Hearing of the House Government Reform Committee on the Unprecedented Challenges: Contracting and Rebuilding Iraq
Federal News Service
HEADLINE: HEARING OF THE HOUSE GOVERNMENT REFORM COMMITTEE SUBJECT: UNPRECEDENTED CHALLENGES: CONTRACTING AND THE REBUILDING OF IRAQ
CHAIRED BY: REPRESENTATIVE TOM DAVIS (R-VA)
WITNESSES PANEL I:
DAVID M. WALKER, COMPTROLLER GENERAL, GENERAL ACCOUNTING OFFICE;
WILLIAM T. WOODS, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT, GENERAL ACCOUNTING OFFICE; NEAL P. CURTIN, DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT, GENERAL ACCOUNTING OFFICE;
LOCATION: 2154 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.
BODY:
REP. TOM DAVIS (R-VA): Good morning. I appreciate everyone's indulgence. The ranking member and myself have been trying to make this move as smoothly as we can for members. The committee will come to order. We meet here today to look into the challenges surrounding the complex tasks of coordinating and executing contracts amid the chaos of rebuilding Iraq.
Even before the conclusion of major military action, there were plans for a massive effort to rebuild Iraq's infrastructure and government. Those responsible knew this endeavor would require an enormous amount of contractor support. Anticipating the worst and recognizing the need for quick and decisive action, agency procurement professionals properly invoked the carefully circumscribed statutory flexibilities designed to quickly provide urgently needed goods and services.
I am referring here to contracts that were let just prior to or soon after the conclusion of major military action. The urgency and difficult circumstances surrounding the anticipated scenarios justified the use of limited competition, or in a few cases, single source awards. Although I am an advocate for full and open competition, Congress, in anticipation of war and other emergency scenarios, provided our procurement professionals with these flexibilities to deal with emergencies just like we had in Iraq.
The rebuilding of Iraq is a very monumental task. Saddam Hussein spent decades frittering away his nation's vast wealth on himself and his Baath Party cronies while little or nothing was spent to meet the urgent needs of the Iraqi people. Decades of neglect and inaction turned this once great nation into one where the majority of people lived in poverty and despair. However, with Saddam ousted, we're witnessing a rebirth of Iraq. Freedom and liberation have brought a new sense of urgency to the Iraqi people. They understand what's at stake and we need to do our part to sustain freedom while rebuilding their nation.
The task at hand is mammoth. It will be years before we are able to truly get Iraq running on its own. Yet, as each day passes, Iraqis are getting a better life thanks to dedicated American soldiers and civilians working there. Our reconstruction efforts are well under way even under life-threatening conditions.
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REP. BETTY McCOLLUM (D-MN): Thank you, Mr. Chairman, and thank you for the time. I find it rather curious that in the process report and several news articles that there was an Army lawyer, who was very concerned about the way that these contracts were being let, made a statement in fact that the contract should be held differently, that they should not be awarded the way that they were to Halliburton. Did you come across any of this? I find it in CBS News and other places on the Internet. Did you come across that at all?
MR. WALKER: My understanding-and I would ask for Bill to follow up-is that we did ascertain as a result of our review that there were certain differences of opinion within the Department of Defense and in fact within the Army, the general counsel's office, as to whether or not it was appropriate to issue a contract dealing with the planning for the oil services and the oil reconstruction, and that there were differences of opinion that exist within the Office of the General Counsel of the Army as well as within the department as a whole, but that, ultimately, the general counsel of the Department of Defense made the decision that he did feel that it was legal.
REP. McCOLLUM: Is the general counsel for the Department of Defense-I'm new to the committee-are they civilian or are they career military? Is that individual who made the decision to override, they are political appointee or are they career military?
MR. WOODS: I believe that the Department of Defense counsel, their senior-most counsel is a political appointee but these were made --
REP. McCOLLUM: Political appointee --
MR. WOODS: No, no. These were made-the memo that we saw was made by a career person in the Department of Defense General Counsel's office. This was a career individual who ultimately decided that, yes, this contingency planning task order was within the scope of the LOGCAP contract.
REP. McCOLLUM: After discussions with the political appointee, it sounds like --
MR. WALKER: Do you want to clarify this for the record since we're all on the road? So, Bill, just to confirm, there was a difference of opinion between the counsel for the Army and for the office, the general counsel for the secretary of Defense. But you're saying the documentation you have does not deal with the general counsel. It deals at the career level where the decision was made.
MR. WOODS: That's right. It was not the general counsel for the Department of Defense.
MR. WALKER: All right. That's important. I think it's important for you to understand.
REP. McCOLLUM: That's helpful to know.
REP. WAXMAN: Would the gentlelady yield?
REP. McCOLLUM: Yes, I would yield.
REP. WAXMAN: As I understand it, GAO thinks that the original career lawyer that thought the planning was outside the scope of the LOGCAP contract and that was his position. That's the one you believe is the correct position?
MR. WALKER: Our view is that the action that was taken was not in accordance with the law and it's consistent with the person-our view is consistent with the original Army general counsel person. At the same point in time, I think it's also important to note that, while we believe that it was not in accordance with the law, we also believe that it's likely that it could have qualified for one of the exceptions, given the urgency and the conditions that existed. They didn't attempt to do that but it's likely that they could have qualified for that. That's correct.
REP. McCOLLUM: Thank you. Reclaiming my time, I find this urgency and state of emergency rather interesting when this was a war that we chose to go into, where there was no urgency or emergency imminent threat by Iraq to our country. Could you please tell me, sir, I've been kind of concerned about the inventory, the manifest shipping things that I have read not only in news articles but in the letters that were provided. When you were doing your investigation, I know that you said you were not charged with finding fraud and abuse.
And once again, I want to know who is responsible then for finding fraud and abuse. We can't have the fox watching the hen-house and expecting everything to be caught.
But inventory, shipment and over-billing, it appears when people who work either as military personnel or civilian personnel made question of people who are familiar with how inventories and shipping receipts should be handled, they were told, "Oh, don't worry about it." What did you find in your investigation of that?
MR. CURTIN: Yeah. I think the way to respond to that, Congressman, is the whole concept that we saw in the early stages of the operation there in Iraq was to get the mission done and there was the cost consciousness which would have resulted in the kinds of questions you're raising there until at least December of '03.
REP. McCOLLUM: Well, sir, I would beg to differ that this isn't cost-it has something to do with cost but it also doesn't. If I'm at the 101st Airborne in Mosul and I have ordered protective gear or I have ordered food or I have ordered ammunition, I would certainly hope that, when it comes to me, I get the amount, the quantity, the size of what I ordered and without any shipping manifest going along with these convoys, I find that pretty hard to say that our soldiers were in fact being served very well. In private business, they are used constantly.