Military Operations
Implementation of Existing Guidance and Other Actions Needed to Improve DOD's Oversight and Management of Contractors in Future Operations Gao ID: GAO-08-436T January 24, 2008The Department of Defense (DOD) relies extensively on contractors to support deployed forces for services that range from food and housing services to intelligence analysis. Since 1997, GAO has reported on DOD's shortcomings in managing and overseeing its use of contractor support. Part of the difficulty attributed to these shortcomings is that no one person or entity that made the decision to send 129,000 contractors to Iraq. Rather, numerous DOD activities were involved, thus adding to the complexity of the problems which GAO identified in its past work on this topic. This testimony focuses on (1) the problems that DOD has faced in managing and overseeing its contractor support to deployed forces and (2) future challenges that DOD will need to address to improve its oversight and management of contractors at deployed locations. In addition, as you requested, we have developed several actions Congress may wish to consider requiring DOD to take. This testimony is based on previously issued GAO reports and testimonies on DOD's management and oversight of contractor support to deployed forces that focused primarily on U.S. efforts in Southwest Asia. This work was conducted in accordance with generally accepted government auditing standards.
DOD leadership needs to ensure implementation of and compliance with existing guidance to improve the department's oversight and management of contractors supporting deployed forces. While DOD issued a comprehensive guidance on contractor support to deployed forces in 2005, we found little evidence that DOD components were implementing this and other guidance. As a result, several long-standing problems have hindered DOD's management and oversight of contractors at deployed locations, even in cases where DOD and its components have developed guidance related to these problems. These problems include failure to follow planning guidance, an inadequate number of contract oversight and management personnel, failure to systematically collect and distribute lessons learned, and lack of comprehensive training for contract oversight personnel and military commanders. Our previous work in this area has identified several instances where poor oversight and management of contractors led to negative monetary and operational impacts. Based on our past work, several challenges will need to be addressed by DOD to improve the oversight and management of contractors supporting deployed forces in future operations and ensure warfighters are receiving the support they rely on in an effective and efficient manner. Those challenges include: (1) incorporating contractors as part of the total force, (2) determining the proper balance of contractors and military personnel in future contingencies and operations, (3) clarifying how DOD will work with other government agencies in future contingencies and operations, and (4) addressing the use and role of contractors into its plans to expand and transform the Army and the Marine Corps.
GAO-08-436T, Military Operations: Implementation of Existing Guidance and Other Actions Needed to Improve DOD's Oversight and Management of Contractors in Future Operations
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Testimony:
Before the Committee on Homeland Security and Governmental Affairs
Subcommittees, U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EST:
Thursday, January 24, 2008:
Military Operations:
Implementation of Existing Guidance and Other Actions Needed to Improve
DOD's Oversight and Management of Contractors in Future Operations:
Statement of William M. Solis Director Defense Capabilities and
Management:
GAO-08-436T:
GAO Highlights:
Highlights of GAO-08-436T, a report to the Committee on Homeland
Security and Governmental Affairs Subcommittees, U.S. Senate.
Why GAO Did This Study:
The Department of Defense (DOD) relies extensively on contractors to
support deployed forces for services that range from food and housing
services to intelligence analysis. Since 1997, GAO has reported on
DOD‘s shortcomings in managing and overseeing its use of contractor
support. Part of the difficulty attributed to these shortcomings is
that no one person or entity that made the decision to send 129,000
contractors to Iraq. Rather, numerous DOD activities were involved,
thus adding to the complexity of the problems which GAO identified in
its past work on this topic. This testimony focuses on (1) the problems
that DOD has faced in managing and overseeing its contractor support to
deployed forces and (2) future challenges that DOD will need to address
to improve its oversight and management of contractors at deployed
locations. In addition, as you requested, we have developed several
actions Congress may wish to consider requiring DOD to take.
This testimony is based on previously issued GAO reports and
testimonies on DOD‘s management and oversight of contractor support to
deployed forces that focused primarily on U.S. efforts in Southwest
Asia. This work was conducted in accordance with generally accepted
government auditing standards.
What GAO Found:
DOD leadership needs to ensure implementation of and compliance with
existing guidance to improve the department‘s oversight and management
of contractors supporting deployed forces. While DOD issued a
comprehensive guidance on contractor support to deployed forces in
2005, we found little evidence that DOD components were implementing
this and other guidance. As a result, several long-standing problems
have hindered DOD‘s management and oversight of contractors at deployed
locations, even in cases where DOD and its components have developed
guidance related to these problems. These problems include failure to
follow planning guidance, an inadequate number of contract oversight
and management personnel, failure to systematically collect and
distribute lessons learned, and lack of comprehensive training for
contract oversight personnel and military commanders. Our previous work
in this area has identified several instances where poor oversight and
management of contractors led to negative monetary and operational
impacts.
Based on our past work, several challenges will need to be addressed by
DOD to improve the oversight and management of contractors supporting
deployed forces in future operations and ensure warfighters are
receiving the support they rely on in an effective and efficient
manner. Those challenges include: (1) incorporating contractors as part
of the total force, (2) determining the proper balance of contractors
and military personnel in future contingencies and operations, (3)
clarifying how DOD will work with other government agencies in future
contingencies and operations, and (4) addressing the use and role of
contractors into its plans to expand and transform the Army and the
Marine Corps.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-436T]. For more information, contact
William M. Solis at (202) 512-8365 or solisw@gao.gov.
[End of section]
I am pleased to be here today to discuss a number of issues regarding
the oversight and management of contingency contracting in hostile
zones. As you know, the Department of Defense (DOD) relies extensively
on contractors for services that include communication services,
interpreters who accompany military patrols, base operations support
(e.g., food and housing), weapons systems maintenance, and intelligence
analysis to provide support to our military operations in Southwest
Asia. Our previous work has highlighted long-standing problems
regarding the oversight and management of contractors supporting
deployed forces and we continue to conduct work looking at various
aspects of these problems. Many of the problems we see in Iraq and
Afghanistan stem from these long-standing problems and need to be
viewed in that context. Moreover, although DOD estimated in its October
2007 report to Congress that 129,000 contractors support deployed
forces in Iraq, no one person or organization made a decision to send
129,000 contractors to Iraq. Rather, the decision to send contractors
to support forces in Iraq was made by numerous DOD activities both
within and outside of Iraq. The scope and scale of contract support to
deployed forces therefore contributes to the complexity of the problems
we have identified in our past work on this topic.
My testimony today will focus on (1) the problems that DOD has faced in
managing and overseeing its contractor support to deployed forces and
(2) future challenges that DOD will need to address to improve its
oversight and management of contractors at deployed locations. In
addition, as you requested, we have developed several actions the
Congress may wish to consider requiring DOD to take.
In preparing this testimony, we relied on previously issued GAO reports
and testimonies on DOD's management and oversight of contractor support
to deployed forces that focused primarily on our efforts in Southwest
Asia. This work was conducted in accordance with generally accepted
government auditing standards. A list of GAO products used to prepare
this testimony is located in appendix 1.
Summary:
DOD leadership needs to ensure implementation of and compliance with
existing guidance to improve the department's oversight and management
of contractors supporting deployed forces. For example, DOD's 2005
issuance of comprehensive guidance on contractor support to deployed
forces is a noteworthy improvement. However, we found little evidence
that DOD components were implementing this guidance or much of the
additional guidance addressing the management and oversight of
contractors supporting deployed forces. As a result, several long-
standing challenges have hindered DOD's management and oversight of
contractors at deployed locations, even in cases where DOD and its
components have developed guidance related to these challenges.
Examples of problems include failure to follow planning guidance, an
inadequate number of contract oversight and management personnel,
failure to systematically collect and distribute lessons learned, and
lack of comprehensive training for contract oversight personnel and
military commanders. For example, we found that the Army did not follow
its planning guidance when deciding to use the Army's Logistics
Capabilities Augmentation Program (LOGCAP) in Iraq, resulting in the
plan being revised seven times in less than 1 year. Moreover, too few
contract oversight and management personnel were deployed to locations
using contractor support. Having too few contract oversight personnel
results in surveillance not being performed sufficiently, and
ultimately DOD not having reasonable assurance that contractors are
meeting their contract requirements efficiently and effectively.
Although DOD policy requires the collection and distribution of lessons
learned to the maximum extent possible, our prior work found DOD lacks
sufficient procedures to help ensure that lessons learned are collected
and shared. In addition, DOD has long recognized the need to
comprehensively train contract oversight personnel and military
commanders; however, DOD does not routinely incorporate information
about contractor support for deployed forces in its pre-deployment
training of military personnel. During the course of our work, we found
examples where limited or no pre-deployment training caused a variety
of problems for military commanders in a deployed location, such as not
being able to adequately plan for the use of contractors upon
deployment, not knowing what services would be provided through
contractors, or not being prepared to provide force protection. We have
found several instances where poor oversight and management of
contractors has led to negative monetary and operational impacts.
Based on our past work, several challenges will need to be addressed by
DOD to improve the oversight and management of contractors supporting
deployed forces in future operations and ensure warfighters are
receiving the support they rely on in an effective and efficient
manner. Those challenges include a number of broader issues, such as:
(1) incorporating contractors as part of the total force, (2)
determining the proper balance of contractors and military personnel in
future contingencies and operations, (3) clarifying how DOD will work
with other government agencies in future contingencies and operations,
and (4) addressing the use and role of contractors into its plans to
expand and transform the Army and the Marine Corps.
As requested, we considered specific legislative remedies for the
challenges facing DOD. While we believe that DOD bears the primary
responsibility for taking actions to address these challenges, these
are three actions the Congress may wish to consider requiring DOD to
take in order to move the debate forward:
* Determine the appropriate balance of contractors and military
personnel as it shapes the force for the future.
* Include the use and role of contractor support to deployed forces in
force structure and capabilities reporting.
* Ensure that operations plans include specific information on the use
and roles of contractor support to deployed forces.
Background:
The U.S. military has long used contractors to provide supplies and
services to deployed U.S. forces, and more recently contractors have
been involved in every major military operation since the 1991 Gulf
War.[Footnote 1] However, the scale of contractor support DOD relies on
today in Iraq and elsewhere throughout Southwest Asia has increased
considerably from what DOD relied on during previous military
operations, such as Operation Desert Shield/Desert Storm and in the
Balkans. Moreover, DOD's reliance on contractors continues to grow. In
December 2006, the Army alone estimated that almost 60,000 contractor
employees supported ongoing military operations in Southwest Asia. In
October 2007, DOD estimated that the number of contractors in Iraq to
be about 129,000. By way of contrast, an estimated 9,200 contractor
personnel supported military operations in the 1991 Gulf War. Factors
that have contributed to this increase include reductions in the size
of the military, an increase in the number of operations and missions
undertaken, and DOD's use of increasingly sophisticated weapons
systems.
DOD uses contractors to meet many of its logistical and operational
support needs during combat operations, peacekeeping missions, and
humanitarian assistance missions. Today, contractors located throughout
Southwest Asia provide U.S. forces with such services as linguist
support, equipment maintenance, base operations support, and security
support. In Iraq and Afghanistan, contractors provide deployed U.S.
forces with communication services; interpreters who accompany military
patrols; base operations support (e.g., food and housing); weapons
systems maintenance; intelligence analysis; and a variety of other
support. Contractors also provide logistics support such as parts and
equipment distribution, ammunition accountability and control, port
support activities, and support to weapons systems and tactical
vehicles. For example, in Kuwait and Qatar the Army uses contractors to
refurbish, repair, and return to the warfighters a variety of military
vehicles, such as the Bradley Fighting Vehicle, armored personnel
carriers, and the High-Mobility, Multi-Purpose Wheeled Vehicle (HMMWV).
Since our initial work on the use of contractors to support deployed
forces in 1997, DOD has taken a number of actions to implement
recommendations that we have made to improve its management of
contractors. For example, in 2003 we recommended that the department
develop comprehensive guidance to help the services manage contractors'
supporting deployed forces. In response to this recommendation, the
department issued the first comprehensive guidance dealing with
contractors who support deployed forces in October 2005. Additionally,
in October 2006, DOD established the office of the Assistant Deputy
Under Secretary of Defense for Program Support to serve as the office
with primary responsibility for contractor support issues. This office
has led the effort to develop and implement a database which, when
fully implemented, will allow by-name accountability of contractors who
deploy with the force. These database implements recommendations we
made in 2003 and 2006 to enhance the department's visibility over
contractors in locations such as Iraq and Afghanistan.
DOD has Experienced Problems with Its Oversight and Management of
Contractors at Deployed Locations, But Has Taken Some Steps to Address
These Problems:
DOD leadership needs to ensure implementation of and compliance with
existing guidance to improve the department's oversight and management
of contractors supporting deployed forces. Several long-standing
challenges have hindered DOD's management and oversight of contractors
at deployed locations, even though in many cases DOD and its components
have developed guidance related to these challenges. These challenges
include failure to follow long-standing planning guidance, ensure an
adequate number of trained contract oversight and management personnel,
systematically collect and distribute lessons learned, and
comprehensively train contract oversight personnel and military
commanders. We have found several instances where poor oversight and
management of contractors has led to negative monetary and operational
impacts.
DOD Leadership Needs to Ensure Implementation of and Compliance with
Existing Guidance Regarding Oversight and Management of Contractors:
Based on our previous work, we believe for DOD to improve its oversight
and management of contractors supporting deployed forces in future
operations and ensure warfighters are receiving the support they rely
on in an effective and efficient manner, DOD leadership needs to ensure
implementation of and compliance with existing guidance to improve the
department's oversight and management of contractors supporting
deployed forces. DOD has taken a number of steps over the last several
years to improve and consolidate its long-standing guidance pertaining
to the use of contractors to support deployed force. Moreover, largely
in response to the recommendation in our 2006 report, DOD established
the office of the Assistant Deputy Under Secretary of Defense (Program
Support) within the office of the Deputy Under Secretary of Defense for
Logistics and Materiel Readiness to serve as the focal point to lead
DOD's efforts to improve contract management and oversight. However, as
we reported in 2006, although the issuance of DOD's new guidance was a
noteworthy improvement, we found little evidence that DOD components
were implementing this guidance or much of the additional guidance
addressing the management and oversight of contractors supporting
deployed forces. For example, additional DOD and service guidance
requires, among other things, the collection of lessons learned, the
appointment of certified contracting officer's representatives, and
that all personnel receive timely and effective training to ensure they
have the knowledge and other tools necessary to accomplish their
missions. Given DOD's continued difficulties meeting these
requirements, it is clear that guidance alone will not fix these long-
standing problems. Therefore, we believe that the issue is now centered
on DOD providing the leadership to ensure that the existing guidance is
being implemented and complied with.
DOD Has Not Followed Long-standing Planning Guidance Regarding the Use
of Contractors to Support Deployed Forces:
As we have noted in previous reports and testimonies, DOD has not
followed long-standing planning guidance, particularly by not
adequately factoring the use and role of contractors into its planning.
For example, we noted in our 2003 report that the operations plan for
the war in Iraq contained only limited information on contractor
support.[Footnote 2] However, Joint Publication 4.0,[Footnote 3] which
provides doctrine and guidance for combatant commanders and their
components regarding the planning and execution of logistic support of
joint operations, stresses the importance of fully integrating into
logistics plans and orders the logistics functions performed by
contractors along with those performed by military personnel and
government civilians. Additionally, in our 2004 report, we noted that
the Army did not follow its planning guidance when deciding to use the
Army's Logistics Capabilities Augmentation Program (LOGCAP) in
Iraq.[Footnote 4] According to Army guidance, integrated planning is a
governing principle of contractor support, and for contractor support
to be effective and responsive, its use needs to be considered and
integrated into the planning process. Proper planning identifies the
full extent of contractor involvement, how and where contractor support
is provided, and any responsibilities the Army may have in supporting
the contractor. Additional Army guidance stresses the need for the
clear identification of requirements and the development of a
comprehensive statement of work early in the contingency planning
process. Because this Army guidance was not followed, the plan to
support the troops in Iraq was not comprehensive and was revised seven
times in less than 1 year. These revisions generated a significant
amount of rework for the contractor and the contracting officers.
Additionally, time spent reviewing revisions to the task orders is time
that is not available for other oversight activities. While operational
considerations may have driven some of these changes, we believe others
were more likely to have resulted from ineffective planning. The lack
of planning also impacts the post-award administration of contracts.
For example, in our 2004 report,[Footnote 5] we noted that one reason
the Army was unable to definitize the LOGCAP task orders was the
frequent revisions to the task orders. Without timely definitization of
task orders, the government is less able to control costs.
Our 2003 report also concluded that essential contractor services had
not been identified and backup planning was not being done.[Footnote 6]
DOD policy requires DOD and its components to determine which
contractor-provided services will be essential during crisis situations
and to (1) develop and implement plans and procedures to provide a
reasonable assurance of the continuation of essential services during
crisis situations and (2) prepare a contingency plan for obtaining the
essential service from an alternate source should the contractor be
unable to provide it. According to DOD Instruction 3020.37, commanders
have three options if they cannot obtain reasonable assurance of
continuation of essential contractor service: they can obtain military,
DOD civilian, or host nation personnel to perform the services, they
can prepare a contingency plan for obtaining essential services, or
they can accept the risk attendant with a disruption of services during
crisis situations. However, our review found that essential contractor
services had not been identified and backup planning was not being
done. Without firm plans, there is no assurance that the personnel
needed to provide the essential services would be available when
needed.
Moreover, because DOD and its components have not reviewed contractor
support to identify essential services, the department lacks the
visibility needed to provide senior leaders and military commanders
with information on the totality of contractor support to deployed
forces. As we noted in 2003 and 2006, [Footnote 7] having this
information is important in order for military commanders to
incorporate contractor support into their planning efforts. For
example, senior military commanders in Iraq told us that when they
began to develop a base consolidation plan for Iraq, they had no source
to draw upon to determine how many contractors were on each
installation. Limited visibility can also hinder the ability of
commanders to make informed decisions regarding base operations support
(e.g., food and housing) and force protection for all personnel on an
installation. Similarly, we found that limited visibility over
contractors and the services they provide at a deployed location can
hinder the ability of military commanders to fully understand the
impact that decisions such as restrictive installation access and
badging requirements can have on the ability of contractors to provide
services.
As noted above, DOD has taken some steps to improve its visibility over
contractor support. In addition, according to a October 2007 DOD report
to Congress on managing contractor support to deployed forces, the
department is developing a cadre of contracting planners whose primary
focus will be to review contractor support portions of combatant
commanders' operations plans and contingency plans, including the
requirements for contractor services.
DOD Lacks an Adequate Number of Trained Contract Oversight and
Management Personnel:
As we noted in several of our previous reports, having the right people
with the right skills to oversee contractor performance is crucial to
ensuring that DOD receives the best value for the billions of dollars
spent each year on contractor-provided services supporting forces
deployed to Iraq and elsewhere. Since 1992, we designated DOD contract
management as a high-risk area, and it remains so today, in part, due
to concerns over the adequacy of the department's acquisition
workforce, including contract oversight personnel. While this is a DOD-
wide problem, having too few contract oversight personnel presents
unique difficulties at deployed locations given the more demanding
contracting environment as compared to the United States. Although we
could find no DOD guidelines on the appropriate number of personnel
needed to oversee and manage DOD contracts at a deployed location,
several reviews by GAO and DOD organizations have consistently found
significant deficiencies in DOD's oversight of contractors due to an
inadequate number of trained personnel to carry out these duties.
In 2004, we reported that DOD did not always have enough contract
oversight personnel in place to manage and oversee its logistics
support contracts such as LOGCAP and the Air Force Contract
Augmentation Program (AFCAP). As a result, the Defense Contract
Management Agency was unable to account for $2 million worth of tools
that had been purchased using the AFCAP contract. The following year,
we reported in our High-Risk Series that inadequate staffing
contributed to contract management challenges in Iraq.[Footnote 8]
During our 2006 review, several contract oversight personnel we met
with told us DOD does not have adequate personnel at deployed
locations. For example, a contracting officer's representative for a
linguistic support contract told us he had only one part-time
assistant, limiting his ability to manage and oversee the contractor
personnel for whom he was responsible. The official noted that he had a
battalion's worth of people with a battalion's worth of problems but
lacked the equivalent of a battalion's staff to deal with those
problems. Similarly, an official with the LOGCAP Program Office told us
that the office did not prepare to hire additional budget analysts and
legal personnel in anticipation of an increased use of LOGCAP services
due to Operation Iraqi Freedom. According to the official, had adequate
staffing been in place early, the Army could have realized substantial
savings through more effective reviews of the increasing volume of
LOGCAP requirements. More recently, we reported that the Army did not
have adequate staff to conduct oversight of an equipment maintenance
contract in Kuwait. During our review of the contract, we found that
vacant authorized oversight personnel positions included a quality
assurance specialist, a property administrator, and two quality
assurance inspectors. Army officials also told us that in addition to
the two quality assurance inspectors needed to fill the vacant
positions, more quality assurance inspectors were needed to fully meet
the oversight mission. According to Army officials, vacant and reduced
inspector and analyst positions meant that surveillance was not being
performed sufficiently in some areas and the Army was less able to
perform data analyses, identify trends in contractor performance, and
improve quality processes.
In addition to our work, a number of other reviews of DOD's contractor
oversight personnel have identified similar problems. A 2004 Joint
Staff review of the Defense Contract Management Agency's responsiveness
and readiness to support deployed forces found that the agency had not
programmed adequate resources to support current and future contingency
contract requirements. The review also found that the Defense Contract
Management Agency manpower shortages were aggravated by internal
policies that limited the ability of personnel to execute those
missions. More recently, the 2007 report of the Commission on Army
Acquisition and Program Management in Expeditionary Operations stated
that the Army lacks the leadership and military and civilian personnel
to provide sufficient contracting support to either expeditionary or
peacetime missions. According to the commission, Army contracting
personnel experienced a 600 percent increase in their workload and are
performing more complex tasks, while the number of Army civilians and
military in the contracting workforce has remained stagnant or
declined. As a result, the commission found that the vital task of post-
award contract management is rarely being done.
As we noted in our 2006 report,[Footnote 9] without adequate contract
oversight personnel in place to monitor its many contracts in deployed
locations such as Iraq, DOD may not be able to obtain reasonable
assurance that contractors are meeting their contract requirements
efficiently and effectively. However, some actions have been taken
since our report to address the issue of inadequate numbers of trained
contract oversight and management personnel. For example, in February
2007, the Deputy Assistant Secretary of the Army (Policy and
Procurement) issued guidance that for service contracts greater that
$2,500, the contracting officer shall appoint certified contracting
officer's representatives in writing, identify properly trained
contracting officer's representatives for active service contracts, and
ensure that a government quality assurance surveillance plan is
prepared and implemented for service contracts. In addition, Congress
has taken steps to improve oversight by increasing the budgets for the
Defense Contract Audit Agency, Defense Contract Management Agency, and
the Defense Department's Inspector General in the fiscal year 2008
Defense Department Appropriations.[Footnote 10]
DOD Is Not Systematically Collecting and Distributing Lessons Learned:
Although DOD and its components have used contractors to support
deployed forces in several prior military operations, DOD does not
systematically ensure that institutional knowledge regarding the use of
contractors to support deployed forces, including lessons learned and
best practices, is shared with military personnel at deployed
locations. We previously reported that DOD could benefit from
systemically collecting and sharing its institutional knowledge to help
ensure that it is factored into planning, work processes, and other
activities.[Footnote 11] We have also made several recommendations
that, among other things, called for DOD to incorporate lessons learned
from its experience in the Balkans to improve the efficiency and
effectiveness of the Army's LOGCAP contract, implement a departmentwide
lessons-learned program to capture the experiences of military units
that have used logistics support contracts, and establish a focal point
within the Office of the Under Secretary of Defense to lead and
coordinate the development of a departmentwide lessons-learned program
to collect and distribute the department's institutional knowledge
regarding all forms of contractor support to deployed forces.[Footnote
12]
Although DOD has policy requiring the collection and distribution of
lessons learned to the maximum extent possible, we found in our
previous work that no procedures were in place to ensure that lessons
learned are collected and shared. For example, DOD has established the
Joint Lessons Learned Program, designed to enhance joint capabilities
through discovery, knowledge development, implementation, and sharing
of lessons learned from joint operations, training events, exercises,
and other activities.[Footnote 13] The program applies to the Joint
Staff, combatant commands, services, and combat support agencies that
are to coordinate activities and collaboratively exchange lesson
observations, findings, and recommendation to the maximum extent
possible. According to DOD policy, combatant commands are responsible
for executing and supporting joint lessons learned functions including
lesson discovery, knowledge development, and implementation activities.
U.S. Joint Forces Command is responsible for developing and
implementing the capability to collect and analyze observations from
current operations and ensuring key findings are appropriately
disseminated.
The Army regulation which establishes policies, responsibilities, and
procedures for the implementation of the LOGCAP program makes customers
that receive services under the LOGCAP contract responsible for
collecting lessons learned. Nonetheless, we have repeatedly found that
DOD is not systematically collecting and sharing lessons learned on the
use of contractors to support to deployed forces. Despite years of
experience using contractors to support forces deployed to the Balkans,
Southwest Asia, Iraq, and Afghanistan, DOD has made few efforts to
leverage this institutional knowledge. As a result, many of the
problems we identified in earlier operations have recurred in current
operations. In 2004, we reported that despite over 10 years of
experience in using logistics support contracts, the Army continued to
experience the same types of problems it experienced during earlier
deployments that used LOGCAP for support.[Footnote 14] For example, we
found that U.S. Army, Europe, which has had the most experience in
using logistics support contracts, has not consolidated its lessons
learned and made them available for others. Similarly, we learned that
a guidebook developed by U.S. Army, Europe on the use of a logistical
support contract was not made available to military commanders in Iraq
until mid-2006.
During the course of our 2006 work, we found no organization within DOD
or its components responsible for developing procedures to capture
lessons learned on the use of contractor support at deployed
locations.[Footnote 15] Likewise, we found that neither the Joint
Force's Command Joint Center for Operational Analysis nor the Army's
Center for Army Lessons Learned was actively collecting lessons learned
on the use of contractor support in Iraq. We noted that when lessons
learned are not collected and shared, DOD and its components run the
risk of repeating past mistakes and being unable to build on the
efficiencies and effectiveness others have developed during past
operations that involved contractor support. We also found a failure to
share best practices and lessons learned between units as one redeploys
and the other deploys to replace it. As a result, new units essentially
start at ground zero, having to resolve a number of difficulties until
they understand contractor roles and responsibilities.
DOD Does Not Comprehensively Train Contract Oversight Personnel and
Military Commanders:
DOD does not routinely incorporate information about contractor support
for deployed forces in its pre-deployment training of military
personnel, despite the long-standing recognition of the need to provide
such information. We have discussed the need for better pre-deployment
training of military commanders and contract oversight personnel since
the mid-1990s and have made several recommendations aimed at improving
such training as shown in figure 1.
Figure 1: Previous GAO Recommendations Highlighting the Need for Better
Training on the Use of Contractor Support to Deployed Forces:
This figure is a timeline showing previous GAO recommendations
highlighting the need for better training on the use of contractor
support to deployed forces.
2/97: Providing training to commanders on using LOGCAP, including
information on contractor capabilities and roles and responsibilities
in planning an execution;
9/00: Direct a more extensive pre-deployment training program for all
contract oversight personnel;
6/03: Develop training courses for commanding officers and other senior
leaders deploying to locations with contractor support;
7/04: Develop and implement training courses on the role of commanders
in others in the contracting process for commanding officers and other
senior leaders deploying to locations with contractor support;
7/05: Develop a training package to ensure commanders deploying to Iraq
have a clear understanding of the role of private security providers in
Iraq and the support the military provides to them.
[See PDF for image]
Source: GAO.
[End of figure]
Moreover, according to DOD policy, personnel should receive timely and
effective training to ensure they have the knowledge and other tools
necessary to accomplish their missions. Nevertheless, we continue to
find little evidence that improvements have been made in terms of how
DOD and its components train military commanders and contract oversight
personnel on the use of contractors to support deployed forces prior to
their deployment. For example, in an October 2007 report to Congress on
managing contractor support to deployed forces, DOD discussed broad,
contractor management-related training programs that it intends to
implement in the future. Without properly trained personnel, DOD will
continue to face risks of fraud, waste, and abuse.
Limited or no pre-deployment training on the use of contractor support
can cause a variety of problems for military commanders in a deployed
location. As we reported in 2006, with limited or no pre-deployment
training on the extent of contractor support to deployed forces,
military commanders may not be able to adequately plan for the use of
those contractors.[Footnote 16] In its 2007 report, the Commission on
Army Acquisition and Program Management in Expeditionary Operations
found that combatant commands do not recognize the significance of
contracts and contractors in expeditionary operations, and concluded
that the Army needs to educate and train commanders on the important
operational role of contracting. Several military commanders we met
with in 2006 said their pre-deployment training did not provide them
with sufficient information regarding the extent of contractor support
that they would be relying on in Iraq. These commanders were therefore
surprised by the substantial number of personnel they had to allocate
to perform missions such as on-base escorts for third-country and host-
country nationals, convoy security, and other force protection support
to contractors. In addition, limited or no pre-deployment training for
military commanders on the use of contractor support to deployed forces
can result in confusion regarding their roles and responsibilities in
managing and overseeing contractors. For example, we found some
instances where a lack of training raised concerns over the potential
for military commanders to direct contractors to perform work outside
the scope of the contract, something commanders lack the authority to
do. As Army guidance makes clear, when military commanders try to
direct contractors to perform activities outside the scope of the
contract, this can cause the government to incur additional charges
because modifications would need to be made to the contract and, in
some cases, the direction may potentially result in a violation of
competition requirements. In addition, our 2005 report on the use of
private security contractors in Iraq noted that commanders told us they
received no training or guidance on how to work with private security
providers in Iraq. To highlight the lack of training and guidance,
representatives from one unit told us that they did not know there were
private security providers in their battle space until the providers
began calling for assistance. They also said that any information about
who would be in the battle space and the support the military should be
providing would be useful.
We also found that contract oversight personnel such as contracting
officer's representatives received little or no pre-deployment training
regarding their roles and responsibilities in monitoring contractor
performance. Many of the contracting officer's representatives we spoke
with in 2003 and 2006 said that training before they assumed these
positions would have better prepared them to effectively oversee
contractor performance. Although DOD has created an online training
course for contracting officer's representatives, individuals we spoke
with noted that it was difficult to set aside the time necessary to
complete the training once they arrived in Iraq. Furthermore, in most
cases, deploying individuals were not informed that they would be
performing contracting officer representative duties until after they
had deployed. We found several instances where the failure to identify
and train contracting officer's representatives prior to their
deployment hindered the ability of those individuals to effectively
manage and oversee contractors. For example, the contracting officer's
representative for an intelligence support contract in Iraq had not
been informed of his responsibilities prior to deploying and had no
previous experience working with contractors. The official told us he
found little value in the online training course and subsequently did
not believe this training adequately prepared him to execute his
contract oversight responsibilities, such as reviewing invoices
submitted by the contractor. Similarly, officials from a corps support
group in Iraq told us that until they were able to get a properly
trained contracting officer's representative in place, they experienced
numerous problems regarding the quality of food service provided by
LOGCAP. The 2007 report of the Commission on Army Acquisition and
Program Management in Expeditionary Operations also discussed the need
to train contracting officer's representatives and warned that the lack
of training could lead to fraud, waste, and abuse.
Some steps have been taken to help address the issue of pre-deployment
training of military commanders and contract oversight personnel. In
DOD's response to our 2006 report, the Director of Defense Procurement
and Acquisition Policy stated that the Army is making changes to its
logistics training programs to be better positioned to meet current and
future challenges.[Footnote 17] This included incorporating contracting
officer's representatives training into its basic and advanced training
for its ordnance, transportation, and quartermaster corps. In addition,
the Defense Acquisition University has updated its contingency
contracting course to include a lesson on contractors accompanying the
force. More recently, the National Defense Authorization bill for
fiscal year 2008 included a provision addressing the need for
contingency contractor training for personnel outside the acquisition
workforce. This provision requires that military personnel receive
training sufficient to ensure that they understand the scope and scale
of contractor support they will experience in contingency operations
and are prepared for their roles and responsibilities regarding
contractor oversight and program management among others.
DOD's Problems in Managing and Overseeing Contractors Have Had Negative
Impacts at Deployed Locations:
DOD's problems managing and overseeing contractors at deployed
locations make it difficult for the department to be assured that it is
getting the services it needs on time and at a fair and reasonable
price. Over the past few years, we reported some of the results of
these long-standing problems. While many of the situations we discuss
below highlight monetary consequences, poor contract management and
oversight can affect military operations as well. Furthermore, although
determining the extent of the financial impact is not always feasible
or practicable, the inability to quantify the financial impact should
not detract from efforts to achieve greater rigor and accountability in
DOD contracting practices. The following are examples of negative
impacts that have occurred at deployed locations.
* On January 23, 2008, we issued a report on the Army's equipment
maintenance contract in Kuwait and concluded that the Army did not
always follow key principles included in the Army Quality
Program.[Footnote 18] This instruction specifies the use of performance
information to perform root-cause analysis and foster continuous
improvement. In addition, the battalion's July 2006 draft maintenance
management plan requires that contractor performance data should be
analyzed to help identify the cause of new and/or recurring quality
problems and evaluate the contractor's performance. However, we found
that the Army did not begin to track contractor pass/fail rates until
July 2007. According to Army quality assurance officials, this metric
was not tracked and monitored because they did not have sufficient
quality assurance staff to perform such an analysis. By not tracking
and monitoring the percent of equipment submitted for Army acceptance
that failed quality assurance inspection, the Army did not know the
extent to which the contractor was meeting the specified maintenance
standard requirements nor could it identify problem areas in the
contractor's processes and initiate corrective action. Furthermore, our
analysis of Army data found that for five types of vehicles inspected
by quality assurance personnel between July 2006 and May 2007, 18
percent to 31 percent of the equipment presented to the Army as ready
for acceptance failed government inspection. In addition, some
equipment presented to the Army as ready for acceptance failed
government inspection multiple times, sometimes for the same
deficiencies. When the Army inspected equipment that did not meet
standards, it was returned to the contractor for continued repair. Our
analysis of Army data found that since May 2005 an additional 188,000
hours were worked to repair equipment after the first failed government
inspection, which translates into an additional cost of approximately
$4.2 million.
* In July 2004, we reported that the Air Force had used the Air Force
Contract Augmentation Program (AFCAP) contract to supply commodities
for its heavy construction squadrons because it did not deploy with
enough contracting and finance personnel to buy materials quickly or in
large quantities. Additionally, the U.S. Agency for International
Development has used the contract to provide disaster relief and
humanitarian assistance supplies. In some cases, the contractor simply
bought the supplies and delivered them to the customer under cost-plus
award fee task orders. We noted that the contractor had received more
than $2 million in award fees since February 2002 for these commodity
supply task orders. While permitted, the use of cost-plus award fee
task orders to obtain supplies may not be cost-effective, as the
government reimburses the contractor's costs and pays award fees for
orders with little risk. Air Force officials recognized that this
business arrangement may not be cost-effective. Under the current Air
Force Contract Augmentation Program (AFCAP) contract, commodities may
be obtained using only firm fixed price orders or cost-plus fixed fee
orders.
* The lack of sufficiently trained personnel can also lead to the
inefficient use of military personnel. In our December 2006 report,
officials with a Stryker brigade told us a lack of contractor
management training hindered their ability to resolve staffing issues
with a contractor conducting background screenings of third-country and
host-country nationals. In this case, shortages of contractor-provided
screeners forced the brigade to use its own intelligence personnel to
conduct screenings. As a result, those personnel were not available for
their primary intelligence-gathering responsibilities.
* In June 2004, we reported that a disagreement between the LOGCAP
contractor and the Defense Contract Audit Agency (DCAA) on how to bill
for services to feed soldiers in Iraq involved at least $88 million in
questioned costs. In this case, the statement of work required the
contractor to build, equip, and operate dining facilities at various
base camps and provide four meals a day for the base camp populations.
The statement of work did not specify, however, whether the government
should be billed on the camp populations specified in the statement of
work or on the actual head count. This is an important distinction
because the specified camp population was significantly higher than the
actual head count, and the subcontractors providing the services
generally billed the contractor for the specified base camp population.
A contractor analysis of selected invoices over a 4-month period found
that it had billed the government for food service for more than 15.9
million soldiers when only 12.5 million--more than 3.4 million fewer--
had passed through the dining facilities. DCAA believed that the
contractor should have billed the government on the actual head count
services, whereas the contractor believed that it should have billed
the government based on the camp populations specified in the statement
of work. A clearer statement of work, coupled with better DOD oversight
of the contract, could have prevented the disagreement and mitigated
the government's risk of paying for more services than needed.
Future Challenges DOD Will Need to Address to Improve Its Oversight and
Management of Contractors at Deployed Locations:
Looking at our past work, I would like to make a number of broad
observations about challenges we believe will need to be addressed by
DOD to improve the oversight and management of contractors supporting
deployed forces in future operations and ensure warfighters are
receiving the support they rely on in an effective and efficient
manner. There are four issues in particular that merit attention by
DOD: (1) incorporating contractors as part of the total force, (2)
determining the proper balance of contractors and military personnel in
future contingencies and operations, (3) clarifying how DOD will work
with other government agencies in future contingencies and operations,
and (4) addressing the use and role of contractors into its plans to
expand and transform the Army and the Marine Corps.
Incorporating Contractors as Part of the Total Force:
DOD relies on contractors as part of the total force, which the
department defines as its active and reserve military components, its
civil servants, and its contractors. As DOD's 2006 Quadrennial Defense
Review noted, "The department and military services must carefully
distribute skills among the four elements of the total force (Active
Component, Reserve Component, civilians, and contractors) to optimize
their contributions across the range of military operations, from peace
to war." Furthermore, in a November 2007 briefing on challenges and
opportunities associated with DOD's transformation efforts, the
Comptroller General called on DOD to employ a total force management
approach to planning and execution (e.g., military, civilian, and
contractors). Similarly, the 2007 report of the Commission on Army
Acquisition and Program Management in Expeditionary Operations called
on the Army to transform its culture with regard to contracting and
establish contracting as a core competency. Many of the long-standing
problems we have identified regarding the oversight and management of
contractor support to deployed forces stem from DOD's reluctance to
plan for contractors as an integral part of the total force. This is
evidenced by the fact that DOD does not incorporate the use and role of
contractors in its professional military education. For example, an
official from the Army's Training and Doctrine Command said it was
important that all DOD components incorporate into their institutional
training information on the use of contractors in deployed location so
that all military personnel who deploy have a basic awareness of
contractor support issues prior to deploying. We therefore recommended
in our 2006 report that DOD develop training standards for the services
on the integration of basic familiarity with contractor support into
their professional military education. This would be an important first
step towards incorporating the use and role of contractors across the
department.
Determining the Proper Balance of Contractors and Military Personnel in
Future Contingencies and Operations:
DOD needs to determine the appropriate balance between contractors and
military personnel in deployed locations in order to ensure its ability
to meet its future mission requirements while at the same time assuring
it has the capacity to oversee and manage contractors supporting those
future missions. As the Comptroller General stated in April 2007, given
DOD's heavy and increasing reliance on contractors in Iraq and
elsewhere, and the risks this reliance entails, it may be appropriate
to ask if DOD has become too reliant on contractors to provide
essential services.[Footnote 19] This is becoming a more important
issue, as DOD becomes increasingly involved in missions such as
stability operations. Looking towards the future, the department needs
to consider how it will use contractors to support those missions and
how it will ensure the effective management and oversight of those
contractors. What is needed is a comprehensive, forward-looking review
of contractor support to deployed forces that provides the proper
balance between contractor support and the core capabilities of
military forces over the next several years. The National Defense
Authorization bill for fiscal year 2008 requires the Secretary of
Defense to conduct, every 4 years, a comprehensive assessment of the
roles and missions of the armed forces and the core competencies and
capabilities of DOD to perform and support such roles and missions.
This could provide the foundation for a comprehensive examination of
the support DOD will require contractors to provide in future
operations and core capabilities the department believes it should not
be relying on contractors to perform. Only when DOD has established its
future vision for the use and role of contractors supporting deployed
forces can it effectively address its long-term capability to oversee
and manage those contractors.
Clarifying How DOD will Work with Other Government Agencies in Future
Contingencies and Operations:
As DOD works to improve its oversight and management of contractors
supporting deployed forces, it is increasingly working with other
government agencies at those deployed locations. This has raised a
number of issues that will likely continue to affect future operations
unless the U.S. government acts to resolve them. For example, the
Department of the Defense and the Department of State need to determine
who should be responsible for providing security to the U.S. government
employees and contractors working in contingency operations. If the
U.S. government determines that it will use private security companies
during contingency operations, it is imperative that DOD and the other
agencies agree on regulations and procedures to govern the use of
private security companies and clarify their rules of engagement.
Another question that has come up in Iraq and may occur in future
operations is which agency should be responsible for reconstruction
efforts. Moreover, there are issues that arise from the different rules
and regulations governing military personnel, DOD civilians, other
government agency employees, and contractors who may all be living and
working on the same installation. For example, concerns have been
raised about the applicability of the Military Extraterritorial
Jurisdiction Act to crimes committed by contractors who support
agencies other than DOD at deployed locations. In addition, contractors
working for DOD in Iraq and Afghanistan fall under military policies
that prohibit the use of alcohol, gambling, and other behaviors.
However, contractors working for other agencies are generally not
required to follow these policies, which can lead to tensions and erode
military efforts to maintain discipline and morale. Given that DOD can
expect to work more closely with other agencies in the future, the
department will need to develop memoranda of understanding with those
agencies and update its guidance to improve its working relationship
with its partners across the U.S. government.
Addressing the Use and Role of Contractors into Plans to Expand and
Transform the Army and the Marine Corps:
DOD also needs to address the role and use of contractor support to
deployed forces as the department develops its plan to expand and
transform its military forces. The department is in the process of
planning for a substantial increase in the size of the Army and the
Marine Corps. As it develops these plans, it is important that the
department address the impact this growth in military forces will have
on the contractor services needed to support those forces. Moreover,
DOD should recognize that not all of the additional personnel must be
dedicated to combat arms; a portion of that increase should be
dedicated to expanding and enhancing the department's professional
acquisition corps. In addition, as the Department continues to
transform its forces, DOD should ensure that it is addressing contract
oversight and management requirements, such as personnel requirements.
For example, the 2007 report of the Commission on Army Acquisition and
Program Management in Expeditionary Operations recommended that the
Army establish an Expeditionary Contracting Command that would be
responsible for providing skilled, trained, contracting personnel for
the support of expeditionary forces, assigned to deployable or deployed
commands.
Concluding Observations:
In closing, I believe the long-standing challenges DOD faces transcend
the current operations in Iraq and Afghanistan and demand a
comprehensive effort to resolve. As requested, we considered specific
legislative remedies for the challenges facing DOD. While we believe
that DOD bears the primary responsibility for taking actions to address
the challenges discussed above, these are three actions Congress may
wish to consider requiring DOD to take in order to move the debate
forward:
* Determine the appropriate balance of contractors and military
personnel as it shapes the force for the future. A Quadrennial Defense
Review-type study of contracting may be in order, one which
comprehensively examines the support DOD will require contractors to
provide in future operations and the core capabilities the department
believes it should not be relying on contractors to perform. In
addition, as the department continues to grow and transform its
military forces, it should ensure that the role of contractor support
to deployed forces is incorporated into its planning efforts.
* Include the Use and Role of Contractor Support to Deployed Forces in
Force Structure and Capabilities Reporting. DOD regularly reports on
the readiness status, capabilities assessments, and other review of the
status and capabilities of its forces. Given the reality that DOD is
dependant on contractors for much of its support in deployed locations,
the department should include information on the specific missions
contractors will be asked to perform, the operational impacts
associated with the use of contractors, and the personnel necessary to
effectively oversee and manage those contractors. In addition, these
reports should address the risks associated with the potential loss of
contractor support.
* Ensure that operations plans include specific information on the use
and roles of contractor support to deployed forces. DOD guidance
requires that contractor support be fully integrated into the logistics
annex of operations and contingency plans. However, our previous work
indicates that this is not being done at a sufficient level. Because of
the increased use of contractors to support deployed forces and the
variety of missions DOD may be asked to perform, Congress may want to
take steps to gain assurances that operations plans for those missions
sufficiently consider the use and role of contractors.
Mr. Chairman and member of the subcommittee, this concludes my prepared
remarks. I would be happy to answer any question you may have.
Contacts and Acknowledgments:
For questions about this statement, please contact Bill Solis at (202)
512-8365. Other individuals making key contributions to this statement
include Carole Coffey, Assistant Director, Sarah Baker, Grace Coleman,
and James Reynolds.
[End of section]
Appendix I: Related GAO Products:
* Defense Logistics: The Army Needs to Implement an Effective
Management and Oversight Plan for the Equipment Maintenance Contract in
Kuwait. GAO-08-316R. Washington, D.C.: January 23, 2008.
* Defense Acquisitions: Improved Management and Oversight Needed to
Better Control DOD's Acquisition of Services. GAO-07-832T. Washington,
D.C.: May 10, 2007.
* Military Operations: High-Level DOD Action Needed to Address Long-
standing Problems with Management and Oversight of Contractors. GAO-07-
145. Washington, D.C.: December 18, 2006.
* Rebuilding Iraq: Continued Progress Required Overcoming Contract
Management Challenges. GAO-06-1130T. Washington, D.C.: September 28,
2006.
* Military Operations: Background Screenings of Contractor Employees
Supporting Deployed Forces May Lack Critical Information, but U.S.
Forces Take Steps to Mitigate the Risks Contractors May Pose. GAO-06-
999R. Washington, D.C.: September 22, 2006.
* Rebuilding Iraq: Actions Still Needed to Improve the Use of Private
Security Providers. GAO-06-0865T. Washington, D.C.: June 13, 2006.
* Rebuilding Iraq: Actions Needed to Improve Use of Private Security
Providers. GAO-05-737. Washington, D.C.: July 28, 2005.
* Interagency Contracting: Problems with DOD's and Interior's Orders to
Support Military Operations. GAO-05-201. Washington, D.C.: April 29,
2005.
* Defense Logistics: High-Level DOD Coordination Is Needed to Further
Improve the Management of the Army's LOGCAP Contract. GAO-05-328.
Washington, D.C.: March 21, 2005.
* Contract Management: Opportunities to Improve Surveillance on
Department of Defense Service Contracts. GAO-05-274. Washington, D.C.:
March 17, 2005.
* Military Operations: DOD's Extensive Use of Logistics Support
Contracts Requires Strengthened Oversight. GAO-04-854. Washington,
D.C.: July 19, 2004.
* Military Operations: Contractors Provide Vital Services to Deployed
Forces but Are not Adequately Addressed in DOD Plans. GAO-03-695.
Washington, D.C.: June 24, 2003.
* Contingency Operations: Army Should Do More to Control Contract Costs
in the Balkans. GAO/NSIAD-00-225. Washington, D.C.: September 29, 2000.
* Contingency Operations: Opportunities to Improve the Logistics Civil
Augmentation Program. GAO/NSIAD-97-63. Washington, D.C.: February 11,
1997.
[End of section]
Footnotes:
[1] Contractors supporting deployed forces refer to DOD contractor
personnel who are authorized to accompany U.S. military forces in
contingency operations or other military operations, or exercises
designated by the geographic Combatant Commander.
[2] GAO, Military Operations: Contractors Provide Vital Services to
Deployed Forces but Are Not Adequately Addressed in DOD Plans, GAO-03-
695 (Washington, D.C.: June 24, 2003).
[3] The Joint Chiefs of Staff, Doctrine for Logistic Support of Joint
Operations, Joint Publication 4-0 (Washington, D.C.: April 2000).
[4] GAO, Military Operations: DOD's Extensive Use of Logistics Support
Contracts Requires Strengthened Oversight, GAO-04-854 (Washington,
D.C.: July 19, 2004).
[5] GAO-04-854.
[6] GAO-03-695.
[7] GAO-03-695 and GAO, Military Operations: High-Level DOD Action
Needed to Address Long-standing Problems with Management and Oversight
of Contractors Supporting Deployed Forces, GAO-07-145 (Washington,
D.C.: December 2006).
[8] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005).
[9] GAO-07-145.
[10] Conference Report 110-434, accompanying Pub. L. No. 110-116 (13
November 2007).
[11] GAO, Information Technology: DOD Needs to Leverage Lessons Learned
from Its Outsourcing Projects, GAO-03-371 (Washington, D.C.: Apr. 25,
2003); and Military Training: Potential to Use Lessons Learned to Avoid
Past Mistakes Is Largely Untapped (GAO/NSIAD-95-152 (Washington, D.C.:
Aug. 9, 1995).
[12] GAO-07-145
[13] Chairman of the Joint Chiefs of Staff Instruction 3150.25C, Joint
Lessons Learned Program (11 April 2007).
[14] GAO-04-854.
[15] GAO-07-145.
[16] GAO-07-145.
[17] GAO-07-145.
[18] GAO-08-316R.
[19] GAO-07-525T.
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