[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 112-153]
OPERATIONAL CONTRACT SUPPORT:
LEARNING FROM THE PAST AND
PREPARING FOR THE FUTURE
__________
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
HEARING HELD
SEPTEMBER 12, 2012
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HOUSE COMMITTEE ON ARMED SERVICES
One Hundred Twelfth Congress
HOWARD P. ``BUCK'' McKEON, California, Chairman
ROSCOE G. BARTLETT, Maryland ADAM SMITH, Washington
MAC THORNBERRY, Texas SILVESTRE REYES, Texas
WALTER B. JONES, North Carolina LORETTA SANCHEZ, California
W. TODD AKIN, Missouri MIKE McINTYRE, North Carolina
J. RANDY FORBES, Virginia ROBERT A. BRADY, Pennsylvania
JEFF MILLER, Florida ROBERT ANDREWS, New Jersey
JOE WILSON, South Carolina SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey JAMES R. LANGEVIN, Rhode Island
MICHAEL TURNER, Ohio RICK LARSEN, Washington
JOHN KLINE, Minnesota JIM COOPER, Tennessee
MIKE ROGERS, Alabama MADELEINE Z. BORDALLO, Guam
TRENT FRANKS, Arizona JOE COURTNEY, Connecticut
BILL SHUSTER, Pennsylvania DAVE LOEBSACK, Iowa
K. MICHAEL CONAWAY, Texas NIKI TSONGAS, Massachusetts
DOUG LAMBORN, Colorado CHELLIE PINGREE, Maine
ROB WITTMAN, Virginia LARRY KISSELL, North Carolina
DUNCAN HUNTER, California MARTIN HEINRICH, New Mexico
JOHN C. FLEMING, M.D., Louisiana BILL OWENS, New York
MIKE COFFMAN, Colorado JOHN R. GARAMENDI, California
TOM ROONEY, Florida MARK S. CRITZ, Pennsylvania
TODD RUSSELL PLATTS, Pennsylvania TIM RYAN, Ohio
SCOTT RIGELL, Virginia C.A. DUTCH RUPPERSBERGER, Maryland
CHRIS GIBSON, New York HANK JOHNSON, Georgia
VICKY HARTZLER, Missouri BETTY SUTTON, Ohio
JOE HECK, Nevada COLLEEN HANABUSA, Hawaii
BOBBY SCHILLING, Illinois KATHLEEN C. HOCHUL, New York
JON RUNYAN, New Jersey JACKIE SPEIER, California
AUSTIN SCOTT, Georgia RON BARBER, Arizona
TIM GRIFFIN, Arkansas
STEVEN PALAZZO, Mississippi
ALLEN B. WEST, Florida
MARTHA ROBY, Alabama
MO BROOKS, Alabama
TODD YOUNG, Indiana
Robert L. Simmons II, Staff Director
Lynn Williams, Professional Staff Member
William (Spencer) Johnson, Professional Staff Member
Lauren Hauhn, Research Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2012
Page
Hearing:
Wednesday, September 12, 2012, Operational Contract Support:
Learning from the Past and Preparing for the Future............ 1
Appendix:
Wednesday, September 12, 2012.................................... 37
----------
WEDNESDAY, SEPTEMBER 12, 2012
OPERATIONAL CONTRACT SUPPORT: LEARNING FROM THE PAST AND PREPARING FOR
THE FUTURE
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
McKeon, Hon. Howard P. ``Buck,'' a Representative from
California, Chairman, Committee on Armed Services.............. 1
Smith, Hon. Adam, a Representative from Washington, Ranking
Member, Committee on Armed Services............................ 2
WITNESSES
Crenshaw, BGen Craig C., USMC, Vice Director, J-4, Joint Staff... 5
DiNapoli, Timothy J., Acting Director for Acquisitions and
Sourcing, U.S. Government Accountability Office................ 8
Estevez, Hon. Alan F., Assistant Secretary of Defense for
Logistics and Materiel Readiness............................... 3
Schwartz, Moshe, Specialist in Defense Acquisition, Congressional
Research Service............................................... 6
APPENDIX
Prepared Statements:
DiNapoli, Timothy J.......................................... 76
Estevez, Hon. Alan F., joint with BGen Craig C. Crenshaw..... 44
McKeon, Hon. Howard P. ``Buck''.............................. 41
Schwartz, Moshe.............................................. 58
Smith, Hon. Adam............................................. 43
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
Mr. Platts................................................... 97
Ms. Speier................................................... 97
Questions Submitted by Members Post Hearing:
Mr. Schilling................................................ 104
Ms. Speier................................................... 101
OPERATIONAL CONTRACT SUPPORT: LEARNING FROM THE PAST AND PREPARING FOR
THE FUTURE
----------
House of Representatives,
Committee on Armed Services,
Washington, DC, Wednesday, September 12, 2012.
The committee met, pursuant to call, at 10:05 a.m. in room
2118, Rayburn House Office Building, Hon. Howard P. ``Buck''
McKeon (chairman of the committee) presiding.
OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A
REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED
SERVICES
The Chairman. The committee will come to order.
This morning we are reminded once more what a dangerous
world we live in and the risks many Americans take to serve our
country abroad. My thoughts and prayers, together with those of
members of the committee, are with the families, loved ones of
those that we have lost in Libya.
We meet today to receive testimony on operational contracts
support--that is, the services that our military buys to
directly sustain operations like those in Afghanistan.
According to a recent study by the Center for Strategic and
International Studies, the Department of Defense spends, on
average, nearly one third of its entire budget contracting for
services. And while this committee and others in Congress have
taken aggressive actions to reform the Government's acquisition
processes, most of our time and effort has been focused on
major defense acquisition programs, such as the Joint Strike
Fighter and the Littoral Combat Ship. Perhaps this is because
they are tangible and there is a more formal process used to
procure hardware. Regardless, we don't spend nearly as much
time addressing issues regarding the way the DOD [Department of
Defense] contracts for services such as engineering,
maintenance, logistics, and base support.
Contracting for services cannot be taken lightly. Here is a
fact, and one that I expect our witnesses will not challenge:
The U.S. military cannot today fulfill its responsibilities to
our national security without a significant contribution by
many hardworking folks that are not in the direct employment of
the U.S. Government.
That fact extends to war zones, too. Most of us are
familiar with the term ``contingency contracting,'' which has
been used over the last several years to refer to contracts in
Iraq and Afghanistan. The term likely conjures up memories of
money wasted on $600 toilet seats, funding that fuels
corruption, and the loss of hearts and minds any time armed
security guards kill or injure civilians.
But the goal of today's hearing is not to reexamine these
or other incidents. There has already been extensive work to
document these deficiencies and to capture lessons learned. The
goal is to learn from the past and charter a way forward,
because I think we can all agree that we will continue to be
reliant on contractors for future operations.
As such, the topic before us today is complex, but it is
also important. We learned a lot of hard lessons on this issue
in Iraq and Afghanistan. We were ill-prepared for the level of
contracting that was required to support these missions, and,
as a result, outcomes suffered. In some cases, those
consequences were grave, and brave Americans lost their lives
as a result.
The question before us is how we can improve operational
contract support outcomes, from saving lives to reducing waste
and graft, to delivering a unity of effort consistent with our
military commanders' intent. This will require leadership and
an emphasis on the importance of operational contract support.
Excellence must be demanded in each of the requirements
generation, contract award, and contract management phases. A
prerequisite for excellence is planning and training like we
fight. There are many recommendations that have been advanced
to meet these goals, and I look forward to exploring those
recommendations in greater detail today.
I am certain that our witnesses' testimony will help us and
the Department of Defense as we continue the mission in
Afghanistan and prepare for the challenges that may come here
at home and around the globe.
Mr. Smith.
[The prepared statement of Mr. McKeon can be found in the
Appendix on page 41.]
STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON,
RANKING MEMBER, COMMITTEE ON ARMED SERVICES
Mr. Smith. Thank you, Mr. Chairman.
And I share your remarks on the events in Libya and also in
Egypt. Our thoughts and prayers certainly go out to the people
who lost their lives and their families. It is a tragic
incident and reminds us, again, of how unstable the world is
and can be.
I thank you for holding this hearing. As well, I thank our
witnesses. I look forward to the testimony and the question-
and-answer period.
Logistics and contracting out are critical, critical parts
of our military and national security operation that don't
typically get the attention that they obviously deserve. With
all of the human resources and all of the material resources
that we have, getting them all in the right place at the right
time and making sure they are properly coordinated is an
enormous and very important task and something that I believe
our military does better than any military in the world.
And part of the reason why we are as successful as we are,
a piece of that, of course, is contracting out those services,
figuring out what can be done in-house and what needs to be
contracted out--also not an easy process. And, of course, there
are our legislative and parochial battles that get in the way
of making it an easy process, as well.
And so I think it is important that we examine that issue
and try to figure out how to maximize our effectiveness at
contracting out and pulling together those logistical
challenges.
I also believe that, given the wars in Iraq and
Afghanistan, we have an excellent opportunity right now for a
lessons-learned approach, go back and look and see what we did,
what worked, what didn't work. A lot of it had to happen fairly
quickly, so I certainly understand that decisions had to be
made quickly. But now that we have had some time to think about
it and look at it, I think this is a great opportunity to learn
from that and make improvements where we can.
With that, I yield back. And I thank the chairman again for
holding this very important hearing.
[The prepared statement of Mr. Smith can be found in the
Appendix on page 43.]
The Chairman. Thank you.
This will be a unique hearing.
We have today the Honorable Alan F. Estevez; Brigadier
General Craig C. Crenshaw, Vice Director, J-4, Joint Staff; Mr.
Moshe Schwartz, Specialist in Defense Acquisition,
Congressional Research Service; and Mr. Tim DiNapoli, Acting
Director for Acquisitions and Sourcing, U.S. Government
Accountability Office.
So we have a good cross-section here of people that I think
will be very helpful to us in going through this process, and
we thank you for being here.
And we will turn first to Mr. Estevez.
STATEMENT OF HON. ALAN F. ESTEVEZ, ASSISTANT SECRETARY OF
DEFENSE FOR LOGISTICS AND MATERIEL READINESS
Secretary Estevez. Thank you, Chairman McKeon, Ranking
Member Smith, distinguished Members of the committee. Good
morning. I appreciate the opportunity to appear before you
today to talk about the improvements we have made with respect
to the management and oversight of operational contract support
and our plan to sustain these efforts into the future.
Before I do so, I do want to thank this committee for its
strong support of our men and women in uniform and for a
civilian workforce across the Department of Defense.
Operational contract support, or OCS, entails the planning
for and managing the reality of contractors on the battlefield.
As Brigadier General Crenshaw and I detailed in our joint
written statement, which I believe was submitted for the
record, the Department has made significant improvements across
the board in a range of OCS areas over the last 6 years. In
fact, during my several visits to Afghanistan over the last
number of years, I have witnessed the ongoing implementation of
our OCS improvements that we have made based on the lessons we
have learned over the last 10 years.
Congressional focus on this important area has been very
helpful in both maintaining visibility and contributing to our
ability to institutionalize OCS. We also appreciate the efforts
of a variety of external boards and commissions, including the
Gansler Commission, the Commission on Wartime Contracting, the
GAO [Government Accountability Office], and Congressional
Research Service. We appreciate their expertise, effort, and,
as appropriate, their willingness to partner with us as we
implement our recommendations.
The Office of the Secretary of Defense and the Joint Staff
together have embarked on an aggressive agenda to improve
planning for and managing contracts and contractors on the
battlefield. Our strong commitment to continuous progress in
this area is demonstrated by the accomplishments the Department
has made, from organizational changes such as the standup of
the Joint Contingency Acquisition Support Office and the
embedding of OCS planners at our combatant commands, to
development and updates to policy and doctrine, from increased
visibility and accountability of contractors on the battlefield
today, to improvements in training and education in both the
acquisition and nonacquisition workforce responsible for
contingency contracts management.
The lessons we have learned from recent operations are
being incorporated and applied to OCS across all echelons of
the Department, including the military services and the
combatant commands. We are already seeing a cultural shift in
the way we plan and prepare for future contingency operations.
As an example, within the first day after the earthquake,
tsunami, and nuclear reactor failure in Japan, Pacific Command
established the Air Force as the lead Service for contracting.
This meant that all forces deploying to Japan had a clear
understanding of the contracting authority and would not be
competing against each other for scarce resources--a critical
lesson that we learned from our experiences in Central Command.
Notably, the first operations order issued by Pacific Command
in response to this disaster was the operations order
establishing this contract and command relationship.
To sustain these advances, we need to maintain our focus,
secure and solidify our gains, and continue the momentum we
have in implementing OCS capability. To lose such capability
now would be truly wasteful, and we are strongly committed to
ensure that this does not happen.
I believe that our testimony will reassure you that DOD has
worked hard to improve our oversight and management in this
very critical area and that we have every intention of
maintaining these efforts into the future. We will continue to
mature as we apply additional lessons learned from Afghanistan
and other operations worldwide.
We are grateful for the committee's continued interest and
support in ensuring that operational contract support remains a
priority. I will be happy to answer any questions that you may
have.
Thank you.
[The joint prepared statement of Secretary Estevez and
General Crenshaw can be found in the Appendix on page 44.]
The Chairman. Thank you.
General.
STATEMENT OF BGEN CRAIG C. CRENSHAW, USMC, VICE DIRECTOR, J-4,
JOINT STAFF
General Crenshaw. Chairman McKeon, Ranking Member Smith,
and distinguished members of the committee, I am pleased to
appear before you today to testify on the Department of
Defense's progress in enhancing our ability to plan and execute
operational contract support contingency operations.
I support the Joint Staff Director for Logistics, who is
the principal advisor to the Chairman of the Joint Chiefs on
the entire spectrum of logistics, to include strategic and
operational planning and doctrines related to operational
contract support, or OCS. My staff and I have worked closely
with the Office of the Secretary of Defense, the Services, the
defense agencies to refine the policies, doctrines, tools, and
processes needed to effectively plan for and execute OCS.
I am pleased to report the Department has made significant
progress to improve the operational planning needed to
effectively use contract support as part of DOD's total force.
I am confident that our ongoing efforts will ensure that we
meet the warfighters' current and future needs while judicially
managing DOD resources and balancing risk.
As Mr. Estevez and I note in our written statement, we
acknowledge our past weaknesses; however, our offices are in
lockstep on a course to institutionalize OCS as an essential
warfighting capability for the current and future joint force.
Due to the ascending of contracting as an integral part of
military operations, the Joint Staff has led a variety of
efforts to strengthen this critical capability area to ensure
that when we go to war in the future, we are better prepared to
execute effectively and efficiently and, most importantly, to
provide the best possible support to the warfighter at a
reasonable cost.
We are absolutely committed to this course, originally set
by Admiral Mullen and affirmed by General Dempsey, to ensure we
get this right as quickly as possible.
Institutionalizing operational contract support is a major
effort that is well under way and represents a major culture
shift in how we plan for and execute military operations. We
began this deliberate effort in 2007 and have significantly
improved the strategic guidance, operation imperatives, and
policy implications required. The Joint Staff is committed to
having all the necessary guidance, doctrines, policies,
processes, and resources in place within the next year.
Much has been done to improve operation contract support,
and our work will continue. The underlining theme for future
planning and supporting of processes involves closer links of
contracts and contractors to operational effect in order to
more rapidly and decisively achieve the Joint Force commander's
intent. We increase our focus on planning and process that not
only delivers supplies and services to the warfighter in a
responsible, cost-effective manner, but leverages the economic
benefits of DOD spending to achieve national strategic and
operational objectives.
In closing, I would like to emphasize a few critical points
with respect to the Department's increased use of contractor
support.
First, I am convinced of the advanced military advantages
this capability brings when planned and used appropriately. Our
military contract capability enables us to maintain a
scaleable, responsive, and cost-effective All-Volunteer Force
while maintaining combat capabilities. In the past decade, we
have recognized that contracting delivers important support to
our troops while advancing operational objectives, such as
those in a counterinsurgency strategy or stability operations.
Our contracting professionals, logisticians, and commanders
in the field are performing superbly in a dangerous environment
while challenged with complex supporting policies and
processes.
The bottom line is that operational contract support is an
integral and important part of our military capability, and our
efforts are squarely focused on how to best accomplish the
mission. I know we share this objective with Mr. Estevez and
the entire OSD [Office of Secretary of Defense] staff.
Finally, sir, let me sincerely thank you for all you have
done on this committee for our marines, our sailors, our
soldiers and airmen to ensure they are well-equipped. And thank
you for the support you provide to them as well as their
families.
Our goals and ideas are the same. We are on the same sheet
of music. What we want is a deliberate process that provides
oversight of our operational contract support. We have made
great strides to that end, and we are not there yet, but we are
prepared to go further.
Again, thank you for this opportunity to appear before you.
I look forward to answering your questions.
[The joint prepared statement of General Crenshaw and
Secretary Estevez can be found in the Appendix on page 44.]
The Chairman. Thank you.
Mr. Schwartz.
STATEMENT OF MOSHE SCHWARTZ, SPECIALIST IN DEFENSE ACQUISITION,
CONGRESSIONAL RESEARCH SERVICE
Mr. Schwartz. Good morning, Chairman McKeon, Ranking Member
Smith, distinguished members of the committee. Thank you for
the opportunity to discuss operational contract support.
For more than 10 years, the United States has been waging
wars in Iraq and Afghanistan. Contractors have played a pivotal
role in these operations, making up more than half of the
Department of Defense's workforce in Iraq and Afghanistan.
As DOD has acknowledged, the military was unprepared for
the extent to which contractors were used in these conflicts.
Contracting was often done on an ad hoc basis without putting
in place sufficient oversight systems, leading to instances of
poor performance, billions of dollars of waste, and failure to
achieve mission goals.
Contractors will likely continue to play a central role in
large-scale military operations. To meet the challenges of
future operations, DOD must be prepared to effectively award
and manage contracts at a moment's notice, anywhere in the
world, in unknown environments, and on a scale that may exceed
the total contracting budget of any other Federal agency.
DOD has made substantial progress in improving how it
conducts operational contract support. However, despite this
great progress, after 10 years of war DOD still faces
significant challenges in effectively utilizing and managing
contractors to support current and future overseas operations.
A number of analysts have argued that one reason DOD has
done a poor job in planning for and managing contractors is
that contracting is not sufficiently valued within the culture
of the military. According to these analysts, contract
management is a mission-essential task, and DOD must change the
way it thinks about contracting, transforming it from an
afterthought to a core competency.
Three common recommendations aim to elevate the role of
contracting within the culture of DOD.
First, senior leadership must focus on articulating the
importance of contract support. Without active and sustained
support from senior leadership, the culture is unlikely to
change. When management establishes priorities, articulates a
vision, and aligns incentives and organizational structures to
match these priorities, the foundation will be set for real
change.
Second, the professional military education curriculum must
incorporate courses on operational contract support throughout
its various efforts. One key to changing the culture and
improving contracting is better education. Increased education
for nonacquisition personnel is critical to changing how the
military approaches contracting both before and during overseas
operations.
Third, training exercises must incorporate contractors
playing the role that they would play on the battlefield. A
number of analysts have called for incorporating contractors
and contractor scenarios into appropriate military exercises to
better prepare military planners and operational commanders for
future operations. Given the extent to which contractors may be
relied upon in future operations, conducting exercises without
contractors could be akin to training without half of the force
present.
While changing the culture may be an important step, many
analysts argue that it is only part of the battle. Effective
and efficient operational contract support will not occur until
an infrastructure is built to facilitate good contracting
decisions.
Three common fundamental systemic weaknesses of contractor
support are frequently cited.
First, poor planning. In Iraq and Afghanistan, there was no
comprehensive plan for how and to what extent to use
contractors. Failure to include contractors in planning and
strategy puts DOD at risk of being unable to get the
capabilities it needs when it needs them and at an acceptable
cost.
Second, lack of reliable data. Without reliable data, there
may not be an appropriate basis for measuring or assessing the
effectiveness of contracting efforts, making policy decisions,
or providing transparency into Government operations. A lack of
reliable data could leave analysts and decisionmakers to draw
incorrect or misleading conclusions. In Afghanistan, DOD did
not have accurate data or sufficiently tracked data upon which
to make strategic contracting decisions.
Third, lack of a sufficiently large and capable workforce
to plan for, manage, and oversee contractors. There were simply
not enough resources or personnel in theater to conduct
adequate contractor oversight in Iraq and Afghanistan, leading
to instances of poor contract performance. DOD has documented
how a lack of oversight has resulted in contracts not being
performed to required specifications and to the theft of tens
of millions of dollars' worth of equipment, repair parts, and
supplies.
Mr. Chairman, distinguished members of the committee, if
contractors continue to be a critical part of the total force,
DOD must be able to effectively incorporate contractors and
contract management into operations.
This concludes my testimony. Thank you again for the
opportunity to appear before you to discuss these issues. I
will be pleased to respond to any questions you may have.
[The prepared statement of Mr. Schwartz can be found in the
Appendix on page 58.]
The Chairman. Thank you.
Mr. DiNapoli.
STATEMENT OF TIMOTHY J. DINAPOLI, ACTING DIRECTOR FOR
ACQUISITIONS AND SOURCING, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE
Mr. DiNapoli. Chairman McKeon, Ranking Member Smith,
members of the committee, good morning. I am pleased to be here
today to discuss how the Department of Defense can improve its
use of contractors in future contingencies.
For more than 15 years, GAO has made recommendations
intended to improve the way the Department plans for, manages,
and oversees contractors in deployed locations. Given the
longstanding, recurring nature of these challenges, in June
2010 we called for a cultural change, one that emphasized an
awareness of contractor support throughout the Department.
Consistent with this message, in January 2011 the Secretary of
Defense identified the need to institutionalize changes to
bring about such a change.
In my statement today, I will highlight three areas in
which sustained DOD leadership is needed to improve operational
contract support. These areas include better planning at the
strategic and operational level, enhancing the workforce
capacity, and providing the tools needed to better account for
contracts and contractors. My statement is based on GAO's broad
body of work involving operational contract support and DOD
contract management issues.
First, future contingencies are inherently uncertain, but,
with better planning, DOD can reduce the risk associated with
those uncertainties.
At the strategic level, DOD has or is in the process of
developing new policies and guidance. It also has established a
Functional Capabilities Integration Board, which is currently
drafting an action plan to close gaps in operational contract
support capabilities.
At the operational level, previous efforts to translate
those strategic requirements into operational plans have been
mixed. In 2010, we found that many of the contract support
plans, those that were approved and those that were in draft,
still needed improvement. To increase awareness of operational
contract support considerations, we recommended in 2006 and
again in 2012 that DOD include these issues in the professional
military education provided to military commanders and senior
leaders.
Turning to the workforce more generally, having the right
people with the right skills in the right numbers can make the
difference between success and failure. As such, DOD has
identified rebuilding the acquisition workforce as a strategic
priority. In that regard, the Department has used the Defense
Acquisition Workforce Development Fund and taken other actions
to increase the size of the workforce from about 118,000 in
fiscal year 2009 to about 136,000 as of last December.
As part of these efforts, DOD is rebuilding the capacities
of the Defense Contract Management Agency and the Defense
Contract Audit Agency. However, gaps remain in DOD's overall
strategic workforce planning efforts.
DOD has also identified the important role that
nonacquisition personnel play in the acquisition process,
especially those that serve as contracting officers'
representatives. DOD's longstanding challenge in this regard is
to be able to identify and train these individuals in a timely
fashion.
Lastly, DOD needs to be able to better account for
contracts and contractor personnel. At the start of operations
in Iraq and Afghanistan, DOD found itself unable to do a number
of key things. First, it really was not able to identify the
number of contractors, where they were, and what activities
they were performing. Second, they didn't have the capability
to maintain effective control over its contracting activities.
Third, it lacked a process by which it could determine whether
contractors or contractor personnel pose a potential risk to
U.S. interests. As issues arose, DOD needed to develop the
policies, processes, and tools to do so. Having these in place
before the next contingency is essential.
In conclusion, DOD knows it needs to learn from its
experiences gained over the past 10 years. DOD's actions to
date are positive, but DOD's challenge will be to sustain these
over the long term, as bringing about cultural change is
neither easy and is no means quick. As the DOD draws down its
efforts in Afghanistan, DOD's challenge is to ensure that those
lessons that were learned in Iraq and Afghanistan are not
forgotten.
Mr. Chairman and members of the committee, this completes
my statement. I will be happy to answer any questions that you
may have.
[The prepared statement of Mr. DiNapoli can be found in the
Appendix on page 76.]
The Chairman. Thank you.
Your complete statements of each of you will be included in
the record, without objection.
I would like to ask all of you if you have looked at the
effects of sequestration, what it will do to the contracting
and to your areas of responsibility.
Mr. DiNapoli. Mr. Chairman, we have not done that. You
know, the Administration has not submitted its sequestration
report, as far as I know, as of last night or so. So we really
aren't in a position to comment upon that.
Secretary Estevez. Mr. Congressman, obviously,
sequestration is bad from the viewpoint of the Department of
Defense, and we hope that we will get relief from that in a
balanced manner.
Most of the contracting that we are talking about--all of
the contracting we are talking about is in the O&M [Operations
and Maintenance] accounts, mostly in OCO, Overseas Contingency
Operations, fund. We will sustain the things we need to do for
the warfight, which means there will be risk-taking back here
in those accounts. But we hope to alleviate that by having
sequestration negated, if you would.
Mr. Schwartz. Mr. Chairman, the sequestration applies to
all defense budgetary resources, including not only DOD's base
budget but, of course, also OCO funding and unobligated
balances for prior years. Under budget law, it is my
understanding that a sequester levies the same percentage
decrease to each program, project, and activity. There is no
distinction for OCO versus other defense resources.
The precise percentage cut under sequester, of course, will
not be known until the fiscal year 2013 appropriations level in
effect as of January is enacted.
Some DOD spokesmen have suggested that they could protect
war funding by making larger cuts in base budget funding. This
would apply to those accounts and programs, projects, and
activities which fund both base budget and war funding. DOD may
have some flexibility regarding contracts if they are within
the same program, project, and activity.
General Crenshaw. Sir, the Joint Staff and General Dempsey
have stated previously that when you look at sequestration,
that it is a budget for the Joint Force and that it should not
be thought of as separate Service budgets, but be comprehensive
and carefully devise a set of choices. And when those choices
are made, you produce a different type of balance.
We can't say precisely what the result of sequestration
will be, but there are some potentials of certainly some of our
weapons system programs--new weapons system programs may be in
jeopardy. But to the extent that we have looked at and
understand what sequestration is, the total impact, at this
point, we cannot precisely state, sir.
The Chairman. Thank you.
Mr. Estevez and General Crenshaw, in your written testimony
you mention that the training and education efforts are aimed
at a range of audiences, from commanders to acquisition
professionals to subject-matter experts performing oversight.
However, you make no mention of predeployment training or
exercises.
We often hear the mantra that we train like we fight. With
acknowledgment that the future force will be heavily reliant on
contractor support on the battlefield, what efforts are you
taking to incorporate contractors in predeployment training and
exercises?
General Crenshaw. Sir, we recognize that, as was stated
earlier, that you need to train the way you fight. We have
instituted training within our various exercises to really
include training as we conduct our OPLAN [Operations Plan]
exercise, as well. We have addressed the Annex W [Operational
Contract Support Annex], which talks to contract, contracts
planning, contract support.
So this is an opportunity, for one, to get it from a
strategic level of focus and then implement it during the
exercises. The exercises create scenarios where our contractor
planners can really exercise and go through the process of what
does it take. It is built off of different types of scenarios
based on the particular OPLAN.
We are not there yet, but I think the idea that we are now
having a discussion and really have put some things on paper.
And to the extent of being able to exercise it the last couple
of years, we are headed in a positive direction.
Secretary Estevez. I would add, Congressman, that, you
know, in the current fight, as the units rotate in, we ensure
that there is adequate training for contracting officer
representatives. And for units that have more responsibility
related to contract support, such as the Expeditionary Support
Command that is currently deployed, had extensive training,
including from the OSD level, related to operational contract
support on the battlefield. So that is for today.
As General Crenshaw said, we do have much work to do to
ensure that that gets developed into criteria for the future
for whatever battle we may be going to. So today we are doing
it, but it is not imbedded for the long term, and that is where
we have to go.
The Chairman. Thank you.
Mr. Schwartz, Mr. DiNapoli, do you believe that the DOD
training efforts are sufficient to prepare the operational
force for how contractors will be used in future operations?
Mr. Schwartz. Apparently, I am going first on that one.
I think that DOD has acknowledged that they have a long way
to go in this area. Acknowledging, again, that they have also
made substantial progress on that, I think there has not been
much disagreement that there is more that can be done. So I
think, that, we can look forward to.
Mr. DiNapoli. You know, I think this is an opportunity to
look for increasing training at all levels of one's
professional development. When you think about using
contractors, we use contractors not only to support operational
forces in the field, but we use contractors in the Pentagon and
we use contractors on bases. And so, to look for opportunities
to increase the training and awareness of individuals at the
very beginning of their career and throughout on the roles and
responsibilities that one has to oversee and manage contractors
and the important role that contractors play and what things we
should be doing and should not be doing will be essential.
Because you should, as you go toward deployment, we should
be well aware of those roles and responsibilities so that we
are not receiving training the last 2 weeks before going to
deployment for the first time. It should be part of that
culture, that we are using that training all throughout their
development to be better situated to address contractors once
they are deployed.
The Chairman. I was meeting with a combatant commander
yesterday, and I was talking to him about the effects of
sequestration. And his concern was that, in trying to find out
the $487 billion cuts and then the $500 billion, $600 billion
on top of that, what will happen to training? Because there is
concern that that is an easy way to find savings, because it is
hard to measure how much training we need going forward.
I know, as I visited bases, the National Training Center,
when we went on our trip and were up at Lewis-McChord and other
visits I have made to other bases, they are really focusing
heavily on training the troops that are on the way to
Afghanistan for IEDs [Improvised Explosive Device]. That is our
biggest--seems to be our biggest problem. And they are really
doing a good job. But if we have to pull back that training to
meet other demands elsewhere, this means lives.
And so that is something I have a big concern about, as did
this combatant commander yesterday.
Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman.
Along the same lines, sequestration--I know with
sequestration there are going to be some reductions in
expectations in terms of where the money is at in defense. If
you look at what we were projected to spend, I guess, 2 years
ago, 18 months ago now, and what we are actually going to
spend, it is quite a bit less.
So imagine opportunities here, when you are looking at your
operational contract support. If you were told, okay, you have
to make this leaner and efficient tomorrow because, you know,
there is just not going to be as much money as there was, what
opportunities do you see with the contracting community and,
for that matter, with existing personnel to say, here is how we
should do this better, here is how we can get more out of the
money we are spending and get the best positive result? Give me
just a couple of examples of how you look at it and see that we
are just not using our personnel as efficiently and as
effectively as we could.
And part of the problem here is, for an extended 7-, 8-year
period of time, we had, you know, a fair amount of money. And
certainly we are all familiar with the problems of too few
resources. There are also problems with having too much. It
comes at you too fast; there is not the same discipline that
comes with that.
So as we move into a scarce resource area, whether you have
thought specifically about sequestration or not, I am sure have
thought about how do you get by on less and get more efficient.
What are the opportunities in the contracting area, do you
think, to help deal with that resource challenge?
And I am sorry, I don't know who--whoever wants to dive in
first.
Secretary Estevez. I will start, Congressman Smith.
I think we need to take this in the broader area rather
than specifically on operational contract support, but with the
contracting in general. And, you know, 2 years ago, Dr. Carter
kicked off ``Better Buying Power'' when he was the Under
Secretary for AT&L--acquisition, technology, and logistics. And
Frank Kendall has continued forward on that program, and is
moving to strengthen it further.
When you look at the contracting we are talking about,
mostly services-type contracting, which is, as I believe I
said, about a third of our spend, $200 billion a year in
services contracting, there are lots of things that we are
doing under Better Buying Power to address that from the macro
scale.
First, we have to ensure competition in our contracting,
and there are lots of ways to do that. One is ensuring that we
are not just going on the sole source, and putting in the
processes to drive that competition----
Mr. Smith. Can I ask you about that? Sorry. I mean,
competition is good, but I think one of the things with the
contracting that has become a bit problematic is, as you take
multiple bids--in fact, we are dealing with this in a couple
different programs--you know, do we down-select to three? Do we
down-select to two?
It is not always the case that more competition is better.
At a certain point, you are drowning in process. And you
compete, you pick a winner, the person who doesn't win
challenges it, and we are 6, 7 years out and, you know, taking
forever to make a decision.
And I know it is a tough balance. But you raise that issue;
you are in that world. How do we strike that balance?
Secretary Estevez. Especially when you are trying to do it
rapidly in a wartime scenario.
Mr. Smith. Right.
Secretary Estevez. I think, again, we need to separate the
acquisition of things, equipment, where we tend to go toward
those type of down-select opportunities----
Mr. Smith. A lengthy process.
Secretary Estevez [continuing]. Versus services, where it
depends on what you are looking for, but there could be lots of
people that could do that.
Mr. Smith. Okay.
Secretary Estevez. The other thing you do there is you put
contracts on the shelf--Wildcat, for example--but you have
competition within that, which is the lesson we learned,
frankly, so that there are opportunities to drive that. And
then you can down-select pretty rapidly, depending on the task
order you are looking for.
The other thing, you know, a highlight is of course we
asked each of the Services--and they have implemented this--to
put a senior executive in the Service at the Deputy Assistant
Secretary level to manage services and to oversee services
contracting, again, to put emphasis on the process.
You know, we run people through Defense Acquisition
University, and we step them up as they become program managers
to buy things; we didn't necessarily have the same process for
buying services. So by putting that kind of level of oversight
into the Services and watching and putting peer reviews in
management that you spend in the services area, we are able to
draw better use of the dollars in that area.
And that rolls down to contracting out on the battlefield.
Contracting on the battlefield is, frankly, just a subset of
what we do in the general services contracting area.
Mr. Smith. Okay.
Anybody else want to take a stab at that?
Mr. Schwartz.
Mr. Schwartz. Sure. I will highlight three things that I
think could substantially help the efficiency.
The first one is reliable data upon which to make
decisions. I think it was the Guard, just 2 days ago, came out
with a report saying DOD is requesting funding for fuel for the
Afghan Air Force, but that there was not sufficient data to
understand how much fuel they needed and where the fuel
facilities even were that were being used.
Better data could help you judge how effectively you are
executing those contracts and decide to go forward, to double
down, or maybe cut back because it is not being effective. So I
think data could help substantially.
And then there are two other things I would like to
highlight. One of them is upfront planning. There have been
examples reported by GAO and some of these special inspector
generals and the IGs on dining facilities that were built as
troops were being relocated to another forward operating base,
or two schools that were being built across the road from each
other. That is a planning consequence. And better planning up
front can save a lot of money and efficiency and effectiveness
further down the line.
And the third one I would point out is in-field, consistent
oversight as projects are being done. There have been
instances, again, of projects that weren't built up to specs
and, as a result, roads were crumbling or bridges weren't able
to last more than a few months because of a lack of good
oversight as things were being built. That prevents having to
rebuild as well as the reputation of the effectiveness of how
we are executing our mission.
Mr. Smith. Okay. Thank you.
Mr. DiNapoli. Just to add on to the conversation, DOD has
had----
Mr. Smith. Can you pull the microphone over? When it gets
over there, it is kind of hard to hear you. Go ahead.
Mr. DiNapoli. GAO has had DOD contract management on a
high-risk list since 1992 and in part because of services
acquisition.
Over the last decade or so, as DOD has increased its use of
services, what we have called for is more strategic planning
for services, such that we would know what we are spending and
who we are spending it from, and using that data to try to
understand what our spending patterns are and how we might
leverage the Government's buying power. I think we will be
putting out a report in the near future that looks at the
Government-wide strategic sourcing efforts and how we could do
better in strategic sourcing.
The other thing is a more tactical level, so when you talk
about contractors or individual contracts, we do need to have
the big three of, you know, better defining requirements, using
the right contracting approach, and providing effective
management oversight. In each area, DOD has made efforts to try
to do that, but we still find lapses in the individual
elements.
With regard to competition, we do think competition does,
in using market forces, does drive down prices, but you have to
have effective competition. And so when we are looking, over
the past year or so--and we have looked at various aspects of
competition--in the efforts that DOD has made to increase
competition, I mean, they only receive one bid, for example.
And there is that fine line between going too far on the
competition side but not getting enough. So you can have
competitive effects in a number of different ways. So if we can
continue to look for opportunities to increase competition as
appropriate, I think that will help drive down prices on the
individual contract actions.
Mr. Smith. Okay.
Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you.
Mr. Bartlett.
Mr. Bartlett. Thank you very much.
Do our operational contract support activities include
those projects that we pursue in concert with the Department of
State?
Secretary Estevez. Let me address that, Congressman
Bartlett.
State has their own contracting actions, but we are
partnering with State on a number of initiatives, including how
we track contractors on the battlefield. We are both using the
SPOT program to do that. As we did the transitioning in Iraq,
we continued to provide them with contract support in a number
of areas where they didn't yet have the capability to do that.
So there is a number of areas where we are absolutely
partnering with State.
Mr. Bartlett. I understand that on many of these
reconstruction projects that we work in concert with the State
Department. Are those always their contracts? Are they
sometimes our contracts?
Secretary Estevez. That depends on the nature of the
contract. I mean, if we are expending DOD CERP [Commander's
Emergency Response Program] dollars for it, then we are going
to be doing the contracting. If it is a USAID [United States
Agency for International Development] project, then they are
going to be doing the contracting on it.
Mr. Bartlett. So then there are three types of contracting
we do there: those that the State Department is involved in,
the operational contract support, and contingency contracting.
In the clips I read each day, there have been a number of
articles about huge amounts of missing money, money just plain
stolen from contracts, projects that are not completed and just
abandoned, excessive cost, exorbitant cost on these contracts.
Can you tell me in which of these three categories of
contracts most of this occurs?
Secretary Estevez. I am not prepared to discuss U.S.
Department of State or USAID contracts. I can say for
Department of Defense contracts, that we are actively managing
so that that does not happen. And I would expect that they are
also, likewise, but I really can't address how they would go
about that.
Mr. Bartlett. So all the reports that I have seen of these
contract problems, none of those are in either one of our
categories of contracts?
Secretary Estevez. You know, Congressman, I hesitate to go
backward in time. Obviously, in the early parts of the last
decade, as we embarked on the war in Iraq and Afghanistan, we
were not prepared to manage the contracts and contractors the
way that we should have been, and that is a fact. But the
processes that we have put in place over the last 5 years or so
should preclude that.
Now, there is, you know, obviously, bad people out there
that commit fraud. I think we have been pretty good in
capturing that, but I always hesitate to say that every
loophole has been closed. We actively work to stop that,
however.
Mr. Bartlett. Would you say that more of the problems that
we had occurred in the OCS activities or in the contingency
contracting activities?
Secretary Estevez. OCS activities oversee contingency
contracting activities, so it is one and the same.
Mr. Bartlett. So more of them would have occurred in the
OCS?
Secretary Estevez. Well, OCS is the process by which we
oversee contingency contracting. So, for us, it is one and the
same.
Mr. Bartlett. In the brief that we had for the hearing, we
were told there were two basic types of contracting: the
operational contract support and contingency contracting.
Contingency contracting was mainly that contracting in direct
support of the warfighter; that the operational contract
support was, I guess, largely, what, getting supplies and stuff
to the--we were misinformed in our brief?
Secretary Estevez. I can't address that. But I can say that
contingency contracting is the contracting we do to support our
warfighters deployed on the battlefield. Operational contract
support is the process that we put in place to oversee how we
do that.
Mr. Bartlett. Oh, okay. Okay.
Well, what about the--okay, do you include in that the
contracts to get the materials to our people? Is that direct
support of the contractors, or is that another contracting
category?
Secretary Estevez. Depends on what the question, frankly,
is--everything in our large enterprise. If we are buying things
in direct support of our combat activities, such as fuel or
food on the battlefield, we would rope that into the
operational contract support environment, even though those
purchases are being done back here.
Mr. Bartlett. Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you.
Ms. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
And thank you all for being here.
Now, as you have gone through a number of these areas, I
think some of it falls into a category that we might call
common sense. I mean, obviously, you need to plan, you need to
have data, you need to have oversight. And yet I guess to
someone just, you know, listening in on that, they would say,
``Well, yeah.'' I mean, what gets in the way of those good
practices?
And I wonder if you could talk a little bit more about the
different kinds of contracting then and where that becomes a
greater problem. Because if it is related to the warfighter and
contingency operations, I would think in many cases that is a
difficulty, as I think you have expressed, of planning. You
don't necessarily know what your situation is going to be until
you are in the middle of it. And on the other hand, if you are
talking about operational, it would seem to me that there is
enough standardization in that that you shouldn't have to go
back to the drawing board every time.
So, you know, can you help--what gets in the way of those
different areas, that we are not able to, I guess, accomplish
what we really want to do?
Mr. Schwartz. I think there are a number of issues that you
raise, and it is an excellent question.
One of the challenges that has occurred in Afghanistan is
that there is a frequent rotation among personnel, uniformed
personnel, as well as contractors, as well as civilian
personnel. And so often someone who gets to theater who has
never engaged in the counterinsurgency operation, which
Afghanistan had, the policy now being pursued there, it takes
them a learning curve, and they say, ``Oh, I get it, I see what
is going on, and now I am 3 months from going home.'' And then
someone else comes in who may not have had that learning curve.
That definitely has an impact on the ability for continuity
in some of these commonsense issues. For example, contracting
in wartime is fundamentally different than contracting in
peacetime. So someone who has done contracting for years and
years here to build a road is thinking cost, schedule,
performance. When they get to Afghanistan, in the beginning
they are thinking, perhaps, cost, schedule, and performance--
and wait, stealing the goods. We can't take them to court. What
effect is this having on the local village? And when they start
getting up to speed, as I mentioned, they start rotating back.
That is one problem.
Mrs. Davis. Uh-huh.
Mr. Schwartz. A second problem is sometimes you have
personnel who, because of the rotational policy, don't have the
experience in that area. When I was in Afghanistan last summer,
a former helo pilot was working on contracting strategy. He had
never done that before. Incredibly talented individual, but it
took him also some time to get up to speed.
So I think that is one factor that makes a difference. I
think the other factor sometimes is just simply exposure to the
magnitude of what one might be dealing with. For example----
Mrs. Davis. I guess, so where--are there, then--because you
talked about, there are gaps in data and in that collection
process. How do you mitigate these issues, which are--again,
they are obvious. There is a certain level of uncertainty that
you can't necessarily plan for. What is the best way of getting
around that, if that is the issue?
The other thing that I just wanted to see if you had some
thoughts on, do we have a sense--I mean, what does the cost of
unpreparedness and the lack of planning have? Has anybody tried
to quantify that? And particularly to the extent that we
obviously need to do better planning, and there is a cost to
that as well. So where is that balance, and what do we think
that is? I mean, is that 10 percent of the budget? Is that 3
percent of the budget?
So the first one, how do you get around those issues that
you have mentioned that are obviously difficult to plan for?
Mr. Schwartz. Let me address just the data. Would you like
me to respond to that one?
Mrs. Davis. Yeah.
Mr. Schwartz. So I think there are a couple of strategies
that have been suggested that could assist. One is, what has
happened often in Afghanistan is you have somebody collecting
data but they don't know how to get it into the system because,
for example, the CIDNE [Combined Information Data Network
Exchange] system, the system that is being used in Afghanistan,
they are not familiar with, or the user interface hasn't been
done in a way that someone who isn't experienced in programming
is necessarily capable of using it effectively.
In that area, training and education can make a substantial
difference, as well as better transition from one rotation to
another because sometimes the person that is gathering the data
has the book on the shelf and the next person didn't know it
was there.
Mrs. Davis. Uh-huh.
Mr. Schwartz. So that is one example.
The second example is making it important. Sometimes the
contracting officers just don't realize, because they have many
priorities and have many other responsibilities, the impact of
the data.
And I will give one example. When fuel is being delivered,
to what extent are they measuring the fuel that is being
delivered? That is how you are going to see how much is being
stolen. Now, in one truck, that may not be as relevant, but
systemically through the battlefield, fuel not being delivered
and being siphoned off starts having substantial impact.
Mrs. Davis. Thank you.
And can you just indicate to me with a hand, do you have a
sense of what the costs of this unpreparedness have been?
Anybody have a sense of that?
Mr. DiNapoli. No, I don't think there is a number
associated
But I would like to go back and kind of build on the
discussion that Moshe was talking about. When you look,
especially now in Afghanistan as we are drawing down and having
our forces think about consolidating our bases, this is time
that we should learn from our lessons in Iraq.
About this 27-month-period out, we were really unprepared
in Iraq to think about what our requirements were. And so we
tasked the contracting folks in Iraq to come up with those
requirements, and that was the wrong thing to do. What we
needed to do was to ask our warfighters, our base commanders,
what are the services that we need, who are the contractors
that are performing it, and obtain the data and information
needed so that we can figure out what our next drawdown plan
is, so we can figure out what to do.
That is what we need to do in Afghanistan.
Mrs. Davis. Thank you.
The Chairman. Thank you.
Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Gentlemen, thank you so much for joining us today, and
thank you for your service to our Nation.
We have heard some themes here about how dynamic the
environment is out there, whether it is drawdown in
Afghanistan, whether it is looking at pending sequestration. I
think it is a very interesting and challenging time for this
Nation.
That being said, General Crenshaw, I want to drill down a
little bit more concerning where we are in Afghanistan, as we
are in that downsizing in Afghanistan and we are looking at how
we currently oversee contractors in Afghanistan, how DOD
oversees contractors.
As the drawdown happens, how will that oversight continue?
Will there be enough personnel in theater to make sure that
oversight continues? And how might oversight change through
this transition?
General Crenshaw. Sir, during this drawdown here, we are
looking at, certainly, the lessons learned from the Iraq
transition. And that has been extremely, extremely helpful.
U.S. 4-A has already begun planning the drawdown of their
forces, and really to include the contractors and their
equipment.
One other thing that is being done is that they have
established an operation contract support drawdown sale. And,
again, this takes into account all the lessons learned from
Iraq. They have asked for a transition working group, where
they show how the same type of process where DOD and DOS
[Department of State] did a transition in Iraq--they asked for
a working group that is really going to address those elements,
as well.
And so I guess, really, the bottom line is that we are
looking at the lessons learned from Iraq, a lot of good lessons
learned. And we have established processes that are going to
allow us, hopefully, certainly not to have the same type of
issues as before.
Secretary Estevez. Congressman, if I could just jump in on
that?
Mr. Wittman. Please.
Secretary Estevez. As General Crenshaw just said, we are
deploying a one-star flag officer, who is currently the
Director of International Operations for DCMA [Defense Contract
Management Agency], who has extensive experience in this, to
oversee that drawdown sale, separate from the one-star that is
there to lead our contracting efforts, just for focusing on
that very thing. Again, lesson learned from Iraq on how we do
that.
Mr. Wittman. Thank you.
Secretary Estevez, let me expand a little bit further and
get you to give us your perspective on where the challenges
will be for both DOD and the contractors as we transition out
of Afghanistan, as our strategy moves toward the Asia-Pacific.
And also looking in that environment, what do you see the
contracting environment being like over the next, let's say,
10-year period as we look at, obviously, challenging economic
times, with budgets being austere, and looking at making some
difficult decisions about resources in the area of national
defense?
If you can kind of give me your perspective both in that
transition and then, looking down the road, what do you think
that environment will be.
Secretary Estevez. In Afghanistan for the transition, in
the near term there is going to remain a robust contractor
workforce on the battlefield even as the force draws down. They
will be doing those base life supports and, you know, operating
some of our high-end devices like the aerostats that we have
that provide persistent surveillance.
It doesn't matter whether we have 10 U.S. soldiers or
68,000 U.S. soldiers, we need those type of devices, and
contractors are in place to operate them. And then, as we start
closing bases, those people will deploy. So that will ramp down
over the next 2 years, but it will stay pretty high-level for
the foreseeable future.
I'll go back to the question that Congressman Smith asked,
how do we get the maximum out of our dollars that we spend, and
as we close down Afghanistan and move out to the Pacific, we
need to retain those types of capabilities. When we go into a
deployed environment, we need to ensure that we are bringing
forward those lessons that we have learned.
You know, if you asked me where we are on operational
contract support, I would say, you know, 5 years ago we had a
gaping wound, self-inflicted as it may be. We staunched the
bleeding, we sutured it up, the scar tissue is healing, but
what we haven't done is embedded it in the DNA and in the
muscle memory. That is what we are striving to do, and that is
what we must succeed in doing in order to have a swing to the
Pacific, or anywhere else in the world for that matter. And I
think we are on the course to do that.
Mr. Wittman. Very good.
Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you.
Mr. Barber.
Mr. Barber. Thank you, Mr. Chairman.
And thank you to our witnesses for being here today.
I want to commend the Department for what is obviously an
incredible effort to change contracting policy, evaluation, and
effectiveness.
But there was a lot said this morning about cultural change
that is needed. Particularly, Mr. Schwartz and Mr. DiNapoli,
you have spoken to that. It is a very vague term, I guess. You
could apply it to any system, any bureaucracy.
Could you provide us with some indicators of what cultural
change needs to be and how we might evaluate it?
I agree with your premise that we need to have data in
order to make good decisions. We also need to have smart people
making use of that data.
So could you explain, what are the barriers, specifically,
as you understand them, to cultural change? And how do we
measure movement toward cultural change that will make
ourselves more effective and efficient in this area?
Mr. DiNapoli. That is an excellent question.
When you think about cultural changes, it is a big concept.
And how do you bring about cultural change? You know, the work
that we have done in past says it is a long-term process of 5
years or more. Probably in this area, with regard to
contracting, it is going to be longer than that.
With regard to operational contracting, one of the barriers
is that folks in the field don't really appreciate contracting
as that enabling capability. And so you do need to get them to
have a better appreciation of the role that contractors play in
support of their mission. And so that does come back to the
education and training part that we have so that individuals
will even recognize that.
So when you think about it from, as you talked, at the
operational level, DOD is setting policy that is trying to set
that vision at the Department level, and now it needs to be
translated down. You go to the operational command or the
operational planning would be the next step, then down to the
military department, and then down to individual units and
individuals.
So I think it is a long-term process. I think the measures
of effectiveness still need to be developed, and the Department
has an action plan. We would like to see how those measures are
better developed in that plan so they can gauge for themselves
how much progress they have made, where they need to go, where
the emphasis needs to be.
Secretary Estevez. If I could jump in there, Congressman?
Mr. Barber. Well, I just want to commend you on your
medical analogy. I liked it. And perhaps that will speak to how
we can make some cultural change, as well.
Secretary Estevez. And it is, frankly.
Now, as Mr. DiNapoli said, it needs to be recognized as an
enabling capability, just like logistics is an enabling
capability to winning a warfight. So the warfighter needs
people behind them.
Contracting is commanders' business. It is not just for the
contracting officer. And that needs to be embedded. So today in
Afghanistan, General Allen puts out guidance related to
management of contracts and contracting because it is part of
his effort to win that fight in Afghanistan.
That needs to go into our military education process and
our civilian education process related to military, in fact.
And that is what we are working to do, is embed that in
courseware so, as today junior officers go through their paces
as they grow into senior officers, that becomes part of their
process: ``When I deploy, I am going to have contractors with
me. Contractors can help me win the fight or they can impede
me. I need to manage them to help me win the fight.''
And once that thought process becomes second nature, the
fact that Dr. Carter or General Dempsey is saying that today,
which they are, you know, ``They are transitory, I am
transitory,'' where you need to have that into the workforce,
into the military force for the future.
Mr. Barber. Thank you.
Mr. Schwartz. And if I may add, of course it is difficult
to measure culture, but there are some, perhaps, flags that one
can look for to see how progress is being made.
One is when contracting officer representatives are being
tagged by senior officers, are they the people that are very
well-respected in the unit or not? In the Gansler report the
Army commissioned a few years ago, one of the concerns was that
it is the people who aren't well-respected who are being
appointed as the contracting officer representatives.
Another one is, to what extent is everybody talking about
the role of contractors as part of the total force? To what
extent is it in the QDR [Quadrennial Defense Review]? To what
extent is it in doctrine? To what extent is it in the
discussion?
And the last would be--and this is clearly not a measure
that is easy, but the anecdote I heard which I found very
useful was in Iraq, when people first got there, the general
question was, where are our guys, where are the bad guys, and
what land do I control, what is my mission? Today, more people
are asking, where are our guys, where are the bad guys, what is
my mission, and where are our contractors?
Sometimes just asking that question and having that in the
consciousness is the example of how culture has changed. And to
the extent that culture has changed as a result of the 10 years
of experience, 12 years of experience we had, perhaps one of
the largest challenges for the Department of Defense is
maintaining and encouraging further culture change so we don't
lose the experience and the changes and the progress that we
have made so far.
Mr. Barber. Thank you.
Mr. Chairman, I yield back.
The Chairman. Thank you.
Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
I think my first question would be, how many contractors--
or is anybody aware of how many contractors we have in Iraq
today?
Secretary Estevez. Iraq, today, end-of-third-quarter number
is about 7,300 DOD contractors.
Mr. Coffman. Seventy-three hundred. And what kind of
missions are they performing at this time?
Secretary Estevez. They are still doing some base support,
delivery of food and fuel, some private security, you know,
some security missions.
Mr. Coffman. Okay. And then how many contractors do we have
in Afghanistan today?
Secretary Estevez. Afghanistan is about 114,000
contractors. And there is a whole range of missions that they
are doing, including base support, linguistics, operating the
things that I was talking about earlier--aerostats, persistent-
surveillance-type devices--performing maintenance, a whole
schema of activities.
Mr. Coffman. So if I understand it, I think we are drawing
down now to about 80,000 U.S. military personnel. Is that the
number?
Secretary Estevez. Sixty-eight thousand.
Mr. Coffman. Oh, 68,000 U.S. military personnel? And we
have 114,000 contractors?
Secretary Estevez. Yes.
Mr. Coffman. And then, so as we draw down, then, through
2014, could you tell me, do we have any idea what that will
look like at the end of 2014 yet?
Secretary Estevez. At the end of 2014, it depends on what
force is left there, you know, working with the Afghans and
whatever the training mission evolves to be at that time. We
don't know what that number is. If it is zero, you know, our
contractor number will be pretty small, you know, working with
State Department.
Mr. Coffman. So how would you break up the contractors
between DOD and State Department?
Secretary Estevez. I don't have the State Department
numbers. I have DOD numbers.
Mr. Coffman. Okay. Does anybody have, is anyone aware of
the State Department numbers?
Mr. Schwartz. I don't have the State Department numbers,
but I think I could add a little bit of clarity to the current
contractors now.
Mr. Coffman. Sure.
Mr. Schwartz. Approximately, there are about 28,000 private
security contractors currently being used by the Department of
Defense in Afghanistan.
Mr. Coffman. Okay.
Mr. Schwartz. With the migration to APPF [Afghan Public
Protection Force], that number, assuming that that migration
takes place, should be go down substantially.
Of the rest, of the other 75 percent of the DOD contractors
being used in Afghanistan, based on the experience in Iraq and
the other data that has been put out, the majority of those are
definitely doing base support.
So, to the extent that a drawdown also draws down base
support requirements, there should be a substantial withdrawal
of contractors for that, as well.
Mr. Coffman. Okay.
The security situation--I know President Karzai has
complained about contract security and wanted, I think, that
relationship terminated, to some extent, and provided
government security. Can anybody give me some visibility or
some clarity on that, on where we are right now? What did the
President want, Karzai want?
Secretary Estevez. The President wanted a transition from
companies hiring their own private securities from other
companies, which could lead to small armies, if you would, to
an Afghan national security force, APPF, as Mr. Schwartz
alluded to.
That program is in process. It is being done initially for
what we call mobile security--think convoys--support, which is
mostly private companies delivering goods for us with security
against that, not our own conveys. We protect our own convoys.
And we have another year to go before it transitions for base
support. And, again, the Afghans have been flexible as that
capability evolves.
Mr. Coffman. Okay.
Mr. Chairman, I yield back.
The Chairman. Thank you.
Ms. Speier.
Ms. Speier. Thank you, Mr. Chairman.
Thank you all for your participation today.
My colleague just made a very important point, which is
that we have almost twice as many contractors in Afghanistan as
we have service members there. And that has historically been
our experience in Iraq, as well, when we were still fully
engaged there, if I recall correctly, certainly more
contractors than we have service members.
So it becomes very clear that in any engagement that we are
in moving forward, it appears that Defense has ceded that
contractors will be a large part of our engagement anywhere, in
fact, much more so than our military presence. Would you agree
with that generally?
Secretary Estevez. In Iraq and Afghanistan, generally we
are about 1.1 contractor to 1 military, so it is almost a 1-to-
1. We are a little higher than that now because of the
drawdown. But I absolutely agree with your premise, that we are
going to be out there with contractors.
Ms. Speier. So, knowing that and knowing that the Wartime
Contracting Commission has already said that we have failed in
managing these contracts and the cost has been estimated to be
$60 billion, we have to get our act together, correct?
With that mind, it is my understanding that--and this is to
you, Mr. Estevez--it seems like the rotation for our
acquisition professionals are too short for them to have a good
sense of the operational environment and really to take
ownership of the programs that they are overseeing.
To what extent is the Department considering extending the
length of these rotations?
Secretary Estevez. I think we need, you know, to separate
rotations of program managers that are overseeing the buying of
stuff from rotations of contractor oversight and contracting
management into theater.
The general officers and their staffs that we are putting
into theater now go on a year rotation. As we bring back our
dwell time, it might be a 9-month rotation. But they are there
for, just like the combat forces, for a period of time. And
they have sustaining staff underneath them. So we have the
capability there today to oversee it.
You know, your point on the Commission on Wartime
Contracting, agreed. Yeah, we are not where we needed to be,
looking into the past. But we believe we are today on the right
timeline in Afghanistan. And, again, it is sustaining that into
the future that we need to look to.
Ms. Speier. So when we send our soldiers to war, we teach
them how to use a gun. We send our officers and staff, and yet,
do we train them in terms of acquisition management? Is there
any requirement that service members have that kind of
training? I mean, we are talking about huge sums of money.
Secretary Estevez. So, the corps of contracting officers
are absolutely trained, and the military acquisition
professionals are absolutely trained in those arts. And we are
increasing the cadre of that able to do that.
When you go further down, contracting officer
representatives, that is going to be someone from a combat
unit. And we are training them today, as they deploy, on how to
oversee those contracts as part of their standard training. And
that has been emphasized at the senior level in the Army and
the Marine Corps, who are the preponderance of forces.
Ms. Speier. Mr. Schwartz, how do we measure whether or not
the Department is doing a better job in terms of managing the
contractors moving forward? How do we deal with an evaluation
of whether or not we have reduced the $60 billion in tax
dollars that have been wasted through improper contracting?
What would you recommend that we be looking at?
Mr. Schwartz. One example might be, in 2010, DOD set up
Task Force 2010. The goal of Task Force 2010 was to assist in
contracting as well as to start looking at who we are
contracting with in Afghanistan. As a result of Task Force
2010, tens of millions of dollars of goods have been recovered
that were stolen, items are being tracked better, there is more
sharing of information of how to do things, and there has been
a substantial increase in the companies and individuals who
have been suspended and debarred. That was established in 2010.
One measure would be how quickly next time. Or in exercises
or in planning documents or in education, there is discussion
on getting that done day one, you know, or the second day that
you are on the ground. How long it takes to start setting up a
Shafafiyat, for example, that was looking into corruption
issues, to a degree, in contracting or a spotlight on--and the
ACOD [Armed Contractor Oversight Division], which was
overlooking the use of private security contractors.
A second way to look at this would also be the extent to
which contracting issues--and I don't mean actually just
writing the contract--the whole value chain of figuring out
what contractors are going to be doing, how they are going to
be doing it, and how you manage that. In addition to the extent
that they are in educational courses and in addition to the
extent to which they are in the military exercises would also
be the extent to which coordination is being done with other
agencies when there are joint operations.
And I will give you an anecdote. When I was in Iraq about
5----
The Chairman. The gentlelady's time has expired.
Mr. Schwartz. My apologies.
Ms. Speier. Mr. Chairman, may I just ask that he prepare a
document with his answer and provide it to you and to me?
The Chairman. If the gentleman could please give the answer
for the record?
Mr. Schwartz. Of course.
[The information referred to can be found in the Appendix
on page 97.]
The Chairman. Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
And I have a couple of comments that deal--or questions, I
should say--that deal primarily with the equipment that will be
coming back from Afghanistan and Iraq. We were in Kuwait a few
months ago, and obviously there is a tremendous amount of
equipment there that will be shipped back to the U.S.
And I guess my question has to do with our capacity on base
and what will happen with the equipment when it comes back, as
far as getting that equipment back in working order and
determining whether it should be scrapped or repaired.
Secretary Estevez. We have a process to do that. Obviously,
if it is there and it is in need for forces or, you know,
backup for damaged/destroyed equipment, it is going to remain
there until such time as it is ready to redeploy.
As units redeploy, we are bringing back their equipment. We
are removing excess equipment from Afghanistan today as we
speak, and they are tracking that on a regular basis.
Mr. Scott. Sure.
Secretary Estevez. And if it is needed for future forces,
it will go in through depot and be repaired and then go back to
the forces. If it is not and we know it is not today, our
tendency will be to destroy it or leave it in Afghanistan or
donate it to someone in Afghanistan.
Mr. Scott. Well, one----
Secretary Estevez. If it--if I could----
Mr. Scott. Sure.
Secretary Estevez. And there is a mix of things that we are
not quite sure, and we will bring those things back and park
them and figure out what the future forward construct might
look like.
Mr. Scott. Sure. Okay.
The reason I ask is I am from Georgia. We have several
depots there, and we have the Savannah port, as well. And,
obviously, a lot of that equipment will be coming into Georgia.
And I will give you a number and we can talk further about this
at your convenience, about a suggestion that I have that maybe
the Department hasn't looked at yet. But I will move on to
another subject matter for now.
One of the things that sticks in my mind with a recent trip
to Afghanistan is a young soldier who spoke to me. She was an
air traffic control officer, and she spoke to me about what the
contractor that sat literally next to her in the chair was paid
versus her pay. And it was simple things like access to
Internet anytime the contractor wanted it, when our soldiers
didn't have some of those same conveniences.
And my question gets back to, what are you hearing from our
soldiers that are out there, like that young air traffic
control officer who is having to sit next to a contractor that
may be getting paid two or three times what the soldier is and
that contractor having, if you will, more of the things that we
enjoy in America than some of our soldiers do?
General Crenshaw. Sir, in regards to that question, as we
have the opportunity to talk to our soldiers, our marines, you
know, our service members, it becomes the motivation factor, in
terms of what are our soldiers--what are they there for, what
is their motivation for being in uniform. And, certainly, there
are some differences in terms of what a contractor has access
to.
Our service members, I think, are very proud of what they
are doing, and they recognize the important role that they
play. And I think, at the end of the day, they do recognize
that they are at a higher calling and that they really enjoy
what they do and, at this point, are willing to accept and
recognize that they are service members. And when they have the
opportunity to be back in the States and have those things,
they will enjoy having them then. But I think, at the end of
the day, good soldiers doing good work for our military, for
our country.
Mr. Scott. Sure. And the person wasn't whining, by any
stretch of the imagination. They were proud to be there, proud
of their service to the country, as well. It was a constituent
of mine. It wasn't so much the pay as it was, you know, if
Internet access can be provided so that the contractors can
talk to their families whenever they want to, you know, isn't
that something that could be done for us, as well?
So my time is almost expired, but thank you for that
answer, and just something to keep in mind as we go forward.
I yield back.
The Chairman. Thank you.
Mr. West.
Mr. West. Thank you, Mr. Chairman and Ranking Member.
And I want to talk, you know, basically from my own
experiences because I may be one of the few people here that
spent 22 years in uniform and 2\1/2\ years as a contractor in
Afghanistan.
What I saw that works is the relationship where there is a
unity of command and a unity of effort. You know, when I was
there as a battalion commander and I had the contractors, they
were in my unit, and they were responsive and responsible for
me.
And when I went back over to Afghanistan, I was part of an
Active Duty unit's staff, and I reported to them, and there was
not that enmity that my colleague just talked about because we
lived, slept, and worked and ate side-by-side with them. We
were not allowed to have weapons, but yet we were going out on
patrols with them just the same. And I think that that helped
to gain a lot of respect from the men and women in uniform.
So I guess my lesson learned, if I can share, is that we
have to make sure that there is no separations in effort
between what the contractors are doing and what the uniformed
service members are doing. And if we can make sure that we
continue to have that close relationship--my contractors
trained with me at NTC [National Training Center] before we
deployed over to Iraq in 2003. So I will recommend that that is
a great way to help, as we move forward.
Now, the question that I have is, in 2003 we had a really
tough time as far as understanding what were the things that
were needed on the ground. And we had initiatives that were
started, like the rapid force, the fielding initiative.
What have we learned as far as that Rapid Fielding
Initiative now? And how can we make sure that we have better
streamlined processes and procedures to be able to get the
requirements from the guys down there at the tactical level up
as soon as possible to the CORs [Contracting Officer's
Representative] and get them the type of equipment that is
needed?
Secretary Estevez. If I could, let me take that,
Congressman.
And I won't even say it is getting into the CORs. It is
getting it back up the chain to the right person who can buy
what it is that they need.
We have honed the JUONS [Joint Urgent Operational Needs
Statement] process, the process by which those rapid emerging
requirements come up. About 2\1/2\ years ago, Dr. Carter, when
he was the Under Secretary, was asked by Secretary Gates, at
the time, to lead an effort to manage those JUONS as they come
in, which seem to be programming requests, to meet those things
that have come through.
And it is all focused on getting those things rapidly what
we know we can buy and put out on the battlefield within the
year, in general. That is how all those persistent surveillance
devices have gone out there, new devices like handheld scanners
for IEDs on the ground, ballistic underwear, all sorts of great
things.
Dr. Carter chairs that group now, even as the deputy, every
3, 4 weeks--he was doing it biweekly--on the video with General
Allen's staff in Afghanistan, talking about what they need;
what is in the pipe; how can we expedite that; putting our
contracting effort, whether it is on the ground in Afghanistan
or back here, in order to buy soldiers, sailors, airmen, and
marines what they need today in a rapid fashion.
Mr. West. Anyone else?
The other thing I think we have heard a lot of questions
about, the waste of funds. How have we improved our
reconciliation process to make sure that we are not wasting
funds and we have a good accountability of the American
taxpayer dollar in these combat zones?
Mr. DiNapoli. We did a report last year that looked at the
closeout process, the DOD contracts in Iraq and Afghanistan.
And we found that there still remains a huge number of
contracts that need to be closed out, in part because of poor
contracting, poor recordkeeping, poor contract administration.
So the numbers are fairly significant in both our cost-type
and fixed-price-type contracts. I think for the cost-type
contracts, the Defense Contract Audit Agency, with increased
staffing, has just announced a new initiative to take a look at
some risk-based approaches to kind of reduce the backlog of
incurred costs in contract closeout activities. We are
currently viewing that activity and hope to issue a report
later in December.
But I think the Department has a long way to go to having
the systems in place that would allow them to do a timely
fashion closeout. The key for Afghanistan, which is an issue
that is still emerging, is to make sure right from the
beginning that we have good contract administration and good
oversight of those contracts so the reconciliation process is
not challenging. It should be fairly simple if we pay attention
during the course of the contract.
Mr. West. Okay.
Secretary Estevez. I would agree with Mr. DiNapoli on that.
It is part of the overall OCS construct, putting good
contracting in to place, putting oversight--you know, we have
DCMA deployed in force out on the battlefield today; that was
not true in the past--and then keeping that process through
contract closeout, which will take years in this case.
Mr. West. Thank you, Mr. Chairman.
I yield back.
The Chairman. Thank you.
Mr. Platts.
Mr. Platts. Thank you, Mr. Chairman.
I thank all the witnesses for being here. And I apologize--
I was coming from another hearing--if I am repetitive.
I want to focus on the issue of Afghanistan, specifically.
And my most recent trip, back in June, was my 10th visit there.
And each time I have come back, one of my biggest concerns is
just corruption in Afghanistan, within the Afghanistan
Government and then with, you know, vendors that we are dealing
with, non-U.S. vendors.
And I know there is an initiative with the vetting of non-
U.S. vendors. Specifically, I guess, two questions. My
understanding is that we are not vetting vendors that are under
$100,000, and we are not vetting subcontract vendors even if
they are over $100,000.
And, Mr. Secretary, am I correct in my understanding? And,
if so, why aren't we, especially when it is also my
understanding that a large majority of our non-U.S. vendors
fall into this category of under $100,000?
Secretary Estevez. I am sorry, I don't know the limits on
what we are doing. I do know we are looking at, from a
corruption standpoint, under Task Force 2010 is looking at a
plethora of contracts, including the subcontracts that are
underneath the contracts and who those people are and what they
are doing.
In fact, this Congress gave us, in the last NDAA [National
Defense Authorization Act], authority to do that at the
subcontract level. They are identifying bad people, and we are
knocking them out. And that was another authority that you gave
us last year.
Mr. Platts. And I know there is more focus on it. And I
don't know if it is a manpower issue, that we are still not
vetting all, and then also not coordinating between DOD,
Department of State, USAID in the vetting process. Are you
familiar with that lack of coordination?
Secretary Estevez. State has its own contracting, USAID has
its own contracting. In the areas where we overlap, there is
good, strong coordination. So I can't address their processes
outside of where they work with us.
On the larger vetting question and what the numbers are, if
you don't mind, I will get you a response for the record on
that.
Mr. Platts. Yeah, if you could. And also for the record,
what, if any, coordination is occurring? Because we are in the
same theater and maybe State, maybe DOD, USAID, but if we vet
somebody and say ``bad apple, related to organized crime,
insurgents,'' you know, we want to make sure we are sharing
that with our colleagues, which it is my understanding we are
not doing very well right now.
Secretary Estevez. If someone gets, you know, to the point
of suspension and debarment, that goes for the Federal
Government-wide, so that is clean.
So, again, I will get you a full response in this area.
[The information referred to can be found in the Appendix
on page 97.]
Mr. Platts. And a final question is, it is my understanding
that the Secretary of Defense and the Secretary of State have
recommended the formation of an illegal activities initiative
for Afghanistan with Justice, similar to what we have done in
North Korea.
Are any of you familiar with that issue and that
recommendation?
No?
Mr. DiNapoli. Congressman, I am not familiar with that
recommendation, but I do want to go back to your point about
vetting.
I think the issues you identified were spot-on. And we did
a report, I believe last year, that looked at the vendor
vetting process, and we did identify weaknesses in both DOD,
State, and USAID's process for the vetting process.
So trying to--for DOD, absolutely, they weren't vetting
contractors under $100,000, weren't vetting subcontractors.
They were vetting contractors already on board, as opposed to
vetting contractors that were prospective. So it was kind of
after-the-fact vetting.
So those issues, I think, they are still in the process of
addressing. I don't believe that they have they fully
reconciled those. And interagency coordination remains a
problem.
Mr. Platts. Did your study identify, was it a manpower
issue, that they just didn't have the resources to do a full
vetting of all of those contractors, or were there other
factors?
Mr. DiNapoli. It was a combination of factors. One is at
the guidance level. I mean, there is guidance that suggested
that we should do certain things, but it needed to be more
clearly spelled out. And we made a recommendation to do that,
and I think DOD did act upon that.
But I think there are limitations in the resources
available, both at the contracting officer level, at the shop
that does the vetting down in Tampa. So I think there were
resource constraints. And the number and volume of contracting
actions that are supposed to be vetted through that shop
greatly exceed, I think, what their expectation was.
So I think there were a number of combinations.
Mr. Platts. Yes?
Mr. Schwartz. If I may add, one of the primary obstacles
was personnel. And there was a path to substantially increase
the number of people who were doing the vetting, particularly
in a reach-back back to CENTCOM [U.S. Central Command] in
Tampa. That was one issue that they were working to address.
At the same time, they were setting up a vendor vetting
cell through ISAF [International Security Assistance Force],
through the NATO [North Atlantic Treaty Organization] allied
forces, as well, to complement each other and to coordinate.
And, third, there were instances, based on a high-risk
analysis, where they were vetting subcontractors. And the
example I would throw out is private security contractors for
the Afghan national trucking contract because of the high-
profile and the critical nature of that. So they did attempt to
do some sort of triage with subcontractors when they felt the
risk justified it.
Mr. Platts. Okay.
Again, thank each of you for your testimony here today,
and, General Crenshaw, especially your lengthy service to our
Nation in uniform. We are a blessed Nation because of heroes
such as yourself who are serving us.
Thank you.
The Chairman. Thank you.
Mr. Conaway.
Mr. Conaway. Thank you, Mr. Chairman.
And gentlemen, thanks.
General Crenshaw, can we dig down a little deeper in the
training aspect? You and Mr. Estevez both said that we train on
a commander level when he or she takes command.
How are they trained with respect to what their
responsibility will be for contractors in their area? I mean,
is it a systemic training that all folks go through as a part
of staff training moving up to command? Or is it specifically
just a handoff training from one commander to the next? What
are we doing with commanders?
General Crenshaw. Yes, sir. The training at this point is
very deliberate, sir. The training is for, at this point, got
it for commanders, we got it for the field-grade level, and we
have it for the actual planners. And what we utilize is the
Defense Acquisition University to conduct part of the training,
particularly the core training. The Army Logistics University,
as well, conducts training.
So you have a series of venues or institutions, if you
will, that will actually conduct the training for the various
levels, to include, at the junior-officer level, at National
Defense University, CAPSTONE offers an opportunity for the
senior leaders to have training.
Mr. Conaway. So there are formal courses. When someone is
being selected to command a company or an area that is going to
be directly supported by contractors, is that person, do they
check to make sure that they have actually gone through those
courses to see that we have the training in place? Is the
personnel system adequate to make sure that folks have the
training before they get into the theater?
General Crenshaw. Yes, sir. The process is to identify
those forces and commanders who are going in theater, that they
are properly trained with the appropriate courses at the
various level where they are.
Mr. Conaway. Okay.
Mr. Estevez, you mentioned you have the number of
contractors in Afghanistan right now. Do those include the food
service guys that are serving meals as well as guys picking up
trash and that kind of stuff?
Secretary Estevez. Absolutely.
Mr. Conaway. The number gets inflated. We think that all
117,000 of them are high-end positions. Can you give us some
sense of nationalities for that contractor group and how many
of them would be considered, you know, care and maintenance and
feeding of the team that is, well, not--doesn't take a lot of
education to serve food at the DFAC [dining facility]----
Secretary Estevez. I can give you some general----
Mr. Conaway. Okay.
Secretary Estevez. Of the about 114,000 in Afghanistan
today, about 48,000 of those are Afghan nationals.
Mr. Conaway. Okay.
Secretary Estevez. Again, so that is helpful to us to
bringing Afghan prosperity.
Mr. Conaway. Right.
Secretary Estevez. About 30,000 U.S. citizens, and the
remainder are third-country nationals from wherever around the
world.
About 36,000 of those folks, or 32 percent, are doing what
we call LOGCAP [Logistics Civil Augmentation Program],
logistics capability support. So those are base support guys--
picking up trash, maintaining the road on Bagram or Kandahar,
leatherneck, serving food, those type of activities.
Mr. Conaway. Right. Okay.
Secretary Estevez. Another 7,000 are Corps of Engineers.
So, again, general engineering stuff, and that could be doing
both projects for the Afghans or projects for us.
Eighteen percent are theater support. So, again, general
support-type roles, and that could be delivering food,
delivering fuel. So they are not on our post, necessarily, but
they are counted against our numbers because they are
contractors using the----
Mr. Conaway. Okay.
Secretary Estevez. And then we have 43 percent in the
``other'' category. And that could range from high-end people
doing high-end maintenance, logistics----
Mr. Conaway. So it looks like 60 percent of those are just
the normal things that you really don't want people in uniform
doing.
Secretary Estevez. That is correct.
Mr. Conaway. And we could. Back when I served, a million
years ago, we had KP duty. It was fun. And my favorite spot was
pots and pans. You are over there by yourself; nobody messes
with you. But we don't need guys in uniform doing pots and
pans.
And so 60 percent of that team is just--well, when we
leave, we don't bring those guys with us. And there are no
long-term commitments to that group either, right?
Secretary Estevez. They go back to whatever they were doing
before.
Mr. Conaway. Okay.
Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you.
Mr. Palazzo.
Mr. Palazzo. Thank you, Mr. Chairman.
And I thank our witnesses for your testimony.
This question is primarily for General Crenshaw and Mr.
Estevez. And I am hoping you are familiar with this report and
the bill that was introduced in the Congress.
But what are your thoughts about the feasibility of
standing up an independent United States Office for Contingency
Operations with dual reporting to DOD and State, as some have
suggested? And what are the benefits and drawbacks of this
approach?
And although we will start with Mr. Estevez, I would like
to hear from CRS [Congressional Research Service] and others,
as well.
Secretary Estevez. We don't believe that that is the right
thing to do. We believe that, you know, while we have been at
war for the last 10 years and we expect to have some level of
instability in the world, as demonstrated yesterday, putting a
contingency office that may or may not have something to do out
on the side is not the way to have a continued trained
workforce.
Contracting in this area is a subset of contracting in
general. There are some specifics related to it, you know,
speed and oversight that is required, and we should be drawing
from our workforce in order to do that and holding people
accountable and put in the proper oversight.
And that applies to both the Department of Defense and--
again, I can't speak to State, but I believe that they view
things the same way.
General Crenshaw. Sir, if I just may add, certainly I
concur with Secretary Estevez. The idea, though, in terms of
spirit, I think we are addressing the spirit of a lot of the
language and recommendations as we currently reorganize and
focus on the new OCS concept. To the extent of having this
different office, sir, again, I think we, in the spirit of the
language, we are actually doing that now.
Mr. Palazzo. Mr. Schwartz.
Mr. Schwartz. So there definitely are varying opinions on
that. One, of course, is, would it be integrated with DOD? They
are opposed to that.
One of the arguments for that, clearly, is to focus the
issue. So I would suggest, number one, to the extent that there
is another alternative, another way to do that that DOD
suggests or the State Department suggests, which would be the
more efficient way to accomplish what the ultimate end goal is,
which is more efficient overseas contract support, OCS?
The second is--and I think very often, particularly in this
case, the devil would be in the details, which is it may be a
good idea, it may not be a good idea, but how would it actually
functionally work? And not only how would it functionally work,
but between operations, what would that office look like? What
influence would it have? Is it something permanent? Is it
something that ramps up?
And that may substantially impact the extent to which it
may or may not be the best idea to go forward. And those are
some of the questions I would ask.
Mr. DiNapoli. Just to build on that, I think there are a
number of options out there that have been proposed, and even
each one has some pros and cons to those. I think to determine
the lines of responsibility and kind of the roles and the
mission in between contingencies, as well as how do you
coordinate among the accountable organizations as a whole, is
important.
In Iraq and Afghanistan, we do have a coordination body
that GAO participates in, so we do try to maximize our
resources to provide oversight.
And so, as we look to the future, I think ensuring
accountability for our activities is essential. An inspector
general, whether it be permanent, whether it be a coordinating
body--I think options do exist. GAO, of course, is still
available to provide assistance to the Congress as appropriate.
So there are different ways of looking at it. It goes back
to clearly defining roles and responsibilities in the mission.
Mr. Palazzo. Thank you for those responses.
I hope you all can address this. As you all know, we have
been dealing with a serious unemployment issue over the past
few years here in the United States. And I personally know many
people who have gone overseas to work as Government
contractors, many because they couldn't get solid employment
right here in the U.S.
Now, as we continue to draw down from our overseas
contingency operation, many of these individuals are being let
go or their contracts are expiring without extension. Does
anyone have any estimates on how many Government contractors,
which I guess are named expats, may be out of work by the end
of our operations in Afghanistan?
Secretary Estevez. Again, I can't say how their companies
that they are employed with will use them. Today, between Iraq
and Afghanistan, we have 40,000 U.S. citizens employed.
Mr. Palazzo. Okay. And I appreciate that.
And I would like just to point out something real quick
with the balance of my time, is that, as these contracts aren't
extended, you know, many of the Americans, U.S. expats that
work overseas are receiving a foreign-earned-income exclusion.
But you have to be over there 330 full days out of a 12-month
period. And I am afraid that, because of the Government's
drawdowns, that these U.S. citizens are going to be forced to
come back and incur tens of thousands of dollars in tax
penalties. And I wish there was a way this committee and
perhaps this Congress can address that so they are not hit with
an unfair tax liability.
Thank you, and I yield back.
The Chairman. Thank you.
Mr. Johnson.
Mr. Johnson. Thank you.
Thank you, gentlemen, for being here today.
General Crenshaw, I would like to ask you whether--well, I
would like to ask you--it is clearly much more difficult to
conduct oversight in a combat zone than in an area that is at
peace. How would you advise reforming combat zone oversight to
prevent waste, fraud, and abuse?
General Crenshaw. Sir, this is something that we have taken
on and really have addressed it very heavily. You know, we have
learned from our past, and we spoke to that piece. And we have
instituted, through doctrine, through training, through
education, a process that allows us to better provide oversight
during combat.
Combat is different, and we understand that. And so our
approach is different. We are more engaged, and we have
different types of boards that allow us to do much more vetting
of contractors and vendors.
I think, again, we have gone a long way in really
addressing some of the lessons learned from our previous
performance in Iraq.
Mr. Johnson. Other than vetting, have there been any other
controls put in place to protect against waste, fraud, and
abuse in a combat setting?
General Crenshaw. Sir, we have a number of boards, fusion
sales boards, that look at the vendors. And also we have our--
our Corps is better trained to go out and look onsite to see
what type of service is being performed, is it a service we
asked for, requested for, is that type of service being done,
and to what level is it being done. And so we do have some
mechanism in place just to provide the better oversight.
And, really, when you get down to the actual, in some
cases, the site where the work is being done, you just need
someone there to make sure it is happening and it is being
reported properly.
Mr. Johnson. Well, now, General, as our forces and
personnel are being reduced in Afghanistan, how prepared are we
to manage the contractors who are left behind? How prepared are
we to manage them?
General Crenshaw. Sir, one of the things that the--what is
being done now in Afghanistan is that U.S. 4-A has already
started to plan the drawdown of contractors and contractor
equipment. And so, again, this is another deliberate process.
The forces in theater, they established different types of
working groups that allow them to take note of all the lessons
learned from Iraq. We have embedded personnel with Department
of State, to a degree that Department of State may at some
point inherit some of the contracting management.
And so, again, all of the steps that are currently being
taken are really a direct reflection of the lessons learned
from the Iraq drawdown.
Mr. Johnson. All right. Thank you.
Mr. Estevez, a recent report found that many contractors
employed in Iraq and Afghanistan are foreigners who--well, many
of the contractors hire foreigners to perform the work that
they have been contracted to do. And many times, or on noted
occasions, there have been foreigners who have been tricked
into working for American contractors and subcontractors who
abuse them with impunity and subject them to grueling hours,
meager wages, and confinement, along with deadly working
conditions.
Can you tell us what steps are being taken to address this
important issue?
Secretary Estevez. First, we have zero tolerance for
trafficking in persons. And what we have is, first, there are
contract laws that prohibit that, and there are severe
penalties for doing that.
We have auditors and Defense Contract Management Agency out
there on the ground assessing contracts and the life of the
contractors that are engaged there. We have regular brochures
that are handed out to people that are operating that show who
they can report to. If you travel around Afghanistan, you will
see posters and the like explaining the rights of the people
who are employed.
But it is really on-the-ground oversight that provides the
direct feedback. And then we would prosecute anyone that we
found violating that.
Mr. Johnson. Thank you.
The Chairman. That concludes our questions for the panel.
We thank you very much for being here, and thank you for your
service.
And that will end this hearing. Thank you very much. This
hearing is adjourned.
[Whereupon, at 11:50 a.m., the committee was adjourned.]
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A P P E N D I X
September 12, 2012
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
September 12, 2012
=======================================================================
Statement of Hon. Howard P. ``Buck'' McKeon
Chairman, House Committee on Armed Services
Hearing on
Operational Contract Support: Learning from
the Past and Preparing for the Future
September 12, 2012
This morning we were reminded once more of what a dangerous
world we live in, and the risk many Americans take to serve our
country abroad. My thoughts and prayers--together with those of
this committee--are with the families of those we've lost in
Libya.
We meet today to receive testimony on Operational Contract
Support, that is, the services our military buys to directly
sustain operations like those in Afghanistan. According to a
recent study by the Center for Strategic and International
Studies, the Department of Defense spends, on average, nearly
one-third of its entire budget contracting for services. And,
while this committee and others in Congress have taken
aggressive actions to reform the Government's acquisition
processes, most of our time and effort has been focused on
major defense acquisition programs such as the Joint Strike
Fighter and the Littoral Combat Ship.
Perhaps this is because they are tangible and there is more
a formal process used to procure hardware. Regardless, we don't
spend nearly as much time addressing issues regarding the way
the DOD contracts for services such as engineering,
maintenance, logistics, and base support.
Contracting for services cannot be taken lightly. Here is a
fact--one that I expect our witnesses will not challenge--the
U.S. military cannot today fulfill its responsibilities to our
national security without a significant contribution by many
hardworking folks that are not in the direct employment of the
U.S. Government. That fact extends to war zones too. Most of us
are familiar with the term ``contingency contracting'' which
has been used over the last several years to refer to contracts
in Iraq and Afghanistan. The term likely conjures up memories
of money wasted on $600 toilet seats, funding that fuels
corruption, and the loss of hearts and minds anytime armed
security guards kill or injure civilians. But the goal of
today's hearing is not to re-examine these, or other,
incidents. There has already been extensive work to document
these deficiencies and to capture lessons learned. The goal is
to learn from the past and charter a way forward, because I
think we can all agree that we will continue to be reliant on
contractors for future operations.
As such, the topic before us today is complex, but it is
also important. We learned a lot of hard lessons on this issue
in Iraq and Afghanistan. We were ill-prepared for the level of
contracting that was required to support these missions and, as
a result, outcomes suffered. In some cases those consequences
were grave and brave Americans lost their lives as a result.
The question before us is how we can improve operational
contract support outcomes--from savings lives, to reducing
waste and graft, to delivering a unity of effort consistent
with our military commander's intent. This will require
leadership and an emphasis on the importance of operational
contract support.
Excellence must be demanded in each of the requirements
generation, contract award, and contract management phases. A
prerequisite for excellence is planning and training like we
fight. There are many recommendations that have been advanced
to meet these goals and I look forward to exploring those
recommendations in greater detail today.
I am certain that our witnesses' testimony will help us and
the Department of Defense, as we continue the mission in
Afghanistan and prepare for the challenges that may come, here
at home or around the globe.
Statement of Hon. Adam Smith
Ranking Member, House Committee on Armed Services
Hearing on
Operational Contract Support: Learning from
the Past and Preparing for the Future
September 12, 2012
Mr. Chairman, I share your remarks on the events in Libya
and also in Egypt. Our thoughts and prayers certainly go out to
the people who lost their lives and their families. It is a
tragic incident and reminds us, again, of how unstable the
world is and can be.
I thank you for holding this hearing. As well, I thank our
witnesses, and look forward to the testimony and the question-
and-answer period.
Logistics and contracting out are critical, critical parts
of our military and national security operation that don't
typically get the attention that they obviously deserve. With
all of the human resources and all of the material resources
that we have, getting them all in the right place at the right
time and making sure they are properly coordinated is an
enormous and very important task and something that I believe
our military does better than any military in the world.
And part of the reason why we are as successful as we are,
a piece of that, of course, is contracting out those services,
figuring out what can be done in house and what needs to be
contracted out--also not an easy process. And, of course, there
are our legislative and parochial battles that get in the way
of making it an easy process, as well.
And so I think it is important that we examine that issue
and try to figure out how to maximize our effectiveness at
contracting out and pulling together those logistical
challenges.
I also believe that, given the wars in Iraq and
Afghanistan, we have an excellent opportunity right now for a
``lessons learned'' approach, go back and look and see what we
did, what worked, what didn't work. A lot of it had to happen
fairly quickly, so I certainly understand that decisions had to
be made quickly. But now that we have had some time to think
about it and look at it, I think this is a great opportunity to
learn from that and make improvements where we can.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
September 12, 2012
=======================================================================
RESPONSE TO QUESTION SUBMITTED BY MR. PLATTS
Secretary Estevez. The Department has made considerable progress in
identifying vendors who are insurgents through Task Force 2010. Task
Force 2010 was formed in July 2010 to provide a business intelligence
capability by conducting assessments of contracts and vendors operating
in Afghanistan; recommend risk mitigation strategies to commanders and
contracting activities to prevent fraud and abuse; and propose actions
to hold contractors accountable. Their desired end-state is to gain an
understanding of the vendors the Department is doing business with; to
prevent and protect U.S. money and property so it does not enrich
insurgents, criminal networks, and power-brokers; and obtain
accountability of the operational effects of contracting actions in
support of International Security Assistance Force's counterinsurgency
mission so as not to undermine the U.S. efforts in Afghanistan.
Identification of the vendors is made available to the contracting
activities. There is an ongoing collaboration and information sharing
with other Federal agencies, e.g., United States Agency for
International Development (USAID) and the United States Department of
State (DOS).
TF-2010, along with CENTCOM--Joint Theater Support Contracting
Center (Forward) and ISAF Joint Command (IJC) hold a biweekly Vendor
Vetting Advisory Panel and share the information on vendors with both
DOD Contracting Agencies that do business in Afghanistan, U.S. Embassy
and USAID. There is an open flow of information to ensure that everyone
has the same understanding about the available information on vendors
wanting to do business in Afghanistan. [See page 29.]
______
RESPONSE TO QUESTION SUBMITTED BY MS. SPEIER
Mr. Schwartz. There is no clear metric against which to measure
cultural change. However, there are some guideposts that can help gauge
the extent to which DOD changes the way it thinks about and values the
role of contract support in military operations. Some of these
guideposts include:
1) The extent to which the role of contractors is incorporated into
various DOD documents (such as the QDR, DOD Instructions or Memos,
Field Manuals, etc.), and the extent to which the role of contractors
is included in the discourse of senior leaders.
2) The extent to which the role of contractors is incorporated into
the military education system and the extent to which such courses are
required or are actually taken by warfighters.
3) The extent to which DOD includes contractor scenarios in field-
exercises.
4) The extent to which resources are dedicated to account for
contracting in planning for future operations (including dedicating
resources for planners and completing Annex Ws).
5) The extent to which working with and managing contractors is
included in relevant performance evaluations and is considered by
promotion boards.
6) The extent to which acquisition workforce and contracting
officer representative billets are filled.
While none of these guideposts, in and of themselves, can be
expected to accurately reflect DODs culture, taken as a whole these
guideposts may provide evidence of the extent to which DOD is seeking
to transform contracting into a core competence. [See page 25.]
?
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
September 12, 2012
=======================================================================
QUESTIONS SUBMITTED BY MS. SPEIER
Ms. Speier. How do we make operational contracting support part of
the warfighter culture? What steps can Congress take to help the
process?
Secretary Estevez. The Department has taken several steps to
integrate operational contracting support as part of the warfighter
culture. DOD has incorporated operational contract support into policy
and doctrine, and is continuing to institutionalize responsibilities
and procedures (to include planning, training, education,
accountability, and reporting) across the Department.
Additionally we are instilling OCS in the warfighter culture
through senior leader engagement (such as policy memorandums from both
the Secretary of Defense and the Chairman of the Joint Chiefs of Staff
focusing attention on contract support integration, planning and
resourcing); expansion of doctrine in the area of OCS (incorporating
best practices from lessons learned); and, the integration of OCS in
training and joint exercises to validate the effectiveness of OCS
plans.
Furthermore, instruction on OCS, which just a few years ago was
focused on acquisition specialists and selected senior leaders, is now
being integrated as part of the core curriculum in military schools.
For example, in mid-October, the Deputy Assistant Secretary of Defense
for Program Support gave a presentation on OCS to the entire Command
and General Staff College student body (1,200 officers) to talk about
contractors as part of the total force, planning considerations, and
their role in identifying requirements for, and integrating and
managing contractor support to, military operations.
We are grateful for Congress' continued interest and support in
ensuring OCS remains a priority.
Ms. Speier. How do we make operational contracting support part of
the warfighter culture? What steps can Congress take to help the
process?
General Crenshaw. The primary means of instilling operational
contract support into warfighter culture is to continue to
institutionalize and integrate this powerful and complex capability
across the full solution space of doctrine, organization, training,
materiel, leadership and education, personnel, facilities and policy
(DOTMLPF-P). For the past decade, the Department has steadily built OCS
capability and capacity and put in place the rules, tools, and
processes to better facilitate OCS planning and execution. With the
support of Congress, the Department has incorporated OCS into DOD
policy; joint doctrine; Secretary of Defense and Chairman of the Joint
Chiefs of Staff strategic and operational planning guidance; detailed
OCS planning requirements, templates, and procedures; joint training;
and joint professional military education. Looking forward, training
and education are viewed as the ascendant means of preparing leaders at
all levels to understand the challenges and opportunities of employing
this powerful but complex capability and instilling operational
contract support into warfighter culture. Congress has been an
excellent partner throughout the process for institutionalizing
operational contract support and we look forward to your continued
support.
Ms. Speier. As you note in your testimony, the acquisition
workforce was largely decimated in the Cold War drawdown. What measures
should Congress consider to ensure that history does not repeat itself?
Mr. Schwartz. Congress has played a critical role in determining
the size of the acquisition workforce. For example, from FY1996-FY1999,
Congress directed the Administration to reduce the size of the DOD
acquisition workforce--defined as the employees who participate in the
development and procurement of weapons, equipment, and provisions for
the military services. Just as Congress in the past directed a decrease
in the size of the acquisition workforce, Congress can take steps to
maintain or increase the size of DOD's acquisition workforce. For
example, in the National Defense Authorization Act for FY2008, Congress
established the Defense Acquisition Workforce Development Fund to help
rebuild the acquisition workforce. While the fund was used to hire more
than 5,800 new acquisition staff through Fiscal Year 2011, a recent GAO
report found that DOD does not have an overarching strategy aligning
the fund with its acquisition workforce plan and that the fund had
large unobligated balances that were not used. In addition to
establishing and supporting programs such as the Defense Acquisition
Workforce Development Fund, other options available to Congress may
include the following:
1. ensuring that a sufficient budget is dedicated to funding
an appropriately sized acquisition workforce; and
2. conducting oversight to ensure that DOD consistently
develops comprehensive workforce planning analyses to determine
the needs and the appropriate size of the acquisition
workforce; develops and executes a workforce development
strategy based on the analyses; and uses existing funding and
authorities to support the acquisition workforce.
Ms. Speier. If the Defense Department does not have the information
it needs to make strategic decisions about its contractor and
acquisition workforce, what steps should Congress take to give them the
information and resources be more strategic managers of their
operational contract support?
Mr. Schwartz. Data reliability is a critical element in making
informed policy decisions. If data is lacking or is unreliable, there
may not be an appropriate basis for measuring or assessing the
effectiveness of contracting, providing transparency into Government
operations, or in making policy decisions. In some circumstances, a
lack of reliable data could lead analysts and decisionmakers to draw
incorrect or misleading conclusions. The result could be policies that
squander resources, waste taxpayer dollars, and threaten the success of
the mission. DOD and other agencies have faced challenges implementing
systems that effectively track contractor and contracting data, as
described here.
In 2004, the U.S. Army Corps of Engineers and the
Project and Contracting Office developed the Iraq
Reconstruction Management System (IRMS), intended to serve as a
single database for tracking, coordinating, and managing all
U.S. Government agency projects receiving Iraq Relief and
Reconstruction Funds (IRRF). According to a report by the
Special Inspector General for Iraq Reconstruction, ``when IRMS
was initiated in 2004, it had a design life of five years
(completed in 2009). A life cycle maintenance program was not
implemented, and the system, then in its fourth year of
operation, was becoming operationally unreliable and
unstable.'' The report goes on to state that agencies used
other internal systems to track and manage their own projects.
Section 861 of the FY2008 National Defense
Authorization Act required DOD, State, and USAID to identify
common databases that will serve as ``repositories of
information on contracts in Iraq or Afghanistan.'' Even though
the three agencies designated the Synchronized Predeployment
and Operational Tracker (SPOT) as their contract tracking
system in July 2008, DOD is still using a manual process--not
SPOT--to report the number of contractors in Iraq and
Afghanistan. According to a recent GAO report, SPOT still
cannot reliably track information on contracts, assistance
instruments, and associated personnel in Iraq or Afghanistan.
Mr. Greg Gardner, then Deputy Chief Information
Officer (DCIO) for the Intelligence Community, stated that in
2009 the U.S. Government had 23 different network Information
Technology (IT) systems in Afghanistan, many of which were
duplicative and/or not interoperable. According to Mr. Gardner,
this multiplicity of IT systems results in wasteful spending
and poor data sharing between and within agencies. Data
reliability issues in Afghanistan persist; International
Security and Assistance Force (ISAF) and the U.S. Government
have not accurately or sufficiently tracked data upon which to
make strategic contracting decisions.
The Federal Procurement Data System--Next Generation
(FPDS-NG) is a central database of U.S. Government-wide
procurement. The purpose of FPDS-NG is to provide data that can
be used as ``[A] basis for recurring and special reports to the
President, the Congress, the Government Accountability Office,
Federal executive agencies, and the general public.'' GAO, CBO,
and the Special Inspector General for Iraq Reconstruction have
all raised concerns over the accuracy and reliability of the
data contained in the FPDS-NG database. According to GAO, FPDS-
NG often contains inaccurate data. Because of the concerns
raised over the reliability of data, many analysts rely on
FPDS-NG only to identify broad trends and make rough
estimations. DOD and other agency officials have acknowledged
gaps in data reliability and are making efforts to improve data
collection and reliability. However, this issue remains one
that many analysts believe is ripe for continued congressional
oversight.
Ms. Speier. What steps should the Department of Defense and
Congress take to be able to have a comprehensive, accurate inventory of
our contractor forces?
Mr. DiNapoli. Reliable, meaningful data related to contracts and
contractor personnel are a starting point for informing agency
decisions and ensuring proper management and oversight. In recent
years, Congress has taken a series of actions to increase the oversight
and availability of information related to certain Iraq and Afghanistan
contracts and assistance instruments. Specifically, amendments from the
Ike Skelton National Defense Authorization Act for Fiscal Year 2011
require DOD, the Department of State, and the U.S. Agency for
International Development to submit annual joint reports to
congressional committees on certain contracts and assistance
instruments with work performed in Iraq or Afghanistan. The reports are
to address several matters, including the total number of contractor
personnel and the total number of contractor personnel performing
security functions. However, in our most recent review of this report,
we found that DOD continues to face challenges in obtaining accurate
and reliable data on contractor personnel, particularly on local
national contractor personnel in Afghanistan. These challenges include
fluctuating numbers of contractor personnel and work performed at
remote locations, which make it difficult for DOD officials to validate
the data. DOD officials informed us that since January 2010, they have
been taking steps to regularly validate data regarding the number of
contractor personnel in Iraq and Afghanistan and that they will
continue to work to improve this data until they consider it to be
sufficiently reliable. DOD has also experienced mixed success in
developing an inventory of contracted services in accordance with
section 2330a of title 10 of the U.S. Code, which requires DOD to
annually compile and review an inventory of activities performed
pursuant to contracts for services, including information on the number
of contractor full-time equivalents providing services to the
Department and the functions they are performing. In April 2012, we
reported that DOD had made a number of changes to improve the utility
of the fiscal year 2010 inventory, such as centrally preparing contract
data to provide greater consistency among DOD components and increasing
the level of detail on the services provided. With the exception of the
Army and one other component, DOD components continued to rely on the
Federal Procurement Data System-Next Generation as the primary source
of their inventory data. As such, DOD acknowledged a number of factors
that limited the utility, accuracy, and completeness of the inventory
data. In November 2011, DOD submitted to Congress a plan to collect
contractor manpower data. DOD officials noted that developing a common
data system to collect and house these data would be challenging given
the different requirements from the military departments and
components. Consequently, DOD does not expect to fully collect
contractor manpower data until fiscal year 2016. DOD's plan, however,
does not establish milestones or specify how it will meet the
legislative requirement to identify the requiring activity and the
function and missions performed by the contractor. In April 2012, we
reported that the military departments' required reviews of their
fiscal year 2009 inventories were incomplete. In our review, we found
that Navy headquarters officials had no assurance that their commands
had conducted the required reviews. Further, we found that the Army and
Air Force inventory reviews had identified 1,935 and 91 instances,
respectively, in which contractors were performing inherently
governmental functions, though this variation may reflect differences
in the departments' approaches to conducting the reviews. In 8 of 12 of
the Army and Air Force cases GAO reviewed, contractors continued to
perform functions that the military departments had identified as
inherently governmental. The absence of guidance that provided for
clear lines of responsibility for conducting, documenting, and
addressing the results of the reviews contributed to these outcomes. To
improve the inventory, we recommended that the military departments and
components develop guidance that provides for clear lines of authority,
responsibility, and accountability for conducting an inventory review.
DOD partially agreed with our recommendation, noting that as defense
components vary in size and mission, the need for individual components
to have organization-specific guidance should not be mandated but
rather determined by each component head. Our work found, however, that
the absence of guidance at the military department-level that provides
for clear lines of authority, responsibility and accountability
contributed to the shortcomings and challenges encountered during the
military departments' review of their fiscal year 2009 inventories. As
such, we continue to believe that it would be prudent for DOD to obtain
sufficient assurance that the military departments' and components'
guidance provide the foundation for conducting a meaningful review.
______
QUESTIONS SUBMITTED BY MR. SCHILLING
Mr. Schilling. How does DOD plan to overcome delays in budgeting
and distributing funds in the Defense Acquisition Workforce Development
fund? Does DOD plan to clarify its guidance on the availability and use
of related funds?
Secretary Estevez. DOD has collected and distributed funds to
components to cover 100 percent of the Fiscal Year 2013 first quarter
execution requirements using DAWDF funds collected in FY 2012.
Additional funds to support component execution requirements for the
second quarter of FY 2013 will soon be distributed using funds
collected in FY 2012. A portion of the FY 2013 DAWDF appropriated funds
will also be available under the Continuing Resolution. DOD has
provided guidance on availability and use of the funds. In addition,
DOD holds biweekly update meetings with components to provide status on
availability and answer questions on use of the DAWDF funding.
Mr. Schilling. What do you think of suggestions that those folks
going into the acquisition workforce be required to not only go through
specific training courses, but to also spend a year in industry to
understand how business works?
Secretary Estevez. While DOD provides opportunities for the
acquisition workforce to obtain experience with industry, it would not
be appropriate to make it a requirement for the 150,000 person
workforce. Opportunities are available through the Secretary of Defense
Corporate Fellows, the Army Training With Industry (TWI), and Air Force
Education with Industry (EWI) programs. Today, the Army, Navy and Air
Force have 37 participants in these industry experience programs and
each year the Air Force selects three participants for a Fortune 500
fellowship. Additionally, Defense Acquisition University has led
establishment of industry knowledge and acumen competencies. Last year
580 industry members participated in training classes at DAU along with
defense acquisition workforce members.
Mr. Schilling. How can DOD improve its responsibility for making
sure acquisition officers get the training they need? Who is
responsible for doing that?
Secretary Estevez. DOD continues to increase training capacity and
resources for the acquisition professionals using the Defense
Acquisition Workforce Development Fund (DAWDF). The Defense Acquisition
University (DAU) has increased training for the workforce by 58 percent
since 2008; increasing seats from 36,000 in 2008 to 57,000 in 2012, and
provided additional targeted training to DOD components. DOD has also
enhanced its curriculum to address departmental and environmental
changes by adding training on Better Buying Power/efficiency
initiatives, Operational Contract Support, and other critical areas.
DOD component acquisition executives and their acquisition career
managers, DOD Functional Leaders, and the Defense Acquisition
University work closely together to ensure the workforce gets the
training they need.
Mr. Schilling. How do you ensure that DOD Senior Leadership puts
the emphasis needed on acquisitions that it should? How can you start
that cultural change?
Secretary Estevez. The change in culture with respect to
operational contract support has already begun. The Department has
taken several steps to integrate operational contract support (OCS) as
part of the warfighter culture at the strategic, operational and
tactical levels. Both the Secretary of Defense and the Chairman of the
Joint Chiefs of Staff as well as senior commanders in the field have
signed policy memorandums focusing attention on contract support
integration, planning and resourcing. DOD has also included an expanded
concept of operational contract support into policy and doctrine,
incorporating best practices from lessons learned. Further, we are
continuing to institutionalize responsibilities and procedures--to
include planning, training, education, accountability, and reporting--
across the Department. Finally, OCS is being integrated into training
and joint exercises to validate the effectiveness of OCS plans.
Mr. Schilling. What do you think of suggestions that those folks
going into the acquisition workforce be required to not only go through
specific training courses, but to also spend a year in industry to
understand how business works?
General Crenshaw. There are a number of existing requirements and
opportunities to help the acquisition workforce understand industry and
how business works. The Defense Acquisition Workforce Improvement Act
(DAWIA) was signed into law in November 1990 and modified several times
in subsequent legislation. It establishes detailed education and
training standards, requirements, and courses for the Department of
Defense civilian and military acquisition workforce across multiple
career fields with certification at three different levels. DAWIA
certification requires a significant amount of prerequisite college-
level business courses in many of these career fields and includes
continuing education requirements. To stay current with industry
practices, many acquisition workforce members also pursue other
professional certification (e.g., Certified Professional Contracts
Manager (CPCM)) to enhance their DAWIA training and education. The
Department also offers various ``training with industry'' programs and
the acquisition workforce includes professionals who have spent time in
industry to broaden their skills. Further, economic cycles have
provided incentives for both Government and industry acquisition
professionals to spend time on each side of the acquisition equation
which enhances career development and appreciation of roles. The
current broad mosaic of acquisition workforce professionals and array
of opportunities to understand industry and business appears to be
healthy and sustainable. More specific questions concerning the
acquisition workforce could best be addressed by the Under Secretary of
Defense for Acquisition, Technology, and Logistics.
Mr. Schilling. How can DOD improve its responsibility for making
sure acquisition officers get the training they need? Who is
responsible for doing that?
General Crenshaw. Training and education requirements for the
acquisition workforce are well documented in the Defense Acquisition
Workforce Improvement Act (DAWIA) and various Department policy and
regulations. It is a shared responsibility between individuals and
supervisors for fulfilling these requirements. Acquisition workforce
members and their supervisors are well aware of the requirements and
means for fulfilling them, primarily through the Defense Acquisition
University. Various tools are used to inform individuals and their
supervisors of their DAWIA training and certification status.
Acquisition workforce professionals take their certification status
seriously to stay current which in turn keeps them competitive for
acquisition positions of greater responsibility. More specific
questions concerning the acquisition workforce could best be addressed
by the Under Secretary of Defense for Acquisition, Technology, and
Logistics.
Mr. Schilling. How do you ensure that DOD Senior Leadership puts
the emphasis needed on acquisitions that it should? How can you start
that cultural change?
General Crenshaw. Education and oversight are two means DOD uses to
ensure Senior Leadership puts emphasis on acquisition. Education
prepares leaders at all levels to better understand acquisition
challenges and opportunities and helps instill critical thought in
addressing complex issues across the solution space of doctrine,
organization, training, materiel, leadership and education, personnel,
facilities, and policy (DOTMLPF-P), regulations, and law. Fortunately,
a large amount of this education and training is addressed under the
Defense Acquisition Workforce Improvement Act and provided by the
Defense Acquisition University. The various oversight mechanisms (e.g.,
Congress, Government Accountability Office, Commissions) also provide
an invaluable feedback mechanism to assess the Department's ability to
manage acquisition and in turn update acquisition regulations, policy,
processes, and education. While the Department already places a great
deal of emphasis on acquisition, further cultural change will be
enhanced by continuing to encourage acquisition education and by
critically reviewing and analyzing oversight findings to determine if
changes to DOTMLPF-P, regulations, or law could enhance outcomes. More
specific questions concerning acquisition could best be addressed by
the Under Secretary of Defense for Acquisition, Technology, and
Logistics.
Mr. Schilling. What do you think of suggestions that those folks
going into the acquisition workforce be required to not only go through
specific training courses, but to also spend a year in industry to
understand how business works?
Mr. Schwartz. For decades, numerous analysts have argued that the
ability of the Department of Defense (DOD) to effectively and
efficiently acquire goods and services depends substantially on the
competence and experience of the acquisition personnel. Yet, compared
to industry, the defense acquisition workforce has often been
considered ``undertrained, underpaid, and inexperienced.'' A number of
analysts have argued that the DOD acquisition workforce does not know
enough about industry, the financial incentives that drive corporate
decisions, or the costs, schedules, and technical performance in large
industrial firms. A lack of insight into the private sector can result
in Government managers not making what may be viewed by some as
difficult decisions required to create and reward lean industrial
organizations. Having an appropriate number of DOD acquisition
personnel spend time in industry could have a positive effect on the
ability, experience, and insight of the acquisition workforce, and a
number of analysts have argued for such an expanded program. The extent
to which time in industry should be a requirement for all (or part) of
the acquisition workforce, required for promotion, advancement and
growth opportunities, or just one option available as part of a
comprehensive training and education program may depend on a number of
factors, including:
1. overall cost to the Government for maintaining such a
program;
2. concerns over conflict of interest rules;
3. any ``Full-Time Equivalents'' (FTE) caps placed on the
acquisition workforce; and
4. opportunity costs for other training options.
In addition to time spent working in industry, some analysts have
suggested that future program managers or other appropriate acquisition
personnel should be required to complete 6 months or more of formal,
advanced training where they can study and learn appropriate management
techniques and acquisition skills. Some analysts have suggested that
DOD make a concerted effort to recruit capable and experienced
acquisition personnel from industry. Others have suggested that
Government may not offer competitive salaries or career advancement
opportunities to interest professionals from the private sector.
Mr. Schilling. Do you believe a stronger focus on STEM (Science,
Technology, Engineering, and Mathematics) education would help address
the future needs for acquisition officers?
Mr. Schwartz. Within the context of the discussion above, a
stronger focus on STEM could be beneficial for those members of the
acquisition workforce who are involved in acquisitions that possess
substantial STEM elements, such as some major defense acquisition
programs.
Mr. Schilling. What is the best way to enforce proper oversight
within DOD's contracting operations?
Mr. Schwartz. For more than 200 years, Congress and the executive
branch have expressed frustration with the level of mismanagement and
corruption in defense acquisitions, having spent significant resources
seeking to reform and improve the process. For example, concerns over
the Continental Army's reliance on contractors during the Revolutionary
War prompted the Continental Congress, in 1775, to establish a
procurement system and appoint both a commissary general and a
quartermaster general to buy goods and services for the Continental
Army. In 1862, during the Civil War, President Abraham Lincoln
requested the resignation of Secretary of War Simon Cameron, in large
part because of contracting, corruption, and mismanagement issues
within the War Department. That same year, the House Committee on
Contracts issued a 1,100 page report that documented corruption and
mismanagement in defense acquisitions that resulted in the Government
buying weapons that did not work, horses that were diseased, and food
that was rotten. More recently, concerns over defense acquisitions have
often centered around significant cost overruns, schedule delays, and
an inability to get troops the equipment they needed when they needed
it. Many analysts believe that cost overruns and schedule delays have a
debilitating effect on the U.S. military and threaten America's
technological advantage and military capabilities. Both Congress and
DOD have been active in trying to improve defense acquisitions. Since
the end of World War II, there have been more than nearly 130 studies
on acquisition reform. Despite the numerous studies, congressional
hearings, and DOD reports that have often echoed the same themes and
highlighted the same weaknesses in the acquisition process, acquisition
reform efforts pursued over the last 30 years have been unable to rein
in cost and schedule growth. In addition to the concerns expressed
regarding the acquisition workforce (see the question on page 105),
many analysts have suggested that changing the culture of the military
is a prerequisite for creating lasting systemic change and improving
operational contract support. Analysts have proposed a number of
legislative options aimed at changing the culture of the military. Some
of these options include the following:
Requiring that Contractors Be Included in Command Post and Field
Exercises.
One of the mantras of the military is ``to train as you fight
and fight as you train.'' Given the extent to which contractors
may be relied upon in future combat operations, conducting
exercises without contractors could be akin to training without
half of the force present. A number of analysts have called for
incorporating contractors and contractor scenarios into
appropriate military exercises to better prepare military
planners and operational commanders for handling future
operations. P.L. 110-181, the National Defense Authorization
Act for FY2008, mandated the incorporation of contractors in
mission-readiness exercises with uniformed personnel. Over the
last few years, DOD has included contractor scenarios into a
number of command and mission-readiness exercises. Despite
increased inclusion of contractors in some exercises, over the
last two years a number of reports have suggested that DOD has
not sufficiently included contractor roles in battlefield
exercises. Including contractors in live-fire exercises for
example, could increase warfighter awareness of the presence of
contractors on the battlefield and improve military-contractor
coordination in actual operations.
Requiring Performance Evaluations To Include Contractor Management
Congress may wish to consider requiring officer and/or
enlisted performance evaluations to include commentary and/or
grade evaluation of contractor management. Including a
contractor management narrative as part of a performance
evaluation could help ensure that attention is given to this
issue. However, contract support is not relevant for all
military personnel, and elements of contract support could also
fall under other evaluation factors, such as personnel
management. Alternatively, Congress could consider requiring
performance evaluations for any military personnel whose
mission involves or substantially relies on contractor support.
Another possible option might be to amend the performance
evaluation guidelines to stipulate that contractor management
be part of the discussion of personnel management or other
related factors.
Requiring Military Departments To Report on Acquisition Education
Courses Available for Operational Personnel
Such a requirement would be similar to Section 527 of the
FY2009 Duncan Hunter National Defense Authorization Act (P.L.
110-417) which requires the Chairman of the Joint Chiefs of
Staff to submit to Congress a report outlining the joint
education courses available throughout DOD. Such a report might
help Congress execute its oversight function.
Requiring Military Departments To Report on Non-Acquisition
Workforce Contracting Education and Training Goals, and Progress in
Meeting Those Goals
Such a report might help accomplish two goals: (1) help
Congress chart the military's progress in preparing the
operational force to work with contractors during expeditionary
operations, and (2) help DOD maintain focus on this issue. DOD
has stated as far back as 2004 that it would explore creating
training courses on contracting for mid- and senior-level
service schools. On the one hand, some analysts have argued
that DOD failed to follow through adequately on creating
additional training on contract support until Congress mandated
training for appropriate non-acquisition military personnel.
DOD has undertaken concrete steps to improve how the
operational force works with contractors and has incorporated
contractors and operations into mission-readiness and other
exercises. Some analysts have argued that only sustained
congressional attention can help ensure that the desired
results will be achieved. On the other hand, some other
analysts have argued that ensuring proper oversight requires
that sufficient personnel and resources are dedicated to
contract management and oversight. Insufficient resources or
shortages in the numbers of oversight personnel increase the
risk of poor contract performance, which in turn can lead to
waste, fraud, abuse, and mismanagement. DOD has documented how
a lack of oversight has resulted in contracts not being
performed to required specifications and to the theft of tens
of millions of dollars' worth of equipment, repair parts, and
supplies. Still, some analysts have argued that one way to
ensure sufficient resources dedicated to contract oversight is
to require that a fee be added to all contracts over a certain
dollar threshold, and that the proceeds of that fee be
dedicated to funding contract oversight and management.
Mr. Schilling. What do you think of suggestions that those folks
going into the acquisition workforce be required to not only go through
specific training courses, but to also spend a year in industry to
understand how business works?
Mr. DiNapoli. We have previously voiced support for establishing an
acquisition professional exchange program. For example, in 2003 we
testified that establishing an exchange program could enhance the
ability of Federal workers and enable them to gain from the knowledge
and expertise of private-sector professionals and entities. However, as
with any training or development program, it would be important for the
Department of Defense (DOD) to first plan for and analyze the design of
an exchange program before implementing it. Front-end planning and
analysis could help to ensure that DOD:
(a) linked such a program to departmental goals and to the
organizational, occupational, and individual skills and
competencies needed for the Department to perform effectively;
and
(b) implemented the program with the Department's
organizational culture firmly in mind.
In our recent review of DOD's fellowship and training-with-industry
programs at think tanks, private corporations, and Federal agencies we
note the importance of overseeing these programs once they are
implemented. Specifically, we reported that DOD had limited insight
into the programs and that military departments had difficulties in
determining whether these programs were achieving their intended
benefits and were cost-effective.
Mr. Schilling. Do you believe a stronger focus on STEM (Science,
Technology, Engineering, and Mathematics) education would help address
the future needs for acquisition officers?
Mr. DiNapoli. Our past work has shown that Federal agencies need to
determine the skills and competencies critical to achieving their
missions and goals, and to identify any gaps between the current
workforce and the workforce needed in the future. By taking these
steps, agencies would be in a better position to adjust to changes in
technology, budget constraints, and other factors that alter the
environment in which they operate. The DOD acquisition workforce is no
exception. The Defense Acquisition Workforce Improvement Strategy
outlines a competency assessment strategy for the acquisition workforce
as a way to assess workforce capability using updated and validated
enterprise-wide models, data, and information. In November 2011, we
reported that, according to DOD, of 13 total planned competency
assessments, the Department had completed 3 assessments (for
contracting, life-cycle logistics, and program management) and was
drafting the final report for another 6 assessments. In turn, such
assessments could identify where DOD needs to improve the acquisition
workforce's professional education in such fields as science,
technology, engineering, and mathematics.
Mr. Schilling. What is the best way to enforce proper oversight
within DOD's contracting operations?
Mr. DiNapoli. Effective contract management and oversight is
essential for ensuring that U.S. military personnel receive the support
they need and that controls are in place to prevent fraud, waste, and
abuse. Ultimately, failure to manage and oversee contracts effectively
could undermine U.S. policy objectives and threaten the safety of U.S.
forces. Our prior work has shown the importance of having an adequate
number of trained oversight personnel in order for DOD to help ensure
that contractors can meet contract requirements efficiently and
effectively. However, as recently as March 2012, we reported that DOD's
contracting officer's representatives--personnel who help to manage and
oversee contracts by acting as liaisons between the contractor,
contracting officer, and the unit receiving support--in Afghanistan did
not always have the proper training and subject matter expertise to
monitor their assigned contracts and that there was a shortage of these
personnel. We recommended that DOD enhance the current strategy for
managing and overseeing contracts in contingency areas such as
Afghanistan by developing training standards for providing operational
contract support, fully institutionalizing operational contract support
in professional military education, and developing standards regarding
the number of contracts that contracting officer's representatives can
oversee based on the technical nature and complexity of the contract.
DOD concurred with all of these recommendations and identified steps it
plans to take to implement them.
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