Hearing Of The Subcommittee On Oversight And Investigations Of The House Armed Services Committee - Coordinating Contract Support On The Battlefield

Statement

Chaired By: Rep. Victor F. Snyder

Witnesses; Gary Motsek, Assistnat Deputy undersecretary Of Defense For Program Support; William Moser, Deputy Assistant Secretary Of State For Logisitics Management; Maureen Shauket, Director Of The Office Of Acquisition And Assistance And Senior Procurement Executive For USAID; John Hutton, Director Of The Acquisition And Sourcing Management At GAO

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REP. SNYDER: The hearing will come to order. Good afternoon and welcome to the House Armed Services Oversight and Investigations Subcommittee's second hearing following up on specific legislation related to contingency contracting and the acquisition workforce.

Today's hearing will focus on the implementation of Section 861 of the National Defense Authorization Act for Fiscal Year 2008, which require the Department of Defense, Department of State, and the USAID to sign a memorandum of understanding regulating contracting matters in Iraq and Afghanistan.

This subcommittee has been interested in interagency cooperation in Iraq and Afghanistan for over two years, and contracting is an important piece of that. Earlier this year, Secretary Gates told the Senate, quote "We have not thought holistically or coherently about our use of contractors, particularly when it comes to combat environments." End of quote.

In April 2008, in a full committee hearing on the Gansler Commission recommendations, Chairman Skelton noted the commission's suggestion that there ought to be an Integrated Expeditionary Command to coordinate contracting with a whole of government approach.

Just last week, Major General Darryl Scott, the former Commander of the Joint Contracting Command-Iraq/Afghanistan, gave us several specific examples of contracting projects where interagency cooperation broke down, resulting in waste of taxpayer dollars. Finally, as was mentioned at last week's hearing that we had, the Department of Defense spends over half of all contract dollars on services contracts and smaller items versus major defense acquisition programs.

Section 861 mandated that the agencies with witnesses before us today negotiate and agree upon a memorandum of understanding, which they did in July 2008. We're here today to see how well they have done in implementing the MOU. The MOU was intended to increase visibility across agencies, and to enhance our ability to track contracts and contractors: to know where they are, what they are working on, how much we are paying them, and how that work is proceeding.

The MOU also provides a framework to ensure that contractors who are traveling through the battle space do so safely, and that any contractor who commits a criminal act is prosecuted to the fullest extent of the law by the appropriate agency. Ultimately, the real purpose of this MOU is to help all our men and women in these wars, both in and out of uniform, accomplish the often difficult and dangerous missions that we have asked of them.

The witnesses we have with us today are at the front lines of making sure this kind of coordination happens, and we look forward to hearing from each of them. And before I introduce them, I'll turn to Mr. Wittman, our ranking member for any comments he would like to make.

REP. ROBERT WITTMAN (R-VA): Thank you, Mr. Chairman. I want to thank our witnesses today for taking time out of your busy schedule to join us; we certainly appreciate that and look forward to your testimony.

In our hearing on contingency contracting last week, the Army and Department of Defense officials described the changes that DOD is instituting to improve management of services contracting contingency operations. Indeed, DOD's response to the Gansler Commission recommendations have been comprehensive and is beginning to have the desired effect. We will continue to watch closely to make sure that today's urgent lessons are not lost in future contingency operations none of us can now foresee.

Today's hearing is about the next step, namely integrating and coordinating the efforts of all elements of the federal government to ensure unity of effort in a contingency operation. While a seamless, efficient, federal goal is a laudable goal, we should recognize that this standard will be difficult to reach.

We are not close to solving interagency coordination here in peace time, Washington, DC, is a far easier challenge than figuring it out under fire in a sovereign foreign nation. Afghanistan and Iraq are the first major conflicts in which we've expected the civilian side of government to perform duties and deliver services in a non- permissive or hostile environment.

It's understandable that our acquisition system is disjointed since we are literally experimenting as we go on new ways to meld the capabilities of the various elements of our federal government. We recognize that the State Department operates through the ambassador, the Department of Defense through the combatant commander, and USAID is semi-independent. But because our new joint-interagency way of operating promises better results as we've seen in Iraq, it is even more urgent that we sort out clear lines of authority for U.S. government activities in contingency operations.

I'm less concerned with dictating a single computer system or contracting method than in ensuring that responsible officials on the ground, be they military or civilian, know what contractor is responsible for what services and what contractors they are responsible to support. I'd like to hear common sense solutions for the practical operational issues our deployed military and civilian leaders face in the field. I'm confident we can make substantial progress if not entirely fix this system.

And we in Congress must do our part to rationalize the maze of authorities the various agencies possess for nation-building efforts. Our witnesses today are experts in this area, and ladies and gentlemen, I look forward to hearing from you and your thoughts and ideas about how we can bring all of these different efforts together in the most efficient way possible.

Thank you, Mr. Chairman, I yield back.

REP. SNYDER: Thank you, Mr. Wittman. Our witnesses today are, Mr. Gary Motsek, assistant deputy undersecretary of Defense for program support.

Mr. William Moser, deputy assistant secretary of State for logistics management. Ms. Maureen Shauket, director of the Office of Acquisition Assistance and senior procurement executive for USAID. Mr. John Hutton, director of the Acquisition and Sourcing Management team at GAO.

We appreciate all of you being here. Your written statements will be made a part of the record. We'll recognize each of you for five minutes and I think hopefully our light will work.

When you see the red light go on, that tells you five minutes is up. We want you to keep going if there are other things you need to tell us, but I'd -- I would encourage you to err on the side of a summary statement. I also appreciate you all being here today to discuss what I think is pretty complicated material.

And this is all in the spirit of doing what we all want to do, which is get the best bang for the buck of the American taxpayer in a way that helps our men and women in uniform in a very, very complicated war environment in Iraq and Afghanistan. So Mr. -- so I think we're going to begin with Mr. Motsek, is that correct, yeah. We'll begin with Mr. Motsek. So for five minutes -- (cross talk) -- again.

MR. MOTSEK: Chairman Snyder, good afternoon. Chairman Snyder, Congressman Wittman, Ms. Davis, good to see you. Thank you for the opportunity to appear before you and participate in today's discussion.

I'd like to thank the committee for their continued support of our troops and all you have helped already for us to do our mission. I'd also like to recognize the men and women who serve our great country and that includes our military civilian coalition interagency and industry partners. None of us could've gotten -- get this job without -- done without the other, and I am continually impressed by the increasing cooperation among us.

I have a written statement which you should have. I may go back to that during Q and A's, because we've embedded some of the matrixes of where we stand with Section 861 on that written statement. In my brief opening remarks, I'd like to highlight the progress we made in our broader efforts to improve oversight and management of contractors in contingency operations and specific emphasis on DOD's progress in implementing the memorandum of understanding regarding contracting in Iraq and Afghanistan that was required by Section 861.

We are continuing to make significant advances in executing our strategic goals as outlined in our earlier Section 854 report to Congress that we submitted last April. There are other complementary enablers along with 861 such as Section 862 and 1248 of the last NDAA that we really have to look at holistically as we respond to your questions. And of course, as the chairman has noted, our response to the Gansler report is also integral to this entire effort.

First, I'd like to provide oversight. To provide oversight and synchronization inside of DOD, I along with the vice director of logistics, the J4 have institutionalized what we call the Section 854 general officers hearing committee. It consists of military department representatives -- (background noise) -- agency senior program managers for operational contract and support, and we would meet regularly as the center of the community of practice and community of interest who regularly oversee and synchronize the implementation of our joint policies.

Second, to ensure we have a single in-theater program manager providing oversight in management of our contracts and contractors, we have instituted a planning and coordination structure for future contingencies. The key to that is the Joint Contingency Acquisition Support Office, which is building its capacity right now to perform program management and operational synchronization for all theaters in their contracting efforts.

On October 20th, we fielded a provisional JCASO structure with an SES in charge. We thank the Congress for giving us the two-star billet, which we will fill in the future when we have a qualified individual. We have developed the concept of operations and we've been exercising that concept along with our joint combatant commanders and their efforts include interagency planning and coordination.

To assist our geographical combatant commanders, to identify the requirements and identifying the gaps in their contracting support packages in their operation plans, we have allocated 14 joint operational contract support planners to the commands. These planners are helping to integrate the required contractor support into future plans and synchronize requirements with the subordinate commands, the other agencies and other good -- government agencies and our coalition partners.

To the date -- to this date, the planners have reviewed the operational plans and concept plans in each of the commands on developing the overarching templates as an operational support annex to the plans. Just as an example, as we sit here today, the official direction about annex W, which is contractors in the -- what we call the chase gap (ph) consists of two paragraphs of instruction. The group -- these planners have now expanded that to a provisional 12 pages of instruction. So that's the level of detail in broad context that we're trying to get into our future operational plans.

Fourth, we're making progress in our transition from the manual accounting of contractor personnel to use the Synchronized Predeployment and Operational Tracker, we call it "SPOT" to track contractor personnel and contractor capability in theater. Approximately 70 percent of our contractor population, which includes virtually all U.S. and most third country nationals are reported -- as reported in our last manual census, have been registered in SPOT.

I anticipate two more cycles of the manual census before we transition to the operational system. But it is incumbent to me that we have a high confidence level, high 90s percent confidence level that we're tracking the exact numbers in both systems. And our interagency partners obviously have the capability to register their contract personnel. With respect, specifically, to implementation of Section 861, State and USAID signed a memorandum of understanding; it has identified their roles and responsibilities and identified SPOT as the common database.

Since that July, we have made significant progress in our implementation. As noted in my written statement, many of the requirements of Section 861 had been added -- have been met through the added functionality of SPOT. Other requirements are being addressed through policy changes and implementation guidance. And again, we're working very closely with our partners.

We are now staffing a revision to the MOU to address the additional requirements that were placed upon us by Section 854 of the last NDAA. From my perspective, the Section 854 found in the 2007 NDAA was a sea change in the way we organize, manage, and support our contractors. Institutionalization of these changes as well as stable funding for their efforts continues to be my primary priority.

There are two important efforts that are ongoing right now. First, the chairman of the Joint Chiefs of Staff has a taskforce on the dependence of contractors in contingency operations. This task force is examining the use of DOD contractors to determine our reliance -- dependence on the contractors' support. The second effort is the Commission of Wartime Contracting, it's been chartered by Congress to look at not just DOD, but all federal agencies in their use of contractors and to make specific recommendations.

We have been extensively engaged with both of these efforts and we urge Congress to let both of these efforts reach their conclusion before developing any future major statutory change to the way we deal with contractors in the battle space. Again, your support has been absolutely critical to our progress thus far, and I will need your continued support to achieve our objectives.

I thank you again Mr. Chairman and the members of the committee and I'll be happy to any -- answer any questions as they come up, thank you sir.

REP. SNYDER: Thank you, Mr. Motsek. Mr. Moser.

MR. MOSER: Yes. Mr. Chairman, Congressman Wittman, Ms. Davis, I welcome the opportunity to provide you an update on the Department of State's implementation of Section 861 of the National Defense Authorization Act of 2008.

Please allow me to first express how much we at the State Department appreciate the support of this subcommittee.

As the deputy assistant secretary for logistics management, I am responsible for ensuring that our global logistics platform provides consistent, reliable support to the men and women who directly implement our foreign policy around the world.

I work daily with the Bureau of Diplomatic Security part of the State Department as well as with our interagency partners to guarantee the safety and security of our personnel in the dangerous, but critical environment of Iraq and Afghanistan. I am pleased to be able to state before you today that this is a good news story. Legislation originated by this body is part of that story.

Section 861 of the National Defense Authorization Act of 2008 reinforced through legislation the strong cooperative effort the Department of Defense, the Agency for International Development and the Department of State began in February 2000 -- began in February of 2007. Even prior to the signing of our July 2008 MOU, our three agencies had discussed at length how best to account for contractor personnel in Iraq and Afghanistan.

We concluded that SPOT provided the best available information system solutions. The Department has enthusiastically embraced this solution. In March 2008, the Department directed contracting officers to incorporate into each contract, a regulation that required contractors to include their personnel deployed in Iraq and Afghanistan in SPOT.

Each of our agencies -- and I will emphasize this -- has its own business process for contracting." From July until November 2008, the Department of State developed our unique system hierarchy for data entry into SPOT and defined business rules, roles and responsibilities. State met the Section 861 120-day deadline, and by November 2008, had included all contracts sub-contracts task and delivery orders over 100,000 into SPOT.

In January 2009, SPOT was mandated for all State Department grants in Iraq and Afghanistan. As of today, in SPOT, State has entered data on 88 contracts and 53 grants. We have 5,670 contract personnel in Iraq and 1,649 in Afghanistan. Much work has been accomplished. SPOT's system enhancement, which Gary had talked about in his written testimony will continue as the State Department, DOD and USAID continue to work together daily to improve our cooperative efforts in Iraq and Afghanistan.

This concludes my testimony and I look forward to discussing with you any questions you may have.

REP. SNYDER: Thank you, Mr. Moser. Our next witness -- we don't get many opportunities to have USAID testify before one of the defense subcommittees, but we appreciate you being here Ms. Shauket, representing your agency. We should say that we are zealous advocates on your behalf on the need for USAID to have -- as with the State Department to have -- in Secretary Gates' words, "dramatic increases in funding of personnel." So we appreciate you being here and you're recognized for five minutes or whatever you need.

MS. SHAUKET: Thank you very much, Mr. Chairman, I'm honored to be here. Mr. Chairman, ranking member Wittman, Ms. Davis, thank you for the opportunity to appear before you to provide an update on USAID's compliance with the National Defense Authorization Act of 2008.

USAID operates in more than 80 countries worldwide to provide economic, humanitarian and development assistance in support of our U.S. foreign policy. In fiscal year 2008, USAID delivered more than $13 billion of assistance throughout the world. This success was achieved by our dedicated civil service, Foreign Service, local and third country national employees working together with our implementing partners to achieve sustainable development results.

Our programs in Iraq and Afghanistan represent 5 percent and 13 percent respectively of USAID's total program budget. Strong oversight and accountability of our programs in these critical countries are priorities for USAID. Like our colleagues in the Department of Defense and the Department of State, USAID is committed to carrying out the terms of the MOU.

Together, we are working closely with our colleagues to properly identify and report contractors on the ground through the use of the SPOT database. USAID has experienced steady progress with SPOT implementation, particularly in Iraq. This progress comes as a result of diligent coordination with DOD's SPOT support team and our State Department colleagues. We are working closely to adapt SPOT to accommodate USAID's business process.

For example, SPOT is being revised to increase the system's capability to track subcontractors. In Iraq, SPOT implementation became a reality for USAID in late 2008. Our staff has been trained and is actively using the database. We have also trained our implementing partners and developed specific procedures to assist their personnel in the appropriate use of the system.

As a result of these efforts, USAID mission users, contractors and grantees now have the capability to use the system. The current operating environment in Iraq facilitates USAID's use of SPOT, because SPOT is being used to generate letters of authorization, the mechanism for receiving U.S. government provided logistic services. The long- established practice of requiring letters of authorization as a means of gaining access to these facilities has expedited -- has been expedited by the introduction of SPOT.

This practice serves as one lesson learned for USAID as we look toward implementation of SPOT in Afghanistan. Reviews are underway to determine how we can best apply the lessons of Iraq to mitigate the challenges posed by the current operating environment in Afghanistan, which differs greatly from Iraq. With more than 10,000 contractor and grantee personnel on the ground in Iraq, and only seven U.S. direct hire contracting officers supporting this effort, we face a great management challenge.

Additionally, we do not use the letters of authorization due to the different nature of operations in Afghanistan. Our implementing partners have long been responsible for their own in-country logistics and operational support. DOD and State have been extremely receptive to working through these challenges with USAID.

Daily conversations are assisting us in moving forward with the practical implementations of SPOT, both in Iraq and Afghanistan. We at USAID are committed to actively working on these solutions. We look forward to continuing the collaborations with our DOD and State colleagues to further enhance our accountability and oversight in Iraq and Afghanistan. Again, I appreciate the opportunity to appear before you today and I will be pleased to respond to any questions you may have.

REP. SNYDER: Thank you Ms. Shauket.

We do have a series of votes, but we'll be able to hear your opening statement. Mr. Hutton, sir, you're recognized.

MR. HUTTON: Thank you. Mr. Chairman and members of the subcommittee, thank you for inviting me here today to discuss DOD, State and USAID's efforts to implement a memorandum of understanding regarding contracting in Iraq and Afghanistan.

As you know, DOD, State, and USAID, have relied extensively on contractors to support troops and civilian personnel, and to help rebuild the two countries. And the use of contractors in contingency operations is not new, but the number of contractors and the work they're performing in Iraq and Afghanistan represent an increased reliance on contractors to carry out these agency missions.

While recognizing the benefits of using contractors, we and others have noted the challenges federal agencies have in managing and overseeing their growing numbers. My statement today is drawn from our ongoing and prior work on contracting in a contingency environment, including Iraq and Afghanistan.

I should also point out that we also had a requirement in last year's NDAA Section 863 to issue a report every October 1st for three years that would provide detailed information on the numbers of contracts, numbers of contractor personnel performing in Iraq and Afghanistan as well as information on casualties.

We issued a report last October, and that work gave us some insights on where the agencies were at that time, but -- and also as we're carrying forward in this year's work, it's given us a sense of how much work has been ongoing.

But today, I'll first highlight the importance of having information on contracts and contractor personnel to managing overseas contractors, and second, the status of the agency's implementation of the MOU in the SPOT database.

First, we've reported extensively on the management oversight challenges related to the use of contractors in support of contingency operations and the need for decision makers, whether they be in the field or at headquarters to have accurate, complete, and timely information as a starting point for addressing this challenge.

Although much of our prior work is focused on DOD, the lessons learned can be applied to other agencies relying on contractors to help carry out their mission. Agencies' lack of complete and accurate information on contractors supporting contingency operations may inhibit planning, increase costs, and introduce unnecessary risk. For example, our work has shown that without incorporating information on contractors into planning efforts, agencies risk making uninformed programmatic decisions.

The lack of insight into contract services being performed increases the risk of paying for duplicative services and costs can increase due to a lack of visibility over where contractors are deployed and what government support they are entitled to. While actions have been taken to address their past recommendations, agencies and officials have noted that the implementation of the MOU and specifically the use of SPOT has a potential to bring dispersed information together so it can be used to better manage and oversee contractors.

And this brings me to my second point. DOD, State, and USAID have made some progress in implementing SPOT as agreed to in the MOU, but not all contractor personnel are being entered at this time. While agency officials have expressed confidence that certain categories of contractors including those who have access to U.S. installations are in SPOT, officials acknowledge that data on other contractors, namely Iraqi and Afghani nationals, for example, are incomplete.

Also USAID is not yet requiring its contractors in Afghanistan to use SPOT. With these and other limitations, the agencies continue to rely on other systems to respond to request for information on their contractors. For example, DOD still relies on a quarterly census of contractor personnel, because it's regarded as more complete than SPOT. But you heard from Motsek this morning their plans in the near time future to move away from the quarterly.

With respect to contract data, while SPOT has the capability to track the required contract information, there seem to be different views among the agencies as to which contracts need to be tracked. The agencies agreed in the MOU to track contracts with a period of performance of 14 days or greater or valued at more than 100,000.

DOD currently requires contracts with more than 30 days of performance or a total value of 25,000 to be entered into SPOT, but there are some considerations to increasing this to 250 -- 250,000. In contrast, USAID officials have suggested that other factors such as whether personnel have access to U.S. installations should determine which contracts go into SPOT.

In closing, by designating SPOT as their database to track information on contracts and contractor personnel, DOD, State, and USAID are not only addressing a statutory requirement, but when fully implemented, they also have an opportunity to use this information to help address the longstanding contract management challenges. However, agencies have varying views on the level of detail and types of information to be captured by the database and usefulness of such data to better plan and oversee contractors.

It is important that DOD, State and USAID continue to work together to develop and implement a database that is flexible enough to be applicable across the agencies while still providing detailed information as to better manage and oversee their contractors. Mr. Chairman, this concludes my prepared statement and I'd be happy to respond to any questions.

REP. SNYDER: Thank you all, and thank you for your -- both your written statements and your oral statements. What we will do is, we have votes that will begin -- will end in about 10 minutes, and we will go ahead and start the -- and I'm going to get in a couple of questions, then we'll need to recess. It is a series of votes, we'll probably be close to half hour or somewhere in that range, I would think.

I have to ask this is as the, you know, as the father of four very young boys about the Synchronized Predeployment and Operational Tracker, what you referred to as SPOT. Mr. Motsek, do you get up in the morning and say, Run SPOT, run. Run, run, run? -- I couldn't help myself. I want to ask --

MR. : Yes.

REP. SNYDER: Yes, -- (laughs.)

MR. : And I do too.

(Laughter)

MR. : And I'm thankful for the acronym, SPOT is easier to say.

MR. : Yeah

REP. SNYDER: It certainly is, Synchronized Predeployment and Operational Tracker. When this MOU legislation was passed in the defense bill, the purpose is not to end up with another report. More information that you all have to compile and get together amongst yourselves to compile and you're going to have to work to make SPOT run, run, run; the purpose is to help achieve the goals that we're trying to achieve in Iraq and Afghanistan.

And so -- my question for each of you -- Mr. Hutton talked about when this information comes together and if this information comes together, it helps manage contracts which I would think would mean we do our job better. My question for each of you is, to this point, do you believe that we're better off by having this MOU, in that is it not just compiling information, but it is -- is it helping you manage this war and redevelopment effort in Iraq and Afghanistan, Mr. Motsek?

MR. MOTSEK: Mr. Chairman, I would say frankly, the MOU is a good first effort.

REP. : Is that a no?

MR. MOTSEK: No. I mean, -- no, it's a yes, but it's a first effort. MOUs by their very nature are a bit of a challenge, because as you know, there's no enforcing mechanism as you can imagine. And you have to -- you know, we're in the crawl-walk-run mode, going back to your children. And we're in the crawl-walk-walk mode now with our interrelationships and our ability to talk some common lexicon and common language.

I personally don't foresee us ever at this point in time having some supernumerary contracting command that would be regional in its construct, because we have separate appropriations, we have separate business roles and quite frankly, we have separate missions. But -- this is one of the issues we've been addressing with the commission on wartime contracting.

What is the appropriate vehicle in the future to work this interagency process? Because fundamentally, even though it's in statute, it's generally a voluntary type process. Right now it's on the goodwill of the agencies involved to bring this forward as we sit here today. And I've got to tell you, frankly, it has been goodwill.

But having worked with these folks working the MOU to begin with, the one thing I learned if you want to find out how many lawyers you have in your agency, try to work interagency MOU, because they will come out of everywhere, and there is just this inherent attempt, inherent belief that you have to protect the interests of your agency, your department. And we've got to push beyond that. So this was an excellent first step.

Just as an aside, the challenges USAID had are somewhat unique compared to DOD. And to accommodate some of their issues, we've agreed and we're creating a classified version of SPOT as well. So they have the opportunity to either put it in the protected but unclassified version or a classified version where we can merge the numbers later, but the personal information can be protected as necessary.

REP. SNYDER: (Off mike.)

MR. MOSER: Yes. Chairman Snyder, I will say we are -- the State Department really does take the position that is essential in any of these situations to have a strong interagency presence. We will starkly defend our independence, particularly the independence of our contracting authority in this case.

But it's also important that we know that we can't get our mission done or execute the foreign policy goals of the United States without the help of our partners whether it be in DOD or with USAID where we're located in many, many countries. I mean this is something that we're used to working in this kind of interagency environment all over the world.

Did the memorandum of understanding help? I think that given the situation, you know, given the situation here that -- before that in Iraq, yes, they have been very helpful.

However, I will say is that we have -- the MOU helped us to get a little bit more focus and then helped push -- helped the people on the ground also get into more closer coordination on a whole host of issues, whether it be the reporting of incidents or it be the movement coordination that these things were -- the MOU was part of an evolving situation where cooperation was getting closer and closer.

REP. SNYDER: Ms. Shauket? It really is okay to say no, it didn't help. But go ahead.

MS. SHAUKET: (Laughs.) No, it has helped us, and while -- mainly in the area of collaboration. And what I have seen on the ground in both Afghanistan and Iraq is that USAID collaborates very closely with our embassy colleagues as we do in every country. But we also coordinate very, very closely with the military on the ground.

A difference has been, I believe, that we are now all collaborating more closely in Washington as well, and that we are -- we have a venue for discussing more of the common problems at both levels now.

MR. MOSER: Yeah. Dr. Snyder, if I could add one point to that is you know, if you go -- you know, Maureen and I are both Foreign Service officers. And you know -- and Gary has been posted, I think, in Brussels, right, before?

MR. MOTSEK: Yeah.

MR. MOSER: He's been actually stationed at one of our embassies overseas -- you were in the NATO mission. And basically, you know, in a way that we feel that for the most part at most of our overseas locations interagency cooperation works pretty well. Really the real problems in interagency cooperation actually happen more frequently in Washington.

And I think -- because overseas, there is a real clear understanding of what everyone's role is, and they know what they're supposed to do. The MOU in that regard was helpful in getting our domestic agency front really coordinated better. And that's important because it's through that coordination in Washington that we actually support those people out in the field.

REP. SNYDER: I think we better recess now for the votes. We'll come back and begin with Mr. Wittman.

(Recess)

MR. : Sir, thank you.

With respect to SPOT, I think that it's going to be a big step as we've said here. We've been calling for the importance of being able to track the use, reliance on contractors, understanding what they're doing and to which we're using contractors. I think the MOU provides an opportunity for this dialogue that you're seeing here where three agencies get together.

I know a lot of our work focuses on DOD. So there's a chance that for the first time you're going to -- each agency is going to be able to have a better understanding of what the other agencies are doing in a particular area of responsibility. So I think there is an opportunity here to have improved management if the agencies are thinking right now as to what specific data they think they need to better manage their contractors and how will SPOT provide that.

With respect to other things, I think that -- and Mr. Motsek mentioned earlier, you know, there's a lot of activity going on right now in many different areas. And one of the areas that we also recognize is important, you can have a database hopefully to help you be more proactive. But we think it's important that you also focus on some of these other important areas.

Something you talked about last week, things like making sure you have a trained non-acquisition workforce, for example, things like, are we able to leverage the lessons learned and be able to plan and incorporate those into our plan for future operations. So I'd throw those out as two areas that I would say are things that we can continue to look to as areas that are very important as well as just having a handle on the database.

REP. WITTMAN: Very good. Thank you.

You know, I've heard all of you speak as you talk about this MOU and the things that it has brought about, talk about collaboration, coordination, more understanding, more opportunities. What I'd like to get from that, though, is to understand what actions it has brought about, what changes has it brought about in things that have happened in the field.

It's great to be able to collaborate, to communicate, to talk more, to understand, to look at opportunities. But I'd like to hear maybe some examples and to go down the panel and start with Mr. Motsek and look at -- giving us examples of where the MOU has actually resulted in things that happened that would not have happened without the MOUs.

Mr. Motsek, we can start with you.

MR. MOTSEK: Well, I would just preface my remarks by saying don't look at the MOU in and by itself, but as Mr. Hutton said, in a broader context, everything else we're doing. Because it -- the dialogue, for example, that Mr. Moser and I have started with our memorandum of agreement on private security contract is quite -- and the MOU was a natural outgrowth of that.

So from a practical standpoint, the -- we actually have in place a process of negotiation and discussions on a routine basis to make things happen. As a practical example, when in Iraq we knew that we were going to lose immunity for our contractors in Iraq, State Department and DOD did not operate in isolation with each other. We collectively, jointly held meetings with our contractors.

I held -- I hosted the meetings in Washington for our contractors in the morning; Will attended with me. I went to the State Department. I attended his meeting. We agreed that we'd have one database -- excuse me -- one website where we would post all the relevant documents for both sets of contractors so we would stay focused and fused as we went through the process. And I would argue that's been very, very successful. So that was a small example.

The fact that we started in DOD exercising the JCASO concept and the State Department on our first exercise in EUCOM, which is a good place to practice these things in European Command, had about five people there to more or less observe the process. In the exercise that's coming up -- I believe it's Austere Challenge this fiscal year, State Department is coming in full blown.

They're going to play as a participatory partner so that it doesn't affect -- to be blown about; it doesn't affect what's going on in Iraq and Afghanistan today. But that's this predictiveness future context that we're operating in. We've learned from hard lessons from our lack of synergies in the existing operation, and we're building an entire exercise program where we're playing together in the same sandbox as we go through.

And that, in my mind, has been extraordinarily successful. And my combatant commanders, DOD's combatant commanders have embraced this dramatically. I mean they see the value of starting at the joint exercise level with their agency partners, because unless you do it in exercise, it becomes too ethereal when you have to do it in practice.

MR. : The one additional one that Gary did not mention is that I think that as a result of both 861 and 862 -- and even though I know the hearing isn't really concerned with 862, but I do consider them as linked areas. One of the things that we have now that we did not have before was an office -- regional security office in Baghdad that is -- on contractor oversight.

And I think that through this, through the MOU process we've gotten much tighter about the whole chain of incident reporting, not only just the movement coordination that's in 861, but also about the incident reporting and the other things there in 862. And that's been a much more formalized process. And I think the MOU helped on that.

I'm going to reference, though, what Gary said and just to elaborate a little bit more. I don't think we would have ever had such a successful approach to the contractors after the signing of the security agreement in November of 2008 if we hadn't already worked on the MOU and already set the foundations in the collaboration.

And it really is a very interesting fact that, you know, I went around in preparation for this hearing said, well, since we've had the loss of immunity for the contractors, has there been any effect on our personnel? Well, the answer is, from all my contracting staff is, no.

Well, part of the reason for that is I think not that -- I'll point Mr. Motsek for this, but I think he and I did actually a very, very good job in rolling this out not only to our contractors but to AID's and Justice' contractors as well. And I don't think that we would have gotten to that level of collaboration if we hadn't already done the work that we did with a series of MOUs. I think that one led to the other.

MS. SHAUKET: Thank you. I agree, and especially, as it relates to the incident reporting. We have definitely had lessons learned on that. We have collaborated, and we have a much improved system for that now. For USAID, it really has expedited our letters of authorization, as I mentioned. Prior to that, we received the CAC cards.

And it was a very cumbersome process and we didn't understand how to move through the system to go through the embassy and DOD to get the CAC cards for our implementing partners. Now that's been very streamlined and expedited with the onset of SPOT. So that's been a real benefit to us.

REP. WITTMAN: Thank you.

REP. SNYDER: Ms. Davis for five minutes.

REP. SUSAN A. DAVIS (D-CA): Thank you, Mr. Chairman.

Thank you all for being here. I'd like to ask about a situation to just try and see how the MOU and the changes are able to track the situation. In 2006, the Army Materiel Command reported that approximately $43 million was wasted on free meals provided to contractors who already were receiving it, the daily per diem for food.

Recent reports indicated that it's possible that this type of waste is still ongoing. Could you each tell me how you determine whether or not contractors are receiving services for which they are not eligible? How do you do that, and has that improved, how do you correct it?

MR. : Ms. Davis, you couldn't ask a better question because it dovetails on exactly what my counterpart in AID was talking about. Let me set the stage. In 2006, we had, at last count, that I could count, we had 192 separate letters of authorization floating out there -- types of letters. Everyone was authorized to sign anything to tell a contractor that you were entitled to the moon as necessary.

We had no standards of medical support, we had no standards of health care, we had no standards of housing, if you will. We were really pretty much out of control. Under our program -- and we all play in the same sandbox now -- if you are issued a letter of authorization which you're not going to get on a military aircraft in the AOR without it. It is a standardized format which your contracting officer controls the input.

You only have certain options that you can authorize. If you are a general contractor, you're only going to be entitled to resuscitative care, for example. If we're going to provide meals for you, it will be listed as meals. And the letter itself -- Chairman Snyder has a copy of one in his book, has a barcode in the bottom.

You can actually scan the letter as if it was your ID card. So -- I will be blunt with you. I don't care whether you're authorized to eat at my dining facility or not. What I do care is that if it is not part of your contract to be fed in that dining facility, that I have a process that I can bill you.

I don't care, frankly, whether or not we gave you more medical care than basic resuscitative care in our medical field, but you have to be able to register into our system so that we know what we gave you, so that we can bill you in the future. So that's the issue.

The second piece of your question is that until we have this centralized database or data source, we literally had incidents where for a variety of good reasons people were entering and exiting our facilities on an access card of some sort. But the access card dates were not necessarily tied to your contract dates.

And so you may have been given your access card on a calendar year, but your contract ended on 30 October. In theory and in practice, you could have stayed 60 days in theater on our dime, the government's dime, getting housed and fed looking for additional work. Now the letter of authorization is keyed, and becomes void the date of the end of the contract. So we police that up.

The other piece of SPOT is a -- as I said, its hundreds of readers. We put them out already, and of course we forced State and AID to fund their own. But it's a standard barcode reader, so we can track you where you are. Because from my position, SPOT doesn't do its job until I can link you to a contract, to the execution of that contract, to a location that that contract is being executed. And so you've got to scan when you go through the process.

REP. DAVIS: Are you able to go back with some of the folks who received medical care, for example, that was way over and above what was --

MR. : I will be -- I don't think we will go back. It's, you know, it's a start. And we've had a -- we've presented this to the medical community, and they have embraced it very, very quickly because they recognize what's going. You know, we're in a box where we pay for an insurance policy or medical care.

And in practice we were seeing that we really didn't charge that medical insurance process unless you were evacuated from theater. So we missed what was happening in theater, and part of it was self- inflicted. We did not have standards because of a lack of standardized letters --

REP. DAVIS: What do you hope will be the timeframe of tracking that and then making certain that people scan --

MR. : I mean it's virtually ongoing right now. I mean we were with the medical department folks not more than two weeks ago trying to finalize making sure we have the scanners in process, for example.

REP. DAVIS: Do any of the -- your agencies -- is there any different take that you would have on that issue in terms of trying work with it?

MR. : Well, we are currently exploring the use of the readers, although the LOAs -- which Maureen's talked about and Gary as well -- are actively used now. That was part of something that we recognized that we have -- in fact we were in the position where we were saying well, let us get to the person in SPOT.

We know it's coming. And we'll get to the LOA, but we had to kind of play a little bit of a catch-up game, because the actual LOA process went into effect before we were really completely ready for -- but we got there.

I think we're pretty comfortable with it now.

MS. SHAUKET: And then just addressing the issue of the cost and --

REP. SNYDER: Ms. Shauket, would you pull on the microphones a little closer to you?

MS. SHAUKET: Oh, sorry.

REP. SNYDER: Thanks.

MS. SHAUKET: And then just to address the issue of cost to ensure that there is no double billing, because it is controlled by the contracting officer who is issuing the letters of authorization. It's the same contracting officer that is writing and negotiating the contract. So they are very aware of the logistic support that will be provided.

And if there is going to be that support provided, then it's not budgeted in the contract. And if they aren't going to be getting it, then we would budget for it in the contract. So we have that kind of control.

MR. : If I may add just one more thing -- I'm sorry. You had Mr. Sodd (ph) up here, I think last week. He may have touched on this. But one of the other things that we have -- what he has forced into the process which is extraordinarily important is that the -- we now have contractor officer representatives in the theater to manage these things.

For example, we have a COR at the dining facility. The contractor can't create his own papers, the COR is there. What Mr. Sodd has forced the process into is the contracting officer must now certify the training of his contractor officer representatives. Before, it was just an additional duty. If we found you're one body, you went and did it.

Now, the contracting officer, as a direct link, must certify the training of his representatives in the field. That is an extraordinarily huge change from where we were just a couple of years ago. And it will pay off in the future.

REP. DAVIS: Thank you.

REP. SNYDER: I know you all have been here awhile because of our votes. We're going to go around another time or two if we can. I want to ask -- you all seem to have a pretty good attitude about this congressional mandate to do this that it has been productive when you see it going as you -- just walking and running like -- or crawling and walking, I believe, was your metaphor, Mr. Motsek.

We're now in the sixth -- it's been six years in Iraq, seven-and- a-half years in Afghanistan. Why does it take so long? Why does it take some kind of a congressional mandate to say can you all sit down, you know, you've got people running around the same areas in a very dangerous situation? Why does it take a congressional mandate?

Because you, as -- and of course I -- Mr. Motsek, you set yourself up for this question because --

MR. MOTSEK: (Laughs) -- yeah.

REP. SNYDER: -- specific things as for years Congress allowed both of these efforts referring to the joint chiefs of staff task force on dependence on contractors in contingency operations and the Commission on Wartime Contracting shared by Congress. You say let both those things run up before we develop future statutory direction, which I think is not unreasonable.

But in fact it was a statutory direction that has led to you saying fairly warm and fuzzy things about being forced to collaborate with each other. Why -- what's going on in your all three's respective organizations that just didn't happen by itself five, six, seven years ago?

And Mr. Hutton, I'd like you, at some point, respond too -- I don't know -- well, why don't we start with you, Ms. Shauket and --

MR. : Good.

(Laughter)

REP. SNYDER: Well, the reason I want to start with you -- I actually think DOD -- I don't know about Mr. Motsek personally, but I think DOD would have been receptive to other organizations coming in and saying, we need to sit down and come up with a way to keep our people protected. (You've got ?) contractors in development running around.

I want you to know where they're going so that they'll be as safe as they can be. I don't think -- that's examples of the kind of things that could occur. So I'm asking, I guess, to critique your own organization.

MS. SHAUKET: Sure. For USAID, we're very used to operating in an overseas environment. But we're not used to operating in a contingency environment. And I think for us that really has been the difference where we are working in the same environment as the military. Normally we would go in after the military had concluded their mission. So this has been a very big learning experience for us.

Also at the same time, we've had huge influxes of resources, and we had a mandate to deliver results immediately on the ground at the time that our staffing within the organization was at probably its all-time low. So it created real challenges for us. And I think with the resources that we had, we were very, very successful. But certainly it's been a learning experience.

And as security has improved, our implementation and our coordination has improved also. I think it has been a real learning environment for us, which is one of the aid lessons that we are taking from how we operated in Iraq to see how we can apply those lessons in Afghanistan even though it is a very different environment for us.

MR. : Well, I will say that Mr. Motsek and I actually met in July of 2007 for the first time at a meeting that we had in OMB, and were talking about some kind of joint database in order to do accounting for contractors, because those of us who would take these issues about contractor accountability very seriously were very much seized with it.

But I must say that in the pressure about the war and in the effort and in the immediacy, you know, the administrative details of the contract oversight that we all feel is very essential, is not exactly on our policy -- on our senior policy officials as always the top -- uppermost in their minds. And then --

REP. SNYDER: But shouldn't it be, though, if over half of your money -- over half of your money has been on services contracts?

MR. : You know, I'll defer part of this question --

REP. SNYDER: I mean it's not just like a waste of money, it's -- somebody needs to pay attention. Do you actually give -- is there actually water in the bottle that you're actually --

MR. MOSER: Well, Dr. Snyder, I will say this is -- for part of that question here. I'll tell you this is. We have a big -- you know, State is very different from DOD because of the size of our operation. And I'll give you a little example and then -- I've actually had -- I'm in very frequent contact with Wartime Contracting Commission and this is what I've told them.

You know, we actually do contingency contracts all the time. State Department does it all the time, because we have emergency situations all over the world all of the time. So contingency contracting, you know, it's almost -- I told the Wartime Contract Commission it's like contingency contracting are us -- to use a grammatically incorrect phrase, because it's something that my contracting authority does.

But let me give you an example of one of the big ones was evacuating the 13,000 people from Lebanon in 2006. You know, that was a contingency contract; didn't involve any shooters from DOD or any military personnel on the ground, but it was a huge effort. We do relief efforts all the time, we evacuate people from other countries all the time, some of these only make the papers for a couple of days. So that's not anything unusual.

As Maureen said, we only had -- we've not had this scale where we've been involved with DOD on the field, and it is a different thing.

But regard to your more specific question about why you should have been doing this, this is where the real difference is for me and DOD. All of my contracting officers that do the major contracts in Iraq sit three floors below me. And if I need to talk to them, I go down and see them or they come and see me.

So the contracts that we have for personal security or the contracting staff that built the embassy in Baghdad, all of those people -- I talk to these people everyday. And it's a lot different for me, because one of the things that we've done to try to control the situation is that we actually have centralized that contracting authority in the State Department in Washington so that we can keep a better handle on it.

Now you asked, well, shouldn't you have an account of the contractors? Yes, but we have small enough numbers that we could actually do this pretty well through manual systems. And it wasn't the same thing. You know, I always tell Gary is always bigger, you know, I have 7,000 in Iraq, Gary has 163,000 --

MR. : But it's --

MR. MOSER: And so this is where we get into differences of scale.

REP. SNYDER: But Mr. Moser was not just -- can you keep a handle on what everyone acknowledged would be as dramatically smaller number of contractors, it was -- given that you've got those number of contractors, can you work with -- is DOD aware of where they are and what they're doing to keep them safe? And I don't think -- is that where we're -- (cross talk) -- through?

MR. MOSER: Well, I think that that is a fair comment, Congressman Snyder. I think that that is a fair contract that we could have been better on this.

REP. SNYDER: Yeah. Mr. Motsek or Mr. Hutton, any comments you want to make?

MR. HUTTON: I'd like to, if I could --

REP. SNYDER: Please.

MR. HUTTON: -- first mention -- you know, you asked a question about why does it take legislation. And I personally think -- I haven't been in this firm for a few years that it often takes legislation to put a real sharp focus on something. Some of these issues we're talking about today GAO has been reporting on.

For example, one thing we were looking at was, you know, with respect to DOD, shouldn't there be a -- you know, there should be a DOD focal point to help execute a lot of these policies and bring the muscle in to make sure that people are doing the right thing. I think Mr. Motsek in that position right now for the last couple of years. We see some of that muscle and we see some of that direction.

But I do think sometimes it comes from the outside to put some focus. And I'd like to react to something Mr. Moser said -- and I think you were just touching upon it -- from the way I look at it, Dr. Snyder, was that, you know, while the agencies have their own individual contracting operations, the key here -- in my mind and where maybe the MOU is going to get people talking -- is that we got to take a focus interagency approach to a lot of these things.

We have more than one tool of state craft to execute a mission. And I think that the fact that we're sitting here -- and I think this kind of oversight hearing quite frankly, I think, puts little extra energy into the focus again on the importance of this issue and getting the agencies get together and talk about their needs, their requirements, and hopefully finding the database that fits each other's needs of one that's going to allow them to be proactive in their management and not just reactive all the time.

REP. SNYDER: Comments, Mr. Motsek?

MR. MOTSEK: I'm going to probably echo much of what you've heard. Interagency process hasn't been as effective probably in my tenure as I experienced it earlier in my life when I was a serving officer. I frankly saw it better in those days. So to be brought about, you need a catalyst to make something happen. You either need a crisis or a catalyst to make something happen.

USAID was absolutely correct. All of our plans, all of our mental focus, all of our processes up to this one was sequential in nature. When the war let AID come in and do their thing, because we're gone, that did not happen. We were operating in parallel lanes with agencies and departments with their own criterias and focus.

So it was -- the fact that -- we didn't fight the way we ever planned to doing something, or we didn't go through the reconstruction as we planned. The size of the operation was beyond anyone's focus. No one -- and I don't think any of our departments would ever, had they extrapolated the numbers that we have in the theater today.

And to be blunt about it, DOD had their own problems managing contractors, our own contractors. We would probably be generally reluctant to take on what we would perceive as a management responsibility for someone else. So there is that inertia inside of our own bureaucracies that would state that. For us, for us, two things happened.

We had a meeting at OMB in 2007, and then we had our PS -- private security contractor issue that blew up between State and DOD. And those two things were the catalysts that literally forced us together. And we -- since that point in time, I got to tell you, it has worked well. So from my perspective, the MOA was a continuation of what we were working. It put some bounce on us, by the way, you know, it gave us some focus.

I'm not against more legislation, by the way. It's major legislation that I'm worried about, because we quite frankly have been running nonstop trying to implement what we've been directed. And we really haven't had a chance to get out -- to catch our breath. We almost need an operational pause so that we can collectively do what we think we've been told to do up to this point, because the GAO is absolutely correct.

You know, we're grinding through this stuff, but no one's ever happy with the speed that we grind through it.

MR. : Now -- and I think that that's fair. And as Gary said before, is we do -- we are all pretty involved with Wartime Contracting Commission, and we really do want to see them take a more reflective approach. And one thing the three of us have already discussed is that we really do want to use what we've done in Iraq, and really make that instructive.

In other words, to not repeat in Afghanistan if we -- when we have a buildup in Afghanistan, to not make some of the mistakes that we did make in Iraq. And I think that you try to take advantage of where you had problem areas in the past. And GAO has been helpful in that process as well.

REP. SNYDER: Mr. Wittman.

REP. WITTMAN: Thank you, Mr. Chairman.

I think those are interesting points, Mr. Motsek and Mr. Moser, that you bring up, and that you point out that with the speed under which things have been pursued, it would be nice to slow down a little bit and kind of figure out what's happening, and to be able to learn from that.

With that, do you see a need, then, to do a sort of a comprehensive reevaluation of the use of contractors for contingency operations and -- look at that standpoint? And then, Mr. Motsek, you talked about sort of a hesitancy about legislation. But I pose this question.

Do you think there may be the need, if you have a chance to go ahead and reevaluate or look at what's going on, what's working, how these pieces are coming together from previous legislation, do you think that there might be a need for legislation or policy changes that might be needed to facilitate or improve the management and oversight of contractors in these contingency operations?

MR. MOTSEK: Well, I can't disagree fundamentally with anything that you said. The challenge that we have is, inside DOD is that the secretary has directed the chairman to do an in-depth analysis. In other words, we are what we are. And we have three sources -- we've had three fundamental sources or resources to do any mission in the battle space.

We have our military force structure which is set by rank, by number, by everything. We have a government civilian workforce which is capped and has a particular number. And then we have the contractor side of the house which is flexible to be blunt about it because it's resource-driven.

My argument to you or my discussion with you is that we do a heck of a good job work in the military piece. We are Nth degree detail.

But what we have not done to the same fidelity is what the DOD civilian piece, the government civilian piece, which has still remained out of focus when we have about 9,000 of those folks sitting in Iraq, and the contractor piece. We are where we are because of the four structure requirements that were placed upon us.

So the chairman is trying to take a clean sheet saying based upon all the missions that the department has, based upon the requirements in law, based upon a variety of requirements, what do I need in each bin. And what will eventually happen is that you do as much as you can in the military bin and then you have to default to the other two.

What I verged and the DOD Comptroller has embraced is that we ought to be doing this in DOD in the QDR process. Now we do a Quadrennial Defense Review where we're supposed to be looking at these big resource issues. And we said in our national defense strategy that we had three components, two are of course military civilian and contractor, and we've always concentrated in the military piece.

And to my astonishment, I'm very pleased to see the new Comptroller who said, no, we've got to look at the other two pieces as well, as we go to the QDR process. He's championing that on, quite frankly, ATL's behalf and I can only applaud that. So that is a major step. I will tell you that we probably would not have had that step had we not had the 861 MOU in place, had we not been engaged, had I not prepped him for his testimony, for his confirmation hearing about these issues.

Something took, something engaged him and there it can only be goodness in my mind coming out of that. So I agree a hundred percent. But at the end state, it ends up being a resource-driven exercise whether you like it or not.

REP. WITTMAN: Mr. Moser.

MR. MOSER: I think that we are going to continue to need contractors to handle contingency operations. We don't know where they're going to come. We're better off now than we were at the beginning of the Iraq conflict because we now have our office of crisis response and stabilization. That is an institution within the state department that is in future supposed to coordinate in the inner agency platform and try to do a better job to address these issues. So that part is there.

But I will tell you, Mr. Wittman, that basically there are a lot of -- the functions that we're having the contractors do in Iraq right now are not the ones that we really want our diplomatic core to do. And basically, we see that being the same in any kind of operation like this in the future. And that's not a bad thing. That's not a bad thing, but given, you know, will the administration, will Congress will have to -- and we will have to use contractors to supplement things that are not part of our core workforce.

REP. WITTMAN: Mr. Hutton.

Oh, go ahead.

MS. SHAUKET: For USAID, we have our contractors and grantees as a core part of the delivery of our mission. We don't actually implement the programs ourselves, but we have our partners implementing our programs. If we were to do away with contracts, we would have to fundamentally shift the way that we're resourced as an organization so that we would have the direct hires to be able to implement those programs.

Right now, we have 10,000 contractor and grantee employees in Afghanistan and we have over 4,000 in Iraq. So, it'd be a fundamental shift in resources for us.

REP. WITTMAN: Let me ask just your thoughts, do you think there are things that could be done to improve the management and oversight of those contractors in these contingency operation, just from your experience?

MS. SHAUKET: Well, certainly we have learned a lot. Oversight has been a challenge in areas where Americans cannot go. We have learned a lot from that. We collaborate very closely with the military on the oversight of our programs. We have instituted contracts to do monitoring and evaluation. We work very closely with the inspector general's office to try to ensure that we are covering our basis and that we are doing due diligence with the taxpayer funds.

MR. HUTTON: Thank you. You are right. Contingency contracting, the issue of getting visibility on use of contractors, the comptroller general in the past has talked about, you know, looking at even broader than that for an agency -- use of contractors. And you know, it's really, as we're talking about all these service contracts, they are all a lot of these individual decisions.

You know, where is that strategic look? And, you know, things such as, you know, to what extent are we using them, what are we asking them to do. Is that what we want to be? If that's not what we want to be, then how are we going to get to where we want to be in terms of use the contractors? We talked about the total force in many different ways here I think.

You know, I keep my ears pretty sharp when I hear discussions talking about how agencies accomplish missions. And the word I'm always waiting to hear is, do I hear the word "contractors." And I would think that as you have your oversight hearings, that's a little thing I do for myself just to see if it's engrained in the thinking.

I do think that we're seeing more and more discussions. I think the opening comments we talked about importance of, yeah, we're relying on contractors a lot. We have to think about them and how do we better manage them, and are we using them the way we need to use them, are we, you know, protecting overall the government's interest? So I think, you know, GAO in the past while this is a huge important issue here, we've also talked in broader, not just DOD, but other agencies.

REP. WITTMAN: Ms. Shauket, in your written statement you mentioned a couple of times from the perspective of USAID's, you see dramatic differences between Iraq and Afghanistan. I need you to explain that to me.

MS. SHAUKET: Well, in terms of the support that we received from the military when we are working in Iraq and we are relying a lot on the military for movement of personnel and for tracking of personnel, and initially we had the cafeterias that everyone was going into.

In Afghanistan, it's very, very different. Our contractors are out in the local community. They aren't behind any walls and they are working in some areas where there is no military presence. It's really a very different environment for us.

REP. WITTMAN: Mr. Motsek, I might have told you this story before in my office. We call it the story of Barney the contractor. But Barney is one of my constituents, Barney Morris, and in fact he wrote this op-ed about this incident moment -- described this incident that occurred. He gives me credit for -- my only credit I had managed to -- I was able to manage my congressional office in such a way that we paid the phone bill and the phones kept operating because that was my only role in this.

(Laughter)

But one -- it was just back in 2004, it was a Friday afternoon, my staff member -- I was back and headed for the airport with my military ally having answer the phone and it was Barney's girlfriend in Little Rock saying she had just gotten an email or some kind of message from Barney in Iraq. And her feeling was that he was really in trouble.

And he was a contractor, was in a sector that was controlled by Ukrainian troops.

The al-Sadr forces were attacking them and she implied -- actually I think she actually thought he was calling to say goodbye that it was not going at all well.

So my staff member picked up the phone that I helped pay the bill on, because I remember -- (inaudible) -- he picked up the phone, called this local CPA. And it wasn't very long at all before a call came back and the answer was its kind of something like, congratulations, you just called an air strike which goes back I think to the Haiti operation where somebody found a payphone to call an air strike.

But in fact what happened, Barney feels very strongly that because of that communication that a couple of hours later a couple of helicopter guns ships went in and we were able to protect them until the next morning they got them out. That's a really shabby way to run a war. They couldn't convince people that there was a problem in the Ukrainian sector.

So my question is given what has occurred now, do we feel better about the possibilities that our contractors are safer in Iraq and Afghanistan because of the communication and collaboration that you all are doing?

MR. MOTSEK: I can't talk about Barney.

REP. WITTMAN: No, I understand, yeah and he would be embarrassed if I'm talking about him.

MR. MOTSEK: I commend his initiative by the way, but I can't talk about Barney. But let me talk in a more general context from our perspective in 2004. The best way I can put it is I met with the third DISCOM mission support command commander. He has a -- at that time, under the organization in the Army, he had about 8,000 troops under him and he was part of the initial fight in Iraq.

And one of his comments to me, and this is when I still worked in the Army, was, you know, your Army supported me great, they did a wonderful job, no one told me that by the way besides my 8,000 troops, I had another 4,000 contractors I was responsible for from day one. He did not know that and of course now its 50:50 ratio.

So during Barney's time, I will tell you that we as a department didn't do a very good job teaching our leaders because frankly we were every bit surprised at the numbers that showed up in the battle space. And we shouldn't have been surprised because Bosnia (ph) has always been a 50:50 ratio. So if we had extrapolated off of Bosnia we might have known better.

So going back to what Mr. Moser had said earlier, the lessons learned pieces is probably the most critical piece. Today, there is a not a brigade commander that hasn't been there before, does not understand that he has the responsibility from a force protection issue and not just military, but its thousands of civilians and government employees.

And that includes our other agencies because on the ground they have broken that code. We've tried to institutionalize that training because if this is not School of Hard Knox. We got the Military Education Coordination Committee which handles the joint training requirements for the chairman to make this is a special area of emphasis.

So now, in other words, when the chairman goes out and reviews the school houses of the departments or the services, one of the areas he's going to be looking for is, are we training our future leaders -- our future brigade commanders, future wing commanders and the like about the responsibility of managing these contractors on the battle space.

Joint forces command today stood up online program for pre- deployment course which is a direct outgrowth by the way the GAO's criticism of us for not having adequate pre-deployment training for these folks institutionalized. There is now an institutionalized course that's out. It's riding on the Joint Knowledge Online program. So it's behind the firewall. But it's there, and it's processing that.

So in 2004, we had not, as an institution, taken our hands to understand the responsibilities associated with everyone in the battle space. That has changed today. I mean, we have learned that lesson, we've learned it the way -- (inaudible) -- quite frankly.

REP. SNYDER: Mr. Wittman.

REP. WITTMAN: Thank you, Mr. Chairman.

Just to follow up on that. I think it's interesting that, you know, you all have pointed out that obviously Iraq and Afghanistan are two very different places. We have learned some significant lessons in Iraq. Obviously, we're having the challenges in Afghanistan unfold in front of us.

The question is the lessons that we have learned in Iraq, how translatable are they to Afghanistan? What are the challenges that we will face in Afghanistan and can we anticipate how to overcome those challenges based on knowing some of the challenges that we've been through in Iraq?

MR. MOTSEK: If you don't mind, I'll go first, real quick.

REP. WITTMAN: Yes, you can go first.

MR. MOTSEK: Just one example. As you know, we created the joint contracting command that sits in Iraq to manage contracting across the area of operation. CENTCOM is in the process making a final decision to move that. The value of the joint contracting command which we, by the way, have institutionalized in our doctrine is evidence. So he is already -- that CENTCOM is already changing the force structure of those folks that manage contractors and they are weighing the fight in the Afghan location, the contractor fight if you will.

That will probably mean, in fact I can't say with certainty, but I'm pretty certain that the flag of that headquarters is going to move. It's going to move. General Petraeus clearly sees the value of that. He developed a very, very good working relationship with the commander of JCC. It's another good example where Congress has done something and we were kicking and screening, but we did it and it turned out to be the right thing.

In Section 854 in 2007, you said that you've to have one flag or general officer responsible for contracting in the region and that guy has to report to the combatant commander. Doesn't report to the chief of staff, doesn't report to the J-4, reports to the combatant commander. Based upon what I see now with General Petraeus, he -- I mean he has embraced that.

You had General Scott here last week. Admiral Dussault who was his replacement just came back a few weeks ago. I mean, they are in the hip-pocket of the combatant commander. That would not have happened, I'm certain, had we not been mandated by law to do that. So that -- you know, I can whine about being told what to do, but the reality is there have been some good things that come out of that. But that simple shift to Afghanistan is happening and we're not waiting for the numbers to change, we're shifting in anticipation.

MR. MOSER: I think in the two very important ones, you know, we had -- we've major programs with our International Narcotics and Law Enforcement Bureau in both Afghanistan and Iraq. Some of their -- there had been problems in early on in the Iraq conflict about oversight problems. It was a 30-position staff up in INL staffing.

You know, Mr. Bowen, the special inspector general, has pointed out the swimming pool that was built incorrectly under a DynCorp contract. I think that I can guarantee you those kind of mistakes will not be repeated because people in the State Department have really taken the contract oversight part of that very, very seriously.

I will give you another example. Our whole relation to private security contractors in Iraq, and as we -- and if this function does plus up in Afghanistan, it's getting tighter and tighter.

After the Nisour Square shooting in 2007, Mr. Kennedy, currently our undersecretary for management did an extensive report about how we increased the oversight of these contractors. Those report -- that report's recommendations have been pretty much wholly implemented, or we felt like that the reason for implementation has been overtaken by advance. And you're going to see that kind of focus.

Now, to get to one that is important to me, because I really do care about this stuff, I am going to make sure as we ramp up in Afghanistan that we count every vehicle, and every piece of capitalized property that the contractors hold because I am tired of getting a tough time from my external auditor about contractor-held property.

Now, those are the kind of things that are really important to me, because those are things that I am directly accountable for. And that is -- and -- so yeah, I think I've learned my lesson and I want to make sure I don't get in trouble again.

MR. HUTTON: I think we've heard some good examples of how lessons learned or -- at least we're thinking about Afghanistan and we now have some operations and things in Iraq that we can maybe transfer. But the thing that I just want to at least put out on the table -- and this is something I observed early on, I was first there in '03 in Iraq was, you know, our -- will we make sure that we have sufficient numbers and sufficiently trained contracting people and the oversight people.

When I was doing the work in Afghanistan, back in '04-'05, one of the things we found was that, I think -- believe it was USAID contracting officers, when you just look at the dollars that they had to manage as a contracting officer per person, it was -- they were huge.

Now, that's not a great metric, but it at least gives you some insight as to workload. The thing that you want to avoid is having so few staff that you end up doing these quick, urgent, and compelling type contracts, where you don't have sufficient time to do some decent acquisition planning, and get a little competition and things like that.

So I would just -- as we're perhaps putting some more emphasis on Afghanistan, and we talked, and we've heard about some of the new initiatives, and I think they're all in positive direction. I would be looking to see, well, how are we doing on just the sufficiency in the trained contracting and non-contracting.

MS. SHAUKET: I would agree. It's -- for us, it's really an issue of resources, and the amount of our staff that are working on the Afghanistan and Iraq programs has been significant.

I think a difference was when we first went into Iraq we had staff dedicated both in the field and in Washington to just issuing all the contracts. Contracting officers around the world pulled together to do that.

We can do that in the short term, it's very hard to do it in the long term. Right now we have seven contracting officers, five in Kabul, and we have additional contracting officers departing out of -- reporting out of Thailand. But we need more resources in order to be able to do this right. And we need more and better trained contracted officers, technical representatives as well.

It is a very different environment for us and for our partners when we're in Afghanistan. We had 407 of our contractor personnel killed in Afghanistan compared to four in Iraq. That's a significant number.

The challenges for us are very, very great there. And we need to recognize that we continue to try to compete to bring in new organizations. But there are very few that are going to be operating in those environments. And so we need to ensure that we have the resources to do the proper oversight.

REP. WITTMAN: That's very, I think, timely. I know that Secretary Clinton is at a conference talking about aid to Afghanistan and Pakistan. In fact her comments just yesterday were -- are we're going to have a concerted effort within the state department and USAID to reform the process. She also said I'm very committed to it.

I know that it's a challenge because we're dealing with decades of practice, so it does seem as though there is an acknowledgement there and a real emphasis on making sure that that part of the process gets the kind of attention that it deserves.

So I appreciate what you all are doing to bring all of the different pieces of this together. I think it's a Herculean challenge at best. And I appreciate the efforts that you all are putting forward.

Mr. Chairman, with that I finish my line of questioning.

REP. SNYDER: Thank you.

Mr. Motsek, we have talked about you're not interested in major piece of the legislation, I mean, Congress, and I understand that.

For each of you, including Mr. Hutton, what do you need from us?

In fact, why don't we start with Mr. Hutton? Just a change of order here.

MR. HUTTON: Well, quite frankly I can't think of any of our work right now that -- what we've been pushing Congress, one of our recommendations or matters of consideration, I think this type of form, having this type of dialogue, getting folks up here talking about what they're doing and bringing some light, and some good questions that we're getting here. This type of oversight I think helps to keep pushing it along.

You know, the thing I want to guard against is that maybe some of this positive steps we're taking aren't because of personality driven. I want to make sure that there is processes in place and there is going to be something sustainable about it.

And I do think there is -- over the last couple of years, based on the work that we've done, there has been some pretty big steps here. I mentioned some of them today. But I think it's no time to kind of take our eye off the ball. And I think a forum like this is very productive.

REP. SNYDER: Ms. Shauket.

MS. SHAUKET: We'll you've recognized that we are different than our colleagues here at the table with us. USAID is a very small organization. Our resources are limited.

We appreciate the understanding that you've had in realizing the challenges that we've had to implement the -- this broad system. We will continue to devote ourselves to them. We're committed to it. And we appreciate your continued patience as we do resource in order to be able to meet these objectives.

MR. MOSER: Mr. Snyder, I think that the main thing that I would ask you for is that we would appreciate Congress' continued interest in this issue. Because it -- you know, we have our own budgetary process, which goes to OMB and the president. And we definitely respect that. But we do want to make sure that this whole issue is about contractors, and how our relationship to contractors, and how we use them effectively.

It continues to be a topic that Congress is involved in, because we really do need that input, I think, from Capitol Hill in order to make the best decisions, the best decisions for the U.S. government.

MR. MOTSEK: Sir, actually I did in the legislation.

MR. MOSER: He always talks about it.

MR. MOTSEK: Not me, no.

Four areas, sir. One is resourcing. The dollars and the resources that we are talking about with all the issues we've laid on the table with you are very, very modest. But because they are so modest they get lost in the noise of the big departments.

So unless I have someone here providing eyes on the target and making sure that we are adequately resourced we're going to have a challenge.

Virtually everything we've done up to this point has been funded via supplementals, because that was the fastest way of doing business. We have to be able, and we need our help -- your help to get that transition into base budget language and base budget resourcing.

The second issue is the threshold that we report things. We talked about in the MOU. It's $100,000.

There is actually other pieces in the legislation that talks about $25,000 threshold to put things into the system. But we --

REP. SNYDER: But the ($)100,000 was not by statute, correct?

MR. MOTSEK: It's in --

MR. MOSER: No, it's actually in the statute. Yeah, it's in the statute.

MR. MOTSEK: No, it's in the statute. I believe it is. I know it's in the MOU so I -- let me just say it's in the MOU.

REP. SNYDER: Yeah, it's in the MOU --

MR. MOSER: Yeah.

MR. MOTSEK: What I would say is that we've talked with staff up here before in both houses and realistically that's an -- the ($)25,000 is clearly unobtainable. There is too much churn.

What we proposed, and we're going to ask is for -- have some help to raise that threshold to ($)250,000 in 30 days or less, because otherwise, there is a churn. And most of that work is really more vendor deliveries than it is actually hiring of contractors. And that churn will let us become more accurate with what we're doing.

Third thing we need a little help on is on definitions. Because in different parts of the statutes when we talk about contractors, are you talking about contractors or bona fide contract, are you talking about craters (ph), are you talking about grants? We need consistency across the board so we understand exactly what we want to measure.

We know what we want to measure, but when you go into the inter- departmental side of the house we need some sort of standards.

The last thing I need -- I would ask you to consider is -- and we've talked around it a couple of times, is that you're talking about the big three inside the area of operation. But we're not the only agencies with folks in there. So it may be wise for you to police up the other agencies and say, you know, you ought to be reporting your numbers as well.

We've got to defend them, we've got to feed them, we've got to protect them in Iraq. And they are in the battle space in both locations. So you may want to consider to pick up those 240 plus Justice Department contractors that are our there in -- by directing us to do that.

Because again it took statute to force us into the MOU. I can't speak for the rest of -- you know, the government. But I suspect it's going to require the same thing to piece -- pick up the smaller pieces.

REP. SNYDER: Mr. Wittman, are you -- do you have any further questions?

REP. WITTMAN: I don't.

REP. SNYDER: I have a couple more I want to ask.

Mr. Hutton, how accurate is SPOT?

MR. HUTTON: Right now -- I'll answer it this way. Right now SPOT has the capability to bring in different data. For example, a year ago they couldn't track SPOT casualties -- contractors killed.

There is a capability now, but it's not live yet in terms of -- I think they're just might be starting to populate --

REP. SNYDER: Now, we had someone, we had -- (cross talk.)

MR. HUTTON: But I'm talking across the board for all three agencies. So I think that was a big change.

Some of the contracting information they're now -- I think they now have the capacity to bring in some data through the Federal Procurement Data System. I think that's something that -- if you were to look into it right now, I don't think you'd see it fully implemented in that way. But I think you have the capacity and the capability to do it right now.

Our work last year and this year where we've been required to identify the number of active contracts, dollar values, descriptions of the contracts, number of personnel in the areas of responsibility that we're talking about, Iraq and Afghanistan, as we're doing our last year SPOT, it wasn't going to get us there. This year's SPOTs right now is not going to get us there, because it's just not ready yet.

Hopefully, it will be when we get around to our third year because it's pretty data intensive for us. It's basically casting out a large net.

DOD has given us multiple spreadsheets and things like that for information. USAID, I think last year a lot of it was manual, state as well. So right now, I don't think I could go to SPOT and be able to report on our objective as part of the Section 863.

But I think just in one year the capability of SPOT -- and then we talked about the letters of authorizations -- that's huge, I think. Because that's leverage -- that's something that's going to -- one, you have to have it. So you're going to get into a system that contractors have to put in -- so that's a big thing.

But I don't think right now I would say that it's accurate enough. I think we're still going to use the census data on the personnel for DOD. And I know state and USAID, particularly in Afghanistan, you know, there is going to be these queries of the contractors, things like that. So I'd say that's the current status.

REP. SNYDER: My last question is -- I think it's important to ask one question that there is no way -- wouldn't see it coming.

So I'm going to -- it's going to be directed to you Mr. Hutton. You were a National War College graduate in 2002.

MR. HUTTON: Yes.

REP. SNYDER: Spent -- was it 10 months there, or about a year?

MR. HUTTON: Eleven.

REP. SNYDER: How do you think in the last five or six years -- it's like -- is it -- perhaps this topic today, how has your analysis, how has your work done in analyzing this topic, following this along, how has that been impacted by the experience you had with, I assume, probably 14 or 15 uniformed people spending 10 months with them, at the War College?

MR. HUTTON: Well, it's a great question. And it's quite larger than that. We had a fairly large state presence, some USAID, very large DOD, plus some international fellows.

It's also interesting, the fact that I was there at 9/11, and it was -- I still have a lot of those memories and -- because, you know, we immediately started talking about what we were going to doing in Iraq and Afghanistan, and it was interesting to watch interagency discussions going on.

And I think an institution like the National War College where you bring people in -- and I understand that even for some of the other things we're talking about today, we're trying to put more information into the service academies and things like that, understanding that contracts are often the way that government executes its mission, so we ought to be thinking about contracts.

It's just not something that, you know, you don't have to manage, or you don't have any insights on, and things like that.

But I would say institutions like the National War College where you get the different institutions talking about these issues, and over time I think it's getting engrained. I mean, they've been doing that for many years, it gets engrained into the psyche of participants. And I -- networks are created, and think it's very positive -- one aspect, but a positive aspect to encouraging this interagency dialogue -- (off mike.)

REP. SNYDER: I was out at the -- several of us were, Dr. Feners (ph) and others with the Industrial College of the Armed Forces, yesterday morning. And one of the things that came out in my informal meeting with about 10 students was a -- there they divide them into groups of 16, and they stick together for that period of time.

And the groups that did not have somebody from USAID or the State Department were very, very envious of those groups that did have one person. And they recognized the problem with this -- talk about today the staffing issue that you all just don't have a flow that you can say, yeah, we can send over 20 people for a year every year. You just -- you can't do that. So this issue is interrelated.

MR. HUTTON: Dr. Snyder, if I may say though. That experience, I think it's a great institution. But the best part of it was that I don't think I've ever been around such great Americans across the interagency. And it was a really valuable experience and gives you a lot of, you know, excitement, I think, about the type of talent that's in government.

And I think it's just a matter of whether it's a SPOT database or something else, getting the interagency process to function better. I think things like that will help.

REP. SNYDER: If only a person from GAO would say they get excited about the SPOT database.

(Laughter)

I think what's interesting too, with some difference when you were there in 2002 is there is -- everyone is really bought into the idea that the interagency has to work closer together, and we have our experience over the last several years. I think that's important.

I appreciate you all being here. I'm sorry we got delayed on votes. And it enables me to go home and tell my little two-year-old boy that I spent all afternoon talking about SPOT, so we are adjourned.

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