111-792
AFGHANISTAN CONTRACTS: AN OVERVIEW
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HEARING
before the
AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
DECEMBER 17, 2009
__________
Available via http://www.gpoaccess.gov/congress/index.html
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri LINDSEY GRAHAM, South Carolina
JON TESTER, Montana ROBERT F. BENNETT, Utah
ROLAND W. BURRIS, Illinois
PAUL G. KIRK, JR., Massachusetts
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT
CLAIRE McCASKILL, Chairman
CARL LEVIN, Michigan ROBERT F. BENNETT, Utah
THOMAS R. CARPER, Delaware SUSAN M. COLLINS, Maine
MARK L. PRYOR, Arkansas TOM COBURN, Oklahoma
JON TESTER, Montana JOHN McCAIN, Arizona
PAUL G. KIRK, JR., Massachusetts LINDSEY GRAHAM, South Carolina
Margaret Daum, Staff Director
Molly Wilkinson, Minority Staff Director
Kelsey Stroud, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator McCaskill............................................ 1
Senator Bennett.............................................. 3
Senator Kirk................................................. 17
Prepared statements:
Senator McCaskill............................................ 35
Senator Bennett.............................................. 37
WITNESSES
Thursday, December 17, 2009
Colonel William H. Campbell, III, Director of Operations, Office
of the Under Secretary of Defense (Comptroller), U.S.
Department of Defense.......................................... 5
Edward M. Harrington, Deputy Assistant Secretary of the Army
(Procurement), Department of the Army, U.S. Department of
Defense........................................................ 7
Jeffrey Parsons, Executive Director, Army Contracting Command,
Department of the Army, U.S. Department of Defense............. 8
Charles North, Senior Deputy Director, Afghanistan-Pakistan Task
Force, U.S. Agency for International Development............... 9
Daniel F. Feldman, Deputy Special Respresentative for Afghanistan
and Pakistan, U.S. Department of State......................... 10
Alphabetical List of Witnesses
Campbell, Colonel William H., III:
Testimony.................................................... 5
Prepared statement........................................... 39
Feldman, Daniel F.:
Testimony.................................................... 10
Prepared statement........................................... 63
Harrington, Edward M.:
Testimony.................................................... 7
Joint prepared statement with Mr. Parsons.................... 41
North, Charles:
Testimony.................................................... 9
Prepared statement........................................... 55
Parsons, Jeffrey:
Testimony.................................................... 8
Joint prepared statement with Mr. Harrington................. 41
APPENDIX
Responses to questions for the Record from:
Colonel Campbell............................................. 66
Mr. Harrington............................................... 74
Mr. Parsons.................................................. 85
Mr. North.................................................... 93
Mr. Feldman.................................................. 100
Charts submitted by Mr. Feldman.................................. 106
AFGHANISTAN CONTRACTS: AN OVERVIEW
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THURSDAY, DECEMBER 17, 2009
U.S. Senate,
Ad Hoc Subcommittee on Contracting Oversight,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:03 p.m., in
room 342, Dirksen Senate Office Building, Hon. Claire
McCaskill, Chairman of the Subcommittee, presiding.
Present: Senators McCaskill, Kirk and Bennett.
OPENING STATEMENT OF SENATOR MCCASKILL\1\
Senator McCaskill. Thank you all very much for being here,
and this hearing will come to order.
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\1\ The prepared statement of Senator McCaskill appears in the
Appendix on page 35.
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I have a great opening statement that an incredibly
competent and conscientious staff has helped me with, but I
think instead of delivering it I think I will make it part of
the record. I think I will tell a story.
Fresh out of auditing in the State of Missouri, having run
a government auditing agency for a number of years, I came to
the U.S. Senate and was honored to get a seat on the Armed
Services Committee. So, as I began to learn about the conflict
in Iraq, I kept coming back to contracting because the auditor
in me was surprised at some of the things I began learning
about contracting in Iraq.
So I went to Iraq, and the purpose of my trip was not to do
what many Senators do when they go to Iraq, which is to look at
the conflict through the prism of the military mission. I went
specifically for the reason to oversee contracting and what was
going on with contracting. So I spent, frankly, more time in
Kuwait, which will not surprise some of you, than I actually
spent in the theater.
And I had many different things that happened on that trip
that are seared into my hard drive--realizations about the lack
of coordination and integration between various pots of money,
amazing lapses in scoping contracts, in making contracts
definite enough that they could be enforced, particularly from
any kind of accountability standpoint and the government
getting their money back when it had been abused and misused by
contractors. I will, though, tell you one of many stories I
could tell you because I think it is so illustrative of how bad
the problem was in Iraq.
We were sitting in a room where the Logistics Civil
Augmentation Program (LOGCAP) was administered in Iraq. This
was not in Kuwait. As so often the case, I say this with
affection, when you are getting a briefing from the military,
there was a PowerPoint. In fact, I think there must be a law
somewhere that you are not allowed to get a briefing from the
military without a PowerPoint.
There was a PowerPoint, and there were a lot of important
people in the room. There were command staff. There were lots
of people that clearly had the military command authority in
the area, but they turned over the discussion of the LOGCAP
contract to a woman in the room, clearly a civilian and maybe
the most knowledgeable about the LOGCAP contract in the room.
And I think they turned it over to her because she was the one
that was trying to make the trains run on time and knew a lot
about it.
She put up a PowerPoint showing the LOGCAP contract by
year. As many of you remember, the first year, the LOGCAP
contract wildly exceeded the estimates by billions of dollars.
I think, I cannot remember now, and I have not gone back to
look, but my recollection is the first year was maybe $17 or
$18 billion on LOGCAP, and the original estimate was less than
a billion.
Then she showed a bar graph of the years, and you saw a big
drop in the LOGCAP contract after the first year to the next
year, and then it kind of leveled out and was still a huge
amount of money.
So she got through the presentation, and you could tell she
was kind of nervous, and so I was trying to help her. Right? I
was trying to be kind. I know sometimes in this hearing room
and others, it does not appear that I am kind.
I was trying to be kind to her, and I said to her, well,
you left out what you all did to bring that contract down so
much after the first year.
There was an awkward, uncomfortable silence in the room as
everyone kind of shifted and looked at each other. And, with
God as my witness, she looked at me across that table and said,
it was a fluke.
That is the best example I can give you of several examples
of how contracting went wild in Iraq.
So here we are in Afghanistan, and I know many of you,
because you reference it in your testimony, have gone through
SIGAR's book of hard lessons. I know many of you understand the
challenges now that we face in contracting.
But one thing is clear; we will have more contractors in
Afghanistan than we will have men and women in uniform. There
is no doubt about that.
We will spend. A significant chunk of the tens of billions
of dollars in Afghanistan will be spent through contractors. So
the purpose of this hearing, and it will be the first of
several hearings we will have, is to begin to get an overview
as to how the ground has changed as it relates to contracting
during a contingency.
How is the coordination occurring, if it is? How integrated
is the effort?
Most importantly, is the mission now saturated with the
knowledge that if we are going to have contractors do supply
lines, make breakfast, do the laundry, build not only the
buildings for our men and women in uniform but also buildings
and roads for the people of Afghanistan, do the taxpayers have
any better shot of getting value for their money this time than
they did in Iraq? I certainly hope they do.
And I want to thank all of you for being here today, and
look forward to your testimony, and a work in progress as we
begin to try to get a real handle on how we spend money in a
contingency, to make sure that we do not waste the billions of
dollars that went up in smoke in Iraq.
Senator McCaskill. I will turn it over to you, Senator
Bennett, for your statement.
OPENING STATEMENT OF SENATOR BENNETT \1\
Senator Bennett. Thank you very much, Madam Chairman, and I
am interested in your story.
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\1\ The prepared statement of Senator Bennett appears in the
Appendix on page 37.
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I have a very quick story about when I went to Iraq and was
being shown in Kuwait--as you rightly put it, that is where
everything jumps off--the transportation program of how they
were shipping material from Kuwait to Iraq. A very competent
lieutenant colonel was in charge of this, and he was obviously
very much on top of the whole thing.
I asked him, are you regular Army or Reserve? And he said,
I am Reserve.
I said, what do you do in civilian life? And he said, I am
a distribution manager for Wal-Mart.
I decided, well, for once, the Army has the right joint of
the civilian experience and the military assignment.
That may be a jumping-off to pick up on where you have led
us with your opening statement. The challenge in Afghanistan
where, as you have correctly noticed, mentioned, we have as
many contractors and contracting personnel as we have military
personnel, and that ratio is going to stay the same and in fact
we may end up with more contracting personnel than we have
military personnel.
They are both engaged in exactly the same thing, which is a
counterinsurgency kind of battle which means the contractor
cannot sit back and say, well, I have done my job, but I am not
engaged in the counterinsurgency because the way we deal with
counterinsurgency, to take the slogan of the Iraq surge, is
that you control it, then you hold it, and then you build. The
contractor is very much involved in the holding and the
building, and must work hand in glove with the military, and
cannot have its own separate command and control system and its
own separate management plan without being completely
integrated in this kind of circumstance.
It is not your traditional war where the military does all
of the warfighting and the contractor simply fills in the back
functions. So I agree with you that you have described this
properly.
Now I am encouraged by the initiatives, some of the things
we have learned in Iraq. I agree with you, there are a lot of
lessons in Iraq that we need to learn that maybe we have not.
But the Commander's Emergency Response Program that allows
the military to, if something needs to be done quickly, put out
the money to do it quickly--do we make sure that we do not
cross the line there of having the commanders do something that
the U.S. Agency for International Development (USAID) and the
State Department should be doing, in the name of the
Commander's Emergency Response Program? That is another part of
this where there needs to be some coordination.
So I guess basically what I am saying is when the
government agencies outsource the work that they want
performed, they cannot outsource the results, and that is too
often what happens. You outsource the work, and you say, well,
that is the contractor's responsibility, and we do not have to
oversee the results.
Everything has to be properly coordinated, and the work,
the challenge that we have from our witness panel is to see
that the military, the State Department, USAID, and the
contractors are all meshed together for the best result there.
I believe in contracting. I think it is a great improvement
over the old military where everything had to be done by a
soldier somewhere, even if it had nothing whatever to do with
the military mission. But, as we move to that good idea, the
challenge of coordinating all of that becomes a very serious
one, and it is very laudatory that you are holding this hearing
to try to probe into how that is done.
Senator McCaskill. Thank you, Senator Bennett.
Let me introduce the witnesses. We have with us today
William Campbell, who is the Director of Operations for the
Under Secretary of Defense, the Comptroller, at the U.S.
Department of Defense (DOD) where in addition to oversight of
operation and maintenance accounts, he has responsibility for
the development of the Overseas Contingency Operations Request.
Previously, Mr. Campbell served as Acting Deputy Assistant
Secretary of the Army for Budget.
We have Ed Harrington, who is the Deputy Assistant
Secretary of the Army for Procurement. He is a former senior
U.S. Army officer with more than 28 years of experience in
weapons acquisition and contracting. He also served as Director
of the Defense Contract Management Agency from 2001 to 2003.
Charles North is a Senior Deputy Director of the
Afghanistan-Pakistan Task Force at the U.S. Agency for
International Development. Mr. North has been with USAID since
1987. He previously served as the Director of USAID's Policy
Office and the Regional Director for the Western Hemisphere in
the Office of the Director of Foreign Assistance in the State
Department.
Daniel Feldman is the Deputy Special Representative for
Afghanistan and Pakistan at the U.S. Department of State. Mr.
Feldman is one of two deputies to Ambassador Holbrooke, the
Special Representative for Afghanistan and Pakistan. He
previously served as Director of the Multilateral and
Humanitarian Affairs at the National Security Council during
the Clinton Administration and was the Counsel and
Communications Advisor on this Committee, the Senate Homeland
Security and Governmental Affairs Committee. Most recently, Mr.
Feldman was a partner at Foley and Hoag.
Jeff Parsons is Executive Director of the Army Contracting
Command. Mr. Parsons also serves as the principal advisor to
the Commanding General of the Army Materiel Command on
Contracting Matters and as the Army Materiel Command Career
Program manager for the Contracting and Acquisition Career
Program.
It is the custom of this Subcommittee to swear in all
witnesses that appear before us. So, if you do not mind, I
would like to ask you to stand.
Do you all swear that the testimony that you will give
before this Subcommittee will be the truth, the whole truth and
nothing but the truth, so help you, God?
Colonel Campbell. I do.
Mr. Harrington. I do.
Mr. North. I do.
Mr. Feldman. I do.
Mr. Parsons. I do.
Senator McCaskill. Thank you. Let the record reflect that
the witnesses have all answered in the affirmative.
We will be using a timing system today. We would ask that
your oral testimony be no more than 5 minutes, and we will put
your entire written testimony as part of the record.
Once again, I want to thank all of you for your service to
your Country. None of you are in these jobs because you are
making the big bucks. You are obviously working in the jobs you
are working because you care about your Country and want to
contribute. So let's start with that, and we will begin with
Mr. Campbell.
TESTIMONY OF WILLIAM H. CAMPBELL, III,\1\ DIRECTOR OF
OPERATIONS, OFFICE OF THE UNDER SECRETARY OF DEFENSE
(COMPTROLLER), DEPARTMENT OF THE ARMY, U.S. DEPARTMENT OF
DEFENSE
Colonel Campbell. Thank you, Chairman McCaskill and Senator
Bennett. I appreciate the opportunity to explain from a budget
perspective the actions of the Department of Defense to improve
the oversight of reconstruction projects in Afghanistan. My
remarks in particular, though, will focus on the Commander's
Emergency Response Program (CERP) program.
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\1\ The prepared statement of Colonel Campbell appears in the
Appendix on page 39.
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As you may know, CERP began as a U.S.-funded program in
fiscal year 2004 and is designed to enable local commanders in
Iraq and Afghanistan to respond to urgent humanitarian relief
and reconstruction requirements within their area of
responsibility. It is a valuable tool that commanders use to
fund projects that will immediately assist the local
populations.
In testimony before the Senate Armed Services Committee
last April, General Petraeus called CERP ``a vital
counterinsurgency tool for our commanders in Afghanistan and
Iraq.'' He added, ``Small CERP projects can be the most
efficient and effective means to address a local community's
needs, and where security is lacking it is often the only
immediate means for addressing these needs.''
Since 2004, DOD has obligated approximately $1.6 billion
for CERP programs in Afghanistan. That includes about $551
million in fiscal year 2009. Of those projects, about 2,300
projects in 2009, two-thirds of those funds were spent on
transportation projects, but about 90 percent of all the
projects were valued at $500,000 or less.
Now recognition of the program's effectiveness and the
value, Congress has authorized for fiscal year 2010 about $1.3
billion for the CERP program, and we understand will
appropriate $1.2 billion for the program. CENTCOM plans to
allocate the bulk of those funds to operations in Afghanistan.
Now, by its nature, CERP involves decentralized
implementation by local commanders in theater. Its hallmarks
are responsiveness to urgent needs and flexibility.
And we have heard the concerns expressed by Members of
Congress here today as well. We have studied the recent
findings of audit reports, and we have examined lessons learned
from previous deployments. And we have taken steps within the
Department, within the Army, and within CENTCOM theater to
improve the oversight of the program, all with a goal of not
diminishing the key element of flexibility and responsiveness
this program provides to the commanders in the field.
Within DOD, the Office of the Comptroller provides guidance
for the program though the Financial Management Regulation.
These regulations went through a significant update in June and
December 2008, and this guidance is then supplemented by field
level instructions and training. All guidance is continually
updated to respond to changing operational conditions.
To improve oversight of the program, the Army has enhanced
CERP training for four key positions: The project manager, the
project purchasing officer, the paying agent, and the unit
commander. The first three form a triad of expertise that every
project must have. Unit commanders are vital to ensure the
appropriate projects are identified. Integrated training and
detailed procedures provide the checks and balances necessary
in every project.
In addition, in Afghanistan, the U.S. Agency for
International Development now participates as a voting member
on the CERP review board at the command level. Their
participation prevents duplication of effort and helps identify
any problems with sustainment of projects nominated by the CERP
program.
The time, energy, and ingenuity that people have devoted to
improving CERP reflects both a desire to spend taxpayers' money
wisely and to maintain a program that has proven to be a
valuable tool in the fight in Afghanistan and Iraq.
DOD recognizes that more improvements can be made in the
management of CERP, to maintain both the flexibility and the
accountability of this essential field-driven program. To that
end, the Deputy Secretary will lead a review of CERP to
determine how best to enhance the Department's guidance,
management and oversight, and this report will be completed and
made available to the Congress this spring.
Let me again thank you for the tremendous support of the
Congress to this program, and I will be glad to address any
questions on CERP. Thank you.
Senator McCaskill. Mr. Harrington.
TESTIMONY OF EDWARD M. HARRINGTON,\1\ DEPUTY ASSISTANT
SECRETARY OF THE ARMY FOR PROCUREMENT, DEPARTMENT OF THE ARMY,
U.S. DEPARTMENT OF DEFENSE
Mr. Harrington. Chairman McCaskill, Senator Bennett,
distinguished Members of the Subcommittee on Contracting
Oversight, thank you for this opportunity to discuss the Army's
contracting operations in Afghanistan where we strive to be
agile, expeditionary, and responsive to our warfighters, while
ensuring the proper stewardship of taxpayer dollars.
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\1\ The joint prepared statement of Mr. Harrington and Mr. Parsons
appears in the Appendix on page 41.
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With me today is Jeff Parsons, Executive Director of the
Army Contracting Command. We have a joint written statement
that I respectfully request be made a part of the record for
today's hearing.
We thank the Members of this Subcommittee and the Members
of Congress as we work to rebuild the acquisition and
contracting workforce to execute the increasing workload in the
number of contracted actions and the contracted dollars, which
in the last 15 years has increased in excess of 500 percent.
With your help and the help of the Office of the Secretary of
Defense, we are working aggressively to rebuild our workforce
numbers and restore their skills to deal with the growing
complexities of contracting.
Along with the additional workforce personnel, we thank you
for authorizing five additional general officer billets for
acquisition. Our progress in filling these positions is
outlined in our written statement.
It is important to note, however, that Major General
Promotable Bill Phillips will soon relinquish command of the
Joint Contracting Command-Iraq/Afghanistan (JCC-I/A), and
become the Principal Military Deputy to our Assistant Secretary
of the Army for Acquisition, Logistics and Technology. He will
also become our Director for Acquisition Career Management.
Both of these require a three-star billet.
Brigadier General Camille Nichols is slated to take command
of JCC-I/A later this month, replacing General Phillips.
General Phillips is the first contracting general officer
to be the Principal Military Deputy. We feel this is a strong
example to the Army's commitment to contracting.
The JCC-I/A is authorized to contract for goods and
services, to include supporting the Defense Department's
Commander's Emergency Response Program. The JCC-I/A mission
does not include reconstruction of Afghanistan because that
mission is assigned to the U.S. Agency for International
Development.
JCC-I/A, however, does have a direct role in developing the
economy of Afghanistan. For example, through the Afghan First
program, JCC-I/A has awarded roughly $1.8 billion to Afghani
business since October 1, 2008. Of note, JCC-I/A awarded more
than $39 million to Afghani women-owned businesses.
In support of the President's decision to send an
additional 30,000 U.S. troops to Afghanistan, General Phillips
and his staff are conducting a mission analysis in coordination
with CENTCOM, the Joint Staff and our Army staff, to determine
the resources, personnel and locations where contractor support
will be required for this surge. We are engaged with JCC-I/A on
a daily basis to provide that direct support to them.
Earlier this year, we established the Joint Theater
Contracting Support Office within my office at the Pentagon to
ensure JCC-I/A has fully funded, manned, and supported
resources in this contingency contracting mission. As
additional troops deploy, this mission takes on even greater
importance.
We are also continually improving our processes to leverage
stateside contracting capabilities to augment JCC-I/A's. As an
example, the Army Contracting Command established a Reach-Back
Contracting Office as a center of excellence at the Rock Island
Contracting Center in Illinois. Through this center, we are
working with JCC-I/A and the Army Contracting Command to
identify requirements in theater that can be performed at Rock
Island. We have also initiated coordination with the Air Force
to provide a team of its contracting officers to augment Rock
Island's reach-back capability.
In addition, to ease the workload in theater, the Army has
established a JCC-I/A specific Contract Closeout Task Force in
San Antonio, now in the process of closing out 80,000
contracts.
Thank you very much, ma'am. This concludes my opening
remarks. Mr. Parsons will now discuss the Logistics Civil
Augmentation Program, after which we look forward to your
questions.
Senator McCaskill. Mr. Parsons, would you like to go right
after Mr. Harrington?
TESTIMONY OF JEFFREY PARSONS,\1\ EXECUTIVE DIRECTOR, ARMY
CONTRACTING COMMAND, DEPARTMENT OF THE ARMY, U.S. DEPARTMENT OF
DEFENSE
Mr. Parsons. Thank you, Chairman McCaskill, Senator
Bennett, and distinguished Members of the Subcommittee. Thank
you for the opportunity to provide information on the status of
the LOGCAP contracts in Afghanistan, including the continuing
transition from LOGCAP III which relies on a single source
company, to the LOGCAP IV which uses three different
performance contractors. Both of these contingency contracts
enable the Army to provide critical support to buoy troops
serving on the front lines of Afghanistan.
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\1\ The joint prepared statement of Mr. Parsons and Mr. Harrington
appears in the Appendix on page 41.
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The highly complex and challenging LOGCAP program is
accomplished by a team of forward deployed and rear echelon
Department of the Army civilians, Army Reserve officers and
noncommissioned officers in the LOGCAP Support Unit, and the
officers, NCOs and civilian employees of the Defense Contract
Management Agency (DCMA). These hardworking, highly skilled
people make up Team LOGCAP and provide contract oversight of
the three performance contractors: DynCorp, Fluor, and KBR.
The Defense Contract Audit Agency also provides forward
support and is a key partner in our oversight functions. Team
LOGCAP is further supported by the men and women serving here
in the United States with the U.S. Army Materiel Command and
its subordinate commands, the U.S. Army Contracting Command and
the U.S. Army Sustainment Command.
Today, I plan to provide you a status update and answer
your questions on what we are doing to support deployed forces
through the LOGCAP contracts in Afghanistan. I thank you for
your continued interest in LOGCAP and the contingency
contracting process.
The Army Contracting command is committed to excellence in
all contracting, including these very complex and critical
LOGCAP contracts. We continue to collect lessons learned and
make improvements and adjustments along the way to ensure
mission success and protection of the interests of the U.S.
Government and the taxpayer. It is my honor to lead the
contracting team in achievement of these goals.
Thank you for inviting me to speak with you today. This
concludes my opening remarks.
Senator McCaskill. Thank you, Mr. Parsons. Mr. North.
TESTIMONY OF CHARLES NORTH,\1\ SENIOR DEPUTY DIRECTOR,
AFGHANISTAN-PAKISTAN TASK FORCE, U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT
Mr. North. Chairman McCaskill, Ranking Member Bennett,
Senator Kirk, and other Members of the Subcommittee, thank you
for your invitation to testify before this Subcommittee on the
topic of Afghan reconstruction and development contracts. I
will keep my remarks brief and ask that my full written
statement be submitted as part of the official record.
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\1\ The prepared statement of Mr. North appears in the Appendix on
page 55.
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Within the President's Afghanistan-Pakistan strategy,
USAID's mission in Afghanistan is to support Afghan-led
development, build Afghan capacity at the local and national
levels and strive for Afghan sustainability.
As you know, Afghanistan is a high-risk environment in
which corruption and extortion pose significant risk. As a
result, it would be impossible for me or for USAID, under these
circumstances, to declare unequivocally that wrongdoing will
never occur. At the same time, though, it is important to
underscore that we have in place well-designed systems and
practices to minimize opportunities for misconduct and
misappropriation of funds.
Based on these requirements, we aggressively manage and
monitor performance, review and improve our systems and
practices, and promptly respond to all allegations.
Furthermore, we work closely with the USAID Inspector General
as well as the Special Inspector General for Afghanistan
Reconstruction and the Government Accountability Office.
To best respond to President Obama's strategy, USAID has
become an integral component in a whole-of-government unity of
effort in Afghanistan. All our planning and operations are
streamlined and coordinated with the various U.S. Government
agencies.
On the ground, we work under the leadership of Ambassador
Eikenberry and Ambassador Wayne. At the Provincial
Reconstruction Teams and in the Regional Command Offices, our
field officers work daily with our military and interagency
civilian counterparts to implement the U.S. Government's
mission in Afghanistan. The PRTs serve as additional eyes and
ears on the ground to further improve our program effectiveness
and to flag potential issues.
USAID's U.S. and Afghan staff are central to program
implementation. Our on-the-ground presence has doubled since
January and continues to grow. As of December 7, 2009, USAID/
Afghanistan has 180 American staff in-country. USAID expects to
have a total of 333 Americans on the ground early next year. We
also have 136 Afghans and 16 third country nationals on our
staff in Afghanistan.
USAID currently has 10 contracting officers who focus on
Afghanistan and more than 57 contracting officer's technical
representatives on our staff in-country as well.
Our staff operate within a new initiative called Afghan
First which others have referred to. The guiding principle is
that Afghans lead, not follow, in their path to a secure and
economically viable country. The program strives to buy Afghan
products, use Afghan-owned firms for procurement and to use
Afghan specialists whenever it is possible in order to build
capacity in Afghanistan.
In conclusion, Afghanistan is hungry for development. The
United States, in coordination with international partners, is
providing jobs for the jobless, a voice to the voiceless, food
for the hungry and hope for the hopeless.
We know it will be difficult. We remain optimistic even
during weeks like this when five members of our team from
Development Alternatives Incorporated were killed by a suicide
bomber. But these principles--extending monitoring and
oversight, a whole-of-government approach, a skilled core of
civilian development specialists, and placing Afghans first--
will make a difference for the people of Afghanistan.
Thank you.
Senator McCaskill. Thank you, Mr. North, and obviously we
continuously stand in awe of people who lose their lives in
this effort. Whether they are civilians from State Department
or a part of our military, it is obviously beyond bravery that
people are willing to stand up and go into a contingency like
that.
Especially, in some ways, I do not think civilians get
enough pats on the back. We love our military and their
bravery, but I think we forget sometimes that there are a lot
of brave people who are stepping forward that do not wear a
uniform, that are in harm's way.
Mr. Feldman, please proceed.
TESTIMONY OF DANIEL F. FELDMAN,\1\ DEPUTY SPECIAL
REPRESENTATIVE FOR AFGHANISTAN AND PAKISTAN, U.S. DEPARTMENT OF
STATE
Mr. Feldman. Chairman McCaskill, Senator Bennett, and
Senator Kirk, thank you for your invitation to appear before
the Subcommittee to discuss our efforts to enhance oversight
and accountability for development and reconstruction
contracting in Afghanistan.
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\1\ The prepared statement of Mr. Feldman appears in the Appendix
on page 63.
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And, as a former staffer on this Committee, it is an honor
and a unique experience to be back in this hearing room, but on
this side of the table.
Senator McCaskill. We cannot wait. [Laughter.]
Mr. Feldman. As you know, this is a complex topic with many
agencies owning various aspects of it. The State Department's
Office of the Special Representative for Afghanistan and
Pakistan has a role in formulating broader policy and then in
reviewing and approving contracts. While our embassy in Kabul
and our USAID colleagues can speak more directly to the
challenges related to implementation, yet other colleagues can
speak more closely to the situation in Afghanistan as it
compares to Iraq.
As Secretary Clinton noted in her recent appearance before
the Senate Foreign Relations Committee, the Obama
Administration inherited an underresourced civilian effort in
Afghanistan. As a result, efforts since 2001 have fallen short
of expectations.
Over the past 10 months, we have conducted a broader
review, not only of our assistance objectives, but also how we
go about delivering our assistance programs. The result of this
review is a new, more focused and effective assistance effort
aligned with our core goal of disrupting, dismantling and
defeating al-Qaeda. Additionally, our assistance is
increasingly implemented in partnership with the Afghan
government and local Afghan implementing partners.
While we have not resolved all the problems that we
uncovered, I believe we now have a more robust system of
review, management and oversight in place that will deliver
improved results over the next 12 to 18 months. Let me briefly
outline a few aspects of our new approach.
Our civilian assistance in Afghanistan aims to build the
capacity of key Afghan government institutions to withstand and
diminish the threat posed by extremism. Short-term assistance
aims to deny the insurgency foot soldiers and popular support
by focusing on licit job creation, especially in the
agricultural sector, and improving basic service delivery at
the national, provincial, and local levels. Long-term
reconstruction efforts aim to provide a foundation for
sustainable economic growth.
To achieve these goals and maximize the effectiveness of
our assistance, we have pursued four discrete topics or
categories: One, smaller, more flexible contracts; two,
decentralization; three, increased direct assistance; and four,
improved accountability and oversight.
On smaller, more flexible contracts, we are shifting away
from large U.S.-based contracts to smaller, more flexible
reconstruction contracts with fewer sub-grants and sub-
contracts that enable greater on the ground oversight.
The premise behind this flexibility is simple. In a dynamic
conflict environment like Afghanistan, we need to be able to
adapt our programs as conditions change on the ground. These
smaller contracts and grants will be managed by U.S. officials
in the field, closer to the actual activity implementation,
making it easier for those same officials to direct, monitor
and oversee projects to ensure the proper use of taxpayers'
funds.
On decentralization, USAID officials posted to region
civilian-military platforms bring with them funding and
flexible authorities to enhance the responsiveness of programs
and better coordinate local Afghan priorities. We found that
not only does a decentralized program platform enhance
development activities at the provincial and district level,
but that it is also more cost effective.
On increased direct assistance, we are also decreasing our
reliance on large international contractors and building Afghan
institutional capacity by increasing our direct assistance
through Afghan government mechanisms in consultation with
Congress. This includes increased U.S. contributions to the
World Bank administered Afghan Reconstruction Trust Fund, which
includes the National Solidarity Program. To receive direct
assistance, Afghan ministries must be certified as meeting
accountability and transparency requirements.
Support to the Afghan Civil Service Commission increases
the professional skills and leadership within the Afghan
government, enabling Afghans to increasingly assume
responsibility for their country's economic development. Our
goal is to have up to 40 percent of U.S. assistance delivered
through local entities by December, 2010, and to certify six of
the core Afghan ministries in the same time period.
On improved accountability and oversight, at the start of
our contracting review, Ambassador Holbrooke and Deputy
Secretary Lew reviewed individually every major contract to
ensure that they were aligned with the strategy that the
President had announced in March 2009. They focused on ensuring
that our new contracts introduced mechanisms to improve
performance and significantly decrease the overall percent of
multiyear contracts.
While Washington remains closely involved in the contract
review process, Ambassador Tony Wayne, who you have previously
heard about, our Coordinating Director for Development and
Economic Assistance in Kabul, now has day to day responsibility
for reviewing each contract to ensure adherence to our national
security goals.
Recognizing that the substantial international assistance
to Afghanistan has the potential to contribute to corruption,
we have deployed a sizeable number of new direct hire
contracting personnel to enhance oversight of programs, as well
as additional technical staff in the field to monitor program
implementation and impact.
The Special Inspector General for Afghanistan
Reconstruction is Congress's eyes and ears on the ground in
Afghanistan, and we support its role in evaluating internal
controls and implementation of assistance programs.
In conclusion, the Secretary and all of us who work on
Afghanistan believe we have a duty to ensure that the resources
provided by the Congress and the American people are used for
the purposes intended and approved by the Congress. The reforms
that we have implemented will, over time, decrease overhead and
related costs for assistance programs, increasing the amount
per dollar of U.S. assistance, directly benefiting the Afghan
people and the Afghan institutions.
Afghanistan is a complex, dynamic, and difficult
operational environment, and that constrains our ability to
sometimes provide the high level of oversight of projects that
we would otherwise require. But we are making every effort to
ensure that the required operational flexibility is matched
with the highest dedication to accountability, and we are
committed to taking the necessary corrective actions when a
problem occurs.
Thank you.
Senator McCaskill. Thank you, Mr. Feldman.
We will each do 5-minute rounds and do as many rounds as we
need to do in order for everyone to cover their questions
today.
Let me start out by asking a question that probably
individually none of you can answer, but it might be one of
those moments for collaboration that would be important. Can
somebody give me a number in terms of how much we are spending
on contracts in Afghanistan, what you would guess the number is
going to be or ballpark number for either this year or next
year?
Can anybody do that?
Maybe let's do it by stovepipe then. Are there significant
contractual obligations other than CERP and USAID? Am I missing
a significant outlay of contracts other than CERP and USAID?
Mr. Harrington. Ma'am, from an Army perspective, both the
Joint Contracting Command-Iraq/Afghanistan will contract for
all of the goods and services.
Senator McCaskill. Oh, LOGCAP. I left out LOGCAP. The
three: LOGCAP, CERP and USAID.
Mr. Harrington. Yes, ma'am, and the Joint Contracting
Command-Iraq/Afghanistan contracts for specific goods and
services for those requirements outside the bounds of LOGCAP
that are instant to the standing-up of a forward operating base
command outpost, those types.
Senator McCaskill. OK.
Mr. Harrington. Host nation trucking, air support, services
such as that.
Senator McCaskill. OK. So we have CERP. We have LOGCAP. I
am going to refer to what you just said as the other.
Mr. Harrington. Yes, ma'am.
Senator McCaskill. And USAID.
Anything else that I have missed, any big pots of money
somewhere that are being spent that I have missed?
Mr. Feldman.
Mr. Feldman. Yes, the State Department altogether, we are
in a little bit of a state of flux with one particularly large
contract. One of our largest contracts under INL, which is for
police training, that is in the process of being transferred
back to DOD. That was about $450 million.
If you take that out, and that should probably be back at
DOD in the first quarter of next year, if you take that out, we
have about $900 million of programming. The majority of it is
INL for counter-narcotics, for justice programs, for
corrections programs, for a range of other things, and then
there is some smaller contracts for security personnel and
embassy security. But altogether, it comes to about $900
million. It seems with taking out that police piece, under
1,500 contractors altogether.
Senator McCaskill. What about LOGCAP? How big is LOGCAP,
Mr. Parsons, in Afghanistan?
Mr. Parsons. Ma'am, the current LOGCAP III contract in
Afghanistan is probably in the neighborhood of $1.8 to $2
billion, and the recent awards that we made to both Fluor and
to DynCorp will well exceed over a billion dollars as well.
I would also like to add that I know we are doing quite a
bit of contracting for the Combined Security Transition
Command-Afghanistan (CSTC-A), where we are buying a lot of
equipment that is being provided to the Afghan army and the
Afghan police, plus some of the training support contracts that
we do for CSTC-A. Those, I know are averaging probably a total
of about a billion dollars a year as well, if not more.
Senator McCaskill. OK, and that is not in other? That is
not in Mr. Harrington's other? That is an additional?
Mr. Harrington. Yes, ma'am.
Mr. Parsons. Yes.
Senator McCaskill. OK. So now tell me again what that is
called.
Mr. Parsons. The Combined Security Transition Command-
Afghanistan (CSTC-A).
Senator McCaskill. CSTC-A.
Mr. Parsons. Right.
Senator McCaskill. You guys kill me. [Laughter.]
Mr. Parsons. Lieutenant General Caldwell.
Senator McCaskill. You have never found an acronym you did
not love.
Colonel Campbell. Actually, Senator, the funds that they
spend are out of the Afghan Security Forces Fund, which is a
separate account that is appropriated to DOD.
Senator McCaskill. OK. What I really need you all to do, we
are going to try to do a chart after this hearing as to where
the money is being spent because what I want to make sure I
know at this point in time is who is responsible for each pot
of money. That is one of the things that made my eyes cross in
Iraq. It was just not clear who was the one that was going to
be accountable when things went badly.
Let me ask this because one of the things that happened in
Iraq was you had Army Corps of Engineers that kind of got
layered in there. And it was interesting to me because I would
go in Iraq to talk to the Army Corps of Engineers, and I would
hear one set of facts. Then I would move to somewhere else, and
I would hear a completely different set of facts. So where is
Army Corps of Engineers in here, if at all?
Mr. Harrington. Ma'am, I was going to say the Army Corps of
Engineers is the other component of this, and I will take a
question for the record to get an accurate dollar count for
you. Some of this is still slightly unknown because
requirements are going to be generated throughout this
timeframe, but we will get the accurate figures for you for the
Army Corps of Engineers.
Senator McCaskill. What will the Army Corps of Engineers be
doing?
Mr. Harrington. Obviously, ma'am, primarily construction
projects, permanent building type construction projects.
Senator McCaskill. For the military or for the Afghan
people, because they were doing reconstruction in Iraq?
Mr. Harrington. Yes, ma'am, essentially for both.
Senator McCaskill. And their money is going to come from
where? The Army Corps money is coming from your money or is it
coming from State's money?
Mr. Harrington. I do not know, ma'am. I will find out.
Senator McCaskill. OK.
Colonel Campbell. Ma'am, I believe actually the Army Corps
of Engineers----
Senator McCaskill. I appreciate your honesty that you do
not know, but it is a problem.
Mr. Harrington. Yes, ma'am.
Colonel Campbell. My understanding is the Army Corps of
Engineers will oversee large projects, and that is probably why
you would get different facts from Corps of Engineers than you
would from an Army command because the Army is going to be
executing funds appropriated to the Army, funds appropriated in
the case of Iraq to Iraq Security Forces funds. There could
also be some MILCON projects that go directly through Army
Corps of Engineers and not through the commands in theater. So
I can understand why you would get different facts in theater.
Senator McCaskill. And that is how things get lost in the
shuffle.
Colonel Campbell. Right.
Senator McCaskill. You know CERP is doing big stuff now.
And I am about out of time for this round. So I am going to go
ahead and turn it over to Senator Bennett. We will come back to
that, but CERP is no longer just fixing broken glass on store
fronts.
Colonel Campbell. Right.
Senator McCaskill. CERP is doing large projects. The
question is are they contracting with people to do that or is
Army Corps going to come in and do that? That is where I am not
clear.
Has CERP drifted from its initial, what I affectionately
called, walking-around money? Has it drifted into the category
of an USAID or an Army Corps reconstruction major project, and
are we losing expertise in this shuffle? More importantly, are
we going to get the oversight and the monitoring that we need?
Thank you, and I will turn it over to Senator Bennett.
Senator Bennett. Thank you very much.
Following through with what the Chairman has said, I have
talked about the coordination between the combat units and the
contractors, and when combat units are in the field they expect
to have a high degree of situational awareness established
between operating centers at higher levels of command. This
means that the tactical maneuvers of one unit do not get messed
up with the tactical maneuvers of another unit. All right.
What is the command structure at the local, provincial, and
national level in Afghanistan to ensure that you have the same
degree of coordination, or avoidance of duplication if you
will, that is expected of combat units with respect to
reconstruction units?
Mr. Harrington. Senator, within the Central Command, the
Joint Contracting Command-Iraq/Afghanistan has the
responsibility for what we call theater business clearance for
all requirements coming into the Central Command. That is the
clearinghouse, if you will, for those requirements with respect
to where our responsibilities lie at, for executing the
requirements for the warfighting units.
Outside of that, we do not have a purview of those other
requirements. But, within that Central Command function, the
Joint Contracting Command-Iraq/Afghanistan, in coordination
with LOGCAP, is the central point through which we find ways to
execute requirements for the warfighters that we support.
Senator Bennett. All right. Since you have that group in
place, do you have any information about how often they stumble
into situations where what is being done in Reconstruction Unit
A does not properly coordinate with what is being done in Unit
B, and they exercise their authority to say, OK, straighten
that out? It is nice to have the thing in place, but you have
been there for long enough that you can give me some examples
of how it works?
Mr. Harrington. Sir, it is the organizational structure in
terms of executing those requirements at the different
geographical locations. When a requirement comes in for a
forward operating base in a certain geographical location, that
regional contracting center gets that responsibility to execute
that. If it is a large, more complex requirement, that is when
we turn it back to the reach-back capability at Rock Island.
So Joint Contracting Command-Iraq/Afghanistan, the staff
that supports that, oversees the allocation of those functions
to award those contracts and has the purview of all of those
functions coming to it. That is within CENTCOM, though. That is
our responsibility.
Senator Bennett. Anyone else have a comment on that?
Colonel Campbell. Senator, I can tell you, again, I am a
budget person. I am not one who works out in the field from an
operational level.
But on the CERP program, what they have done in
Afghanistan, and partly from lessons learned in Iraq and even
going back to Kosovo and Bosnia, they have set up a CERP review
board. And, as I mentioned in my opening statement, it has a
USAID representative on there, and that board is at the command
level. So it is not sort of segregated or dispersed out in the
field. All those CERP projects come back up to at least a two-
star, if not higher level, command where they can do the kind
of integration that you are referring to.
I cannot say that they have everything in there, but they
do their best to integrate at least with USAID.
Senator Bennett. There have been reports of friction
between the State Department and USAID that exacerbated after
the 2006 merger of USAID into State. I am not asking you to
tell any tales out of school, but can you give us some
characterization of the relationship between USAID and the
State Department?
Mr. Feldman. I think we should both answer.
Senator Bennett. Everything is fine?
Mr. North. Sir, we work very closely with the State
Department at all levels. Certainly here in Washington,
Ambassador Holbrooke's staff is an interagency group which
includes three USAID officers on his staff.
We have three USAID officers on Ambassador Holbrooke's
staff to help with that coordination here in Washington. Out in
Kabul, we work very closely with Ambassador Wayne and
Ambassador Eikenberry. We have several examples of interagency
strategies and implementation plans, for example, on
agriculture, with the U.S. Department of Agriculture and the
National Guard and how we go forward on implementing
agricultural programs in Afghanistan.
When you go out to the provincial level, at the planning
level there, we have heard USAID does participate in CERP
decision-making, but it is also interagency effort, not just
USAID and the military but also with the State Department.
So it is a close relationship, two different organizations.
There are areas we continue to work on to improve that
coordination.
Senator Bennett. Mr. Feldman, do you have any comment?
Mr. Feldman. No. I would just say the success of our
mission would be impossible without a very close working and
cooperative relationship with USAID, and we feel very lucky to
have the working relationship that we do with them. It was part
and parcel of Ambassador Holbrooke's intent when he created his
office to make it the whole-of-government approach.
We have detailees from 10 different agencies, but USAID is
the only one that has three there right now. Actually, DOD also
has three representatives. So those are far more representated
than any of the others, and they are extremely well integrated
into our staff, into all of our planning.
And I would also amplify the point about Ambassador Tony
Wayne in the field, who is the Coordinating Director for
Development and Economic Affairs ever since June. So he
oversees all U.S. Government non-military assistance, and we
have created a counterpart also in Pakistan to try to have the
same sort of coordination. So he directs and supervises a wide
range of embassy sections, programs, agencies, and there are 15
national level working groups to coordinate policy
implementation.
So, not only do we believe, we have to work towards as
coordinated an interagency approach as possible to be
successful.
Senator Bennett. Thank you.
Madam Chairman, I have another Subcommittee I have to go
to. So I am at your mercy. You can do whatever you want by
unanimous consent. [Laughter.]
Senator McCaskill. By unanimous consent, I would like us to
vote on the health care bill by Monday, so I can get home for
Christmas. Will that work?
Senator Bennett. Maybe not that?
Senator McCaskill. I thought I would give it a shot.
[Laughter.]
Senator Kirk.
Senator Kirk. Thank you, Madam Chairman and Senator
Bennett, for this opportunity. It is a timely hearing,
obviously.
We welcome you gentlemen and thank you for your service.
We are about to spend billions of dollars in the
construction and counterinsurgency in Afghanistan, a country
that enjoys a reputation of having a culture of corruption. It
is sometimes said it is the second most corrupt country in the
world.
General McChrystal, when he was here, and he has written
beforehand that the success of the American operation in
Afghanistan will largely be measured on how we do--I am
paraphrasing--by, with and through the Afghanistan government.
I guess my first question is with that as a background, in
each of your agencies and departments, are there particular
procedures, practices and systems that you are going to
undertake that will give us some assurance, and the American
taxpayers some assurance, that the money that is going to be
spent over there will be properly overseen and accountable, so
that we do not fall into the trap of that culture and find that
a lot of our taxpayers' dollars are being expended as payola or
for kickbacks or however you want to describe it?
Maybe I will start with you, Mr. North, and if others want
to join in, in terms of what is happening in your respective
departments and agencies, it would be helpful.
Mr. North. Thank you. We do recognize the issue of
corruption is a major concern in Afghanistan, but we are also
looking increasingly to put more of our resources through the
government of Afghanistan, but doing it responsibly.
We have ongoing programs to strengthen the capacity of
government ministries, not only the personnel, but their
systems, so that they can bring them up to the standards that
we require for us to provide direct assistance to the
government. We signed an agreement with the Ministry of Health
a little over a year ago for over $200 million, and we have
since also certified the Ministry of Communications and the
Ministry of Finance to receive direct financing.
In addition to continuing to strengthen their systems, we
have ongoing assessments of other ministries including the
Ministry of Education, the Ministry of Agriculture and the
Ministry of Rural Rehabilitation and Development. By going
through these assessments, we can identify where the weaknesses
are and support their efforts to strengthen their systems, not
just to be able to manage our resources, but also to improve
the overall accountability of Afghan resources for the long
term.
So this is very much a part and parcel of what we are
about. It is strengthening their systems but also working with
and through the Afghan government.
Mr. Feldman. I am happy to.
Senator Kirk. Thank you.
Mr. Feldman. There are a range of initiatives that we have
tried to implement since the beginning of this year, to try to
improve contract oversight and performance, and they fall
roughly into five broad categories.
The first is the overarching organizational structure, and,
as I laid out already, having Ambassador Tony Wayne there
helped to do that. That position did not exist a year ago. Its
establishment helped improve the oversight and the interagency
coordination.
Second is the actual contracting methods, and the structure
of these development contracts has changed. So USAID is now
increasing its use of performance-based one-year contracts
which give more options for contracting officers who encounter
poor performance. Contracts are designed with fewer
subcontracting layers and with more professional supervision,
so they will hopefully perform better. And, as Mr. North has
said, we are moving towards Afghan contractors when feasible
and international contractors that have a strong percentage of
Afghan personnel. This also includes working with certified
Afghan ministries.
The third category is the actual personnel additions. So
the State Department and USAID are both increasing the number
of financial analysts, contracting officers, technical
officers, program officers, who altogether better track the
flow of money and ensure that contractors are performing more
according to standards.
The fourth is the general civilian increases in the field
at the national and sub-governance levels. We have more than
doubled and come close to tripling the number of U.S.
Government civilians deployed to the field this year. The more
that are there, where the contracts are actually located and
the projects are happening, the more oversight we can provide.
And the fifth is the external oversight mechanisms, and
that is obviously working in close concert and supporting the
missions of SIGAR, the various inspectors general, the GAO and
other external reporting mechanisms.
Then last, what I would say about corruption in particular
is that this is obviously an issue that is at the core of our
strategy in combating it in Afghanistan. We have made a very
robust and consistent case on dealing more aggressively on
corruption to the Karzai government. It was part of his
inaugural speech, as we had hoped it would be. He held just
yesterday the anti-corruption conference. But it is something
that we and the rest of the international community are going
to continue to watch very closely.
There has been a range of suggestions from revitalize the
anti-corruption commission, to hopefully bring some high level
prosecutions, if we cannot deal with it at the national level,
to working at a sub-national, regional governance structure
where we can hopefully work around corruption if we have to. So
it is something that is very central to our core mission.
Senator Kirk. Thank you very much.
Mr. Parsons. Sir, if I could add just real quickly, one of
the things that we are doing with our soldiers that are
becoming contracting officer representatives is we see them as
kind of the front line on being able to identify bad business
practices. We are teaching all of them now a block on ethics
training and the things that they need to look for as they
perform their duties as a contracting officer representative.
So I think that will go a long way.
In fact, I met with the Expeditionary Fraud Investigation
Unit right before this hearing, this part of the Criminal
Investigation Division of the Army, and they are increasing
their presence there as well, in Afghanistan.
Senator Kirk. Thank you. Madam Chairman, I know my time is
up, but may I just ask if there are any other statments?
Senator McCaskill. Absolutely. Take all the time you would
like, Senator Kirk.
Senator Kirk. Mr. Campbell or Mr. Harrington?
Colonel Campbell. Senator Kirk, yes, thank you.
What I would do is just give you an example which I think
will get to sort of at the local level issue you are talking
about. Of course, all CERP money is executed and managed by
U.S. Government employees or soldiers. In rare exception,
Coalition Forces can use CERP money.
One of the things that General McGhee, who is the resource
manager in CENTCOM, has implemented is moving more towards
electronic transfer of funds. So, in Iraq, years ago where we
used to have to essentially just fly in plane loads of cash,
what you are finding more in Afghanistan is a lot of this money
is being transferred, one, in local currencies but, two, as an
electronic fund transfer.
Of course, once it gets into the hands of the local
population, it is kind of up to them to deal with, but I think
that is where State Department's and USAID's more overarching
efforts will come into play.
Senator Kirk. Thank you.
Mr. Harrington. Sir, Army-wide, to reinforce Mr. Parson's
comments, we are taking a lot more of an active role in
training our contracting officer's representatives earlier in
the process and ensuring that they are identified, trained and
assigned, with certificates, such that when they do arrive in
theater they are then linked with their contracting officers,
and they go through a very good briefing on the contractor's
performance and the contractor's functions.
That training includes being able to evaluate the
contractor's performance and provide that relative information
to the contracting officer. That really culminates in
ascertaining the deliverable we are supposed to get, in either
a supply or a product, and then executing a payment, as Mr.
Campbell notes, electronically, so that we have got a very
good, succinct process all the way through the payment of the
contractor.
Senator Kirk. Thank you.
Just a final question on this, the notion that has been
advanced, I think, by President Karzai that the contracting or
the licensing program be managed or administered through the
Afghan government, is that something that we should take
comfort in? Is that notion something that can work out, do you
think?
I mean are you confident about that for the same reason
that obviously this is a great amount of dollars, a very
important theater?
In my own view, we are taking a huge bet on success in
Afghanistan, and part of it obviously is going to be the
civilian component of it. I am just wondering about the
licensing program being administered by the Afghan government.
Is that something that each of you subscribe to as the right
way to go?
Mr. Feldman. Ambassador Eikenberry addressed this in his
recent testimony, and we are fully supportive of that. We do
think that it would help to provide a certain consistency.
This came up in part due to the rates that international
contractors pay compared to rates that Afghans may make, lesser
rates at this point, if they go into the army or police or
things, and wanting to make sure that we create the right
incentives and do not create disincentives for them to join
security forces, which is in our own long-term interests. This
was a question that obviously Chairwoman McCaskill asked about.
So we do see this as one way to help address that, and we would
strongly favor it.
Senator Kirk. Thank you very much.
Madam Chairman, I am also going to have to excuse myself.
Thank you for your forbearance, and I thank you gentlemen as
well.
Senator McCaskill. Thank you, Senator Kirk. We are glad you
were here.
Let me start on a little bit drilling down on LOGCAP. You
know how I feel about LOGCAP III, it is like the movie that
never ends. I continue to be confused why we are utilizing
LOGCAP III and not more aggressively transitioning to LOGCAP
IV.
Even though we have awarded under LOGCAP IV, it appears to
me that less than a billion has been funded under LOGCAP IV,
and LOGCAP III now is totaling $34.4 billion. What is the hold-
up here? Why can we not let loose of the KBR dynasty?
Mr. Parsons. Well, ma'am, I think we are letting loose of
that. We have been deliberately moving from LOGCAP III to
LOGCAP IV. I think as we have testified before and have talked
with many of the staffers, there was a deliberate process that
we would move from Kuwait requirements on LOGCAP, move them
from III to IV, then move to Afghanistan, and then move to the
more complex situation which was in Iraq. And that is what we
have been following.
I think you are aware that all the work, LOGCAP
requirements in Kuwait have now transitioned fully to LOGCAP
IV. We are in the beginning parts of the transition in
Afghanistan, from the old LOGCAP III to LOGCAP IV. We expect
that transition to be complete by about July 2010.
It is not a simple transition process, as we have learned
especially with having to account for all the equipment that
has been bought by KBR at the different FOBs and the different
camps, and having to account for that, and also just getting
men and women and equipment in to transition in Afghanistan. So
it does take some time, and we have got to be cognizant of the
commanders' operational requirements as well.
With LOGCAP requirements in Iraq, we should be making an
award I hope at the end of this month or the beginning of
January for some of the services in Iraq. What has been holding
us back a little bit on the base life support is knowing
exactly what the requirements are going to be now that the
President has made the decision with the drawdown and trying to
extract all the forces by December 2011.
So it has been taking us some time working with theater to
identify those, but I think we are there. We should be
releasing that RFP very soon, and then that transition will
start taking place again sometime in 2010.
Senator McCaskill. It is my understanding that Fluor has
the North in Afghanistan and DynCorp has the South, correct?
Mr. Parsons. Correct, ma'am.
Senator McCaskill. And they are doing all of the tasks in
those areas?
Mr. Parsons. Yes.
Senator McCaskill. So it is not task to task competition
that we ended up with. It ended up regional competition.
Mr. Parsons. Yes, ma'am. What we did, we made a conscious
decision in Afghanistan to split Afghanistan in two, with two
different contractors, because we wanted to maintain that
capability and capacity with two contractors. So, if we need to
increase the requirements, which obviously we need to do now,
they will have that capacity in there.
Plus, we did not want to have a single point of failure,
which is what we really recognized in Iraq. We were tied to KBR
in Iraq. If KBR decided not to perform anymore, we did not
really have a backup. This way, if we have problems with one of
the performance contractors, we will have two there in the
theater. Then one of them, the other one could pick up.
I know you had concerns about the way we structured these
task orders. We recognized that if we were going to select one
for the North and one of the South, we would have to find a way
to preserve the competition that we had with the award of those
task orders. So what we did was we established what they call a
service price matrix.
We took about 80 percent of all the key services that are
provided underneath those task orders for all the different
base life support, and we had a matrix where the baseline
pricing, which the fee was based on. So the fee that these
contractors will earn are tied back to that pricing matrix. So,
even if there is really no incentive for them to run the costs
up because they will not get any more fee.
Senator McCaskill. So what you are telling me, which is
great news, huge improvement, is that somebody who is peeling a
potato up North is going to get paid about what somebody who is
pealing a potato down South?
Mr. Parsons. Not necessarily, ma'am. There are differences
for some of the services between what we have in our price
matrix for the North versus the South, but that is because the
contractors have different rate structures. They took different
approaches at it.
What we are also going to have is DCAA going in and
auditing the baseline for both contractors for these prices.
Senator McCaskill. Right, I am aware they are doing that.
Mr. Parsons. If they see something out of whack, we will go
back and negotiate with them.
Senator McCaskill. Let's just say something a little bit
easier. Per head breakfast, I mean on a per head. I assume we
are buying breakfast by head.
Mr. Parsons. Very close. There was no unbalanced pricing
that we saw when we did the competition.
Senator McCaskill. OK.
Mr. Parsons. So, when you take a look overall, we are
pretty comfortable.
Senator McCaskill. I saw that DynCorp's partner got
indicted, Agility, criminally indicted for violations of the
False Claims Act, which to translate into lay terms, they got
caught ripping us off.
Now I understand that you all have suspended them, but it
is also my understanding that the way the rules and regs and
laws work, they can continue to get work under their contract
with Fluor even though they have been indicted for ripping us
off. Is that accurate?
Mr. Parsons. Ma'am, interesting that you should bring this
question up. Mr. Harrington and I met with DynCorp officials
earlier this week to discuss another matter, but they did bring
up Agility. I know that what they informed us was that they
were no longer going to be using Agility as a partner. They had
set up the agreement with their partners that if anybody got
indicted for any reason, that they could dis-establish that
relationship, and we were informed on Monday this week, that
was their plan.
Senator McCaskill. More progress, OK. I also understood
that you recently suspended $14.2 million in costs that were
billed by Fluor, that you, under LOGCAP IV, have refused or
decided not to pay $14.2 million worth of expenses that were
submitted.
Mr. Parsons. Ma'am, there are some withholdings that are
taking place. I do not know the exact amount. I would have to
get back to you on that, but there have been some questions
about Fluor's compensation and also their purchasing system. So
I know that the administrative contracting officer, working
with the contractor officer, has been looking at withholds
until those systems are corrected.
Senator McCaskill. Well, I would love to know the details
of that. For one thing, it will reassure me that we have
transitioned into a situation where we are going to try to take
money away, instead of paying them and then saying later: Maybe
we should not have given that to you, but too late now. We have
already given it to you, and we are not going to try to claw
back.
Mr. Parsons. Right.
Senator McCaskill. So I would like to know the underlying
details. If in fact we are withholding, I would like to know
what the details are.
Mr. Parsons. OK, we will get that for you.
Senator McCaskill. Now let's talk about the contractors
versus police and military. If you cannot give me these answers
now, these are answers I think it is very important for the
record.
Understanding I went over this with Secretary Gates in the
Armed Services hearing, and with McChrystal, it is my
understanding that many of these contract positions--people
need to understand this is a world of difference from Iraq in
terms of the use of Afghans. We have got more than 50 percent,
in fact almost 100 percent of the security contractors are
Afghans. I think right now we have about 11,000 security
contractors, and 10,000 of them are Afghans. Clearly, that is a
much different scenario than what we had in Iraq when it was
almost all third party nationals.
Now the same thing is true with the other contractors. More
than half, in fact I think it is close to two-thirds of the
100,000 contractors we have in Afghanistan are in fact Afghans.
Now it is my understanding, and some of this was from
talking to Ambassador Holbrooke, that he mentioned to me that
Karzai talked about this problem in his inauguration address.
That is that we are paying our contractors more money than they
are paying their police or their military. If you are an Afghan
and you can make more money cooking for American troops than
you can make taking up a gun to fight the Taliban, I am betting
they are going to cook for the troops.
If our entire mission is to build up the Afghan military
and the Afghan police, how do we accomplish that if the left
hand does not know what the right hand is doing and we are
paying our contractors more than those military or police make?
Can any of you confirm that is in fact the case and what is
being done to fix that problem? Because we are never going to
accomplish our mission since we are hiring certainly many more
contractors than we are ever going to be able to attract to the
police or the military.
Mr. Harrington. Ma'am, let me take that question for the
record and get the accurate facts back to you.
Senator McCaskill. OK. If it is true, then it really
worries me because that means once again we have not had the
integration between the military mission and the realities of
contracting. In fact, the realities of contracting in this
instance are completing undercutting the military mission, and
I am betting the military did not even realize that was
potentially occurring.
Mr. Harrington. I understand.
Senator McCaskill. So I think it is pretty important.
Mr. Harrington. Certainly.
Senator McCaskill. And I really want to know specifics. How
much does somebody make doing laundry for our troops and how
much do they make, let's say, in Kandahar or at Camp Phoenix?
What do they make and what do they make in the police
department locally? So we can do an apples to apples comparison
about the level of salary and if we are cutting off our nose to
spite our face.
Let me go to USAID and State Department now for some
questions about that. I know there is a reason we have six
ambassadors in Afghanistan, but it is not clear to me who is
doing what. Who is the ambassador? Who is in charge?
Where is the org chart? What is the difference between
Eikenberry and Holbrooke, and who is answerable to them?
Can you help me with that, Mr. Feldman?
Mr. Feldman. I would be happy to. We do have six
ambassadors in Kabul, but we feel extremely well served by
having them there, given the critical nature of our mission and
given the talent that they bring.
So Ambassador Eikenberry is charged with all of our work
coming out of the embassy. I am just looking for the actual org
chart, which I brought with me and am happy to share.\1\
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\1\ The chart referred to by Mr. Feldman appears in the Appendix on
page 106.
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Senator McCaskill. That is fine. You can get it to us for
the record.
Mr. Feldman. Sure.
Senator McCaskill. The reason I ask the question is not to
try to--I am sure that there is a valid substantial reason for
all of the work that all of them are doing. I am trying to
focus on this just because I have learned the hard way that the
accountability piece never happens if you do not know who is in
charge, and I am trying to determine among these ambassadors
who is the ambassador that has the authority and the
accountability and the responsibility in terms of the
contracting that is going on.
Mr. Feldman. Yes. Ambassador Eikenberry has responsibility
for the State Department's operations in Afghanistan, including
all foreign assistance programs. Ambassador Ricciardone is his
deputy. Ambassador Mussomeli helps to run operations.
And, Ambassador Wayne, as we said, is the Coordinating
Director for Development and Economic Assistance. So he is the
one that oversees all the U.S. Government non-military
assistance to Afghanistan. He directs and supervises the range
of embassy sections, programs, agencies, offices in the field.
He is our main point of contact on many of these specific
contracting issues, but obviously anything would go up to
Ambassador Eikenberry, if need be.
Ambassador Holbrooke, here in Washington, coordinates the
interagency effort to advance the U.S.'s strategic goals in
Afghanistan and Pakistan.
Senator McCaskill. So Ambassador Holbrooke's office is the
one that would be looking to see if CERP was trying to do the
same thing that USAID was doing, that was trying to do the same
thing State was trying to do?
Mr. Feldman. Yes, in Washington, we do all of that. That
interagency coordination is done from our office.
Senator McCaskill. OK.
Mr. Feldman. But, importantly, much of this work is
actually done in the field, obviously--so, on CERP, on the
specific decisions that are done with the local councils, on
how the project is implemented. We need and rely on what is
being done in the field, which ultimately goes through
Ambassador Wayne for our coordinating basis, but we do the
coordinating in Washington
Senator McCaskill. Well, if we determined down the line
that there was a lack of coordination that caused a massive
amount of waste, the buck would stop at Ambassador Holbrooke's
desk?
Mr. Feldman. I think it would be jointly our desk here in
Washington, and we would be working with the appropriate people
at post as well, but, yes.
Senator McCaskill. OK.
Mr. Feldman. As far as the fifth ambassador, I think it is
just Ambassador Carney who was there for the specific elections
purpose and, now that the elections are over, will be
returning.
Senator McCaskill. OK. USAID, you are not putting your
contracts into the database.
Mr. North. Which database?
Senator McCaskill. SPOT.
Mr. North. SPOT.
Senator McCaskill. The fact that you had to ask which one
is a problem. There is supposed to be one, and everyone is
supposed to be using it, so we can have transparency across in
terms of all the contracts that are outstanding and the work
that is being done.
Mr. North. We are, definitely. We are putting our contracts
into SPOT. We are putting at the company organizational level.
We have not put in individual names because of concern for
the security of the individuals. Of the 20,000 people who work
under USAID contracts and grants in Afghanistan, 19,000 are
Afghans. There is great concern, particularly among the NGO
community, about having their names in a database. There are
concerns for their security and privacy.
So, while we are complying with the law in terms of
ensuring that all the companies that are working for us are
included in the database, we have not as yet put individuals
into the system.
Senator McCaskill. Well, let me ask is the information that
the Army is putting in, I assume it is more comprehensive than
what USAID is putting in?
Mr. Harrington. Yes, ma'am. I do not know what USAID is
putting in, but the Army requires the contractors to put
specific names of his contractor personnel in the database.
Senator McCaskill. I think we got to resolve this. Clearly,
everyone is hiring Afghans. I mean this is an unprecedented
hiring of locals in terms of our country. I do not think we
have ever embarked on this kind of massive hiring program in-
country when we have been in a contingency, or even close. So I
think we have to decide if it is a security problem for the
people at USAID, then certainly it is a security problem for
the people that are working through the military.
The problem is going to be this whole SPOT was designed so
that we could at least have one central repository which we
never had. I mean we did not even have electronic in Iraq. It
was all paper everywhere. The accountability is very important,
that this database work in theater, everyone using it.
So I would ask USAID to come back to the Subcommittee with
their specific concerns as to why they are not fully utilizing
the database and what needs to be done in terms of getting
everyone together and everyone doing the same thing.
Mr. North. I would note that there is a separate meeting
ongoing this afternoon on SPOT, here on the Hill.
Senator McCaskill. Good timing.
Mr. North. Thank you. Also, about 40 members of the NGO
community asked to meet with us this afternoon to express their
concerns about the system. It was also supposed to be today,
but now we have been able to put that off to the first week of
January.
We need to work with them to ensure that as we go forward
with implementation that their concerns are addressed. We have
considered the possibility of using the classified version for
putting individual names in. That is a possibility we can look
at, but we still need to work through those issues.
We want to fully comply with the law and make a joint, full
U.S. Government effort on this, but we also have to be mindful
of the concerns of the groups that we work with.
Senator McCaskill. Well, I think if everybody gets in the
same room, I would find it defies common sense that you all
would not share the same set of values as to what should go in
the database and what should not. I think that we just got to
all agree on what we are going to put in or what we are not
going to put in, and, if we are not putting in something, then
there has to be obviously a great justification for it.
My concern is everyone is not utilizing it the same way.
Until they are, it is of limited value. I am really tired of
databases with limited value. There is about every five feet
you walk in Federal Government, you find a database that is of
little value.
So I am determined that we are going to--since I was
involved in trying to make sure we had some kind of central
database--I am determined to stay on it and make sure that we
get it so that it is working the way it should.
Mr. North. If I could make one last comment on this.
Senator McCaskill. Sure.
Mr. North. There is a memorandum of understanding that we
are working out with DOD on SPOT and how we will go forward.
That is in draft. So we are trying to figure this out.
I would also say we are also hiring a full-time person just
to administer this database from our side and make sure that we
are keeping up to date on data entry.
Senator McCaskill. That is terrific. Chop, chop. I know how
long those MOU drafts take sometimes. Let's see if we cannot
move that along because we are spending a whole lot of money,
and we have got a lot of contractors on the ground. The ability
to do oversight is going to be greatly hampered if we do not
get that database working the way it should.
Let me go to CERP. I am trying to get a handle on the
evolution of CERP and especially when you realize that such a
large percentage of the monies being spent now are on projects
that cost more than a half a million dollars.
General McChrystal told me in the Armed Services hearing
that there was sign-off. It goes as high as Petraeus on some of
these.
Is JCC-I/A doing the oversight and reporting requirements
on CERP, and is it your responsibility that is where it is
occurring?
Mr. Harrington. Ma'am, at dollar values of $500,000 and
above, JCC-I/A contracting officers execute CERP actions as
contracts. They are overseen with contracting officer's
representatives. They are paid in accordance with our payment
processes for the normal FAR-based contracts. So, yes, on those
types of actions.
For actions below $500,000 it is much as Mr. Campbell
described in terms of the assignment of a project payment
officer, project control officer.
Senator McCaskill. Is the COR still somebody who, are they
involved in the CERP, the contracting officer's representative
in unit? Are they doing part of this?
Mr. Harrington. Yes, ma'am. The requiring activity provides
the contracting officer's representative in all these types of
actions. So, when the CERP requirement comes forth, we require
a contracting officer's representative to be able to be there
to surveil.
Typically, the project control officer, so far anyway, has
been that function, to oversee the execution of that.
Senator McCaskill. Would it make sense when it is over
$500,000 that it transfer over to USAID? I mean would that not
make more sense?
I mean you guys oversee. I mean you have got turnover. The
idea that we have the military overseeing a massive road-
building project just seems weird to me.
Yes? That is nod for the record. He is nodding yes.
Mr. Harrington. Yes, ma'am. We will take whatever job comes
to it and try to do our best with it. But, if it is more
appropriate and the expertise lies in another area, then
absolutely. We are here to take the mission on when it is
assigned to us.
Senator McCaskill. I mean we are going to build up a whole
level of expertise within the military in overseeing massive
building projects. To me, that is very duplicative of what we
are trying to maintain at USAID. Right?
He is nodding yes, for the record.
Mr. Harrington. Yes, ma'am.
Senator McCaskill. Mr. North, would you like to comment on
that?
Mr. North. I would just note that as I have mentioned
before we do work very closely with the military on CERP
planning, certainly at the provincial and at the district
level.
Before the striker brigade began clearing areas of
Kandahar, there was close coordination planning. USAID
development officers, with other civilians at that level,
worked with the military to figure out what needed to happen.
We advised on the use of CERP, so that it would have a
development impact that all thought was appropriate, and then
our folks entered the clearing areas within 24 to 48 hours
behind the military.
So there is a very close relationship that we are working
to build, and continuing to build, at the provincial level, and
even down at the district level. When an idea comes up, that
here is something we need to do, to finance, it is that joint
interagency team of military, USAID, State Department, USDA,
others, that figures out which is the best mechanism to get the
job done.
Senator McCaskill. I have a sneaking suspicion, and maybe I
am being cynical, that it is easier to get money in the budget
for CERP than it is for USAID. I have watched CERP grow, and my
suspicion is that folks around here are much more willing to go
wherever they are asked to go, to support the military in a
contingency, whereas when you start talking about USAID, then
all of a sudden it does not feel that it is as important to
many members.
We do this all the time around here. Because of ways to get
money in the budget, we twist up like pretzels in terms of what
our responsibility should be.
So I want to make sure that even if you want to continue to
try to get CERP money in the budget, I want to make sure you
are not duplicating the expertise at USAID in order to spend it
because that truly is a waste of money.
Mr. Harrington. Yes, ma'am. I think our obligation--it is
Commander's Emergency Response Program, and I think our
obligation is to ensure that requirement is a commander's
emergency response requirement.
Senator McCaskill. Yes. Building roads, I mean I know it
may seem like an emergency in Afghanistan in some instances.
But I do not ever remember someone saying we have an emergency,
we have to build 15 miles of highway.
Mr. North. Well, I think in the case of roads one of the
reasons that CERP would see as a reason for funding it is a way
of employing youth in the region and, therefore, pulling
loyalties away from the Taliban.
Senator McCaskill. And that makes perfect sense.
Colonel Campbell. And Senator, if you would not mind if I
could expand a little bit.
Senator McCaskill. Sure, absolutely.
Colonel Campbell. I would say the reason that CERP does
such a large funding of road projects in Afghanistan is for two
reasons. One is just kind of where we are in the process of, in
the phasing of operations in Afghanistan.
As has been mentioned here already, I believe it was there
are about 300 USAID officers in Afghanistan. There are 60,000
soldiers in Afghanistan, out in the field. So they act as kind
of the eyes and ears of what is needed out in the population
and bring those back up through their command level, so that it
is then integrated with USAID.
Actually, I was on the phone the other day with someone in
Kabul, or actually Kandahar rather, and what they were
explaining to me on why there are so many road projects is
because there are not any roads in there now to speak of. Less
than 20 percent of the villages are actually connected by a
road.
Your phrase that you used where CERP was initially was
walking-around money, well, they need something to walk around
on in Afghanistan, and so that is why I think you are seeing so
much emphasis on road projects.
Senator McCaskill. So many more road projects, yes. That
makes sense.
Colonel Campbell. At some point, it should transition to
more of a State Department/USAID issue, but right now it is in
the military's interest.
Senator McCaskill. Let's talk a minute.
Mr. Feldman. Madam Chairman, can I say one word on that.
Senator McCaskill. Yes, Mr. Feldman.
Mr. Feldman. On CERP, we absolutely believe it is a
valuable program, and it is closely integrated with the
civilian effort.
I just wanted to also make sure you and the Subcommittee
realize that the State Department had requested and received
$30 million from Congress through fiscal year 2009
supplemental, for quick response funds which is meant to be
exactly that type of walk-around money, which we will start
implementing in the first half of 2010 and will be used for
State Department civilians in the field--so nothing approaching
CERP--which have been trying to implement.
Senator McCaskill. CERP that is small.
Mr. Feldman. But to get at that same core mission, which
you realize.
And I did find the org chart.\1\
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\1\ The chart referred to by Mr. Feldman appears in the Appendix on
page 106.
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Senator McCaskill. OK, great.
Let me talk about projects that do not work. We have $1.4
billion contract to restore Afghanistan's infrastructure, a
joint venture between Berger and Black and Veatch, USAID. It
was supposed to build two power plants projected to deliver 140
megawatts of electrical power. Two hundred and fifty million
dollars have been spent. It is 2 years later. The two projects
together were only capable of producing 12 megawatts of power
and not 1 megawatt has been delivered to 1 single citizen of
Afghanistan.
Worse than the failure to complete the project, the
inspector general at USAID found that the Afghan government may
not be able to even operate the Kabul power plant because it
cannot afford to pay for the diesel fuel it needs to run it.
The other plant, which is producing zero power, is costing
USAID one million dollars a month to be guarded.
So we have $250 million spent. We have a little bit of
electricity being generated but not being delivered. And we
have one plant that has been built, and we are spending a
million dollars a month to guard it with nothing going on.
What is the problem here and have the contractors been held
accountable?
Mr. North. The security has been a major issue certainly
for many infrastructure programs. In the case of the Kabul
power plant, the latest figures I have show that it is now
producing 105 megawatts of power.
Senator McCaskill. Is any of it getting delivered?
Mr. North. Yes, it is.
Senator McCaskill. OK.
Mr. North. And we are also concerned about the
sustainability of this plant. Mind you, the intent, in addition
to the economic needs for Kabul, was certainly to demonstrate
that the government of Afghanistan was able to deliver
services. So there was certainly a short-term political need.
But at the same time we were looking at the sustainability
of the plant. We had negotiated with the government that they
would pick up the operating costs, but with the understanding
that we were also building transmission lines coming from the
North integrated with Central Asia, to provide power to Kabul,
so that the power plant then becomes a backup system rather
than the main, primary means of power.
The other plant I believe you are referring to is the
Kajaki Dam which is now producing 33 megawatts of power.
Kandahar now has power 24 hours, though there are some areas
that are not. It is uneven in some areas.
We have two of the turbines that are running. The third
needs to be installed. It is at the dam. It took one of the
largest NATO operations since World War II to move that turbine
into place a year and a half ago. We are now, due to security
concerns, unable to get that turbine installed as well as to
build additional transmission lines.
So we are taking actions to hold off on further costs to us
until the military, ISAF, can secure that region so those
programs can go forward.
With the third turbine, we will increase power going from
Kajaki to 55 megawatts, but we are already seeing significant
impact in Kandahar and some of the smaller cities, Lashkar Gah
and so forth in that region, from what we have already been
able to do.
Senator McCaskill. Well, I am glad that you have updated
information based on our research, and I would appreciate
getting all of that for the record, so we can compare the
information we have--it came from the IG--and check with the IG
on it.
Frankly, if you are holding off to make sure that you have
the correct security environment, that is progress over Iraq
because we did not hold off in Iraq and almost everything we
built got blown up. That is part of the money that went up in
smoke.
So thank you for the additional facts that you have done
there.
Let me finish up. Unfortunately, if I allowed myself to, we
could be here for another couple of hours. I have that many
questions. But there are more hearings, and we can cover many
of these subjects as we go forward in these hearings.
Let me ask each of you to give yourselves a grade on how
well you are coordinating contracting in Afghanistan. Let's
assume that there was an F in Iraq, and, if you think you
deserved more than an F in Iraq, you are grading on a different
scale than I am grading on. I think it was an F.
Now, in the end, it got better. But in terms of how it all
came about and how the LOGCAP happened and how all of the
reconstruction happened and the confusion and the lack of
accountability, maybe a D minus.
What do you think your grade is in Afghanistan right now,
in terms of how well you are integrating, coordinating,
monitoring, and overseeing contractors?
Mr. Campbell.
Colonel Campbell. Yes, ma'am, I can start. Right off, I
would say probably about a C, and let me put that into
perspective for you.
I think we have done a good job, probably towards the A and
B range, on the front end where we have put together now some
lessons learned. We have put out guidance. We have put out
training. We now have these officers and enlisted soldiers
being trained here in the States before they go over to
Afghanistan, on CERP and CERP management. So we have done, I
think, pretty well here on the front end.
Where we are lacking and where we still need some work and
where we are concentrating our efforts now is more the back
end. We have systems in Afghanistan that track contracting. We
have systems that track the financial piece. We have systems
that the Corps of Engineers uses to track construction
projects--all useful databases, but, to your point, what we
have got to do now is link them together.
That is one of the things in this review group that we are
looking at. We have the Business Transformation Agency looking
at the entire business process--end to end as they call it--in
Afghanistan, to see rather than going and inventing a new
database and inventing a new process or system, how do we first
link together what is out there, so we can get some immediate
feedback and immediate results, so that we do not have soldiers
and civilians out there doing spreadsheets, pulling numbers out
of three different databases. So, on that part, I would say we
are still in the D minus/F.
So, on average, I would probably rate CERP at about a C.
Senator McCaskill. OK. Mr. Harrington.
Mr. Harrington. Ma'am, I would give us a C also for a
different reason, if I understand your question correctly. We
see awarding contracts to contractors. Over the period of time,
some of the prices for the commodities and services continue to
get bid up because other agencies, other organizations are
contracting with the same contractors and contractors are
enjoying being able to present products at a higher price. I
think the organization aspect of this needs to be addressed
further.
We have review boards, requirements review boards. We have
priorities, allocation processes in place to evaluate what
comes first in the order for addressing, in terms of the most
urgent needs and in terms of the most widespread needs. But it
is an organization, from my perspective, at a higher level that
gets together and collaborates in theater to determine overall
where the requirements are being placed and how to best
leverage the contractor community there, the vendor spread if
you will, to be able to make sure we are getting the best deal
for the government as a whole.
So I think there is an organizational element needed at a
higher level to be able to accomplish that. We would obviously
participate as a component to that and be able to present our
priorities to that and, as well, coordinate with other agencies
to determine how to get the best contracts in place, perhaps on
a wider basis, on an agency level basis as opposed to an
individual basis.
Senator McCaskill. Mr. North.
Mr. North. I guess I am a little more optimistic. I think
we have a B, but I think a lot of that relates to the effort
and the progress we have made in the last 10 months. Things
like the agricultural strategy as a whole-of-government
strategy, clearly defining roles and responsibilities among the
respective agencies involved, but also the clarity of purpose
in where we are trying to go in the agriculture sector--this is
one example that we have developed.
There are others. Certainly our collaboration in the health
sector with the U.S. Military, with CDC and others has been
quite strong.
An area that we need to improve on, that we are working on
certainly is getting more of our staff into the theater, so
that when you are at the PRT there are more development staff
there to help with coordination and to monitor and manage our
programs.
So there are systems that still need work, of course, but I
think we are moving in the right direction.
Senator McCaskill. Mr. Feldman.
Mr. Feldman. Showing the synchronicity between State and
USAID, I would say----
Senator McCaskill. Oh, you guys get along so well. You are
going to give yourself a B, let me guess. [Laughter.]
Mr. Feldman. I would also give ourselves a B, but I think
actually more important than the grade is the general
trajectory. I would say at the beginning of the year we were
probably much closer to a D, and I think that we have gone up
quite a bit.
There is a lot of people in Washington, a lot of people in
Kabul, a lot of people around the world and certainly in the
field, actually implementing these projects, that are working
very hard at doing all the things that we uncovered in the
course of our review and that we tried to put in place to make
sure that we were the best possible stewards of U.S. taxpayer
money.
And I think that we are definitely going in the right
direction, with the better coordination with civil agencies,
with military partners, with the international community, with
the civilian surge, with all the kind of oversight mechanisms
that I laid out, including the financial and technical
officers.
But, yes, this is going to take a while to do, and there is
going to be a lot more to be done, and we will have to continue
to be very vigilant and rigorous in implementing this. So there
is always room to do much better, but I think at this point I
am pretty comfortable with where we are.
Senator McCaskill. OK. Mr. Parsons.
Mr. Parsons. I would say if Iraq was a F, then I think we
are a C in Afghanistan because we have learned a lot of lessons
out of Iraq.
Certainly with the establishment of the Army Contracting
Command and being part of AMC with LOGCAP, we have a very close
bond now with the Joint Contracting Command-Iraq/Afghanistan.
We are doing reach-back for them, so there is a lot of good
coordination going on there. What the ACC is allowing us to do
from an enterprise is look where are we duplicating efforts and
where can we be more effective in using different types of
contract instruments.
I know that one of Brigadier General Camille Nichols'
concerns as she goes in to be the new commander in Joint
Contracting Command-Iraq/Afghanistan is even though we have
established some of these Joint Logistics Procurement Support
Boards where we try to bring the different parties together to
look at the procurement requirements in Afghanistan, those are
more of a collaboration and cooperation by the parties to come
see those boards and look at it.
And we do have coalition partners there, and I know one of
her concerns is that we understand that NATO is doing quite a
bit of contracting in Afghanistan as well as for some of their
forces. So I know General Nichols is going to put that as one
of her priorities, to look at how do we get closer
collaboration and cooperation there.
But there is a lot of room for improvement.
Senator McCaskill. If we are getting integration and
coordination between NATO and our efforts, then I will give all
of you an A because that means we have our house in order and
now we can try to integrate NATO into it. I still think we have
a ways to go.
As time goes on, we will see if the grades hold up. I think
it may be a little grading on a curve, Mr. Feldman, to go from
a D to a B in 10 months because you are moving a very large
thing here. This is not an organization, as it relates to
contracting, that is nimble or flexible.
When it is nimble and flexible, it generally is a bad
contract because it happened too quickly, and nobody was paying
attention to what was in it and whether it was definite enough
and whether there were enforcement mechanisms contained in it.
Let me leave you with what I would like to still get for
the record as we begin to build our information, so that we can
continue to do the kind of oversight I think that we need to
do.
I want to make sure I understand what every silo is in
terms of contracting money. The new CSTC-A, I want to try to--
that is a new one I have to now put into my jargon. Now that I
finally figured out LOGCAP, you spring a new one on me.
I want to make sure that there is some kind of org chart
that has where the contracting money is all going, and we will
put that together if you all will give us what is within your
silo of contracting money and how much it is.
I believe that we will end up spending as much or more on
contracting in Afghanistan as we spend on our military.
Therefore, we have a huge obligation to try to get this right.
So, if you all will get that to me, that would be great, and
then we will begin to drill down in those various places and
make sure of the on-the-ground oversight.
And the other thing that we would like from you is if you
believe you have enough oversight personnel in place, right now
in theater, and if not what you need to get enough oversight
people in place in theater.
I really appreciate all of your time today.
And I am going to say this. I do not mean to embarrass her,
and I do not mean to embarrass Mr. North or Mr. Feldman. But
the woman in the front row that keeps handing you notes, I
think I want to have lunch with her. [Laughter.]
I think she knows an awful lot because every question I
ask--everyone was feeding them to her. OK, the whole little
group, I need all of you to come to my place for lunch, so I
can begin to get----
Mr. Feldman. This is how integrated we are.
Mr. North. She is an USAID officer on Mr. Holbrooke's
staff.
Senator McCaskill. That is great. There you go. There is
that integration.
OK, thank you all very much. I appreciate your time today.
[Whereupon, at 3:45 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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