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67–365 PDF 2011

U.S. MILITARY LEAVING IRAQ: IS THE STATE

DEPARTMENT READY?

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

HOMELAND DEFENSE AND FOREIGN OPERATIONS

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

MARCH 2, 2011

Serial No. 112–8

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.fdsys.gov

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY, HOMELAND DEFENSE AND FOREIGN

OPERATIONS

JASON CHAFFETZ, Utah, Chairman

RAU ́ L R. LABRADOR, Idaho, Vice Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PAUL A. GOSAR, Arizona

BLAKE FARENTHOLD, Texas

JOHN F. TIERNEY, Massachusetts, Ranking

Minority Member

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

STEPHEN F. LYNCH, Massachusetts

MIKE QUIGLEY, Illinois

(III)

C O N T E N T S

Page

Hearing held on March 2, 2011 .............................................................................. 1

Statement of:

Green, Grant S., Commissioner, Commission on Wartime Contracting,

accompanied by Michael Thibault, co-chair, Commission on Wartime

Contracting; Stuart Bowen, Jr., Special Inspector General, Office of

the Special Inspector General for Iraq Reconstruction; Ambassador Patrick Kennedy, Under Secretary of State for Management, U.S. Department of State; Ambassador Alexander Vershbow, Assistant Secretary

of Defense for International Security Affairs, U.S. Department of Defense; and Frank Kendall, Principal Deputy Under Secretary of Defense

for Acquisition, Technology and Logistics, U.S. Department of Defense . 8

Bowen, Stuart, Jr. ..................................................................................... 16

Green, Grant S. ......................................................................................... 8

Kendall, Frank .......................................................................................... 37

Kennedy, Patrick ....................................................................................... 27

Letters, statements, etc., submitted for the record by:

Bowen, Stuart, Jr., Special Inspector General, Office of the Special Inspector General for Iraq Reconstruction, prepared statement of .............. 18

Chaffetz, Hon. Jason, a Representative in Congress from the State of

Utah, prepared statement of ........................................................................ 4

Green, Grant S., Commissioner, Commission on Wartime Contracting,

prepared statement of ................................................................................... 11

Kendall, Frank, Principal Deputy Under Secretary of Defense for Acquisition, Technology and Logistics, U.S. Department of Defense, prepared

statement of ................................................................................................... 40

Kennedy, Ambassador Patrick, Under Secretary of State for Management, U.S. Department of State, prepared statement of ........................... 29

(1)

U.S. MILITARY LEAVING IRAQ: IS THE STATE

DEPARTMENT READY?

WEDNESDAY, MARCH 2, 2011

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL SECURITY, HOMELAND

DEFENSE AND FOREIGN OPERATIONS, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The committee met, pursuant to notice, at 9:30 a.m., in room

2154, Rayburn House Office Building, Hon. Jason Chaffetz (chairman of the committee) presiding.

Present: Representatives Chaffetz, Labrador, Platts, Turner,

Gosar, Farenthold, Tierney, Braley, Welch, Yarmuth, Lynch,

Quigley.

Also present: Representative Cummings.

Staff present: Ali Ahmad, Deputy Press Secretary; Thomas A. Alexander, Senior Counsel; Brien A. Beattie, Professional Staff Member; Michael R. Bebeau, Assistant Clerk; Robert Borden, General

Counsel; Molly Boyl, Parliamentarian; John Cuaderes, Deputy

Staff Director; Gwen D’Luzansky, Assistant Clerk; Kate Dunbar,

Staff Assistant; Adam P. Fromm, Director of Member Liaison and

floor Operations; Linda Good, Chief Clerk; Justin LoFranco, Press

Assistant; Erin Alexander, Fellow; Carla Hultberg, minority Chief

Clerk; Scott Lindsay, minority Counsel; Dave Rapallo, minority

Staff Director; Cecelia Thomas, minority Counsel/Deputy Clerk.

Mr. CHAFFETZ. The committee will come to order.

I would like to begin this hearing by stating the Oversight Committee mission statement. We exist to secure two fundamental

principles. First, Americans have a right to know that the money

Washington takes from them is well spent. And second, Americans

deserve an efficient, effective government that works for them. Our

duty in the Oversight and Government Reform Committee is to

protect these rights.

Our solemn responsibility is to hold government accountable to

taxpayers, because taxpayers have a right to know what they get

from their government. We will work tirelessly in partnership with

citizen watchdogs to deliver the facts to the American people and

bring genuine reform to the Federal bureaucracy.

This is the mission of the Oversight and Government Reform

Committee.

I want to welcome everybody here today. This is an exciting time,

an exciting time for me, on a personal note. I appreciate the opportunity to serve in the U.S. Congress and to serve as the chairman

of this subcommittee. It is truly a thrill and an honor, and I hope

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to live up to the high expectations that I think people have in the

roles and the duties in this seat.

This is the first meeting of the National Security, Homeland Defense and Foreign Operations Subcommittee. I would also like to

welcome Ranking Member Tierney. I look forward to working with

him. I have a good personal relationship with him. While we may

disagree on some things, I think we can be united in our love of

country and the need and the function of this committee.

I want to also welcome those that are here for the very first time,

and all the new Members that have joined in this 112th Congress.

I am looking forward to a very active year.

Today we are examining the challenges facing the Defense Department and the State Department as they transition from a military to civilian-led effort in Iraq. On November 17, 2008, the Bush

administration and the government of Iraq signed a status of forces

agreement which set a December 31, 2011 deadline for the departure of all U.S. military forces from Iraq. As agreed, the United

States has withdrawn over 90,000 personnel, 40,000 vehicles and

11⁄2 million pieces of equipment. Today there are fewer than 50,000

U.S. forces in Iraq.

As the military draws down, the State Department is ramping

up. According to Ambassador Kennedy, the Department ‘‘will continue to have a large civilian mission in Baghdad’’ to ‘‘meet the

President’s goal for an Iraq that is sovereign, stable and self-reliant.’’ In support of this effort, the State Department will help train

the Iraqi police, operate an office of security cooperation to manage

foreign military sales, train and equip the Iraqi military and ensure that ongoing reconstruction projects are properly transferred

to Iraqi control.

To do this, it will dispatch hundreds of employees to Iraq. Yet

each of these employees will be supported by roughly 16 contractors. It is estimated that the State Department will employ nearly

17,000 personnel as contractors. The rough cost to the U.S. taxpayer will be in the range of $6.27 billion in fiscal year 2012 alone.

The State Department will rely on these contractors for services

ranging from the simple food supply to counter mortar and rocket

fire. Many in the Oversight Committee have expressed concern

about the State Department’s ability to meet this daunting challenge, and rightly so. The State Department’s core mission is diplomacy, not combat.

In its July 2010 report, the Commission on Wartime Contracting

stated that, ‘‘There is not enough evidence of a thorough, timely

and disciplined planning approach to the coming transition.’’ In its

written testimony today, the Commission still maintains that the

State Department is not necessarily ready to carry out this mission.

Stuart Bowen’s written testimony today also questions the State

Department’s capacity ‘‘to execute program elements in the postDoD setting to ensure adequate oversight and simply to function in

the unpredictable security situations that will exist after troop

withdrawal.’’ These concerns are echoed by Ambassador Patrick

Kennedy. In an April 7, 2010 letter to Under Secretary of Defense

Ashton Carter, he stressed that the State Department would have

3

to ‘‘duplicate the capabilities of the U.S. military’’ in order to fulfill

its security mission.

In a plea to the Pentagon, Ambassador Kennedy warned that

personnel would suffer ‘‘increased casualties’’ without the transfer

of military hardware, including Blackhawk helicopters and MRAP

armored vehicles to State. As best we can tell, the Defense Department has yet to provide the necessary equipment, or even necessarily formally respond to this letter.

While cooperation between the top military officer and to diplomat on the ground in Iraq has been generally praised, it seems

like the senior leadership of the relevant departments in Washington may be playing off on a different sheet of music. I am also concerned that State and Defense have been less than transparent

with the Oversight Committee. It has come to my attention that

personnel within each department have begun restricting the Oversight Committee’s access to critical information and personnel. If

this is the practice, it must end. This administration must be

transparent and forthcoming with SIGIR, GAO, the Inspectors

General, that they may fulfill their obligations to oversee this transition.

The central issue before us today is whether the State Department is ready to assume the mission in Iraq. From all outward appearances, the answer appears to be no. At least a huge question

mark. With only 10 months left, the administration must work

quickly to get this right, if for no other reason than over 4,400

Americans, service members, have given their lives for it.

I look forward to hearing from our panel of witnesses today.

And now I would like to recognize the distinguished ranking

member, the gentleman from Massachusetts, Mr. Tierney, for his

opening statement.

[The prepared statement of Hon. Jason Chaffetz follows:]

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Mr. TIERNEY. Thank you, Mr. Chairman, and congratulations on

your new role. I think we will have an easy time working together

on this. Oversight is not a partisan matter. I think you can tell

that from the work we have done over the last 4 years, and the

number of projects that you and I have discussed and participated

in. So this is one of the functions of Congress, you are right, we

legislate, and then we try to make sure that legislative intent is

carried out and the moneys are spent in the most efficient and effective way possible.

With that in mind, I want to thank all of our witnesses here

today. Some of us are becoming old friends. This is a topic that has

been much discussed, but I think it is well worth continuing that

examination, particularly in light of the 2011–2012 budget discussions that are going on right now.

We did agree to withdraw all of our troops from Iraq by the end

of 2011. We have been sticking to that agreement, and we are on

track to meet that deadline. There has been a heroic sacrifice over

8 years, that cost over 4,000 American lives and nearly $1 trillion.

The men and women of our armed forces are going to leave Iraq

with their heads held high.

But now the task is to make sure that all that hard work that

was done by the military, the gains are not squandered and Iraq’s

fragile stability is not lost. So the President has charged the State

Department with the responsibility for supporting the stability and

development of Iraq once the military has left. That transition of

operations to the State Department marks a whole new role for

State. It has been asked to oversee functions traditionally under

the purview of the Department of Defense.

Of particular concern are the State Department’s capabilities,

both operationally and financially, to undertake activities traditionally managed by the Defense Department and to oversee the expected increase in contractors operating in theater. All on a budget

that is many orders of magnitude smaller than what the Department of Defense has been working with.

Simply because the State Department is taking on these new

functions, we can’t expect that contractors will entirely fill the void.

One of the primary objectives in establishing the Wartime Contracting Commission, when Jim Leach and I put the legislation together, and when Congress passed the bill, I believe, was to ensure

that contractors were not performing functions that were properly

reserved for government personnel.

During previous Oversight Committee hearings on this subject,

I discussed at length with Mr. Thibault the fundamental necessity

of identifying inherently governmental functions leading up to this

transition. In spite of those concerns, in many respects, we are no

closer to identifying and staffing inherently governmental positions

than we were when the hostilities in Iraq began 8 years ago. And

the transition in Iraq is an effort led by the State Department that

threatens to make the situation even worse.

So not only do we have inherently governmental functions that

haven’t been clearly defined, but according to reports, contracting

has often become the default option out of necessity for the State

Department. That doesn’t give me much comfort that the State DeVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
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partment is aware of the oversight and capacity problems, if it does

not have the time and financial resources to properly address them.

As Mr. Green and Mr. Thibault state in their written testimony,

‘‘An expanded U.S. diplomatic presence in Iraq will require State

to take on thousands of additional contract employees that it has

neither the funds to pay nor the resources to manage.’’ So yesterday, the Commission on Wartime Contracting issued a report entitled Iraq: A Forgotten Mission? The report states that without a

substantial increase in budgetary support from Congress, the post2011 prospects for Iraq and for the U.S. interest in that region will

be bleak.

It continues, ‘‘Without increases to sustain operations for fiscal

year 2011 and beyond, it is inevitable that some missions and capabilities will be degraded or sacrificed altogether, and that large outlays of taxpayer funds will have been wasted.’’ In fact, the Commission’s No. 1 recommendation is that Congress ensure adequate

funding to sustain State Department operations in critical areas in

Iraq. Unfortunately, today, Congress’ willingness to ensure adequate funding for the State Department’s mission in Iraq is very

much in doubt.

H.R. 1, the Republican-led appropriations bill that passed the

House in February, dramatically cuts State Department funding

overall and makes specific cuts to the major programs that are critical to the mission in Iraq. According to Secretary Clinton, who testified yesterday in front of the House Foreign Affairs Committee,

‘‘The 16 percent for State and USAID that passed the House last

month would be devastating to our national security, and it would

force us to scale back dramatically on critical missions in Iraq, Afghanistan and Pakistan.’’

This is the definition of penny-wise and pound-foolish. After investing so much blood and nearly a trillion dollars in Iraq, we must

give the State Department the basic resources they need in order

to successfully relieve the military of their mission there, and help

ensure Iraq’s stability and future prosperity.

Indeed, the State Department effort in Iraq is vastly more affordable than the operation led by the Defense Department. As Ambassador Kennedy notes in his testimony, withdrawing the U.S. military from Iraq will save $51 billion in fiscal year 2012, while the

State Department is only seeking a roughly $21⁄2 billion increase

in its budget to take over many of the same responsibilities. So for

about 4 percent of the funds that were being spent on the Department of Defense, State believes it would be able to carry out its

mission.

It is important to this subcommittee to continue to scrutinize this

transition. But we must also look at the context of proposed budget

cuts that would fundamentally undermine the State Department’s

ability to successfully achieve its new responsibilities. Mr. Chairman, we certainly have to watch every penny and where it goes,

and we have to make sure that money is wisely and efficiently

spent. On the other hand, we shouldn’t be guaranteeing success by

so undermining their responsibility that we won’t give them at

least enough resources to get the job done, to move as many people

in State itself to the inherently governmental functions and have

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at least enough people to manage and maintain the contracts that

it does have to give out.

Thank you.

Mr. CHAFFETZ. Thank you. Welcome again to the Members here

from both sides of the aisle. Particularly I want to recognize Ranking Member Cummings for being here with us today.

Members will have 7 days to submit opening statements for the

record. We would now like to recognize our panel, with very brief

intros. A very distinguished and accomplished group. I appreciate

you all being here with us today.

The panel includes Mr. Grant Green, who is a Commissioner on

the Commission on Wartime Contracting. Mr. Michael Thibault cochairs the Commission on Wartime Contracting. Mr. Stuart Bowen,

who is the Special Inspector General for Iraq Reconstruction. Ambassador Patrick Kennedy, who is the Under Secretary of State for

Management. Ambassador Alexander Vershbow is Assistant Secretary of Defense for International Security Affairs. And Mr. Frank

Kendall, who is the Principal Deputy Under Secretary of Defense

for Acquisition, Technology and Logistics.

Pursuant to committee rules, all witnesses will be sworn in before the testify. Please rise and raise your right hands.

[Witnesses sworn.]

Mr. CHAFFETZ. Thank you. You may be seated.

Let the record reflect that all witnesses answered in the affirmative.

Now we are going to move to opening statements. I would appreciate it if you could keep your verbal comments to 5 minutes. We

have a large panel, and Members would like to ask some questions.

You should have a light there, when it turns red, I would appreciate it if you could wrap up your comments. Also, if you could

make sure, we have this nice, new, beautiful room, just make sure

that the button is pushed when you start the mic and move it close

so that we can all hear you.

We will start with Mr. Green. Thank you.

STATEMENTS OF GRANT S. GREEN, COMMISSIONER, COMMISSION ON WARTIME CONTRACTING, ACCOMPANIED BY MICHAEL THIBAULT, CO-CHAIR, COMMISSION ON WARTIME

CONTRACTING; STUART BOWEN, JR., SPECIAL INSPECTOR

GENERAL, OFFICE OF THE SPECIAL INSPECTOR GENERAL

FOR IRAQ RECONSTRUCTION; AMBASSADOR PATRICK KENNEDY, UNDER SECRETARY OF STATE FOR MANAGEMENT,

U.S. DEPARTMENT OF STATE; AMBASSADOR ALEXANDER

VERSHBOW, ASSISTANT SECRETARY OF DEFENSE FOR

INTERNATIONAL SECURITY AFFAIRS, U.S. DEPARTMENT OF

DEFENSE; AND FRANK KENDALL, PRINCIPAL DEPUTY

UNDER SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY AND LOGISTICS, U.S. DEPARTMENT OF DEFENSE

STATEMENT OF GRANT S. GREEN

Mr. GREEN. Good morning, Chairman Chaffetz and Ranking

Member Tierney, members of the subcommittee.

I am Grant Green, a member and former acting co-chair of the

independent and bipartisan Commission on Wartime Contracting

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in Iraq and Afghanistan. Participating with me in this joint statement is Commission co-chairman, Michael Thibault. Our biographies are on the Commission Web site, so I will note just a few

points that bear on today’s issues. I am a retired U.S. Army officer,

have served as Assistant Secretary of Defense, Under Secretary of

State for Management and Executive Secretary of the National Security Council.

Mr. Thibault, who is also a U.S. Army veteran, served more than

35 years in the Department of Defense, the last 11 as Deputy Director of the Defense Contract Audit Agency. He has also worked

in the private sector as a consultant and as an executive for a Fortune 500 company.

We are here on behalf of all eight commissioners, who yesterday

approved release of a fourth special report to the Congress, which

we have titled Iraq: A Forgotten Mission? We have brought printed

copies with us today and have also posted the report on the Commission’s Web site.

As with our appearance today, the report reflects bipartisan consensus. We respectfully request that it be included in the committee’s hearing record.

This hearing poses the question, U.S. military leaving Iraq, is the

State Department ready? I think the short reason is no, and the

short reason for that answer is that establishing and sustaining an

expanded U.S. diplomatic presence in Iraq will require State to

take on thousands of additional contractor employees that it has

neither funds to pay for nor the resources to manage. We base our

findings and recommendations on the Commission’s research hearings, as well as two trips to theater to probe specifically the transition process.

Mr. Thibault and I led the first trip, which prompted our July

12, 2010 special report, entitled, ‘‘Better Planning for Defense to

State Transition in Iraq is Needed to Avoid Mistakes and Waste.’’

Commission co-chair Christopher Shays and I led the second trip

to Iraq on this issue in December. We observed significant

progress, but our observations and subsequent research have led to

our follow-on special report, the one I brought with us today, ‘‘Iraq:

A Forgotten Mission?’’

Teams at State and Department of Defense have been working

hard on identifying transition needs and dealing with hundreds of

tasks ranging from logistical support and medical care to air movement and security. State’s plan to establish two permanent and two

temporary locations in parts of Iraq away from Baghdad will also

require reconfiguring some property still occupied by the U.S. military and undertaking some new construction.

All of these activities will require increased contracting as well

as additional funding and increased staffing for contract management and oversight. This is particularly problematic, when you consider that the State Department’s recent quadrennial diplomacy

and development review acknowledges that, No. 1, contracts are

often State’s default option, rather than an optimized choice; contracts are often well into the performance phase before strategies

and resources for managing them is identified; third, its contract

Management and oversight capability has languished, even as conVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
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tracting has grown; and finally, State has a need to restore government capacity in mission critical areas.

State deserves credit for recognizing these problems, which we

would note also occur in many other Federal departments and

agencies.

Besides the collaboration and contract Management challenges,

other looming problems for the DoD to State transition is time. As

you mentioned, Mr. Chairman, 10 months from today, all but a

handful of U.S. military personnel will be gone from Iraq. State

needs to have many new contracts in place with contractors at

work by October or even sooner to ensure a smooth transition. And

that means many contracts must be launched quickly, in fact,

should have already been launched.

As concerned citizens, we can all agree that the stakes in Iraq

and the region are high. We can all agree that as members of this

Commission, however, that we are confining our observation to the

implications of the contracting required for State’s planned presence in Iraq after 2011. We are not opining on the merits of State’s

plan or urging that Congress provide everything that the State Department has requested. If anything, considering the extent of contracting waste, fraud and abuse we have seen in Iraq and Afghanistan, we would encourage the Department and lawmakers to examine that plan closely to seek, where appropriate, more economies

and safeguards for taxpayer dollars.

We are simply pointing out here that the declared, coordinated

policy of our government to expand the Department of State’s role

and visibility in Iraq after the U.S. military departs has large and

unavoidable consequences for contingency contracting, and must be

recognized and resolved. Our new special report, ‘‘Iraq: A Forgotten

Mission?,’’ spells out our concerns in more detail. We will close by

quoting the three recommendations in that report that the Commission recommends.

No. 1, that Congress ensure adequate funding to sustain State

Department operations in critical areas of Iraq, including its greatly increased need for operational contract support. No. 2, the Department of State expand its organic capability to meet heightened

needs for acquisition personnel, contract Management and contractor oversight. And three, the Secretaries of State and Defense extend and intensify their collaborative planning for the transition,

including execution of an agreement to establish a single senior

level coordinator and decisionmaker to guide progress and promptly address major issues whose resolution may exceed the authorities of departmental working groups.

[The prepared statement of Mr. Green follows:]

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Mr. CHAFFETZ. Thank you. Mr. Green and other members of the

panel, you can submit the balance of any testimony into the record.

But given that we have gone over 7 minutes at this point, I would

like to transition to the next speaker, if I could.

Mr. GREEN. Fine. Thank you, Mr. Chairman.

Mr. CHAFFETZ. I believe we are going to go to Mr. Bowen, then.

It was a joint statement, so I appreciate it.

STATEMENT OF STUART BOWEN, JR.

Mr. BOWEN. Thank you, Chairman Chaffetz, Mr. Tierney, members of the committee, for this opportunity to testify on the crucial

question before you today, before the country today. And that is,

is the State Department prepared to sustain and engage in the significant programs necessary to support Iraq over the next year, and

frankly, over the next 5 years.

This is not a perennial issue, this is a significant national security issue. So before I answer that question, let me provide three

premises that put my answers in context. One, the United States

will continue to support Iraq next year and for the next 5 years,

because we have crucial national security interests at play there.

Two, the State Department will be in the lead there, and will need

to implement programs that it can execute so that those national

security interests are protected.

And three, to meet that mission, next year, over the next 5 years,

it will require substantial resources to do so. Much less than the

resources expended over the last 8 years annually. As General Austin testified a few weeks ago before the Senate Foreign Relations

Committee, DoD was spending $75 billion last year on maintaining

its mission in Iraq. The State Department, as Secretary Clinton

testified yesterday, will spend a fraction of that next year, over the

next 5 years.

Is the State Department ready today to manage the DoD programs that are at play in Iraq? No. Self-evidently, no. Because

there is a significant planning and execution program underway regarding transition. Will they be ready on January 1st of 2012?

That time will tell. Do they have the capacity to execute the programs that they are shaping and scoping? Yes, but there are concerns that we have raised over time about contract management.

There is obviously no doubt about the truth, that the contracts the

State Department had to take on in Iraq over the last 8 years were

the largest in its history. And SIGIR has issued a number of audits

that raised, frankly, core concerns about its capacity, its acquisition

Management, its ability to keep track of money, to break it right

down to the core matter, in Iraq.

Has it made improvements? Yes. Does it need to do more? Yes.

Ambassador Kennedy in his statement acknowledges that, and also

points to important steps that the State Department intends to

take, notably the evaluation of results about its programs that it

will implement.

I think one of the things that the most need to do, and I told

Paco Palmieri this 2 weeks ago when I was in Iraq, the head of

INL, the INL program there, is to ensure they have sufficient number of in-country contracting officer representatives that are keeping track of taxpayer dollars. Yes, we have to spend substantial reVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
17

sources. Yes, it is crucial to sustain the fledgling democracy in Iraq.

But yet we must steward that money, that money for those programs, in an effective way to assure the taxpayers that their

money is being well spent and it has a salutary effect of improving

the execution and performance of those policy initiatives.

I just returned from trip 29 and met with General Austin, met

with Ambassador Jeffrey, I met with the Iraqi leadership and they

are collectively concerned about what Iraq will be like after the

troops withdraw. And those concerns stem from capacity to execute

programs, but also security. One thing that is predictable about security in Iraq, it is unpredictable. And it is going to be very difficult to judge today what the environment will be like in 2012. So

the State Department is planning, worst case scenario, as it should,

so its capacity to operate will be limited by that security environment.

SIGIR is on the ground today, carrying out audits of the transition programs, specifically of quick response fund, which we will

soon release, private security contractors, a rule of law, crucial elements that must be improved. Corruption is as bad as it has ever

been. That is what Judge Rahim, the Director of Corruption Fighting for the Iraqis, told me just 2 weeks ago. He cannot convict a

senior official. They can still immunize any employee by fiat. These

are unacceptable standards within the system that frankly we are

going to have to continue to engage heavily with Iraq on all fronts,

and we, I am talking about the State Department, to improve their

fledgling democracy.

We recommend two things in our statement that the committee

might consider regarding the use of the substantial funds over the

next year, and one is that for any of these large contracts, that

State might submit a plan for review, so that you see what the

strategic intentions and tactical uses of those billions will be. You

have transparency, the transparency that you expressed a need for

in your statement, Mr. Chairman.

And second, that they certify to the Congress that they have the

resources in place and that they are committed to the oversight, to

the contractor and officer representatives, so that you have the capacity to do your job, and that it manage the taxpayers’ dollars effectively.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Bowen follows:]

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Mr. CHAFFETZ. Ambassador Kennedy.

STATEMENT OF PATRICK KENNEDY

Mr. KENNEDY. Mr. Chairman, Ranking Member Tierney, members of the committee, thank you for inviting me today to discuss

the State Department’s preparations for the U.S.’ transition from

a military to a civilian-led presence in Iraq.

Our efforts in Iraq are critical in supporting an Iraq that is sovereign, stable and self-reliant, and to achieve a strategic long-term

partnership between the United States and Iraq. The administration’s request will provide resources for the diplomatic platform

that will allow U.S. interests in Iraq to be advanced.

As Secretary Clinton, Secretary Gates and Admiral Mullen have

emphasized, shortchanging our civilian presence now would undercut our enduring national interest in Iraq. Between 2010 and 2012,

the U.S. military drawdown will save the U.S. taxpayers $51 billion, while State’s total operating budget request for Iraq will only

increase by $21⁄2 billion. State’s 2012 funding needs will increase

because of the military to civilian transition. But the overall cost

to the U.S. taxpayer will decrease dramatically.

In short, a stable Iraq is in the U.S. national interest, and anything less than full funding would severely affect the transition.

This is an overview of the larger Iraq policy issues. Today I

would like to address the safe and secure management platforms

needed to support successful implementation of our Iraq policy,

which are my responsibilities. There are eight key components to

launching those platforms. Security. In addition to our embassy in

Baghdad, we are planing consulates general in Erbil and Basrah,

and embassy branch offices in Mosul and Kirkuk. All U.S. personnel and contractors will be under chief of mission authority. Security will be shared with the State Department’s Bureau of Diplomatic Security, responsible for all State Department sites, and DoD

responsible for Offices of Security Cooperation personnel.

At locations where State and OSC-I co-locate, diplomatic security

and DoD security will coordinate movements, but diplomatic security will have sole responsibility for facilities. Contracts for static

movement and security movement have already been awarded or

are about to be, thanks to assistance from our friends at DoD. We

are finalizing and agreement with DoD to loan us 60 MRAP vehicles, and we will use a U.S. Army existing contract for vehicle

maintenance. An unmanned aerial vehicle reconnaissance program

is being established. We are coordinating with DoD on a sense and

warn system for indirect fire. And we will have tactical radio communications in our vehicles and tactical operations centers at all

our sites.

Medical. We will establish robust medical units in Basrah, Baghdad, Kirkuk and Mosul and smaller medical units in seven other

locations. These units will stabilize trauma cases that will then be

moved to nearby first-world medical facilities in Jordan and Kuwait. We expect to award that contract by the 20th of May.

Contracting and contract oversight. Our success in Iraq depends

on effective contracting efforts. Unlike other U.S. embassies, Iraq

is a non-permissive environment, which means we cannot hire local

staff as static guards or as cleaning crew, nor can we visit markets,

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gas stations or pharmacies. We are heavily dependent on contractors until security improves, and have developed a contracting

strategy for life support, security, transportation, communications

and facilities.

While it is most effective for State to use its own competitive

process to award contracts, we also will leverage DoD resources

where DOD has superior contracting capabilities in theater. One

example, the Logistics Civil Augmentation Program [LOGCAP], is

a proven support mechanism with strong mandatory contract Management requirements. Interim use of LOGCAP will give us time

to put our own into place, and we will also be using the Defense

Logistics Agency for food and fuel.

I take our contracting oversight responsibility seriously. I led the

2007 Nisour Square Review Team, in that regard. I can assure you

that we will engage heavily.

Our contracting team in Washington draws on headquarters expertise, and while in Iraq, there are multiple levels of technical

oversight. Since 2008, when I reorganized the funding stream for

the Office of Logistics Acquisition Management, we have hired 102

additional staff for contract administration, and for security contracting oversight in Iraq, we will have over 200 direct State Department security professionals engaged. That is a 1 to 35 ratio,

which is very, very good.

We are not using contractors by default. It is a deliberately chosen strategy to address a transitory need. It makes no sense to hire

that many individuals to become permanent U.S. Government employees when the need for those numbers will decrease over time.

Let me be clear: we will transition. In Erbil, in the north, already

92 percent of our guard force is locally engaged staff. And we have

robust efforts underway in real property, aviation facilities, information technology and life support.

Finally, on February 14th, Secretary Clinton announced Patricia

Haslach as the coordinator for Iraqi transition assistance. This is

the largest effort underway in the State Department since the Marshal plan in the 1940’s. We will be ready.

[The prepared statement of Mr. Kennedy follows:]

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Mr. CHAFFETZ. Thank you, Ambassador Kennedy.

Ambassador Vershbow.

Mr. VERSHBOW. Sir, Mr. Kendall will give the main statement for

the Department of Defense.

Mr. CHAFFETZ. Thank you. Mr. Kendall.

STATEMENT OF FRANK KENDALL

Mr. KENDALL. Thank you, Mr. Chairman.

Chairman Chaffetz, Representative Tierney, members of the

committee, thank you for the opportunity for Ambassador

Vershbow and me to appear before you today to discuss the challenges associated with the transition from the Department of Defense to Department of State in Iraq. I ask that you include my

written statement in the record.

The DoD is fully engaged in support of Operation New Dawn, ensuring a smooth transition of DOD functions to State in support of

the enduring U.S. Government diplomatic and security assistance

missions, while providing oversight of logistical functions associated with the orderly withdrawal of the Title 10 military forces by

the end of December 2011. We are already in th execution phase

of this transition.

DoD recognizes the importance of the transition in Iraq, that

there are significant material and support issues. We are fully committed to executing our role within the boundaries set out in the

security agreement between the U.S. Government and the government of Iraq.

We have undertaken a whole of government approach to support

State as relations normalize in Iraq. While ultimately the role

State will play in Iraq is not in itself unusual, the scale and complexity of the transition presents a huge undertaking, and DoD is

doing everything it can to make this transition successful.

While the Under Secretary of Defense for Acquisition Technology

and Logistics is not responsible for establishing policy in this area,

we are responsible for the success of the material, contracts, supply

and selected construction components of the transition.

DoD and State have established a temporary senior executive

steering committee, our group, for coordination and synchronization. The group is co-chaired at the Deputy Assistant Secretary

level and meets biweekly to review status and progress of eight

subordinate functional areas. Those areas are: supply chain, equipment, contracting, medical facilities and construction, information

technology, security and aviation.

The twelfth meeting of the steering committee was held yesterday with direct participation from the embassy and U.S. forces in

Iraq, as well as other key players.

To facilitate the whole of government coordination, in November

2010, DoD embedded a staff officer within the transition team in

State to serve as a liaison and work day to day issues. Additionally,

to expeditiously respond to requests for equipment, a joint combined OSC and joint staff equipping board was established early

January 2011. These activities have been overseen by Ambassador

Kennedy and myself, with assistance from the Under Secretary of

Defense for Policy and the joint staff, among others.

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Currently in Iraq, joint State and DoD teams have been established in each of the remaining locations to develop practical solutions to issues resulting from the downsizing of a site footprint.

These transition of these sites is not a turn-key operation and each

presents unique challenges. For example, each site team is establishing new perimeters and moving T-walls, re-site containerized

housing units, rerouting utilities and where needed, undertaking

general site preparation. These actions are occurring at varying degrees at all the enduring sites.

To enable secure communications at these sites, DoD is restructuring its secured network infrastructure to accommodate the

changing footprint. I visited Iraq in October and met with Ambassadors Jeffrey and Jackson, as well as General Austin, to discuss

plans for transition. The chairs of the senior executive steering

group recently returned from Iraq, where they conducted site visits

to future State Department enduring presence posts, to assure that

transition plans are proceeding.

State does not have the management and oversight capacity intheater to immediately handle the large scale support requirements

for all the remaining sites. Therefore, the Department of Defense

will provide a number of specific functions in accordance with the

Economy Act. The LOGCAP4 contract will provide base life support

and co-logistic services. Requests for proposals were released in

January 2011. . Proposals are due in 5 days, and we expect to

make the award in July.

Food distribution and fuel distribution and supply will continue

to be provided by the Defense Logistics Agency, as Ambassador

Kennedy mentioned. The Army Sustainment Command will provide maintenance contract support for those items not maintained

under existing site contracts or LOGCAP, such as the sense and

warn systems and mine-resistant ambush protection vehicles that

we are providing to the State Department.

The Army Sustainment Command will also provide selected security contract support. DoD will provide fixed-site contract security

under combat and commander rules for the independent sites operating through the Office of Security Cooperation in Iraq.

The synchronized information systems. The synchronized pre-deployment and operational tracker response and the total operational picture of support systems had been designated by State as

a personal management tool that they will use, and those will transition directly from DoD. State will reimburse DoD for all these

contracts and services provided.

DoD has received and continues to address State requests for approximately 23,000 individual equipment items, ranging from medical equipment to counter-rocket protection. As mentioned above, a

joint equipping board has been established to streamline and centralize the request process. There have already been a number of

success stories with respect to the transfer of equipment. For example, we are loaning 60 Caiman Plus MRAPs in place of the basic

model Caimans to provide a greater level of protection to State Department personnel. We took State’s initial requirement for three

CT scan systems for their medical equipment, which would have

cost in excess of $9 million, and found a solution that would provide the scanners for less than $1 million total. We have found two

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excess CH46 helicopters that were being provided to State, with a

potential of four more to be made available to meet the immediate

need in State’s worldwide air fleet, and free up other assets.

The rules of engagement for fulfilling the equipment needs have

been established. Excess items are being transferred at no cost.

State is to provide funding for Defense services associated with

these transfers, including transportation and maintenance. Non-excess items are being provided on a reimbursable basis, most

through sales from stock.

In instances where funding is not available, those items will be

addressed on a case by case basis by the equipping board cited

above. DoD will consider loaning non-excess equipment on a case

by case basis, based on radius impacts. All equipment transfers are

being completed in accordance with the Economy Act.

I just want to close by saying that we are very well aware of the

challenges. Our greatest challenge is probably time. And Ambassador Kennedy and I are working together, as is our entire team,

to assure that we do the things that are needed to successfully execute this transition.

Another challenge, of course, is funding. We are working also

with the Iraqi government on several agreements which are not finalized. But we are beyond the planning phase, though some planning continues. We are executing at this time, and we believe we

are on track to meet the schedule that has been set out.

Thank you, Mr. Chairman.

[The prepared statement of Mr Kendall follows:]

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Mr. CHAFFETZ. Thank you, Mr. Kendall. Thank you all.

Your entire statement will be submitted for the record.

We are going to now move to the portion where Members will be

each allowed 5 minutes for questioning. We will alternate, obviously, on different sides of the aisle. I would ask that Members try

to maintain the 5-minute rule, in deference to their colleagues, in

moving forward.

I would like to start, if I could, please. Through some discussions

with the Special Inspector General, some written testimony from

the Special Inspector, conversations that Members have had in

Iraq, staff and what-not, it is our understanding that both the

State Department and Department of Defense have actually been

tightening up and not have been as forthcoming in providing the

Special Inspector access to both the information and personnel that

they have in the past.

There are two memos in particular, one dated October 7, 2010,

another one January 8, 2011, that have restricted this access. I

would appreciate a comment, starting perhaps with you, Ambassador Kennedy, about the State Department’s granting of access to

document and information. Is that something you are going to be

forthcoming with, or is it something that we need to dive into a little deeper?

Mr. KENNEDY. Mr. Chairman, we deal with the Inspector General for Iraq, we provide him information. We provide information

to the General Accountability Office. We provide information to the

State Department’s Inspector General. We provide information to

the Agency for International Development’s Inspector General.

Each one of those individual entities has defined lanes of the road

that have been worked out in response to congressional mandates,

and we provide each one of those offices with all material that they

are entitled to.

Mr. CHAFFETZ. Ambassador Vershbow, or Mr. Kendall, either

one? I guess what I am concerned about with the Department of

Defense is this new operating procedure that you have instituted,

that creates this delay of 15 days, having to fill this four or five

page document out, instead of this unfettered access that they have

had previously.

Mr. KENDALL. Mr. Chairman, I have to apologize, I am unaware

of any attempts to withhold information. And I am not familiar

with the memos. Our policy is to be, I believe, the same as State

Department, to be open in those regards. I would be happy to take

this for the record and get back to you on the specific——

Mr. CHAFFETZ. Perhaps, Mr. Bowen, you can express the concern.

Mr. BOWEN. Yes, sir. On the DoD front, I addressed this with

General Austin, my staff has worked with his chief of staff over the

last weeks, and we have resolved, I believe, satisfactorily, the concerns that we have had regarding access. At least it appears so, in

practice.

On the State Department front, yes, we get substantial information from the embassy. I have to say, Ambassador Jeffrey has been

forthcoming, as have his deputies. So it is clear, we are responsible

for reporting on any contract ‘‘to build or rebuild physical infrastructure in Iraq, to establish or re-establish a political or societal

institution in Iraq, or to provide products or services to the people

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of Iraq.’’ That is about as broad as it gets. That is the congressional

mandate that you all have given us.

We have had some problems over the last 6 months regarding

getting information about provincial reconstruction team transition, transitions to the new embassy offices, support, logistical contracts that are going to help the State Department continue its

mission in overseeing contracts that fall under these rubrics.

Mr. CHAFFETZ. My time is short as well. My concern is that the

access has not been growing, it has been shrinking. And the timing

of that access is critical, not only for the Special Inspector, but for

your own inspectors general to do their jobs.

We will continue to followup, but this is of upmost importance.

I am trying to signal that here today. Any attempt to try to slow

that process down or to hold back information I don’t think will be

met with, it won’t be met very well.

Very quickly, in July, for the State Department, if I could, Ambassador Kennedy, in July 2010, the State Department identified

14 core lost functionalities, as they called them, everything from recovering killed and wounded personnel, recovering damaged vehicles, counter-battery notification, counter-battery fire, things that

traditionally Department of Defense has operated, but now is going

to the State Department.

The core question is, are you prepared to actually do this in the

next 10 months? How are you going to gear up to actually do that?

We are very concerned that these are some very difficult things to

do. How prepared are you to actually fulfill those duties?

Mr. KENNEDY. Mr. Chairman, of the 14, I think we have resolved

about 7 of them. On the other hand, there are another seven that

simply make no sense for the state Department or are simply not

applicable. They disappear when DoD disappears.

For example, the DoD has been assisting the Iraqi government

in policing the green zone. That is not a function the State Department should take on in another nation. Counter-battery fire, the

State Department engages in defensive activities of its personnel.

We are never going to be launching 155 millimeter artillery rounds

back at the opposition. That is a function of the government of

Iraq. I would be glad to submit something for the record, Mr.

Chairman. But we will do everything that is necessary for us to do.

However, there are simply functions that do dissolve and disappear

when the Department of Defense leaves, because they are military

functions.

Mr. CHAFFETZ. Thank you, Ambassador.

I will now recognize the ranking member, Mr. Tierney, for 5 minutes.

Mr. TIERNEY. Thank you very much.

Ambassador Kennedy, I think Mr. Bowen gave us a pretty good

idea here to help us with our work. So I want to put it to you for

as close to a yes or no answer as you can reasonably do here. Will

you and the State Department submit to this subcommittee sufficiently in advance of implementation for our review and comment

each plan for carrying out your responsibilities, including the strategic and the tactical aspects?

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Mr. KENNEDY. I think, sir, the answer is yes. But I do not have

the kind of written plans, for example, I can provide a copy of our

contract for the maintenance of the MRAPs. That is my plan.

Mr. TIERNEY. Well, when you have a plan for strategy and tactical, carrying out any of the responsibilities that you have, I take

it as a yes that you will submit that to us sufficiently in advance

for our review. And I appreciate that.

Mr. KENNEDY. We will certainly submit them to the committee.

However, everything is ongoing. Every day, we make decisions, Mr.

Tierney.

Mr. TIERNEY. But you don’t make a plan every day. Every day

you carry out aspects of a plan.

Mr. KENNEDY. Exactly.

Mr. TIERNEY. Every so often, you make a plan. When every so

often you make that plan, the tactical and strategic aspects, I am

taking it as a yes that you will submit it to this subcommittee and

Congress so that we can have enough time to look at it. I think it

was a good idea.

Mr. KENNEDY. It is an excellent idea, but we may have to implement it immediately.

Mr. TIERNEY. We will work with you on that. And will you certify

to Congress and this subcommittee that for each plan that you

have the actual resources that you need to implement it, and that

you are committed to the oversight and management of that plan?

Mr. KENNEDY. We will certainly certify we are committed to the

Management and oversight. However, we have plans that are dependent upon appropriations. So I cannot certify——

Mr. TIERNEY. You can certify the condition that you have the resources, subject to certain appropriations?

Mr. KENNEDY. I can certify that we have things subject to appropriations.

Mr. TIERNEY. And in that line, let me just go on with that. On

February 17th, Secretary of Defense Robert Gates testified before

the Senate Armed Services Committee. He was pretty passionate

about his call to support the State Department’s budget request for

fiscal year 2011 and 2012. Here is what he said: ‘‘The budget request is a critically urgent concern, because if the State Department does not get the money that they have requested for transition in Iraq, we are really going to be in the soup.’’

Further, he went on, he said without this funding, ‘‘much of the

investment that was made in trying to get the Iraqis to the place

they are is at risk.’’ Admiral Mullen also added that sufficient investment in State’s capabilities was critical, otherwise, we are

going back for a lot more investment and a lot more casualties. So

despite these pleas from Defense and military leadership, last

month the House passed an appropriations bill that seeks to dramatically cut State’s budget request for fiscal year 2011. Secretary

Clinton, as I said in my opening remarks, testified yesterday that

cuts would severely inhibit State’s ability to perform its mission.

Ambassador Kennedy, if H.R. 1 became law, with that 16 percent

cut in there, how would the cuts impact your ability to perform

your mission in Iraq?

Mr. Kennedy. Mr. Tierney, we would not be able to perform the

mission that has been tasked to the State Department.

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Mr. TIERNEY. And Ambassador Vershbow and Mr. Kendall, am

I correct in assuming that you agree with Secretary Gates that full

support for State’s budget request is essential to the success of the

mission in Iraq?

Mr. VERSHBOW. Absolutely, Congressman Tierney.

Mr. TIERNEY. Mr. Thibault, the Commission’s recent report on

the Iraqi transition makes its No. 1 recommendation that Congress

adequately fund State to perform its duties in Iraq. In your view,

what would happen to the mission if Congress dramatically slashed

State’s top line program budgets, as proposed?

Mr. THIBAULT. Mr. Congressman, the mission would not be accomplished. It would be mission failure.

Mr. TIERNEY. In the Commission on Wartime Contracting report

that you released yesterday, the recommendation was made that

the State Department expand its organic capability to meet heightened needs for acquisition personnel, contract management and

contract oversight. The report goes on to say that shorter funding

and program Management staff to adequately conduct oversight of

the thousands of contractors we will need to hire in order to successfully take the reins of U.S. operations in Iraq from the Department of Defense, some of these contracts will be for highly critical

or sensitive missions, such as handling unexploded ordnance.

In addition, the Commission warns that if the scope of State’s

contracts in Iraq increases, failure to provide for expanded oversight and implementation of contract administration strategies will

lead to instances of waste, fraud and abuse in contracting. So Mr.

Thibault, do you think that spending money now to ensure that

State can conduct effective oversight of the contractors necessary to

implement the transition will ultimately prevent waste, fraud and

abuse in contracting, and save the American people money?

Mr. THIBAULT. Yes, Mr. Congressman, and we also believe that

part of that process or plan includes both the pre-award costs, evaluation and analysis, and as previously mentioned, oversight. Because they not only need the money, but they need the ability to

implement the program.

Mr. TIERNEY. Exactly so. Thank you. I yield back, Mr. Chairman.

Mr. CHAFFETZ. Thank you. It is now my pleasure to recognize the

gentleman from Idaho, Mr. Labrador, who is going to serve as the

vice chairman, a new Member of the 112th Congress, and somebody who just recently returned from a visit to Iraq. Mr. Labrador,

you are recognized for 5 minutes.

Mr. LABRADOR. Thank you.

Being new to Congress, I sometimes question some of the things

that are happening here in Washington, DC. It seems like we make

some assumptions.

Mr. Ambassador Kennedy, explain to the American people, really, there are going to be 17,000 new workers, people employed in

Iraq. Yet 16,000 of them are contractors. That doesn’t make any

sense to me, especially when we pay contractors a lot more money

than we pay government employees. Can you explain how you justify that?

Mr. KENNEDY. On two grounds, Mr. Vice Chairman. First of all,

the General Accounting Office did a study, which I would be glad

to make sure that you receive, that actually shows that the State

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Department use of contractors in protective security operations actually saves the U.S. Government money in the long term.

Second, we have a surge issue here in Iraq. We need aviation

support. We need medical support. We need logistical support. We

need that effort in Iraq and in Afghanistan. I do not need that effort in the other 163 American embassies that we have.

Hiring permanent U.S. Government employees for a 20 or 30

year career for a need in Iraq for aviation or particular security or

explosive ordnance disposal, etc., is not good government. It is not

good for the American taxpayer to saddle them with a long-term

30-year bill for employees, when I need them for a surge capability,

for a brief period of time.

Therefore, if I need them for a long period of time, they become

government employees. If I don’t need them for a long period of

time, that surge capability is best done and least expensively done

for the long haul with the use of contractors, sir.

Mr. LABRADOR. According to the GAO, for the past 3 years, the

State, DoD and USAID have been unable to determine the exact

number of contractors you employ in Iraq. Without having reliable

data on the number of contractor personnel it is currently relying

on in Iraq, how has State developed projections regarding the number of additional contractor personnel after the drawdown of U.S.

forces?

Mr. KENNEDY. Two points, Mr. Vice Chairman. One, I believe

that I know exactly how many contract employees I have on any

given day in Iraq, and I would be glad to meet with you or your

staff to discuss that.

But second, what we do is we have analyzed each of those major

functions that I have referred to: aviation, medical, etc. And we

have done a table of organization, I need so many pilots, I need so

many bomb disposal personnel, I need so many static guards. We

have a table of organization and that is actually what we give to

the contractor. You must fill each one of those billets. And then

when they provide us personnel, we use a data base that we borrowed within the Department of Defense that is called SPOT, and

we register every single one of those contractors in that data base.

Mr. LABRADOR. So you claim that GAO is wrong? You do have

a number? What is that number of contractors that we have?

Mr. KENNEDY. Today? Let me submit that for the record, because

that number does change every day.

Mr. LABRADOR. But GAO was wrong when they said you couldn’t

account for them?

Mr. KENNEDY. That is correct. I believe that I can account for

every single contractor I have in Iraq, yes, sir.

Mr. LABRADOR. But you don’t know right now what that number

is?

Mr. KENNEDY. I brought our planning numbers for the transition.

I didn’t bring with me my charts which show exactly how many I

have on board today. My apologies.

Mr. LABRADOR. OK. Now, Mr. Green, in his testimony Under Secretary Kennedy disputes your finding that the State Department

did not arrive at its decision to use contractors by default. He

points to the fact that State has hired an additional 102 staff for

contract administration, 200 managers for oversight of private seVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
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curity contractors, and is supplementing its oversight of the

LOGCAP with subject matter experts from DoD. Is this sufficient,

in your view?

Mr. GREEN. Well, it may be sufficient today. But if you look at,

and I don’t disagree with Secretary Kennedy, if you look at the

number of contractors that the State Department will require post2011, they do not have enough oversight today to oversee and manage those contractors in the way they should be.

One of the things that this Commission has found in the last 2

years is a huge difference in the number of contracting, procurement, acquisition personnel on board, not just in State, but in

every agency we have looked at, and the number of contracts that

are being awarded. So we have this lack of oversight generally.

And with State, with the huge increase in the number of contractors that they are going to experience, they need a lot more oversight, and they need it on the ground.

Mr. LABRADOR. Thank you, Mr. Chairman.

Mr. CHAFFETZ. Thank you. The gentleman’s time has expired.

We will now recognize the ranking member of the full committee,

Mr. Cummings of Maryland, for 5 minutes.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Mr. Chairman, as I have listened to this testimony, I want to

thank you, gentlemen, for your testimony. It is very enlightening.

I can conclude that we all understand that we need to tighten our

belts, no doubt about it. But we have already spent 8 years, $1 trillion and lost, unfortunately and tragically, 4,000 American lives in

trying to help Iraq. Certainly we applaud our military for all they

are doing to slash the State Department’s budget in this way at

this time is not only irresponsible, but it is a clear and present

danger to our national security. And as I listened to you, Mr. Ambassador Kennedy, you were asked some questions about, if you

had to take the cuts that now seem to be coming down the pike,

we would be in deep trouble, wouldn’t we?

Mr. KENNEDY. Sir, we would not be able to execute the mission

that we have been given without the funding that is both in the

fiscal year 2011 President’s budget and the fiscal year 2012 budget,

yes, sir.

Mr. CUMMINGS. And another term for that would be mission failure, is that not correct?

Mr. KENNEDY. Yes, sir.

Mr. CUMMINGS. Now, on February 24th, the Commission on Wartime Contracting released a report entitled At What Risk, Correcting Our Over-Reliance on Contractors in the Contingency Operations. In the report, the Commission identified several policies and

practices that hamper competition for contingency contracts. Ambassador Kennedy, you testified that State is considering bids for

several functionalities that are vital to a successful transition in

Iraq, including the police development program, security operations

and life support services.

As State begins the process of significantly expanding its contracting and oversight functions in Iraq, what steps are you taking

to expand competition?

Mr. KENNEDY. Sir, we believe in competition. For example, on

our security, for both static and movement security, we are enVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
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gaged in competitive bids for all those contracts. For the construction of our facilities in Iraq, our Office of Overseas Buildings Operations is using competitive competition. For our medical contract,

competitive competition. Our aviation contract was awarded by

competitive competition. We are using competitive competition ourselves, or we are riding DoD contracts that were awarded already

by competitive competition, and we access them through the Economy Act, sir. We are using competitive competition.

Mr. CUMMINGS. And do we have appropriate oversight over those

contracts? Because we had some testimony a few days ago from

GAO that we have contractors overseeing contractors.

Mr. KENNEDY. Sir, we do not have contractors overseeing contractors.

Mr. CUMMINGS. Good.

Mr. KENNEDY. We are doing three things. We have increased significantly the staff of our contracting operation at headquarters.

We are deploying, and will deploy, 200 U.S. Government diplomatic

security personnel to oversee the contracting operations. We will

have State Department medical personnel overseeing the medical

contract, and we will have State Department logistics people, etc.,

overseeing those contracts.

We are deploying additional contracting officers’ representatives,

i.e., U.S. Government employees, to oversee every single one of our

contractors.

Mr. CUMMINGS. You understand why I am saying that, because

we want the American taxpayers’ dollars to be spent effectively and

efficiently. I think it is very difficult when you have a contractor

overseeing a contractor, and we lose control over the billions of dollars that we are spending.

Let me just get to this last question. The Commission on Wartime Contracting and SIGIR testified that State does not have adequate resources in place for contract Management and oversight. In

its July 2010 report, CWC found that planning for moving vital

functions in Iraq was not adequate for effective coordination of billions of dollars in new contracting, and risked both financial waste

and undermining U.S. policy objectives. Today, Inspector General

Bowen testified that he continues to have some concern about

whether State’s current structure and resources provide a sufficient

basis for managing very large continuing contracts and programs.

Ambassador Kennedy, do you believe that State has the current

structure and resources necessary to manage and oversee the very

large contracts and programs that State will be responsible for?

And I assume your answer is yes, based upon what you just said?

Mr. KENNEDY. It is, sir. We have the plans, we have the program

in place. My only codicil to that is, carrying out the full program

in Iraq depends on the President’s budget request for the State Department for fiscal year 2011 and fiscal year 2012 being enacted.

Mr. CUMMINGS. I see my time has expired. Thank you, Mr.

Chairman.

Mr. CHAFFETZ. Thank you.

The chair will now recognize Mr. Farenthold of Texas, a new

member to this committee. Welcome, and you are recognized for 5

minutes.

53

Mr. FARENTHOLD. Thank you. As a new member of this committee, and not an expert in foreign affairs or the situation, and never

having been to Iraq, I am troubled by what I am hearing here. My

impression of Iraq comes from what I see on television and read

in the newspapers, which might in and of itself be a mistake.

But we are talking about an unprecedented logistical situation

for the State Department going in there. We are talking about unmanned aerial vehicles, we are talking about recovering bodies, we

are talking about trauma medical facilities. We are talking about

pretty hefty defenses against attacks. We are talking about not

being able to get gasoline or groceries within the country.

This kind of troubles me. I realize the Bush administration set

a hard deadline of the end of this year for getting out of Iraq on

a military basis. I guess I will address this to the DoD, or Ambassador Kennedy, you are welcome to jump in on this. It doesn’t

sound like we are ready for the military to get out of there, if the

situation requires this level of logistical support. Has anybody in

the Obama administration or the DoD talked to the Iraqi government and said, hey, you think maybe it might be a good idea for

us to stay a little bit longer until this is more stable?

Mr. VERSHBOW. Congressman, that is a very good question. First

of all, the decision to draw down our forces by the end of this year

was a mutual decision with the government of Iraq. We honor the

commitments that we made in the security agreement to carry out

the drawdown in a responsible way.

We do think that the Iraqi security forces have become increasingly capable of managing security for the country as we go forward. They have taken responsibility step by step. We transitioned

to full Iraqi lead responsibility on September 1st of last year. And

the security conditions, in our view, are improving.

That is not to say that everything is perfect in Iraq, and there

have been very dramatic and tragic spikes of violence in recent

weeks. But I think that we have seen the Iraqis respond in a professional way.

So we will depend more and more on the Iraqis for our security.

But I think that with the effort that has been described here by

Under Secretary Kennedy and by Mr. Kendall, we are aiming to

equip our State Department colleagues for success. It is, indeed,

going to be an unprecedented effort in its scale. That is all the

more reason why Secretary Gates emphasized the need for providing the State Department with the resources that it needs to succeed.

I would also emphasize the strategic importance of Iraq, in light

of the recent dramatic upheavals in the region. With all the popular pressures around the Middle East and North Africa for reform

and democratization, Iraq is now serving as an example.

Mr. FARENTHOLD. I am excited that we have achieved the success

that I think the Bush administration, Iraq being a shining example. But if they can’t provide even groceries for us, I am not sure

we are there yet.

And maybe I will address the question to Mr. Bowen. You spent

some time over there. Are you aware of any requests from anybody

within the Iraqi government that maybe our military presence,

that we reevaluate our time lines?

54

Mr. BOWEN. Yes, I am. I was in Iraq 2 weeks ago, and I met with

a number of senior officials, specifically a deputy prime minister

who indicated that there is openness at the very least to renegotiating a security agreement. And I think Secretary Gates has spoken openly about that possibility as well.

But as Ambassador Vershbow noted, this is really something

that the Iraqis secured from us originally in security agreements,

and that they would really need to publicly reopen. That matter,

of course, doesn’t have much time. December 31st will be here

soon.

Mr. FARENTHOLD. Are you aware of anybody within the administration who is actually pursuing these discussions? Or is this something they just came up with over coffee somewhere, or I guess tea?

Mr. BOWEN. I am not involved in the policy matters related to

this issue.

Mr. FARENTHOLD. I am just about out of time, so I will yield back

my remaining 20 seconds.

Mr. CHAFFETZ. The gentleman yields back. We will now recognize

the gentleman from Illinois, Mr. Quigley, for 5 minutes.

Mr. QUIGLEY. Thank you, Mr. Chairman, and welcome to your

new position.

I guess I am struck with something I heard someone from State

say when I was visiting Iraq. We were being briefed, and they kept

saying, we want to make sure we have this right, so we don’t have

to come back. Finally, after about an hour of that, a few of the

Members said, we are not coming back.

But there was a sense within the people there at State, and some

of what I hear here, that we have to make things perfect. Let’s

name a Middle East country that isn’t at least facing some possibility of extraordinary instability. Are we going to embed ourselves to

that degree you are talking about in Iraq to maintain the stability

we would love for our own national security?

I just think perhaps we are talking about a bridge too far. Someone mentioned the corruption is as bad as it has ever been. I don’t

know that the people of Iraq will ever get along to the extent that

you are talking about, or that corruption is going to change, or that

all the efforts that we have already done or that you have planned

for the next infinite number of years will achieve what you would

like it to do. It is almost, from my point of view, impossible.

So it is what stuck in my mind since I went there, and nothing

has changed, that I heard today. But let me ask Ambassador Kennedy a question on this specific issue.

You wrote a letter, I believe, April 7, 2010, to DoD, the problems

that State Department will face in implementing the new life support system, any number of other agencies, entities have expressed

concerns as well. There are related issues.

Could you elaborate and make us feel a little better about how

that situation is going to play out?

Mr. KENNEDY. Yes, sir. We have been receiving absolutely stellar

cooperation, both in Iraq and the United States, from the Department of Defense. They are providing us surplus equipment, they

are providing us equipment on loan. They are permitting us, under

the Economy Act, to ride, utilize their contracts, for example, for

food, for fuel, for logistical activities.

55

So we have now crossed that barrier. We now have a way forward in those activities. Thanks to the cooperation from the Department of Defense, the contract is on the street for that, using

the superior buying power, so to speak, of the Department of Defense. As you know, the Department of Defense has facilities all

over the Middle East and Southwest Asia. Therefore, our ability to

partner with DoD on these gives us greater economies of scale, to

save money for the American taxpayer, and also permits us to use

the contracting capabilities and the contract oversight for DoD.

So I am very, very pleased with the progress we have made, and

we are on track, sir.

Mr. QUIGLEY. What still needs to be done?

Mr. KENNEDY. The contract has to be executed. It is now out for

bid. We will get the bids back in, they will be evaluated by DoD,

and it will be awarded. But there is plenty of time to meet the half

October 1st, half December 31st deadline, sir.

Mr. QUIGLEY. Thank you. I yield back, Mr. Chairman.

Mr. CHAFFETZ. Thank you, the gentleman yields back.

Now we will recognize Mr. Yarmuth of Kentucky for 5 minutes.

Mr. YARMUTH. Thank you very much, Mr. Chairman.

Thank you for your testimony, all of you. Mr. Tierney inquired

earlier about the impact of the top line cuts proposed in H.R. 1,

and on the ability to carry out your mission. You may not have reviewed all of the provisions of H.R. 1, but are there perhaps other

provisions in H.R. 1 that concern you about your ability to either,

in Defense or State, in carrying out the mission, things that may

not relate to just the top line cut in State’s budget?

Mr. KENNEDY. My review, sir, is that the major issue at hand

here is the funding levels. The State Department has both a core

mission in 165 countries in the world to advance our economic security, to provide life and safety for the thousands and millions of

American citizens who travel, to be the first agency in terms of our

border security, in terms of passport issuance, in terms of these

issues overseas.

Cuts of that magnitude are devastating not only to the State Department’s special missions in Iraq, Afghanistan and Pakistan, but

they are also devastating to our core mission to advance our national security through diplomatic means.

Mr. YARMUTH. Were there any other cuts in any other budget besides State at Defense? Were you concerned about any of the provisions in H.R. 1 that relate to these areas of operations?

Mr. KENDALL. As far as I know, it is the State Department cuts

that are the gravest concern. We have requests before the Congress

for both fiscal year 2011 and fiscal year 2012 which I think are still

under consideration. But I think any substantial cut, as Secretary

Gates mentioned, I think, when he testified just a couple of weeks

ago, this is a dominant concern for us right now, State Department’s funding.

Mr. YARMUTH. Thank you for those answers.

During the Oversight Committee’s last hearing on this subject,

there was some concern expressed about whether contractors were

being asked to perform inherently governmental functions. Ambassador Kennedy, you mentioned before some of the functions that

would disappear when the military the military operations ceased.

56

But Mr. Thibault and Mr. Green, do you believe that tasks such

as IED clearance and hostage rescue are inherently governmental

functions?

Mr. THIBAULT. Mr. Congressman, yes, I do. In the sense that absent, there are two parts that have been discussed today. Are the

Iraqis ready to assume responsibilities, and then second, absent a

military solution, are contractors the right solution. I have seen no

indication that on the highly technical areas we are discussing

here, such as IED removal, such as counter-battery, and when I

say highly technical, I mean competence also, UAV, that is something that we would transfer to the Iraqis.

So that leaves it to, the military is doing an exceptional job. And

I might use counter-battery, and I try to visualize things. But what

I have seen is, if the enemy, and I think everyone has seen it, they

will bring a small pickup truck, throw down one rocket, pop the

rocket and leave. That is because the objective, DoD is so exceptional at putting counter-battery on them within 8 seconds. They

know that.

If that degraded, and we are talking about safety to all government and contractor personnel, that are within an area of risk, if

that degraded, the real question then becomes, would that knowledge be available. And then at that point, would there be the normal process of a military where you have a forward observer, you

redirect fire, and you really can do damage to target areas.

Those are areas where, from an inherently governmental viewpoint, the U.S. Army is exceptional. And there are several areas

such as that quite frankly, I am very uncomfortable personally, and

we have discussed as a commission transferring those kinds of

functions to the contractor world.

Mr. YARMUTH. Thank you very much. Mr. Green, did you want

to add anything to that?

Mr. GREEN. No. I would certainly agree. Some of these, as we call

them, functional areas that will be taken over by State are very

close, if not inherently governmental. I guess the basic question is,

today, in the next 10 months, what is the option? State is not going

to hire and bring in-house DoD personnel. And DoD is going away.

So it leaves us very little wiggle room when it comes to performing many of these functions. Hopefully, State uses contractors now

in other locations for, I will call it bomb disposal, if you will. Do

they need to build that capability within their organization? And

how often would you use it?

So I think as ill-defined as inherently governmental is today, I

think when you talk about the time, there are many of these functions, or certainly a good number of them, that are appropriately

done by contractors.

Mr. THIBAULT. And I might add, though, in building upon Commissioner Green, if I might, in about 10 seconds, the key for State,

if they go contractor, is to have and bring in government employees, because State has said it is not their objective to have contractors looking at contractors, that are experts in the proper way to

do these types of examples we have seen. I don’t believe that capability exists presently. I think that is something they would have

to grow into, in order to do the oversight.

Mr. YARMUTH. Thank you for your response.

57

Thank you, Mr. Chairman.

Mr. CHAFFETZ. The gentleman’s time is expired.

We are actually going to go to a second round of questioning, if

the number of Members here would like to ask some questions. I

am going to recognize myself for 5 minutes.

Ambassador Kennedy, I was struck here, actually, as we thought

more about your answer to the 14 lost functionalities, that there

were 7, and I would be interested in your followup on which 7 stay

and which 7 don’t, I was really struck by your comment, and I hope

I heard you right, we will have to go back and look at the record,

you said that State wasn’t going to fire back. We may be actually

taking mortar rounds, we may be taking rocket fire, but you don’t

plan to fire back. Is that right?

Mr. KENNEDY. Yes, Mr. Chairman, we have no intention of using

155 millimeter howitzers from the American embassy compound to

fire back into Iraq.

Mr. CHAFFETZ. So we are just going to keep taking the shells,

and just keep taking it?

Mr. KENNEDY. No, sir. We are already working very, very well

with the government of Iraq, providing them with the locations

that the material has been fired at us, and the Iraqi government

has been successful, not to the degree that I wish they were, in disrupting those who would fire on our diplomatic and consular positions.

But it is not the function of a diplomatic entity to engage in a

defense engagement.

Mr. CHAFFETZ. Well, that is the concern, at the end of the day,

that is the concern that on January 1st, we don’t expect that suddenly it is going to be safe, safe place.

Mr. KENNEDY. Yes.

Mr. CHAFFETZ. We will have to continue to explore this.

Mr. KENNEDY. Could I finish?

Mr. CHAFFETZ. Yes.

Mr. KENNEDY. There are two parts to the counter-battery, sir.

There is the return fire. But the prelude to that is called sense and

warn, which we are retaining, which is a radar system that tracks

the incoming fire, then sounds a warning for our people to take

cover. And that we are retaining.

Mr. CHAFFETZ. I am familiar with it. This will obviously need to

be further explored.

In a Senate Foreign Relations report issued by Senator Kerry on

January 31st, of this year, he maintains that of December, land use

agreements had not been signed and construction had not begun on

satellite sites. With less than 10 months to go before the deadline,

could you please give us an update on this? It seems like a very

short amount of time in order to build a fairly significant facility.

You haven’t even acquired the land, is that correct?

Mr. KENNEDY. We are very, very close to signing agreements

with the government.

Mr. CHAFFETZ. What is that going to do to the time line?

Mr. KENNEDY. We believe at the moment, we are still within the

time line, because what we have done as part of our planning process in coordination with our Defense Department colleagues, we

have identified the plots of land that we need. We have surveyed

58

them, we have engaged the architectural and engineering work.

And the contracts for the construction have been sent out for bids

and the bids are back in.

Mr. CHAFFETZ. OK, if you are telling me you are still going to

hit the time lines——

Mr. KENNEDY. At the moment, today, I am telling you I am still

going to hit the time lines, yes.

Mr. CHAFFETZ. Mr. Kendall, briefly, briefly.

Mr. KENDALL. Mr. Chairman, I just want to mention, so the committee understands, that the land we will be using is land we are

currently generally in possession of. So we are shrinking our bases

to provide compounds, if you will.

Mr. CHAFFETZ. Thank you. I do appreciate it.

I need to move on. In April 2010, Ambassador Kennedy, you sent

a fairly direct statement out, a letter saying that without the

equipment that you needed, for instance, Blackhawk helicopters

and what-not, that there would be ‘‘increased casualties.’’ I get a

sense that some of that list has been to your satisfaction. But

where are we on the list that you issued in April 2010?

Mr. KENNEDY. Thanks to the good work of the Department of Defense, I believe that we are on track to receive everything from

DoD that I need, or, because for example, DoD’s own shortage of

Blackhawk helicopters, we are either acquiring other helicopters

from Sikorsky.

Mr. CHAFFETZ. But you are confident that you are going to get

100 percent of that?

Mr. KENNEDY. I am confident that we will have 100 percent of

what we need from multiple sources, including directly from the

Department of Defense, yes, sir.

Mr. CHAFFETZ. And then for the Department of Defense, the

question is, how many troops, how many American military will be

in-country on January 2nd?

Mr. KENDALL. Those numbers are still a little bit in flux. But the

entire OSC-I, Office of Security Cooperation in Iraq, DoD presence

will be under 4,000. The most recent number was about 3,900. We

think we are going to come down 10 or 15 percent from that.

Mr. CHAFFETZ. And that is of January 2nd?

Mr. KENDALL. No, that is at the end of—yes, January 2, 2012,

next year.

Mr. CHAFFETZ. But we will still have close to 4,000 troops?

Mr. KENDALL. Four thousand total DoD personnel, of which

roughly 1,000 will be government personnel. A subset of those will

be military. The rest will be contractors.

Mr. CHAFFETZ. And what will the military personnel be doing

there?

Mr. KENDALL. Various types of security assistance, training, missions such as that.

Mr. CHAFFETZ. I would appreciate some further clarification of

that as we move forward.

My time has expired, so I will now recognize for 5 minutes the

ranking member, Mr. Tierney.

Mr. TIERNEY. Thank you.

Ambassador, you started to get engaged in the issue on inherently governmental functions there beforehand. Is there something

59

you want to add to that conversation? I think it is an important

topic.

Mr. KENNEDY. Yes, thank you very much, sir.

The State Department believes that the functions that we are

being contracted out for are not inherently governmental. We

would never violate the law and contract out for something, these

are complex functions, however. So our predicate for handling this

is to ensure, and I will use security as the example here, is to have

very, very robust oversight by 200 diplomatic security, State Department career, government professionals, over that contract

body. It is about a 1 to 35 ratio, which we believe will fully ensure

that the contractors perform the non-inherently governmental functions under robust diplomatic security supervision.

Mr. TIERNEY. Describe for me, if you would, a security mission

that isn’t inherently governmental.

Mr. KENNEDY. For example, if you look at many, many Federal

installations or even State and local government installations in

the United States, static guards, fixed guards around many Federal

buildings in Washington are carried out by contract security personnel. It is widely accepted in the U.S. Government that static security personnel are not inherently governmental. Because they do

not have arrest authority and they do not engage in law enforcement activities, sir.

Mr. TIERNEY. Don’t you draw a distinction between the properties that we might be trying to protect and the people we might

be trying to protect in a contingency zone, like Iraq, make a distinction there between a building in downtown Washington?

Mr. KENNEDY. No, sir, because I think the predicate of it is the

same. But second, I have 1,800 diplomatic security personnel sworn

worldwide. It makes no sense for me at all to move that number

from 1,800 to 1,800 plus 7,000 for a period of time. The surge capability is, in my mind, what contracting is for, is to be able to grow

the work when you have a particular need, and then to be able to

shrink that work back for the benefit of the mission and the American taxpayer at the same time.

Mr. TIERNEY. How many Marines are going to be protecting our

embassy in Iraq?

Mr. KENNEDY. There will be, probably, I would say a couple of

dozen.

Mr. TIERNEY. That entire compound?

Mr. KENNEDY. Yes, sir.

Mr. TIERNEY. Will they be supervising any contract security people?

Mr. KENNEDY. No, sir, the Marines do not supervise the contractors. The regional security officer supervises both the Marines and

the contract personnel.

Mr. TIERNEY. Would you say that a hostage rescue mission is an

inherently governmental function?

Mr. KENNEDY. I think that a hostage rescue mission in a war

zone like Iraq, led by diplomatic security personnel and supported

by contractors stays within the boundaries of what is legal and

what is not legal, sir.

Mr. TIERNEY. Why would you have that supported by contract

personnel and not be strictly U.S. personnel?

60

Mr. KENNEDY. Because I do not have enough diplomatic security

personnel to do the mission, and I do not have a permanent need

for that many personnel to hire individuals for a 20 or 30 year career.

Mr. TIERNEY. All right. So the first part I don’t accept. The idea

on that is because you don’t have enough people doesn’t mean it

is no inherently governmental, it means basically you want to get

to that point some time and you are going to bring those people on,

you just can’t do it right now. I think we can have a debate about

the surge capacity on that, whether it makes sense for us to have

enough capacity worldwide that we can bring people and have people in areas where that is a likely situation and work on that. I

would like you to take another look at that, if you would.

Mr. KENNEDY. And when you say a hostage situation, obviously,

if I had the exactly definition of what the individual situation was,

I might very, very well use just diplomatic security’s sworn personnel, special agents that I have on the ground. I might use those exclusively, given the situation. They might need support, however,

from the contractor personnel they supervise.

Mr. TIERNEY. I would like to think that we would have some capacity worldwide, as I say, that wouldn’t mean kicking that sensitive type of operation out to contractors on that. I hope you will

take another look at that at some point.

Inspector Bowen, just quickly, in your experience, what is a

rough ratio of management and oversight personnel to contractors

and contracting dollars? What would be the appropriate ratio?

Mr. BOWEN. Within the State Department spending?

Mr. TIERNEY. Yes.

Mr. BOWEN. It varies on location. I mean, the number of contractors to government personnel can range up to 60 to 1 down to 20

to 1, 15 to 1. But I think that the Senate Foreign Relations report

of January 31st makes an important point that the committee

ought to take under consideration and advisement. That is, allow

the regional security officer flexibility on how he or she spends that

money across the country.

For example, Erbil. One bomb in 8 years. It is a safe place. No

Americans killed up in Kurdistan. But there are very high ratios

and standards of security protection that seem inconsistent with

the real security situation. Allowing more creative flexibility, I

think is the phrase that the report uses, will save taxpayer dollars.

Mr. TIERNEY. Thank you. Thank you, Mr. Chairman.

Mr. CHAFFETZ. The gentleman yields back. We will now recognize

Mr. Turner of Ohio for 5 minutes.

Mr. TURNER. Thank you, Mr. Chairman. I want to thank you for

holding this hearing, and certainly the importance of this issue.

Gentlemen, I am going to apologize to the extent that my question may overlap with other questions. I am on the Armed Service

Committee and just came from the Army budget hearing where

General Casey and Secretary McHugh are testifying. I stepped

away from that hearing to come and ask my question today. I think

certainly what we have seen in the materials that are available

from this hearing, there is a great deal of concern as to how this

transition would occur. I am going to follow on the questions about

the contractors.

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In looking at the materials, I think it is pretty startling to everyone that upwards of 17,000 contractors may be relied upon. If you

look at your plans, we are all concerned that you are going to rely

heavily on contractors for security. Given the problems that the Department of Defense had in providing oversight of contractor operations, I would like to express certainly my concerns and get your

thoughts on the State Department’s reliance on contractors, and

particularly, the impact it might have on our relationship with Iraq

and the Iraqi people.

I have been to Iraq five times, and Afghanistan five times. Certainly we are all aware of the issues that we have had when we

have looked to contracted security. General Caldwell was just before the NATO Parliamentary Assembly, and he voiced his concerns in the contracting process where he was looking at services

for training Afghanistan military police and its military, saying

that frequently, the contracting process limited the scope and the

ability to manage what functions were occurring.

We certainly also had concerns of how contractors relate to the

Iraqi people, or the government itself, questions have arisen concerning status of forces agreement, what is the status of contractors. I would like you to address that issue as to while they are in

Iraq, how they will be treated, the contractors themselves, what is

their legal status.

And then also the issue of the oversight of dollars, because there

is obviously a significant amount of dollars that will be applied toward the contracts themselves. Could you speak about that for a

moment, please?

Mr. KENNEDY. Yes, sir. If I could divide it into three pieces, I

think it would be responsive to you.

The first is, I think when you talk about contractors in the security arena, in gross terms you talk about either fixed, static security on the one hand and movement security on the other. The

fixed, static people stay within the walls or in the perimeter of the

U.S. embassy in Baghdad or our post outside. So their interaction

with the Iraqi people is very, very limited, because their mission

is within the walls.

On movement security, where we are escorting Members of Congress, other distinguished visitors or our own personnel out into

the city, every one of those movements which is staffed by contractors, the agent in charge of that movement is a State Department,

U.S. Government security professional who gives direction to the

contractors and is on control of that operation at all times. So we

think we have oversight, and that is my second point. We have

oversight both in the sense of the contract, we have oversight in

terms of the control of the contractors’ activities when they are engaged in their missions.

The third point, sir, you asked about the status. The contractors

are not covered by any type of diplomatic or consular immunity

under either of the two Vienna conventions. If they engage in any

inappropriate conduct, they are subject to both potentially U.S.

law, but also they would be subject to Iraqi law.

Mr. TURNER. That takes me to my point, and I appreciate your

use of the word inappropriate. But it also places them at risk for

appropriate actions, does it not, as they go, set about providing seVerDate 11-MAY-2000 13:58 Jul 29, 2011 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67365.TXT KATIE PsN: KATIE
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curity, if there should be a security issue that is addressed? You

have significant issues that need to be addressed with respect to

what their relationship is to what has occurred. And I think we

have certainly seen probably dozens of news stories that we have

all read of issues where there has been a security issue that has

arisen, and a concern with the security forces having been contract

forces.

Do you have thoughts as to how you will be addressing that?

Mr. KENNEDY. Yes, sir. There is a joint U.S.-Iraq security group

that is led by the regional security officer from the U.S. embassy,

with senior Iraqi military and police officials. That process has

been successful to date in resolving any issue that may have arisen. We believe we have a process in place, we believe it will be a

successful one, because there is a track record of it having been

successful.

Mr. CHAFFETZ. The gentleman’s time has expired. We will now

recognize the vice chairman, Mr. Labrador from Idaho, for 5 minutes.

Mr. LABRADOR. Thank you, Mr. Chairman.

Ambassador Kennedy, actually, Mr. Bowen, you said that we are spending $75 billion in Iraq currently. Do you know how much we

are going to spend in fiscal year 2012?

Mr. BOWEN. The State Department proposal is around $6 billion.

Mr. LABRADOR. Six billion. There has been a lot of testimony

here that if we decrease the spending levels, we are not going to

be able to do the mission in Iraq. So $75 billion, $6 billion, we are

a looking at a $69 billion savings, yet we are asking for more

money for the State Department. Ambassador Kennedy, what is

the State Department’s budget this year?

Mr. KENNEDY. Overall, the State Department budget request for fiscal year 2012 that the President has just submitted, sir, is $14.9

billion, for State Department.

Mr. LABRADOR. For the entire State Department?

Mr. KENNEDY. Yes, the entire State Department, excluding our

expenses in Iraq and Afghanistan.

Mr. LABRADOR. Fourteen point?

Mr. KENNEDY. Fourteen point nine, for Iraq, $4.3 billion for Iraq, Afghanistan, Pakistan, and $14.9 for our core diplomatic mission.

Mr. LABRADOR. Mr. Kendall, what is the Department of Defense

budget for next year? What is the request?

Mr. KENDALL. I would hesitate to give you a number off the top

of my head. I believe it is about $550 billion for the base budget.

Here it is, I have it, I think. No, wrong answer. Let me give you

that for the record. I am sorry. I should have it in my head, but

I don’t. Five twenty-four, base budget.

Mr. LABRADOR. Five twenty-four billion. So we are talking about

$524 billion for the Department of Defense, the Department of

State is going to have $14.9 billion. We are talking about a significant amount of money that is out there, and we are going to be

saving a significant amount of money by drawing down. I am just

not really clear why we need additional money and why any cuts

are going to be hurting us.

Are there no savings out there that we can do? Is the Department of Defense, for example, since we are saving that money in

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the Department of Defense, can we just transfer some money? Explain this to me, Mr. Kendall.

Mr. KENDALL. The Department has been under an intense effort

to find savings ever since last spring, when Secretary Gates made

a speech in Abilene that you may be aware of. We have worked

very, very hard. The services were all tasked collectively to try to

find $100 billion in money they could save in efficiencies and move

into other, more value-added activities. We are cutting general officer slots, we are cutting senior executive slots. It has been an extremely intense effort to get rid of every ounce of fat we possibly

can in our budget.

As the Secretary has said, if we are going to sustain our force

structure and modernize it as we need to, we absolutely have to

find savings. So there is an intense effort there. There is not an

ounce of extra fat, as far as I can tell, left in the Defense Department’s budget.

Mr. LABRADOR. And I applaud, actually, what the Secretary is

doing. But it just seems to me that if we are going to be saving

money in Iraq, and now for everyone here to testify that we can’t

save any money in our budgets, it just doesn’t make any sense.

There are some savings. For example, in your letter, Ambassador

Kennedy, of April 7th, you clearly asked for the equipment to be

transferred to the Department of State. How much would that save

us, if instead of purchasing the equipment, it was just transferred?

Mr. KENNEDY. I don’t have that figure in front of me, Mr. Vice

Chairman. But our budget request for 2012 was put together after

that was taken into consideration. So I would have had to request

additional funds for the armored vehicles or the other equipment

DOD was transferring to us. In other words, my request is net of

the transfers that DoD is making to us. My request would have

been higher if I was having to buy the equipment. Instead, I am

receiving it from DoD. So I did not request that as part of my Iraq

budget.

Mr. LABRADOR. So is DoD transferring all the equipment that

you need, or just transferring some of the equipment?

Mr. KENNEDY. They are transferring everything that they have

available in surplus.

Mr. LABRADOR. OK, thank you. I have no further questions.

Mr. CHAFFETZ. The gentleman yields back. We will now recognize

Mr. Farenthold of Texas for 5 minutes.

Mr. FARENTHOLD. Thank you.

As I have been sitting here, I wanted to talk a little bit more

about some of my concerns I brought up in my earlier question

about whether really this is the appropriate time and whether or

not we have reevaluated the drawdown deadline of the Bush administration, in light of the amount of extraordinary efforts that

the State Department is going to have to put into security.

I guess I would like to start off asking Ambassador Kennedy, in

light of everything you are asking, and the situation as you see on

the ground, would you feel comfortable taking your wife and kids

to serve with you in a facility in Iraq come next year?

Mr. KENNEDY. Sir, we permit working spouses to accompany the

State Department employees to Iraq now, and we will continue to

do that. The answer is, I would not inject children into Iraq now

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or later or any time in the near future. But that is only one of a

number of countries where pat of my job is to decide where family

members are permitted to go.

Mr. FARENTHOLD. All right. My earlier question to Mr. Bowen

was, are you aware of any negotiations on behalf of the Obama administration with high level Iraqis about possibly extending or renegotiating the number of troops that will be in Iraq after the end

of the year. And I probably asked that question to the wrong folks.

I would like to address that to you, Ambassador Kennedy, and our

two folks from the DoD. If you would each take a second and let

me know if you all know anything along those lines.

Mr. VERSHBOW. Congressman, as Secretary Gates has said, the

initiative for any discussion on any possible follow-on military presence would have to come from the Iraqis. We have an agreement

whereby we have mutually agreed to draw down our forces by the

end of this year, and will honor that agreement. In his testimony,

Secretary Gates identified some concerns he has about areas where

the Iraqis will need additional capability.

But I want to say that drawing down doesn’t mean we are disengaging. The Office of Security Cooperation in Iraq and the State

Department’s FMS programs are going to be important tools for

helping to continue to increase the capacity and the effectiveness

of the Iraqi security forces. And the police development program,

of course, will be very important as a complement in improving the

professionalism of the Iraqi police.

So we are preparing for that outcome. And we do believe that the

Iraqis, who have had the lead responsibility for security now for

more than a year, are doing an increasingly effective job. The question was asked earlier, is this going to be perfection. No, the Iraqis,

I think, understand that they have a long way to go in terms of

building the institutions of a stable state. I think it is in our strategic interest to help them, and that is what we intend to do, and

the State Department’s programs and the Department of Defense’s

continued engagement will be critically important in doing that.

Mr. FARENTHOLD. I appreciate that. But I am troubled by your

statement that any request would have to come publicly from the

Iraqis. There are two parties to this agreement. If I am unhappy

with a contract, I am going to live up to it, but if I think there are

some things that need to be renegotiated, I think it is open for either side to open it up and renegotiate. I just make that point.

And finally, again, I am going to ask the direct question. Is anybody on the panel aware of any request from the Iraqi government

for us to up those numbers?

Mr. KENNEDY. Sir, I think we will have to get back to you on

that question.

Mr. FARENTHOLD. All right. I would appreciate it if you did.

Thank you very much. I yield back.

Mr. CHAFFETZ. Thank you.

I am going to recognize myself for 5 minutes as we wrap up the

questioning here, starting with Ambassador Kennedy. I want to be

crystal clear, I want to go back to the very first thing we started

with. Will the State Department give unfettered access, complete

and total access, to the Special Inspector General to do their job?

Mr. KENNEDY. The——

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Mr. CHAFFETZ. All right, now, that says a lot right there. That

is my concern, is the hesitation.

Mr. KENNEDY. The Special Inspector General for Iraq has a mandate. We will provide him with all the material that is relevant to

his mandate.

There are other inspectors general with other mandates that we

provide information to. So if the Inspector General for Iraq asks me

for something within his mandate, he will receive it. If the Inspector General of the State Department asks me——

Mr. CHAFFETZ. I am not understanding what would be outside of

that scope. Mr. Bowen, be as direct and succinct as you can. I only

have a few minutes here.

Mr. BOWEN. That question is properly placed at this table between Ambassador Kennedy and me. You have raised an important

issue regarding that Congress has all the information it has come

to expect from SIGIR about what is going on in Iraq, and specifically about what is going on with regard to transition.

We have an expanded mandate over and above what is usually

the case for IGs. It requires quarterly reporting, it is cross-jurisdictional. As we pointed out in our last quarterly report, and as is

very specifically detailed in that October 7th memo you cited, the

State Department has stopped giving us information that it was

giving us before. That question is now before Ambassador Kennedy,

and I am confident that they will resume giving us the information.

We need to ensure that you have the information about what is

going on in Iraq.

Mr. CHAFFETZ. Ambassador Kennedy, do you care to further comment?

Mr. KENNEDY. Mr. Chairman, I could only repeat my position.

We provide——

Mr. CHAFFETZ. No need to repeat your position. I find it a troubling position, quite frankly. It is something we will continue to

have to further explore, as we will with the Department of Defense.

There are other questions that Members would like to submit.

We would appreciate your prompt response to those questions.

As we wrap up here, I would appreciate maybe if we could start

with Mr. Green and just go down the table. What is your No. 1 concern? This is a mammoth, massive task that is before us. I cannot

thank the men and women who are scrambling every day, putting

their lives on the line making this happen. I hope they understand

the appreciation of the American people, those of us in Congress

and others, for their good, hard work and dedication.

But as we move forward, it is also imperative that we highlight

the concerns that you all have. You are the closest to it. If we could

just go down the line and cite, what is your biggest concern moving

forward?

Mr. GREEN. We have discussed many of them here today. I think

to name one or two, it is to ensure that we have the adequate oversight. The fact is that we are going to have a heck of a lot of contractors in-country. But we have to increase the oversight, because

that is where we leave ourselves open to waste and fraud.

Mr. CHAFFETZ. Thank you. Mr. Thibault.

Mr. THIBAULT. Thank you, Mr. Chairman.

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Probably my No. 1 in the context of these discussions is, it is explained in our charter, we get bound up sometimes in inherently

governmental, and our charter by Congress said, those functions

that should be best performed by the government versus contractors. And in that context, and in our discussions here, we talked

about these 14 items. I really think it warrants an analysis, because the U.S. Army has built an exceptional capability over time.

And to even think about transferring that capability to me introduces the potential for safety of government and contractor employees who reside in those locations that are protected.

Mr. CHAFFETZ. Thank you. Mr. Bowen.

Mr. BOWEN. Accountability for outcomes. As Mr. Tierney pointed

out, this committee and the Congress needs to know what the State

Department plans to achieve. What are the specific outcomes that

$6 billion will be spent, if you include the program money, not just

the operating money that the State Department, if it gets it all,

will receive this year. Knowing what the police development program will achieve with the 190 trainers across the country that are

going out to help the Iraqis improve, what outcomes will they

achieve.

Mr. CHAFFETZ. Thank you. Ambassador Kennedy.

Mr. KENNEDY. Achieving the adequate funding levels in order to

carry out the mission that I have been tasked to do.

Mr. CHAFFETZ. Thank you. Ambassador Vershbow.

Mr. VERSHBOW. I share Ambassador Kennedy’s concern. Secretary Gates said, ensuring that the State Department has the resources it needs to stand up this very ambitious and complex mission is critically important. And it is very urgent, because as the

Secretary said, there are facilities to be built, there are people to

be hired. So we need to get them the resources that they need as

quickly as possible.

Mr. CHAFFETZ. Thank you. Mr. Kendall.

Mr. KENDALL. Mr. Chairman, let me first correct a statement I

made earlier. The numbers I gave you were not quite accurate for

the DoD presence in the future in Iraq. The total number is approximately less than 4,000. But of that 4,000, about 1,000 total

are security assistance. And within that total of 1,000, approximately 200 or less are actually DoD or government personnel.

The answer to your question, from my perspective, is time. Time

is a big factor here. And we have a great deal to do in a relatively

short period of time. In the fall, the U.S. forces will start to transition very much to exiting from Iraq. We have to accomplish a great

deal before then. Along with that, of course, I would add the funding concerns that were expressed earlier.

Mr. CHAFFETZ. Thank you. I thank you all for your participation

and your great work and service to the United States of America.

I thank you for the interaction and look forward to interacting with

you in the future.

Thank you. This committee is now adjourned.

[Whereupon, at 11:18 a.m., the committee was adjourned.]

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