Hearing of the Oversight and Investigations Subcommittee of the House Armed Services Committee - Contingency Contracting: Has the Call for Urgent Reform Been Answered?

CHAIRED BY: REP. VIC SNYDER (D-AR)

WITNESSES: SHAY D. ASSAD, DIRECTOR, DEFENSE PROCUREMENT, ACQUISITION POLICY AND STRATEGIC SOURCING, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR ACQUISITION AND TECHNOLOGY; EDWARD HARRINGTON, DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR PROCUREMENT; JEFFREY P. PARSONS, EXECUTIVE DIRECTOR, U.S. ARMY CONTRACTING COMMAND, U.S. MATERIEL COMMAND; MAJOR GENERAL DARRYL SCOTT, USAF, DEPUTY COMMANDER, TASK FORCE TO SUPPORT BUSINESS OPERATIONS IN IRAQ, OFFICE OF THE DEPUTY UNDER SECRETARY OF DEFENSE FOR BUSINESS TRANSFORMATION

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REP. VIC SNYDER (D-AR): Good afternoon. Welcome to the first in a series of three hearings to be held by the Oversight and Investigations Subcommittee. This year, the follow up on specific legislation related to contingency contracting in the Department of Defense's acquisition workforce. Today's hearing will focus on the department and the army's progress in implementing the recommendations made by the Gansler Commission on army acquisition and program management for expeditionary operations. Our next hearing will focus on the congressionally mandated memorandum of understanding the outlines DOD's, State Department's and USAID's role and responsibilities for managing contracts and contractors on the battlefield.

Our third and final hearing in this series this spring, will look at progress made in implementing legislative provisions on improving the department's acquisition workforce in the last two defense authorizations. These three hearings examine specific conflicts that are a part of the larger defense acquisition system. And as I'm sure most people here know, Chairman Skelton has decided to bring about a House panel on defense acquisition reform, which is to be led by Congressman Rob Andrews. It's going to take a look at more general questions on how to provide the war fighters what they need, when they need it, and how to provide the best value to the tax payer in buying goods and services for the department.

And we're going to be working with Congressman Andrews, and the staff's been working together. We're very excited about the work that's going to be done this year. To support our nation's missions in Iraq and Afghanistan, thousands of contracts worth billions of dollars have been awarded, and the Department of Defense has hired an army of contractors. There is currently one contractor for every service member in Iraq, and roughly two contractors for each service member in Afghanistan. The army, in its role as DOD's executive agent for contingency contracting was unprepared to manage all of them when these contracts began.

The result has been a disappointing amount of fraud, waste and abuse. Who ultimately pays? We all do, the American taxpayer. And ultimately, our men and women in uniform suffer if they don't get what they think the American taxpayer's paid for. In response to these problems, Secretary of the Army, Pete Geren appointed the Gansler Commission to review lessons learned from recent operations, and to provide recommendations to improve the army's capability for contingency contracting. The commission's recommendations called for a major change in the army's cultural attitude toward contracting, and for institutional changes to the army's contracting capability. Since the Gansler Commission reported its findings and recommendations, both the Army and DOD have issued progress reports that were required by the FY 08 Defense Authorization.

Today we look forward to hearing about the progress that's been made in implementing the commission's recommendations. We want to know if army contracting career paths and leadership positions have been established, and what progress has been made in rebuilding the army's contracting workforce. We would like our witnesses to discuss how the commission's recommendations of finding other services, and to highlight any other department initiatives taken to improve contracting capability. We especially are interested in the training of those outside the contracting workforce, those in the operational forces, who have to deal with contracts and contractors in the battle space.

We're very pleased that all four of you are with us today, and we know that all four of you have worked very, very hard on these issues. And it's clear that progress has been made, and we appreciate you being with us. So, from the Office of the Secretary of Defense, the Director of Defense Procurement Acquisition Policy and Strategic Sourcing, Mr. Shay Assad. Mr. Assad is also the executive director of the panel on Contracting Integrity, which was established by statute in the fiscal year 07 defense bill. We also have two acquisition officials from the army, the Deputy Assistant Secretary of the Army for Procurement, Retired Brigadier General Edward Harrington, and the Executive Director for the New Army Contracting Command, Mr. Jeff Parsons.

We are fortunate to have with us, Major Darryl Scott, U.S. Air Force, who is just six days away from his retirement. General Scott was on the front line of contingency contracting as the Commander of the Joint Contingency Contracting Command for Iraq and Afghanistan from January 06 until January 08. And let me say, General Scott, thank you for your service and for the service you're rendering today. Thank you all for being here. I'm going to yield to Mr. Wittman for any comments that he may want to make at this time.

REP. ROB WITTMAN (R-VA): Thank you, Mr. Chairman. I'd like to welcome our witnesses today. Thank you so much for joining us, and thank you so much for your service to our nation. We deeply appreciate that. You know, defense acquisition and contracting are matters that have gotten a great deal of attention in recent months, from the public, from the president and from the congress. And most of the current dissatisfaction is directed at weapons system acquisition, and there is plenty of room for improvement in that area.

The Department of Defense has also received some significant criticism regarding the cost and less than exacting oversight of general support contracts in the contingency operations, which is the subject of today's hearing. But to be fair, this is an evolving and expanding area of military operations. While even George Washington relied on contractors for battlefield support, contractors today are an essential part of our deployed force structure. Our way of waging war is such that are deployed forces now rely more and more on contractors to provide basic and increasingly more operational services in contingency operations.

As important as contractor provided services are to the battlefield commander, little conceptual thought has been applied regarding how best to structure the support systems so that a commander knows precisely what services to expect, and how to manage contractors. Additionally the military services have largely reduced their pool of acquisition specialists in recent years.

The combination of greater demand for contractor services, fewer professional contract administrators, and no over-arching infrastructure has led to some undesirable outcomes. Our purpose today is not to go over those mistakes, but to see how the department and military services have embraced the recommendations of the Gansler Commission to improve our expeditionary contracting. I think the department is headed in the right direction, in the increased pace of operations and base expansions in Afghanistan will provide ample opportunity to demonstrate greater competency. Proper oversight of contingency contracts is important.

And we spend much or more on those contractors as we do on weapon's acquisition, which makes it even more important in the years to come. These contracts often do not get the same attention, because the work is performed overseas by more than 50 thousand U.S. citizen contractors and over 200 thousand foreign nationals in the central command area of operations alone. Mr. Chairman, the magnitude of contingency contracting operation clearly deserves this committee's continuing attention, and I thank you for your leadership and scheduling this hearing today. And our witnesses are experts in DOD's efforts in this area. And I look forward to their testimony. And with that, Mr. Chairman, I yield back.

REP. SNYDER: Thank you, Mr. Wittman. You all may recall that in April 2008, just about a year ago, Mr. Skelton and the full committee held a similar kind of hearing on how we were doing with the Gansler Commission. This issue of how moneys have been spent, which you all have been dedicating your lives to for some time now, we appreciate it, is one that the congress and the American people are very interested in. And in fact, this morning, Mr. Skelton had a hearing, which I thought was an interesting hearing, on the title, Effective Counter Insurgency -- How the Use and Misuse of Reconstruction Funding Affects the War Effort in Iraq and Afghanistan. And I think that's ultimately what this is about, how we spend money affects the results and affects our men and women in uniform, and their families.

And so that's why we want to do this hearing. We will continue to, probably, maybe not this sub committee, but the congress is going to continue to look at this for some time. We, your written statements will be made a part of the record. And then we'll hear from Mr. Assad, and then I understand, General Harrington and Mr. Parsons, you have a joint written statement. Then we'll go to General Scott, who didn't give us a written statement, but is going to make some introductory comments. But we will use the clock, when you see the light go on to red that just tells you five minutes have gone by. If you should feel free to go beyond that, if there's some things you need to say, but just to give you an idea of, of time. So, Mr. Assad, you're recognized.

MR. SHAY ASSAD: Thank you, Mr. Chairman, members of the subcommittee. My name is Shay Assad. I'm the Director of Defense Procurement, Acquisition Policy. I'm also presently serving as the Acting Deputy Under Secretary of Defense for --

REP. SYNDER: Would you mind pulling that microphone a little bit closer to your, and

MR. ASSAD: Yes sir.

REP. SNYDER: Pretty good microphone, -- (inaudible). Thank you.

MR. ASSAD: My name is Shay Assad. I'm the Director of Defense Procurement and Acquisition Policy. And I'm also presently acting as Deputy Undersecretary of Defense for Acquisition and Technology. In that capacity, among other things, I'm responsible for all contracting policy with regard to contracting in the combat environment. And I'm also the functional leader for all of those who do contracting within the Department of Defense.

I want to thank you today for the opportunity to appear before you and to participate in today's hearing. At your request, I'll address the department-wide applicability of the Gansler Commission recommendations, actions taken since our report was written, and other ongoing initiatives. The army will be reporting to congress directly on its own activities. The Gansler Commission developed a broad based strategy for addressed shortcomings identified during its assessment. On October 31, 2007, the commission published its recommendations in an independent report.

The committee provided four over arching areas of recommendation; increase the stature, quantity, and career development of military and civilian contracting professionals, restructure the organization, and restore responsibility to facilitate contracting and contract management in -- (inaudible) -- environment. Provide training and tools for overall contracting activities and expeditionary operations, and to obtain legislative regulatory and policy assistance to enable contracting effectiveness in expeditionary operations.

The committee provided 40 specific recommendations in support of their four overarching areas. Twenty-two of those recommendations were specific to the army, and we believe that the army is making significant progress towards meeting those recommendations. But there is much work left to be done. The remaining 18 recommendations were found to effect the entire department, and are applicable to all services. All require legislative regulatory or policy enablers, and are the focus of my testimony. In order to implement the requirements of Section 849, the Undersecretary established a task force for contracting and contract management for expeditionary operations. The purpose of that task force was to evaluate the applicability of the recommendations to the entire department. It was staffed by eight cross cutting teams, members from all three services, the joint staff, DCMA (ph), Defense Acquisition University, and the joint contracting command in Iraq and Afghanistan participated. I acted as the executive director.

While the department agrees with the intended outcomes of all of the Gansler recommended actions, we did not agree with specific recommendations as they were written in one specific area, and that is as it related to DCMA, and I'll be happy to discuss that with you. At this point, I would like to provide you a brief overview of several actions since the report to congress, as well as ongoing DOD efforts that continue to go beyond the recommendations in the four areas. With regard to contract management and oversight, the military departments and defense agencies must plan and program to have the force structure capable of supporting the current effort and future contingency operations, consistent with their core capabilities.

To do this, we created a joint contracting command, or services executive steering group. On February 19th, the Deputy Secretary of Defense required each military department and agency to conduct a total force assessment of their required contingency contracting officers, and the contracting officer representatives to meet their mission. With regard to civilian personnel policy, the department must be able to fully access the range of talent within the DOD civilian community in order to quickly and efficiently support complex mission operations.

To accomplish this mission, the department is staffing a program office to oversee its civilian expeditionary work force initiative. Regarding Section 852 of the National Defense Authorization Act of FY '08, the department has taken important steps to have the Department of Defense Acquisition Workforce Development fund targeted for increased training associated with contingency contracting officers. I want to thank congress for their support of the acquisition workforce and the flexibilities provided for using this fund. In the area of tools and training for overall contracting activities and contract operations, we've made significant progress.

The department has made improvements in training the -- (inaudible) -- in support of expeditionary contracting for both the work force, as well as the non contracting workforce. The instructor pilot session for advanced contingency contracting will get underway this spring. It will provide just in time training to journeymen contracting professionals deploying into management positions in Iraq and Afghanistan.

The commission recommended that we train as we fight. Operators outside the acquisition community must be trained on the role, importance and rules of operating with contractors and expeditionary operations. All senior leaders need to have a fundamental understanding of what operational contracting support is; the ability to plan and integrate the contract support with other military and inter agency capabilities, and the ability to account for and manage contractors as an integrated part of the total force. We're working with the joint forces command to make this training a reality. In summary, the department has implemented or adjudicated all of the commission's recommendations. But there is more work to be done.

Our war fighters deserve our very best effort.

And the taxpayers rightfully should expect our best effort in providing our war fighters the goods and services they need to meet their mission. Finally, the department is grateful for the support that congress has provided in enabling us to achieve the necessary improvements, and I'm prepared to answer your questions. Thank you, Mr. Chairman.

REP. SNYDER: Thank you, Mr. Assad. (Inaudible) --- Mr. Parsons will, thank you.

MR. JEFFREY PARSON: Chairman Snyder, Congressman Wittman, distinguished members of the subcommittee on oversight and investigation, thank you for this opportunity to discuss the army's progress in completed actions to enable an agile expeditionary and responsive contracting mission for our war fighters, while ensuring proper fiscal stewardship of our taxpayer dollars. It is my honor to represent the army as its Deputy Assistant Secretary for Procurement, having assumed this position last December. As an introduction, while on active duty, I served as Director for Contracting for the Army, and in my last assignment as a general officer, led the Defense Contract Management Agency as its director. As you noted sir, with me today is Mr. Jeff Parsons, executive director of Army Contracting Command.

We have a joint written statement that I respectfully request be made a part of the record for the day's hearing. Mr. Chairman, in August 2007, the Secretary of the Army chartered a special commission on contracting, led by Dr. Jack Gansler to look at the long term strategic view of the army's acquisition and contracting system in support of expeditionary operations. At the same time, the secretary established the Army Contracting Task Force, internally, to review current contracting operations, and take immediate actions where necessary.

With that work complete, the army established the Army Contracting Campaign Plan Task Force in February of 2008 to review the commission recommendations and other contracting recommendations, and determine the requirements and resources needed to address them. The mandate of this task force too, has been met, and the workload has been transferred to my organization, Mr. Parson's organization, and other enduring organizations responsible for sustaining long term army contracting success. Mr. Chairman, the army's progress has been steady and significant, and the senior leadership remains fully committed to executing and sustaining this positive trend. We've been guided by the Gansler Commission's over arching recommendation. Implement the commission's recommendations rapidly and measure success.

In addition, the commission outlined four supporting recommendations for the success of future expeditionary operations. These four supporting recommendations included 40 actions to correct discrepancies identified. Twenty-two of these are army specific, while the remaining eighteen are within the prevue of the Office of the Secretary of Defense, or are legislative actions being addressed jointly among the services, with OSD as the lead agent. The army has taken action, or is implemented 21 of the 22 army specific recommendations.

The remaining one, to increase the contracting workforce by 400 military and 1000 civilians will require more time to ensure we both have the quality and the quantity necessary to execute our contracting mission. Our plan for fiscal year 2009 is to increase our military contracting workforce by 131 members, and our civilian workforce by more than 500 members. The increase in work force size will continue over the next three years. We thank the Congress for the five additional general officer -- (inaudible) -- designated for acquisition. As of September 2008, the army selected one additional general officer, Brigadier General, as commander of the recently established Expeditionary Contracting Command, and we well select more general officers this year. As an experienced member of the senior executive service, Mr. Parsons heads the army contracting command, two star position that is part of the Army Materiel Command.

Another billet presently filled by a member of the senior executive service, is the one star mission and installation contracting command. The remaining two billets are the military deputy for contracting and the army core of engineers, and an acquisition contracting general within my office. The critically important issue for us is the size, structure and training of the military and civilian acquisition workforce. From 1998 2006, contracting workforce declined by 20 percent, while the workload and the number of dollars associated with that workload experienced a five fold increase.

The army, with the help of congress and the Secretary of Defense is making steady, forward progress in addressing these workforce, workload issues. Over the years, we've added more than 850 contracting professionals. This holistic focus on army contracting will ensure that we attract and retain additional military and civilian contracting professionals, who are trained to meet the increasingly complex demands placed on them. This concludes my opening remarks. Mr. Parsons also has remarks, after which I look forward to your questions.

REP. SNYDER: Yes. Mr. Parsons.

MR. JEFFREY PARSONS: Chairman Snyder, Congressman Wittman, distinguished members of the subcommittee on Oversight and Investigations, I appreciate the opportunity to appear before you to discuss our progress in implementing the recommendations contained in the Gansler Commission report. While the U.S. Army's smart contracting report to congress, dated December 14, 2008, provides a broad overview of how the army has responded to the 22 army actions, specifically identified in the Gansler report. I'm here today to report on the progress we've made in standing up the U.S. Army contracting command, and its two subordinate commands, the expeditionary contracting command, and emission and installation contracting command.

The stand up of these organizations was one of the first actions directed by the Secretary of the Army, the Honorable Pete Geren, in response to the Gansler Commission report, and continues to be a focus of our army senior leadership. In fact, this past Saturday, I briefed the chief of staff of the army, and General Ann Gunwoody (ph), our commander of the Army Materiel Command, on our progress in standing up this new command. One year ago, we provisionally established U.S. Army Contracting Command at the ceremony held at Fort Belvoir, Virginia.

By combining the contracting resources of the former army contacting agency, and the U.S. Army's Materiel Command, we designed a new two star subordinate command to the army material command that is responsible for global contracting support to our army and its soldiers. Our concept for the new command was approved by the army in mid July, and provided increases to both our civilian and military resources. These additional resources will add over 900 civilians and nearly 400 military to the new command. The majority of these resources will be contracting specialists, contracting officers, and contingency contracting personnel.

We are now in the process of hiring civilians and increasing accessions for our military personnel. Between the active guard and reserve components, we'll eventually have 905 soldiers in our expeditionary contracting structure. To date, our army contracting command and expeditionary contracting command headquarters are nearing a 50 percent fill rate. We have appointed a one star general, Brigadier General Camile Nichols (ph) as the leader of the expeditionary contracting command. And we have activated four contracting support brigades, led by seasoned colonels.

These brigades provide contracting support and contract planning support to our army service component commanders. These brigades currently support U.S. Army central command, U.S. Army Europe, U.S. Army Korea, U.S. Army North, and U.S. Army South. Later this year, we will activate two more contracting support brigades, and the remaining seventh brigade will be activated in 2011. Underneath these brigades, we have eight contingency contracting battalions. To date, we have activated five of these battalions. The battalions provide contracting support and contract support planning at the army core level, and provide oversight over senior contingency contracting teams and contingency contracting teams.

These four person teams provide contracting support at the division and brigade level. By the end of fiscal year 09, we will have activated 42 teams. The teams, battalions and brigades are modular in nature, and can be deployed worldwide in support of military operations. The teams and battalions get their day to day contracting training and work experience at our installation and contracting centers, located across the army contracting command.

While we have a ways to go in staffing and training our contingency contracting soldiers, we are providing forces to the joint contracting command Iraq Afghanistan, in support of army joint manning (ph) requirements.

Our soldiers also support numerous exercises and smaller military operations on a day to day basis across the globe. We have tested our deployable capability and doctrine in two significant joint exercises in Panama and Europe. Lessons learned from these exercises are used to refine our doctrine and training. There is still much to be accomplished, but I am confident that we are making good progress in building our expeditionary contracting capability to support our army and future joint operations.

I appreciate the congressional support of the army's efforts in providing our nation's war fighters and allies with quality products and services. We continue to pursue improvements in our contracting processes and workforce, as demonstrated by our secretary's commitment to implement the recommendations in the Gansler Commission report. I look forward to your questions.

REP. SNYDER: Thank you, Mr. Parsons. General Scott.

MR. DARRYL SCOTT: Thank you, Congressman Snyder, Congressman Wittman. I appreciate the opportunity to participate in today's panel. I'm Major General Darryl Scott, and with my retirement this month, I conclude 34 years of service with the United States Air Force. More than 28 of those years I served as a military contracting officer. During that time, I was guided through a variety of acquisition and logistics (ph) assignments, and development opportunities, that taught me not only how to make a sound business deal, but also how to establish and maintain the standards of stewardship that the American people expect, as well as how to develop, employ and support the elements of military power. I've held line and staff jobs.

I graduated from the Air Commander Staff College, and -- (inaudible) -- college in the armed forces. I've commanded three times, and I served as the director of the Defense Contracts Management Agency, December 2003 and January 2006. The senior officers who nurtured me as my mentors, leaders and commanders, had similar backgrounds to mine; balance of operations, leadership and contracting and acquisition education training and experience. Their experiences taught them that the essence of good stewardship is a careful balance between effective oversight and operational mission accomplishment.

Too little attention paid to either results in waste and mission failure. And they made sure that I understood that also. For me, all that experience and preparation culminated in the most challenging and rewarding assignment of my career, as commanding general of the joint contracting command, Iraq Afghanistan, from February 5, 2006 to January 19, 2008. During my tour, nearly 900 of the finest airman, soldiers, sailors, marines and DOD civilians I have ever met rotated through the command. Almost without exception, they were as honorable, mission focused, hard working, and selfless a group as you could ever wish for.

And I am extremely proud of them. But sometimes hard work itself, sacrifice by themselves aren't enough. Too frequently we found that the individuals the service had sent us weren't adequately prepared to work in an environment as complex as Iraq. Some had been trained only for small purchases of commercial supplies. Yet in my first year there, 50 percent of our work load were large, infrastructure reconstruction projects. Someone well versed in the processes for awarding new contracts, but lacked experience in managing and overseeing contractor's performance.

Many were unfamiliar with the exceptional authorities congress had provided with streamlining contingency contracting operations. Most had no experience synchronizing contracting activity with strategic objectives of the Iraq and Afghan campaigns, and no experience managing scare human resources in ways that properly balanced operational and business risks. Some, particularly among my army personnel and marine core commission officers, were on their first assignment in contracting. Almost literally, baptism by fire. It is clear to me that these shortcomings were not their fault, but rather the fault of the system that over a period of more than 10 years had eliminated the path that produced the superb senior officers who mentored me.

The Gansler reports notes that at the time I took command, the army had no general officers in contracting, that indeed, I was the only career contracting active duty flag officer in any of the services. I was privileged to be allowed to testify at length to the Gansler Commission about the challenges my command faced in trying to provide effective stewardship over contracting, and the reasons behind those challenges. I was pleased with the comprehensiveness of the commission's findings, and the seriousness with which the army's leadership responded.

Still, I remain somewhat apprehensive. The circumstances that permitted the cadre of senior officers skilled in both contracting and operational art (ph), wither away, will require years of persistent effort to fix. I applaud the foresight of the congress, OSD and the army in establishing ten new contracting plan billets (ph), five for the army and five in the joint command. The true test of this policy will be whether the bright, young contracting lieutenant colonels of today will receive the care and attention from knowing mentors like I did, that care and attention that will enable them to advance into these positions. And will the brightest young captains and majors of tomorrow look at contracting experience as career enhancing, or as a career determent? Thank you for your time today. I look forward to your questions.

REP. SNYDER: Thank you all. I apologize. I was having to deal with my cell phone there. My wife and I have a three and a half month old babies at home, and every once in a while that's how she fires off a red flair, and she had a question that we had to deal with. I appreciate your all's statements today. What we'll do is, Mr. Wittman and I will put ourselves on the five minute clock, and go back and forth here until we run out of things to ask about. I thought, Mr. Assad, I think it was your, no, I guess it was Mr. Harrington.

Your statement, you have referred to it, I think, briefly, on page eight, in which you discuss what seems to be underlying problem. You say that we found that more than 600 thousand contracts may be complete, but have not been officially closed out in the contract management system. We've taken immediate steps to obtain greater fidelity in this figure, explore the root causes of implement a comprehensive plan to clear the backlog of contracts requiring closeout.

A primary cause has been the 25% reduction in the contracting workforce during a period of 500% increase in contract transaction workload. I think that really describes the challenge that you all are dealing with and that is not at all necessarily an Army created problem; that's as much a congressionally created problem as anything. But that really brings home -- as you pointed out -- brings home the problems. You just pointed out, General Scott, it can take a long time to put those pieces back together. It's a lot easier to reduce your cadre of trained people than it is to build it back up again when you've let them go.

I think the first question I wanted to ask you, Mr. Assad, in your statement you refer to the senior leadership. You say on page 23, "All senior leaders need to have a fundamental understanding of what operational contract support is; the ability to plan and integrate contract support with other military interagency capabilities, and the ability to account for managed contractors as an integrated part of the total force." It seems like -- I suspect if we went out and talked to most Americans, are you aware that half the force that we sent to Iraq are civilian contractors? They weren't all sent there so maybe the numbers are brought from other countries to there but are you aware that over half of our force are civilian contractors? I think over half of the contractors are for base support. It's not like they're doing something that's not significantly important to the force.

I suspect most Americans would not think in those numbers. We always talked about how many troops are in Iraq -- how many troops are in Iraq? Yet it's a pretty much one-to-one ratio in Iraq since this thing has started. How do you think the military is doing and the Army is doing with regard to the concept of how significant the contracting force is -- so significant that they need to prioritize in their mind the ability to manage contracting and manage contracts?

MR. ASSAD: Mr. Chairman, I don't think there is any doubt that the leaders of today fully understand the fact that they're managing an integrated force and that there are 148,000 contractors in Iraq and some 71,000 in Afghanistan. The commanders on the ground clearly have a much better understanding today than they did five years ago of the power of that force and the importance of that force.

I can give you one personal example: I actually came on board in the civilian service in 2004 with the Marine Corps and I was the senior civilian contracting official with the Marines at that time. General Mike Hagee was the commandant of the Marine Corps at that time. When I took over this position at OSD, I went to see the commandant to thank him for everything that the Marine Corps had done for me. He said to me, "you know, Shay, six or seven years ago I might not have said this but the reality is if I was a battlefield commander, if I was going to the battlefield, one of the first three people I'd bring with me is a contracting officer." There's no doubt that the leadership now understands the importance of being able to contract for certain non-organic capability and then to integrate that capability into the force.

This has been a learning experience for the entire community in terms of the large number of contractors that we have on our force. But there's no doubt that I think, as we go forward, contractors will remain part of the support force for the war fighting Army and Marine Corps especially. The reality is that I think as we go forward -- we're working with the Joint Forces Command now so that we get training courses into all of our staff colleges and into all of our junior courses and our non-contracting military officers so they understand what it's like to have contractors supporting them and to have members of their operational force who will be responsible for overseeing that contract performance.

I think the Army is going through a transition right now in that regard in the sense that it is the operating force that really will provide most of the oversight for our post camp and station type activities. We will always have folks from the Defense Contract Management Agency and professionals overseeing certain unique oversight of certain technical contracts in all of our engineering support contracts for our major weapons systems. For post camp and station, we will rely on our operating force to do that and I think our operational commanders are up to it now.

REP. SNYDER: Mr. Harrington, do you want to comment on that issue of the senior leadership?

MR. HARRINGTON: Certainly, sir. I'd give you two examples: about a month and a half ago I was called in to brief the vice chief of staff of the Army -- much as we're discussing this today. I got to my second slide on an update of Gansler and what we are doing with it and he stopped me and he had all of the major Army commanders on ATC hookups into The Pentagon and all of the Army staff -- to include some of the secretariat. And the reason he stopped me, he expressed very clearly through the chain of command that throughout the Army contractor support is a part of the Army. He essentially said it's a part of our force structure. We've got to accept it; we've got to get our arms around contracting officer representative support. Commanders at each level have to emphasize the proper training of a selection of those CORS; that they are a vital component of ensuring the contractors deliver what they're on contract to deliver; that they're the eyes and the ears of the contracting officer.

As recently as a week and a half ago, I provided -- and Mr. Parsons did also -- an update to the Secretary of the Army and we're due back in another week to continue to follow up with him on the actions we're taking. So I think the senior Army leadership is tuned- in; they know it's a matter of emphasis; they understand the value of what contracted support provides the Army. They understand the necessity of overseeing it properly to ensure we get what we pay for.

Mr. Parsons had just mentioned the chief of staff of the Army was with General Dunwoody last Saturday -- and that's a component. We just left the VTC with our two bosses, General Dunwoody and Mr. Popps (ph) to come here. They discussed specifically the contracting support in Iraq and what we're going to do in Afghanistan.

REP. SNYDER: Mr. Wittman?

REP. WITTMAN: Thank you, Mr. Chairman. That's a great segue to my question. If you look in the long run, it looks like in Iraq we're certainly going to see a reduction in demand for contracting and contractor support. It seems like in the near term, as we move personnel and equipment out of Iraq, there is going to be an increase in demand. We're also going to see that in Afghanistan as we move more personnel and equipment into Afghanistan. With that being the case, can you talk a little bit about what steps need to be taken to prepare for this surge in contractor support and for the demands that it's going to place on the contingency contracting system?

MR. ASSAD: Sir, we're looking right now at working with the Army in regard to what the increases to the joint contracting command will be that are going to be necessary to meet this requirement and whether or not there is a civilian workforce component of certain types of contracting that we can do in the rear to support what will be done on the ground. So we're actively looking right now at increasing the number of contracting officers on the ground in the joint contracting command both in Iraq and Afghanistan for the very reasons you mentioned.

MR. HARRINGTON: Yes, sirs, at the conclusion of our VTC today we confirmed Brigadier General Bill Phillips has a contracting background; he commands the JCCIA that Darryl Scott commanded. He has done a deliberate workload assessment both in Iraq and Afghanistan and looks at weighting the effort in Iraq, for instance, with more civilians because of the relatively more secure environment there and weighting the Afghanistan requirements with more military.

I'd ask Mr. Parsons, if it's okay, to talk further on that.

REP. WITTMAN: Absolutely.

MR. PARSONS: Sir, one of the other things that we have done that we've learned out of Kuwait is that we could establish some reach-back capabilities -- what we call it where we do some of the contracting back here in the States for the theater. We can't do this in all cases and, certainly, you still need a presence in that country. But we've established a 10 to 12 person cell dedicated to the joint contracting command in Iraq and Afghanistan now out at Rock Island. We're going to increase that, and as General Phillips identifies the requirements that he believes we can execute back here in the United States in support of him, we will do that; that allows some reduction on the demand for having people right there on the ground. It also gives us the ability to reach into a lot more expertise when it comes to the more complex contracts too -- that's the other aspect we're doing.

We're also putting a LOGCAP presence with LOGCAP IV into Afghanistan to help with the surge requirements; in fact, task orders have been already issued under LOGCAP IV in support of the buildup there.

REP. WITTMAN: General Scott, your thoughts?

MAJ. GEN. SCOTT: Congressman, I will remind everybody that I returned from Iraq 14 months ago, so I don't feel I would ever second guess Brigadier General Phillips in his assessment of what's necessary. But I will say that one of the things that came out of the Gansler report was a realization on all of our parts that, first of all, we needed more people in theater and we've heard from Mr. Assad that plan is underway. But, as Mr. Parsons said, if we plan the work properly -- you don't have to do all of the work in theater. I would say that one of the maturation steps of the contingency environment has been recognizing that we need to do a better job of planning and organizing. Frankly, my predecessors were faced with a pick-up game. They show up into the driveway and the next game you play is in the Sweet 16, where now we're doing a far better job on that and learning an awful lot and taking advantage.

REP. WITTMAN: I want to talk a little bit about integrating this whole thought process on contractor support. Have combatant commanders recognized the importance of contractor support? How many have included operational contractor support requirements in either their op plans or their con plans?

MR. ASSAD: Sir, we're working with -- we now have an organization called the Joint Contracting Acquisition Support Office. The purpose of that office is to accomplish that very mission and that is to work with each of the combatant commanders and ensure that they, in fact, have contracting planning support done and in their op orders. Three or four years ago, frankly, those op orders would have been pretty bare in terms of the direction and the scope of contracting. In today's environment, we just conducted, for example, our first joint contracting command training over in EUROCOM. We've got two more training sessions going on this year, one at PACOM and one in SOUTHCOM, I think.

But the idea here is to get the plans in place so that our operational commanders not only understand what is the scope of the contracting support that needs to be brought to bear, but what are the contracting tools that are going to be used to get that contracting there on time? Just as important, who is going to oversee this so that the taxpayers get what they're supposed to get and our war fighters get the goods and services they wanted?

MR. PARSONS: And if I could add to that: we just recently in the staff's office participated in a joint exercise called PANAMAX, which focused on Panama down in the southern hemisphere. It was the first time -- well, not really the first time but the second time that we tested this joint task force and joint contracting by deploying one of our contracting support brigades. They started very early on with the joint task force commander in the other services in the planning for that operation. So we're proving that the up-front planning pays off. One of the things that they did was they included the Air Force contracting folks; they included the Navy folks; and by that early planning were able to actually identify contract vehicles that were already in place that could be used for things like opening a port. So we're seeing this paying off in spades now.

What my observation is: I think there's a lot more joint-ness that's now taking place between the services as we work with these combatant commanders in doing their operational plans.

MAJ. GEN. SCOTT: Sir, if I may add? One of the things that I think the Army has done extremely well is the Army is out in front in developing organizational concepts that facilitate the planning part. The problem prior to the establishment of the contract support brigade was you have military organizations that were designed to award contracts, but they weren't designed to plan the ingress phase, transition phases, and to do the kinds of market research that you need to do to see what's available in theaters.

When I first saw the structure of the contracting support brigade, I said, gee wiz, I wish I had this when I was walking into Iraq. It would have made life a whole lot simpler because you have folks already who understand what the tasks are and how to sequence things in order to make them work a whole lot smoother. We sort of learned all of that on the fly.

REP. WITTMAN: Thank you, Mr. Chairman.

REP. SNYDER: I guess, using the jargon that you all use more than we do, General Scott, you talk about these skills being a core competency and not something that you kind of pick up as you need to when you go to a new theater or something. This sounds like you're going back to the discussion about what are the senior leaders doing that we're moving in that direction? Is that what you're saying?

MAJ. GEN. SCOTT: Yes, sir. I would say a challenge is getting them to understand it's not just knowledge of the federal acquisition regulations; it's understanding what the concept of operations for supporting force are, given the particular mission that that force had. This is one of the reasons why you really need the senior military folks in here because core competencies for military force employment are in the uniformed side of the Department of Defense.

It's that knowledge and skill, combined with FAR-based knowledge, combined with sound business judgment that results in a good contracting support plan. If any of those pieces are missing, the job becomes orders of magnitude more difficult. And, frankly, those are the kinds of things that it seems where fraud, waste, and abuse can occur. It starts with we don't have a really good plan; don't know how we're going to do oversight; don't have the identified frame to task -- and the opportunities for mischief grow.

REP. SNYDER: This is you all's book here, I think. You may have provided it, I don't know. Anyway, this appeared in my office today that I had requested. But your book brings home another issue too -- everything that you just said there, General Scott -- but this does not look like a nice pristine real estate office. Those are pieces of paper out on what is a hood of a Jeep I think or hood of some vehicle. You've got that whole environment too that you're in strange settings, dealing in different languages, and trying to do things very, very rapidly. That seems to be the theme through this book of how to do these things when you're in difficult environments. Is that a fair statement?

MAJ. GEN. SCOTT: Yes, sir.

REP. SNYDER: I wanted to ask -- maybe I'll ask you, Mr. Assad. With regard to the SERP funds, I guess that's the commanders' emergency response program, isn't that the acronym? Where do you see the management and contracting and oversight of the SERP funds? We've had this discussion on the congressional side of: are these development funds? I don't think they're development funds, I think they're counterinsurgency funds. In an area that has just been cleared out and I see 300 mend standing around and I can pay them $5 a day to clean trash and that gets them occupied, who cares about the paperwork? That's a bit of an attitude at that time but I'd like to hear your review of how you see the SERP funds in this whole picture.

MR. ASSAD: Dr. Snyder, that's an interesting point. When I got to OSD, one of the concerns that was expressed by some of the operational leadership was that we were invoking too many FAR-based principles, Federal Acquisition Regulation principles, on the SERP fund. We were preventing it from being used in the manner that it should be used. So we did a pretty exhaustive examination of that. As you all know, there are know regulations that necessarily have to apply to that; in fact, there were no FAR regulations that had applied. But it was the operational commanders themselves and their concern that the money be properly accounted for that led to very stringent rule-making amongst non-contracting folks, if you will, in an effort to try to account for those funds properly.

I'd like -- maybe General Scott can talk a little bit about that in terms of the ordering officers who were actually using those funds.

MAJ. GEN. SCOTT: Well, I'd like to talk about that in terms of two brief war stories. The first one was when now current Vice Chief of Staff of the Army, who was the Corps Commander at the time, invited me for lunch at his headquarters and forgot to inform me that I was the main course. Actually what General (Chiarelli ?) had in mind was a campaign -- this was an operation to get us forward to the second battle of Baghdad. The strategy was: clear, hold, and build. So we do a security operation to clear the area; we establish a cordon around it to hold it; and then we want to build within that area -- whether it's restoring public services, whether it's pairing the 300 guys around the Corps to pick up the trash. But we wanted to do something to show the folks the quality of their lives was going to improve.

The problem that he was faced with was the FAR-based bureaucracy, even in the best circumstances, if you're going to spend a half a million dollars under the FAR, it's going to take you about 45 days to do that. What they had in mind was about a 48-hour response time. We would clear an area, 48 hours later we'd have people in there picking up the trash, restoring the water, sewer, and electricity, and improving the lives of the folks. So what we did is we went and examined it and said, well why is this that we have this lag time between "flash-to-bang," as the Army calls it, between the desire for it and the actual effects showing up?

It turned out that when we did that examination, most of the rules that had been imposed did not require federal acquisition regulations and were not required by the Department of Defense. Congress had been very, very clear that their intent for SERP money was you need a process that's fair, transparent, and accountable, but we give commanders broad discretion in how they establish that. It turned out that most of the rules we had put on ourselves.

So the fairly quick solution was, loosen up. We established some local procedures for accountability. We told the folks, their ordering officers, that this is the standard for competition: three independent sources, bidding on a project, and everything you do write it down because eventually we will have to come back and account for it -- and we did that.

First of all, we achieved a 48-hour turnaround where we could achieve the effects that the commanders wanted in that time frame. Second of all, through that whole period of time, there was not one case where SERP money went unaccounted.

Folks took it very, very seriously. Commanders understood that they were personally liable and accountable.

This was not something that some contracting officer was going to go to jail for, it was something they were going to be held accountable to and they responded.

REP. SNYDER: Mr. Wittman?

REP. WITTMAN: Thank you, Mr. Chairman. Mr. Chairman, you had mentioned a little bit earlier that the hearing we had earlier today that talked about the use and misuse of resources there in the reconstruction of Iraq -- it brings me back to the Gansler Commission Report that talked about there being more auditors in the field than government contractors there.

The question is this, do we have the right balance now between auditors and contractors and are the folks in charge of auditing doing the proper job in staffing and training those folks that are charged with that audit function?

MR. ASSAD: I think we've done a lot better. Right now what we're doing, Mr. Congressman, is examining -- especially in Afghanistan -- an answer to that question. Do we have enough oversight of not just auditors, but defense contract management, agency professionals, as well as properly-trained contracting officer representatives? I think that in terms of auditing invoices for our U.S.-based contractors -- we've got that down pretty well. When we start to talk about local procurements, then it becomes a little bit more difficult because there are situations where the contractor is there one day and not there the next.

So what we want to make sure of, however, is that as we award these contracts, sufficient oversight is in place. We are looking to put more contract oversight in theater; there is no doubt about that. We need to train our contracting officer representatives more capably and we also need to look at our defense contract management agency staffing. Right now there are about 240 folks in defense contract management command who are overseas in Iraq and Afghanistan; that probably needs to be plussed-up a little bit.

MAJ. GEN. SCOTT: Sir, if I could just comment on that. I would also say that in a contingency, the relationship between the auditors and the contracting officers have to be somewhat different than it is in typical stateside contracting. What we found worked very well was to maintain the independence that an auditor must have in order to do their job effectively. There had to be some degree of cooperation. It was almost -- I'm an Air Force guy -- it was almost like an air defense solution where someone cues the weapon to the target and then somebody else goes out and prosecutes the fight. And the someone that cued the weapon to the target, most frequently, was the contracting officer. Something smells bad about this. I've got a bad feeling about something going on. Can you guys please go take a look at this? Stateside, we were more used to the auditors setting their audit agenda much more independently, as well as conducting the audits themselves.

But I will tell you, I met with the special IG for reconstruction monthly and my staff met with them weekly. I met with Army audit agents monthly. When DCAA established their presence over there, we had monthly meetings. It was really kind of an audit coordination where we would look at it and say, "look, I am really worried about blanket purchase agreements. I think that they may be being misused. Can you guys go take a look at it and give me either a thumbs-up or a thumbs-down?" Then as for me, as the commander, was those initial reports came directly back to me and to my contracting officers so we could go do something about it right then, not wait until two or three months later when things go through the normal coordination cycle, and a nice pretty bound report comes out. Well, by that time, the guy that was doing all of the mischief is gone.

MR. ASSAD: If I might say something, Dr. Snyder. You had mentioned that we have a panel on contracting integrity that was set up by this committee. As a matter of fact, it was initiated through the HASC. One of the subcommittees that we have is on procurement fraud, in particular, and it was to educate and create tools to educate our contracting officers on the battlefield to become more aware of areas, events, or situations that they could be in that might cause and/or waste and abuse, such as creating checklists, simple things like checklists, for when they were going to relieve another officer in a forward operating base; what they should be looking for; and also helping that officer who is at that forward operating base to say, "you'd better be prepared with the following documentation because it's going to be expected of you by your relief."

We've worked with the DOD IG as well as the Navy, Air Force, and Army IGs in setting up some terrific tools on web sites for our contracting officers who are in the battlefield to gain access to tools that will help them with regard to ferreting out fraud.

MR. PARSONS: I would just like to add one more point to what you just said. In our design of these contracting support brigades, led by these colonels, the Army CID and the Army Audit Agency have both agreed to make a pool of deployable CID agents and Army auditors that we can tap into as part of our deployment for the brigades. So when a brigade deploys, we will most likely bring a CID agent and an Army auditor with us as well. Those CID agents are already helping us and doing some instruction with the contracting officer representatives.

So when we give a class to the CORs today, the CID has a block that talks about procurement fraud and bribery and those types of things. So a lot of the education is improving.

I think the more we get our forces educated, the less auditors you really need on site. I think what we're suffering now is the fact, like General Scott says, so much inexperience and not enough people kind of led to that environment where you almost have overreact with a number of auditors. So I mean, I think in the future it will be better balanced.

MR. HARRISON: Right. So I'd add with the help of OSD within the Army we've restored what's called the Procurement Management Review Process. We've now just about completed staffing up two teams and -- and very much appreciate Congress' support for the resources to be able to do that. These two teams are specifically dedicated to going out into the Army. As recently as last week we reviewed the (Q-8 ?) contracting command under Mr. Parsons and today we're putting the planning together to go into JCCIA in Iraq as well as in Afghanistan in about another month.

The Procurement Management Review goes into contract files, looks at policies, processes, tools. It's not just the inspection activity. It's to say -- to determine are you adhering to the guidance that you've got that says well, my tool to collect data on what we need to do at our level, better enable our contracting work force. Mr. Parsons has the same capability in the Army contracting command.

It's our ability to gain first hand experience about what's -- what's really happening out in the activities wherever they may be. So we've got that in process.

REP. SNYDER: See, we get to rest up for five minutes but you all don't so we got -- we got a tag team going on. I wanted to ask, have any of you ever heard of the steamboat the Sultana? Sultana -- there, I see a nodding head in the second row back there -- the Sultana -- (inaudible) -- the worst maritime accident in the history of the United States. It was a couple weeks after the end of the Civil War.

I don't remember where it shoved off from but it picked up a load of mostly Union soldiers who had been released from prisoner of war camps in the South. They were all emaciated, sick, not doing very well. It was -- the company had a contract to haul these soldiers up north. Now, this is where there became a problem because the steamship was -- I think it was three times the load it was supposed to take.

It actually pushed off from Memphis, picked up a load of wood at Marion, Arkansas, went out in the middle of the river. It was at flood stage and the boiler blew. And so I -- I forget the number. I'm not sure they know exactly --1,700 or so lives lost and most of them were very weakened Union soldier war veterans.

The country didn't pay a whole lot of attention to it except for the families because they were -- Lincoln had been assassinated shortly before then. The war was over. But it brings home it's not just writing the contracts. It's the -- what happens to quality of the performance. Obviously, we haven't had anything like that, I don't think, ever since then but there's -- we do have things that have occurred.

The one that's gotten, I think, the most press attention has been the allegations of improper electrical work that resulted in the loss of life. I've got your book now and I don't see anything along here, this little index thing, about monitoring a contract or quality controls during the performance of the contract. Where does that fit in? And that may not be your all's responsibility.

Where does that fit in for the guy who just signed this on the hood of the vehicle? What's his responsibility to go back and check on the contract?

MR. ASSAD: Well, his responsibility is to ensure that the contracting office's representatives that are participating and -- and working with him are in fact properly trained to execute their responsibilities and that DCMA, working through the Joint Contracting Command in the case of Iraq and Afghanistan, is in fact overseeing contract performance. It depends on the instrument. If it's -- (inaudible) -- for example, much of that oversight is conducted by the Army contracting officer representatives.

If it's a technical contract, that would in fact be overseen by DCMA. And so I don't want to -- I believe there is a section in there, Doctor, and I'll be happy to get it for you but that does talk to contract --

REP. SNYDER: Contract administration?

MR. ASSAD: Yes, sir. That's it.

REP. SNYDER: Ah ha, look at that.

MR. ASSAD: (Laughter.) But there is a section in there. But having said that, there is also a DVD in -- in the back of that book that we've provided to our contracting officers that leads them to -- it'll be on the last page of that that will lead them to a website that gives them additional information with regard to contract oversight and contract management services. Should be the very last page of the book, Mr. Congressman.

REP. SNYDER: Actually I'll read the first sentence. It says, "This chapter discusses actions a contracting officer should take to administer a contract that covers the actions to be taken and documentation to be included from contractor award to contract closeout and this includes -- (inaudible) --monitoring, transferring, terminating, and closing out of contracts." So I missed the tab. You've got it all covered.

MR. ASSAD: You got me worried there, Mr. Congressman.

REP. SNYDER: I know it. It is an issue though about how -- I mean, you -- you mentioned I think the 600,000 contracts that hadn't been formally closed out. I suspect that's not because somebody's doing a bad job. I suspect it's because they're overwhelmed with volume.

MR. ASSAD: You know, Dr. -- Dr. Snyder, I think that the issue here is, and it's one that we're all looking at very carefully, and I did mention to you that there was one, a recommendation -- actually it was three -- that were tied into DCMA and it was about contract oversight. And the -- the difference of opinion was that the commission felt that contract oversight for post, camp, and station in the United States should be done by DCMA. I've got two former DCMA commanders here. That's never been a responsibility of DCMA and would have required a significant change in organizational structure to make that happen.

But it's our belief that in order to have the operational force understand the capability that they're contracting for is to lay some of that responsibility on them to do oversight for post, camp, and station. And so when we're in theater, when we're looking at life support services -- dining facilities and laundry facilities, things of that nature -- we're looking for the operational force in concert with the contracting officer and with DCMA oversight to do that oversight. It's -- you're absolutely right, sir. It's a critical function that at the end of the day we've got to assure the taxpayers as well as the warfighters that we got what we paid for.

REP. SNYDER: Mr. Wittman?

REP. WITTMAN: Thank you, Mr. Chairman. One -- one final question. Gentlemen, the GAO and others have come out with a report talking about some of the longstanding challenges regarding contractor support for deployed forces. If you were to look at what the Army and DOD are recommended to do under the Gansler Report, would you see in comparing those is there anything left? If all the Gansler Report recommendations are fulfilled would there be anything left that (a ?) GAO has pointed out that needs to be done, and if so, who would be responsible for doing -- (inaudible)?

MR. ASSAD: I think that we are really in the early phase of getting true integration of our operational commanders in the planning of contract operations, and -- and I think that that is the area that we really have -- we are focused on with the Joint Forces Command and the joint staff but that's the area that we really need to place a significant amount of focus on so that -- you know, every plan changes, that's true. But the reality is we -- we need to ensure that we've inculcated that mindset that says we really do need not only to plan what's organic and what's not but exactly what contracting mechanisms and who's going to do it as well as which -- which part of the operating force is going to oversee the work that needs to be done.

So I'd say, Mr. Congressman, from my perspective it's that aspect of contract planning and ensuring, as Darryl said, that you understand what is in fact the battle plan and -- and how are we integrated into it to ensure that we provide the support that's necessary.

MR. HARRISON: Sir, we'll provide a contracting offices representative pocket guide for you. We'll get that over to you. That -- that reinforces -- that's what's (given ?) a soldier and actually anyone that's going to be a COR out there, you know, boots on the ground actually watching what the contractor does. The challenge we've got, I think, is exactly as Mr. Assad described. It's -- we're on a path now.

We need to have the continued emphasis at every level for it. We need -- we need to, you know, evaluate contract files, ensure the contract team and the contracting office's rep provides that key input into that contract file -- (inaudible) -- upon which we judge the performance of a contractor. And those are critical functions I think we've begun to reinforce. Just have to continue to emphasize it.

MR. PARSONS: And, sir, I would just add that I think the other area where we're going to need the continued help is the -- the focus on this -- on this issue. We have a long way to go in building up this capability as General Scott alluded to and, you know, my fear is that, you know, if the world becomes a calmer place and there is a draw down on the number of deployments that we're making there may be a sense that we can, you know, eliminate some of what we're trying to build up here. And so, you know, my appeal would be we've got great support out of Congress as we've gone forward on this Gansler Commission Report.

I think we need to keep that laser focused on that to make sure that the capability we are developing and building up we do not lose 10 years from now, and that we do follow through on the, you know, the appointments of the general officers in developing the career path for these military officers and NCOs.

GEN. SCOTT: Congressman Wittman, I -- as I was thinking through my answer and listening to my colleagues, I checked my route home and made sure that I don't have to get off at the Foggy Bottom metro stop -- (laughter) -- because I would say that the one thing that's not -- that remains to be done is not strictly the purview of this committee. It's the coordination and synchronization of everyone who's involved in stabilization in reconstruction operations. When I was there, half the money I spent came through the State Department but USAID, (Main ?) State, Department of Commerce all had different rules, all organized to conduct contracting and contractor support differently, and the only place that all came together was in the ambassador's office.

There needs to be a functional, operational, and tactical level coordination that says if we're going to bring all the elements of national power to a counterinsurgency fight we've got to have a way where everybody's capabilities are put on the table, and the senior leaders in charge of the U.S. mission, be they the ambassador's staff or be they the joint task force commanders staff, can look and say who is best qualified or best positioned to do this because when you don't do that you have an opportunity for duplication, you have an opportunity for waste, you have an opportunity for -- for effort that's less effective than it could.

It's -- one of the classic cases that the GAO pointed out was cases, for example, where one department would built a water treatment plant but the other department is charged with putting in the sewer pipes that carry the waste to the water treatment plant, and if the two schedules and the two contracts are not synchronized you either end up with waste running in the street because the plant's not there or you end up with this beautiful plant with -- with no inflow coming into it. So in my view, that's what needs to be done in setting up the mechanisms for coordination between all the branches of government that are operating the counterinsurgency.

REP. WITTMAN: Very good. Thank you, gentlemen. Great -- great answers. Thank you.

REP. SNYDER: General Scott, you answered one of the questions I was going to ask which was about State and USAID because this has been an ongoing interest of this committee is how everybody working together. You -- the example you just gave I think you said came from GAO. What -- did you have any from your personal experience where you saw things that didn't go so smoothly?

GEN. SCOTT: Yes, sir. First of all, I would say that -- that most of my relationship with State went very well but it was highly personality dependent -- that I worked very closely with the Iraq Reconstruction Management Office, later ITAO. I can't remember what the ITAO initials stood for -- Iraq Transition Assistance Office. I worked very closely with those staff -- staff members and we had an excellent relationship that allowed us usually to work out problems. But nevertheless, there were cases.

For example, we had to take over the contract to complete the Children's Oncological (ph) Hospital in Basra after USAID had initiated the effort. Contract was overrun -- cost overrun -- contractor wasn't making adequate progress and eventually it took my contracting officers and the Army Corps of Engineers doing quality assurance to come through and get the project completed. It should have been apparent that this was a program that exceeded USAID's capabilities because at the time USAID had three contracting offices in the country and they had no ability to extend their contract oversight down to Basra. I had a local contracting office down in Basra. The Corps of Engineers had a -- had a regional office down in Basra.

We were willing to provide -- (inaudible) -- the contract oversight and quality assurance for -- it was almost like a Chinese menu. Pick the services that you want and we can provide them. There was no mechanism short of the First Lady herself getting involved in this to cause people to coordinate and cooperate in order to bring success to the project.

REP. SNYDER: I think our -- the opinion is that there's a lot of excellent State Department USAID people but we've dramatically cut back on their numbers for the last decade and a half to our great detriment as a country.

GEN. SCOTT: Sir, that -- that would be my observation. Now, I had no -- no question about the quality of folks either in USAID or in -- in State. But, you know, I had 171 contracting officers in Iraq and they had three.

REP. SNYDER: I wanted to ask -- Mr. Assad, I wanted you to go into a little bit more detail about the DCMA, Defense Contract Management Authority, (correct ?) ? And you go through it in Page 6 of your written statement. I want to be sure I understand, which was Gansler recommended that DCMA would manage all the contracts for base security, water, all those kinds of things.

MR. ASSAD: Actually, what -- what he's recommend -- what he recommended, Congressman, was that the responsibility for base operations and base oversight in -- in CONIS at all of our post, camp, and stations will be done by DCMA.

REP. SNYDER: DCMA, and -- and the Army said no because -- I mean, we actually have some officer basically we refer to as the mayor. I mean -- (inaudible) -- because you felt that was an -- or not you but the Army felt that was the integral part of being the base commander, that that was a military function. Is that correct? And so that was why the pushback on that?

MR. ASSAD: Actually, Mr. Congressman, it was all four services.

REP. SNYDER: Right.

MR. ASSAD: Army, Navy, Air Force, and Marine were uniform in the thought that the responsibility for oversight at a particular post, camp, and station it should be (resident ?) and the responsibility of the commanding officer. What Dr. Gansler's concern was was that when we went into theater if we were going to expect DCMA to do that kind of oversight -- the post, camp, and station oversight in theater if they didn't have the same experience in CONIS or a way to train themselves repeatedly that that could be a problem.

But our view where -- where we're headed is to ensure that when our soldiers and our Marines, our airmen are in garrison that they're -- they're getting the experience that they need in garrison to do that kind of oversight and that we'll conduct the training so that when we have our plan in place each of our organizations knows how many of their folks within their operational unit will actually have to do that kind of oversight overseas and that we have that training in place so that they can in fact do it in CONIS. It was just not -- we just didn't feel like that particular responsibility have never having been a responsibility of DCMA at any time in its existence was -- was an appropriate way to use the resource.

REP. SNYDER: That makes sense. Mr. Wittman, did you have any other questions?

REP. WITTMAN: (Off mike.)

REP. SNYDER: I wanted to ask if you had any comments and I think -- I think, General Scott, you talked a little bit about it because you're with the Air Force but if we had a group of people here today from the Army, from the Marine Corps, from the Navy would we have a similar kind of reporting? I mean, what do you think about with regard to where the other services are at, Mr. Assad?

MR. ASSAD: It is not consistent in terms of -- if what we're talking about is senior leaders across the force we need more, in my view, more flag officers, more general officers in the acquisition and contracting profession. There's no doubt about it. At one point in time, the Air Force really was -- was the preeminent service in terms of leadership within the contracting profession. When General Scott, who's now about to retire, leaves we'll have one and, you know, at one point in time there could be three or four general officers serving in various positions within the Air Force who would be significantly capable in the contracting profession.

The same is true for the Army but the Army has in fact recognized and much to the credit of -- of the chief and the secretary they've moved out smartly in terms of increasing their numbers. The Navy has remained relatively stable. It turns out that we have a resource within the Navy that we haven't always tapped and that's our commanding -- our flag officers who are in the civil engineering corps. Every one of those officers has to be a level -- (inaudible) --level three certified contracting officer and so they're perfectly capable of operating in a combat environment and serving in the role that General Scott served in.

In terms of the Marine Corps, it's a much smaller force. There are only about 175 Marines who are presently contracting officers or NCOs with contracting experience.

So the path that the Marines have chosen and frankly, I fully support, is one where they're trying to get their logistics officers to have significant contracting experience so that when they get to the O6 level it becomes an enhancement to -- to command and an enhancement for general officer rank to have contracting experience. So right now we have no -- well, that's not true.

The two-star general officer who is in charge of logistics for the Marines in fact was a contracting officer at one time. But that wasn't necessarily done by plan. The Navy has two officers. In fact, Rear Admiral Dussault just returned from Iraq. She relieved General Scott, and Rear Admiral Kathleen Dussault is now back -- back home in CONIS who's moving on away to the joint staff.

They have two officers in contracting and then they have their contracting officers in the civil engineering corps. So I would say of all the services I think the Air Force, frankly, in my view needs to re-look at increasing the number of general officers that they have in contracting and I think the other three services are pretty well addressing the matter.

REP. SNYDER: General Scott, you only got six days left. Do you agree with that assessment of the Air Force?

GEN. SCOTT: Yes, sir, I do. At one time, there were six general officers in Air Force contracting, and when I retire in six days there will only be one, Brigadier General Wendy Masiello, and she's currently not serving in contracting -- (inaudible). The value of the kind of background that I had proved itself, I think, over in Iraq and Afghanistan.

Frankly, one of the questions that was asked was could we do the job with a member of the senior executive service, and we looked very closely at that when it was time for me to rotate out of the command billet and the conclusion that we universally came to -- and by the way, the guy with the heaviest vote was a guy named Dave Petraeus -- was that no, you need a -- an experienced flag officer to do these kinds -- kinds of missions and with the Air Force only having one that's a mighty thin (badge ?).

MR. PARSONS: Can I just add -- I think it's very critical that the junior officers and -- (inaudible) -- see that there is a career path for them to be -- be general officers. So if you eliminate these general officer slots then what we found, especially in the Army, is that anybody that came into acquisition would lean over towards the program management side because they knew that there was a possibility to make general officer on the program management side. And so I think it's really key that if you want to keep the viable career path, not that everybody attains this rank of general officer while they're in active duty but it is a career goal for many in the -- in the service.

REP. SNYDER: I don't know. I see General Scott sitting there about to retire next week and it seemed to be a career path that preserves your youthful appearance so, you know, that -- (laughter). In response to Mr. Wittman, you all talked a little bit about the way ahead. Do you all have any specific concrete legislative things that you think are obstructing your way or a suggestion of things we need to look at as we head into this year's defense bill and --

MR. ASSAD: Dr. Snyder, actually I think Congress has done very well by us. I mean, as far as we're concerned almost everything that we've asked for Congress has in fact enacted some form of legislation to support us, and so at the present time I think what we need to do is utilize the flexibilities and capabilities that Congress has given us to -- to move forward. There were a couple of minor legislative actions that we asked for which were not significant that -- that would make -- would make life a little easier but it really -- one of them, for example, was the (express option at the GAO for protests ?). We asked for that but in reality every time we've asked the GAO to use the express option they've in fact given it to us.

So, you know, in practical terms I don't think it has much benefit. So right now, I would say I'd like to thank the Congress very much for being so responsive to us and enable us -- enabling us to get our jobs done.

MR. HARRISON: Sir, we second that, particularly with respect to the work force. Congress' help has been tremendous -- that the flexibilities we have with the Section 852 funding will help us get the workforce built back up, restored, and trained over the coming year so that we can make them a permanent part of the Army civilian workforce structure. So we -- we're -- it's incumbent upon us to execute the support and reinforcement -- (inaudible).

GEN. SCOTT: Sir, as the field commander I was delighted with the support I got out of that Congress and it was clear that the members were paying attention. When we asked for something it came through quickly and usually in exactly the form that we asked for it. So one of the things that we had to be very careful is to make sure you know -- you know what you're asking for because Congress is going to give it to you.

I have nothing but praise for the support that I received out of the Congress while I was a field commander. It was clear that you all were on our side even when there were a lot of other people that were putting obstacles in our way. Congress was not one of them.

REP. SNYDER: I think the -- the -- the last question I would -- I would ask and it's not to be answered today but I hope that you all will feel free to provide as a -- in writing anything you want to add. We'll make it a part of the record and response -- (inaudible) -- consider it as a formal question for the record that -- to augment anything you've said today if there's something you think we need to hear of. General Scott, I think I'll give you the last opportunity here and you're one week out, if there's anything final you'd like to tell us about before we close the hearing. This is your last chance.

GEN. SCOTT: Well, sir, I'd -- since it'll be on the record I just want to say for 34 years it's been my honor and my delight to serve our great nation. When I went over to Iraq and Afghanistan, I felt like the athlete who had trained long and trained hard and had never gotten an opportunity to play in the big game until the end. I got in the game. I got to score some points.

I may not have gotten a complete victory but I think it put everybody on the right -- on the right path. It's with somewhat of a -- of a slightly heavy heart that I hang up the uniform after serving the nation for as long as I have. One thing I can assure you is I will always be there to answer when the nation calls even if it's -- even if it's not in uniform.

I thank you, sir, for the opportunity to testify. Thank you for the support that you and the committee have given us. God bless you all and God bless America.

REP. SNYDER: We appreciate your service, General Scott. I hope you will convey to all the folks that work for you how important we think they are. I mean, they -- they're not the kind of folks that are going to be on television but they are so important. Now, they will get these cool pictures though of them signing contracts (on the hoods of vehicles ?) but we think they are so important and the American taxpayers think they are very, very important and the men and women in uniform and their families.

They may not know who it is that's important -- (inaudible) -- but it's the folks that you're trying to train up and the ones that are already doing the work and we appreciate you, and you can count on us revisiting these topics as -- as time goes by. This is very important to the speaker, very important to Mr. Skelton, and very important to -- to all the members. So we are adjourned.

END.

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