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i 

20–081 2017

[H.A.S.C. No. 114–121] 

EVALUATING DEPARTMENT OF DEFENSE 

INVESTMENTS: CASE STUDIES IN 

AFGHANISTAN INITIATIVES AND 

U.S. WEAPONS SUSTAINMENT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

AND INVESTIGATIONS 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

APRIL 15, 2016 
(II) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

VICKY HARTZLER, Missouri, Chairwoman 

JEFF MILLER, Florida 

K. MICHAEL CONAWAY, Texas 

JOSEPH J. HECK, Nevada 

AUSTIN SCOTT, Georgia 

MARTHA MCSALLY, Arizona 

JACKIE SPEIER, California 

JIM COOPER, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

GWEN GRAHAM, Florida 

HEATH BOPE, Professional Staff Member 

KATY QUINN, Professional Staff Member 

MIKE GANCIO, Clerk 
(III) 

C O N T E N T S 

Page 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Hartzler, Hon. Vicky, a Representative from Missouri, Chairwoman, Subcommittee on Oversight and Investigations ...................................................... 1 

Speier, Hon. Jackie, a Representative from California, Ranking Member, Subcommittee on Oversight and Investigations ...................................................... 3 

WITNESSES 

Lilli, Charlie, Deputy Commander, DLA Aviation, Department of Defense ....... 8 

Sopko, Hon. John F., Special Inspector General for Afghanistan Reconstruction ........................................................................................................................ 5 

Wicecarver, Jacqueline L., Acting Deputy Inspector General for Auditing, 

Department of Defense ........................................................................................ 6 

APPENDIX 

PREPARED STATEMENTS: 

Lilli, Charlie ...................................................................................................... 102 

Hartzler, Hon. Vicky ........................................................................................ 35 

Sopko, Hon. John F. ......................................................................................... 39 

Speier, Hon. Jackie ........................................................................................... 37 

Wicecarver, Jacqueline L. ................................................................................ 93 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Letter from the Department of Defense Inspector General office regarding 

sampling methodology .................................................................................. 126 

Testimony of Brian P. McKeon, Principal Deputy Under Secretary of 

Defense for Policy .......................................................................................... 111 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Conaway ..................................................................................................... 131 

Ms. McSally ....................................................................................................... 131 

Ms. Speier ......................................................................................................... 131 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

EVALUATING DEPARTMENT OF DEFENSE INVESTMENTS: CASE STUDIES IN AFGHANISTAN INITIATIVES 

AND U.S. WEAPONS SUSTAINMENT 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, DC, Friday, April 15, 2016. 

The subcommittee met, pursuant to call, at 9:02 a.m., in room 

2212, Rayburn House Office Building, Hon. Vicky Hartzler (chairwoman of the subcommittee) presiding. 

OPENING STATEMENT OF HON. VICKY HARTZLER, A REPRESENTATIVE FROM MISSOURI, CHAIRWOMAN, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

Mrs. HARTZLER. Welcome. I am delighted to convene this hearing. Overseeing the investment of taxpayer dollars is extremely important. It is one of the core responsibilities we assume as representatives of the people. I know Ranking Member Speier and others of this committee all find this obligation equally significant. 

In the year since September 11, 2001, the Department of Defense 

has been in a fight against emboldened terrorists. Congress met 

the increased national security demands by significantly enhancing 

the Department’s base budget and overseas contingency operations 

fund to address new threats and meet new requirements. Since 2010, Congress has slashed defense spending by $1.3 trillion, however. And today we are realizing significant negative impacts within the Department of Defense based on those decisions. 

Readiness of all of our Armed Forces is at an all-time low. Our 

Air Force is smaller and older than when it was conceived in 1947. 

Our Navy has fewer ships to meet an ever-increasing operations 

tempo. Our ground and amphibious forces of the Army and Marine 

Corps still have yet to recapitalize and reset from past years of 

combat operations. And most unfortunate is that our standing 

among our partners and allies leaves many questioning U.S. commitment and resolve to navigate through the multitude of emerging 

security challenges we face as a nation and leader of the free 

world. 

China is rising. Russia is resurging, emboldened by a lack of 

checking its power. Iran is beginning to flourish militarily from the 

good deal they got from our nuclear negotiations. North Korea consistently acts out from some form of provocation against its neighbors as it tries to achieve nuclear capability, and extremist ideologies are spreading through the Middle East and other parts of the 

world at alarming rates. 
2 

In addition to my service on this committee, I am also privileged 

to serve on the House Budget Committee and I am the only member of my party to sit on both. Many other members of the Budget 

Committee and I are concerned about the combination of these 

emerging threats and the desperately low levels of funding we are 

devoting to defense against these current and developing national 

security threats. The picture is clear. These threats cannot go 

unaddressed and our national defense is in need of more resources 

to ensure our national security and the common defense is secure. 

At the same time, it would be very difficult for anyone in this room to dismiss our country’s current $19 trillion in debt, and as 

representatives of those who are ultimately on the hook for that 

debt, the taxpayers, we would be neglectful not to investigate and 

scrutinize how their tax dollars are being spent. We need to be able 

to look our colleagues and our constituents in the eye to sincerely 

assure them we are doing everything we can to oversee wise investments. 

That brings us to the heart of our hearing today. We are here 

to examine a number of cases coming from the later stages of operations in Iraq and Afghanistan to investigate how taxpayer dollars 

were spent and determine what if any changes need to be made 

going forward to assure the people their tax dollars are being spent 

responsibly. Nation building is not a core responsibility of the Department of Defense. Yet, as major combat operations of Iraq and 

Afghanistan began to subside in 2010, the Department shouldered 

much of the post-hostility responsibility, primarily because it is 

large enough and has the ability to provide immediate resources 

and capabilities. 

Consequently, the Department of Defense established the Task 

Force for Business Stability Operations, first in Iraq, and then 

again in Afghanistan in 2010, with similar and parallel goals to 

support the transition away from war, what is known as phase 4 

and phase 5 efforts. The task force case studies we plan to discuss 

today include the Afghan compressed natural gas infrastructure 

project, the Italian cashmere goat import project, and the housing 

and security accommodations that task force personnel utilize 

while deployed in Afghanistan. 

But not all imprudent spending decisions occur during contingency operations. For example, as the Department of Defense Inspector General previously reported, there have been some problems with the aviation spare parts supply chain of the Defense Logistics Agency. While it is extremely important that we scrutinize 

the Department’s purchases to ensure they are smart and reasonable, it is just as important that we use all means necessary to get 

our taxpayers’ money back or exchange parts from vendors that 

may have supplied parts that did not meet contractual requirements or technical specifications. In other words, if our airmen receive the wrong or defective parts, we must make it right by the 

taxpayer. 

Again, I reiterate the importance of hearings such as this one. 

We live in a world of vast and expanding threats that require a robust and full response. If we are going to use hard-earned tax dollars to fulfill our obligation to provide for the common defense, we 

owe it to those taxpayers to rigorously scrutinize how those dollars 
3 

are spent and the qualifications of those making spending decisions. 

I look forward to exploring and learning more about these certain 

high-profile case studies which, as Department of Defense investigators have recently reported, may have benefitted from more exacting standards of how those investments were made. 

And so before I introduce the witnesses, I turn to the Oversight 

and Investigation Subcommittee ranking member for any opening 

remarks she wishes to make. 

[The prepared statement of Mrs. Hartzler can be found in the 

Appendix on page 35.] 

STATEMENT OF HON. JACKIE SPEIER, A REPRESENTATIVE 

FROM CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS 

Ms. SPEIER. Thank you, Madam Chair, and I thank our witnesses for being here today. I want to especially thank Mr. Sopko 

and Ms. Wicecarver for the service that you provide to our country 

and to the taxpayers of this country. 

Today’s hearing includes discussing a herd of cashmere goats; 

yes, goats. DOD [Department of Defense] spent millions of dollars 

on a project involving shipping male Italian goats to Afghanistan 

to be mated with female Afghan goats in order to make cashmere. 

Too bad many of the female goats were already infected with a disease that could have wiped out the entire herd. Too bad that only 

two of those fancy Italian goats are still usable in the project. 

I think we can safely say that manufacturing warm, fluffy sweaters are not the key to economic recovery in Afghanistan; nor, is it 

in DOD’s expertise. But that is not all. DOD also wasted money on 

an unused coal storage facility, an unsustainable business incubator, and one of the most expensive gas stations in the world. 

The Special Inspector General for Afghan[istan] Reconstruction [SIGAR] estimates the gas station alone cost $43 million. Now, we 

can quibble about how much it really cost, but in the end, it costs 

over $43 million. And a gas station in Pakistan, similar to the gas 

station in Afghanistan, cost only $200,000. 

Today we are going to discuss two dysfunctional DOD programs 

that are desperately in need of oversight and budgetary common 

sense. The first is DOD’s ill-conceived and badly executed USAID 

[U.S. Agency for International Development] knockoff, the Task 

Force for Business and Stability Operations, TFBSO for short. 

Starting in Afghanistan in 2010, TFBSO was supposed to catalyze 

economic development in support of the military. But according to 

SIGAR, they have received more complaints, more complaints 

about fraud, waste, and abuse over the last 2 years than any other 

organization operating in Afghanistan. Even compared with the old 

boondoggles in Afghanistan, the shortsightedness and sheer absurdity of these projects is mind-boggling. 

These projects are tailor-made ammunition for critics of our nation-building misadventure here. We will also discuss poor practices at the Defense Logistics Agency [DLA] which put our service 

men and women at risk. At the core of this hearing is, what do we 

have to show for our money? For TFBSO, I can say that the answer 

to this question is not much. 
4 

Here is what we got for the nearly $1 billion, nearly $1 billion 

spent at TFBSO activities: a defunct cashmere goat farm; private 

villas for TFBSO staff; and an outrageously expensive gas station. 

Is that it? We don’t know, since the Pentagon apparently no longer 

possesses the expertise to address the question. Were there any 

successes or sustainable accomplishments from TFBSO, or should 

we have just left economic development to USAID and the State 

Department, instead of using the military as untrained aid workers? As IG [Inspector General] Sopko recently said, tasking DOD 

to do development is, quote, ‘‘like giving the Postal Service the mission to run our drones in Afghanistan.’’ Unquote. 

The DODIG’s [Department of Defense Inspector General] report 

is equally damning on DLA Aviation and the problems associated 

with defective parts. For example, the DODIG found that defective 

tie-down straps used to attach oxygen hoses to pilots’ helmets remained in the inventory even after the Air Force reported that they 

should be recalled. The flaw was severe. The ties did not hold the 

oxygen hose to the mask which could have caused the loss of oxygen to aircrew members during flight. The frightening part is, 

these defective ties may still be in DLA inventory. 

This and other poor oversight and procedures are projected to 

have cost taxpayers $12.3 million in unrecovered funds over just 6 

months. Unfortunately, this is old news. Past DODIG and GAO 

[Government Accountability Office] reports have found that the 

DLA has regularly overpaid for spare parts and badly manages 

their bloated inventory. 

Today I would like to know what the DOD has learned from the 

SIGAR and DODIG reports. Has oversight coordination and accountability been improved or will it be improved as a result? Or 

does the DOD intend to go on wasting taxpayer moneys on Italian 

goats and defective spare parts? 

We have to remember that we have many competing uses for 

funding, and wasted funds hurt our troops and their readiness. 

This is the kind of stuff that belongs on Last Week Tonight with 

John Oliver, not as a subject of a congressional hearing. On behalf 

of the Department of Defense, I apologize to the American taxpayers for the wasteful spending that has gone on, and with that, 

I yield back. 

[The prepared statement of Ms. Speier can be found in the Appendix on page 37.] 

Mrs. HARTZLER. Thank you, Ms. Speier. I am pleased to recognize our witnesses. I want to thank them for making the time to 

be with us. Today we have Mr. John Sopko, the Special Inspector 

General for Afghanistan Reconstruction; Ms. Jacqueline Wicecarver, the Acting Deputy Inspector General for Auditing from the 

Department of Defense; and Mr. Charlie Lilli, the Deputy Director 

of Aviation and Head of Aviation Contracting Activity from the Defense Logistics Agency. So thank you all for being with us here 

today. 

So we will begin now with your opening statements. Mr. Sopko. 
5 

STATEMENT OF HON. JOHN F. SOPKO, SPECIAL INSPECTOR 

GENERAL FOR AFGHANISTAN RECONSTRUCTION 

Mr. SOPKO. Thank you very much. Chairwoman Hartzler, Ranking Member Speier, and members of the subcommittee, I am very 

pleased to be here again to discuss SIGAR’s activities in Afghanistan, and particularly, our review of DOD’s Task Force for Business Stability Operations, commonly known as TFBSO, and three 

specific aspects of that operation that the chairwoman asked me to 

look at or to comment on. 

The first one dealt with the construction of a compressed natural gas program in Afghanistan. TFBSO spent approximately $43 million to construct such a gas filling station in Sheberghan, Afghanistan. The project was intended to take advantage of Afghanistan’s 

natural gas reserves and reduce the country’s reliance on expensive 

imported gas. However, SIGAR has been unable to find any evidence that TFBSO considered the myriad of potential obstacles to 

the success of the project, including the lack of a natural gas transmission and distribution infrastructure, the cost of converting gaspowered cars to run on compressed natural gas, as well as the lack 

of a market. As a result, the project failed. 

The second project you wished us to discuss has to do with TFBSO’s spending of $150 million or approximately 20 percent of 

their overall budget on providing private villas and security for 

their staff while in Afghanistan. To date, again, SIGAR, as well as 

the Office of the Secretary of Defense Policy shop, have been unable to find any evidence that TFBSO conducted a cost-benefit 

analysis of quote-unquote ‘‘living on the economy’’ rather than in 

U.S. Government facilities in Afghanistan. In fact, in a memo from 

June 2011, then TFBSO Director Paul Brinkley directed all TFBSO 

personnel in Afghanistan to move back to U.S. military bases by 

August of that year. It remains unclear to this day as to why Mr. 

Brinkley’s directive went unimplemented for another 2 years. 

The third issue you wished us to address has to deal with goats. 

And as I think Ranking Member Speier and the Congresswoman 

has mentioned, you may wonder why I am talking about goats in 

the Armed Services Committee and not the Agriculture Committee. 

But TFBSO spent millions of dollars to bolster Afghanistan’s cashmere industry. The purpose of the program was to breed lighterhaired Afghan goats which would yield a higher price on the international market. To do so, TFBSO paid to have 9 Italian goats and 

10 Tajik goats imported to Afghanistan. Ultimately, this program 

also failed because it was overly ambitious, poorly staffed, poorly 

managed by TFBSO, and in essence, what they tried to do in a couple of years would normally have taken decades. It also, as I said, 

was a failure. 

TFBSO in these three instances apparently lacked effective oversight, project development, and execution. In addition, our comprehensive review of TFBSO’s operations in Afghanistan have identified three broader challenges. TFBSO did not have a clear strategy. Secondly, it lacked a focused and consistent management and 

leadership team. And lastly, it did not coordinate its efforts with 

the other U.S. agencies. 

Now, one may ask, why does any of this matter now? TFBSO has 

closed its doors. The money has been spent. And to be quite honest 
6 

with you, I doubt if we will recover any of that nearly $1 billion. 

However, you have to remember there is $12 billion still in the 

pipeline. This is money that has been authorized and appropriated 

to be spent in Afghanistan. We have also promised a decade of support at $6- to $8 billion a year in Afghanistan. So despite these 

commitments, the management available to oversee these massive 

efforts has decreased. This means that learning from past experiences is more important than ever if we are to protect future taxpayer dollars. 

Before the U.S. contemplates similar endeavors, either in Afghanistan or elsewhere, several questions must be answered. And 

the most fundamental being, should DOD be tasked with economic 

development operations during future contingency operations? 

SIGAR will continue to do its part to help answer these questions 

about the task force as well as other questions about our operations 

in Afghanistan. And I am happy to answer any questions at your 

pleasure. 

[The prepared statement of Mr. Sopko can be found in the Appendix on page 39.] 

Mrs. HARTZLER. Thank you, Mr. Sopko. Ms. Wicecarver. 

STATEMENT OF JACQUELINE L. WICECARVER, ACTING DEPUTY INSPECTOR GENERAL FOR AUDITING, DEPARTMENT OF 

DEFENSE 

Ms. WICECARVER. Thank you and good morning. Chairwoman 

Hartzler, Ranking Member Speier, and distinguished members of 

the subcommittee, thank you for the opportunity to appear before 

you to discuss our audit of the Defense Logistics Agency Aviation 

process to obtain restitution for contractors that provided defective 

spare parts. 

We audited DLA’s product quality deficiency reporting process. A 

product quality deficiency report identifies problems in parts design, workmanship, specifications, material, and other nonconforming conditions. Our first two audits focused on the DLA Aviation supply chain. An ongoing audit is on the DLA Land and Maritime supply chain. Today I will discuss the second report on DLA 

Aviation’s processes to obtain restitution from contractors for defective parts. I request the report be submitted for the record. 

[The information referred to is retained in the committee files 

and can be viewed upon request.] 

Ms. WICECARVER. Based on the results of our finding for 65 sample items, we projected for 269 stock numbers, contractor supplied 

defective parts, and DLA did not recover at least $12.3 million in 

restitution for those defective parts. We found that DLA Aviation 

missed opportunities to hold poor-performing contractors accountable and for DOD to receive the appropriate restitution. DLA shortcomings in pursuing and obtaining restitution left defective parts 

unaccounted for in DOD inventory, negatively impacting warfighter, and safety and readiness. 

To pursue and obtain appropriate contractor restitution the DLA 

needs to complete four steps either independently or with assistance from other designated personnel such as users or Defense 

Contract Management Agency. 
7 

Let me go into further detail. DLA did not ensure that contractors responsible for defective parts were contacted and that restitution was pursued. DLA did not adequately search DOD inventory 

to remove and to identify and remove defective parts. While DLA 

usually searched its own depots for defective parts, it rarely notified DOD customers to search their inventory for defective parts. 

DLA did not always return defective parts to responsible contractors to receive replacements or provide instructions to DOD customers or DLA depot holding defective parts, and did not follow up 

to ensure that the instructions provided were properly implemented. 

Finally, DLA did not properly track and maintain oversight of 

defective parts, return to contractors to ensure that appropriate 

restitution was received. In most cases the failure to successfully 

complete any one of these steps prevented or limited DLA’s ability 

to pursue and obtain appropriate restitution for the defective parts. 

I would like to share two examples, one which Congresswoman 

Speier already talked about where the readiness and safety of our 

warfighters were jeopardized. First, the 412th Maintenance Squadron at Edwards Air Force Base California issued a deficiency report 

on tie-down straps stating that the straps broke causing loss of oxygen to aircrew member during flight. These tie-down straps valued at $1 per hundred straps were considered critical application 

items and were used to attach oxygen hoses to pilots’ helmets. DLA 

investigated the deficiency report and determined that the contractor was responsible for the defect. The contractor had delivered 

52,314 tie-down straps on the contract. In response, DLA searched 

its depots and located 16,701 of the defective tie-down straps. The 

remaining 36,613 of the tie-down straps were unaccounted for in 

the supply system. 

The second example. We reviewed a deficiency report investigation for the C–5 aircraft that had defective copilot control wheels 

valued at about $36,000 each. The 436 Maintenance Squadron, at 

Dover Air Force Base in Delaware, initiated this deficiency report 

and stated that the improperly manufactured parts prevented the 

control wheel assembly from being properly installed. The deficiency report further stated that continuously changing the component caused a work stoppage, hampering the ability to complete 

the required maintenance. The deficiency report investigation determined that the contractor had provided 30 defective control 

wheels. The contractor replaced three control wheels and agreed to 

replace the other 27 upon receipt. Although DLA instructed its 

depot to ship the control wheels to contractor, it could not produce 

any evidence, when asked, that the control wheels were ever 

shipped or the restitution was received. 

For both examples, DLA did not notify other customers who purchased the remaining defective parts and request a search for DOD 

inventory. 

We made five recommendations, in our report to DLA, to address 

the deficiencies identified during this audit. The director of DLA 

agreed with the recommendations and stated DLA would complete 

corrective actions by March 31, 2016. We did not receive formal 

written response outlining the status of the corrective actions. 
8 

However, a DLA official informed us that several actions were either planned or in progress. 

This concludes my statement and I would be happy to answer 

any questions you may have regarding this audit. 

[The prepared statement of Ms. Wicecarver can be found in the 

Appendix on page 93.] 

Mrs. HARTZLER. Thank you, Ms. Wicecarver. Mr. Lilli. 

STATEMENT OF CHARLIE LILLI, DEPUTY COMMANDER, DLA 

AVIATION, DEPARTMENT OF DEFENSE 

Mr. LILLI. Good morning Chairwoman Hartzler, Ranking Member Speier, distinguished members of the subcommittee. I am Charlie Lilli, the deputy commander of the Defense Logistics Agency 

Aviation headquartered in Richmond, Virginia. 

DLA Aviation is a field activity of the Defense Logistics Agency 

of the Department of Defense’s Combat Logistics Support Agency. 

DLA’s mission is to provide effective and efficient global solutions 

to warfighters and our other valued customers. We are a global 

enterprise which manages nearly 5.1 million lines through 9 supply 

chains which provide virtually every consumable item to our military forces required, including food, fuel, medical supplies, uniform 

items, and weapon systems repair parts. 

DLA Aviation is the lead for more than 1,340 aviation platforms 

and systems and acts as the U.S. military’s integrated material 

manager for more than 1.2 million national stock numbered items. 

Last year we delivered repair parts valued at roughly $4.2 billion, 

procuring those items from more than 4,500 unique suppliers. On 

average, we receive about 2,400 deficiency reports annually. And of 

those, about 20 percent or 480 reports represent defective material. 

We take very seriously our responsibilities to identify and prevent 

defective parts from entering into the supply chain and to ensure 

we are good stewards of the taxpayer dollars. 

We appreciate this opportunity to discuss the findings of the February 23, 2016, DODIG report and inform you of the actions we 

have taken and will take to improve our processes to obtain restitution from contractors that provide deficient spare parts. We recognize the issues identified in the report and concur with the recommendations. We agree that the oversight and management control of this program needs to be strengthened and have taken aggressive action. 

Our first priority was to ensure that defective parts are removed 

from the supply chain to mitigate any impact on our warfighters 

and readiness safety. To that end, we immediately reviewed the entire population of product deficiency reports received at DLA Aviation over the last 24 months and have taken the necessary action 

to segregate and freeze the defective stock until proper disposition 

can be determined. 

In addition we alerted the customers about the potential for defective parts and provided them with disposition instruction. As a 

result of the findings documented in the draft report published in 

October, we updated our desktop guides based on best practices 

across DLA enterprise. These guides provide step-by-step procedures to ensure that material is dispositioned as required. We conducted training with all personnel involved in the proper proc-
9 

essing of deficiency reports and the new procedure is implemented 

in the updated guides. We developed a plan to pursue restitution 

of any material or funds the government is entitled to and will execute that plan over the next 6 months. 

Finally, we are establishing both first-line and senior level oversight procedures, corporate metrics, and a surveillance program to 

enable us to more effectively manage this program in the future. 

As an enterprise, the Director of Logistics Operations initiated a 

review of all DLA supply chain deficiency reports discovered since 

January of 2014 to validate the removal of deficient items from inventories. 

In addition, DLA has established an enterprise-wide supplier restitution working group consisting of cross-functional team members 

who will thoroughly evaluate the requirements for enhanced oversight of the PQDR [product quality deficiency reporting] process, 

examining from a process and systems perspective what changes 

would be required to improve visibility and facilitate the resolution 

of these cases. 

Madam Chairwoman, distinguished committee members, we 

have gained a valuable insight from the DODIG and we appreciate 

any feedback that improves our support to our warfighter and 

strengthens our management controls. As a retired Navy flight officer, as the father of two daughters, both naval officers, one currently deployed in the Middle East, and the father-in-law of a Marine Corps V–22 pilot also deployed to the Middle East, I assure 

you that no one takes this issue more seriously than I do. 

Thank you for the opportunity to testify today, and I welcome 

your questions. 

[The prepared statement of Mr. Lilli can be found in the Appendix on page 102.] 

Mrs. HARTZLER. Thank you to all of the witnesses for your testimony. This is very, very important to not only our national security, but certainly to the lives of our service members. 

I want to start with Ms. Wicecarver and Mr. Lilli because we are 

talking about two separate instances of potential waste or inefficiencies in the Department of Defense that we want to look at so 

that we can address and get better. One was from the past, as Mr. 

Sopko indicated. The program dealing with Afghanistan reconstruction has ended but we have a lot of lessons learned there so we 

want to talk about that for the future. 

But I want to start with you because this something that is currently going on right now as we have pilots in the air and we have 

planes flying, we want to make sure that the parts that are in 

those planes are up to the specifications they need to be and no 

warfighter is in danger. 

So Ms. Wicecarver, it is apparent the defective parts DLA received from its vendors made it into the service’s supply chain. Did 

your team find any instances in which any of the defective parts 

were installed in any end items as replacement parts for repair or 

return to service? 

Ms. WICECARVER. Madam Chairwoman, we did not find as a result of this, but we do know they are in the supply chain because 

they left 36,000-plus straps in the supply chain and we know that 

they are there. We don’t though if they have been on a flight—put 
10 

in, customers were not notified, but I believe that they are in the 

supply chain and should be pulled. 

Mrs. HARTZLER. Yeah. So Mr. Lilli, what are you doing to try to 

find these 36,000 parts that are potentially still out there in pilots’ 

helmets. 

Mr. LILLI. The way that we go about identifying and finding 

parts that are in the customer’s inventory is to provide what we 

call a supply alert. Each service has a screening activity which is 

then responsible for working with their individual service customers to alert them to the deficiencies of the—potential deficiencies of the parts and then work to have them notified and then 

coordinate the return of those materials to our defense depots. 

So as a result of the audit, when we were alerted to this incident, 

we went back and ensured that that notification was sent and we 

sent an additional notification to once again reinforce the fact that 

we had this potential. It will be dependent now though and we will 

continue to work with the services to try and identify parts that 

are in the inventory and pull them back. 

In addition to all of this, in 2008, this particular—they call it a 

tie strap, but it is a zip tie, a small about 2-inch piece of plastic 

zip tie that you put on to hold that hose to the helmet. So those 

zip ties were identified with several other sizes of zip tie in 2008 

as a potential problem. And in 2008 the inventory that is in DLA 

warehouses was the frozen and has been frozen since that time. 

And in 2008 those particular zip ties were included in a larger suspension where our customers were notified. 

So back in 2008—and those by the way, those particular products 

have remained in litigation since 2008. That litigation was finally 

cleared in 2014. The result of that litigation was that the customer 

representative that faced the Department of Defense for that company was disbarred. He is no longer available or allowed to do business with us. And we fined that company and we received $400,000 

back for the deficient material. 

Mrs. HARTZLER. Well, that is good. Now, didn’t you just complete 

your audit fairly recently, Ms. Wicecarver? 

Ms. WICECARVER. Yes, ma’am, in February 2015—I am sorry, 

2016. 

Mrs. HARTZLER. Okay. So we have in April of 2016. You just released this in February. So I understand, Mr. Lilli, you have only 

had a couple of months to start making corrective actions. And we 

appreciate your, you know, commitment to doing that and the steps 

you have already taken. 

What procedures will you follow to track this 36,000 ties that are 

out there that are defective? So you have sent the alert. How will 

you know whether they have turned them back in, they have recovered them, is there a checklist, or how will you have assurance that 

this has been taken care of? 

Mr. LILLI. As a result of the audit, we have taken several steps 

to improve and strengthen our processes. One of the steps we have 

established is the creation of a position we call the product deficiency report coordinator. We have now assigned one person, an individual who is going to be responsible for monitoring PQDRs, from 

the day that they are established in the system until the day that 
11 

the materials actually is returned back to the system as repaired 

or refunded to us. 

And so this person will be responsible in this particular case for 

now picking up that tracking to ensure that number one, any material that is identified in the inventory system is returned to us, and 

that we then send it—well, in this case, because of the low dollar 

value and the inability of a manufacturer to repair the ties, they 

will be destroyed and we will get a refund for those. 

Mrs. HARTZLER. Now, I understand you have only had 2 months 

to get started on this. 

Mr. LILLI. Uh-huh. 

Mrs. HARTZLER. But how much of the $12.3 billion—million dollars. 

Mr. LILLI. Million. 

Mrs. HARTZLER. Okay, $12.3 million estimated worth of restitution that is recoverable from defective parts, how much of that do 

you anticipate that we will be able to get and how will we know 

as Members of Congress how much of that has been recovered? 

Mr. LILLI. We are conducting the comprehensive review of all of 

the PQDRs that we have in file. Currently, we have gotten through 

half of them, of their 1,077 total over that time period. We have 

gotten through half of them and have determined that for those 

PQDRs, we have recovered $3.5 million as a part of our normal 

process. So those are things that have been recovered before the 

audit. 

That is not to say that there is a lot of material out there. We 

completely agree on that. Where our process broke down was after 

the alert, we didn’t have a good mechanism to track as has been 

pointed out in the hearing, the follow-on return to the supply system and then back to the vendor. 

So we have 500 now PQDRs that we are working as a result of 

our comprehensive review. We have a line-by-line, step-by-step procedure to go and take for each one of those 500 we have inventory 

in the system. What it will require for us is to discuss with the 

suppliers that provided them a restitution plan, whether that be, 

that we will ship those 500 items back to the supplier for repair 

and then return to us, whether they will pay us to fix them internally in our organic depots, or whether they will just provide us 

credit back. We intend to complete that process of those 500 

PQDRs by August of this summer. 

Mrs. HARTZLER. Okay, very good. And I know I have other questions for all of you, Mr. Sopko, but I am going to let my colleagues 

ask their questions and move on. And then we will come back to 

another round. 

Ms. Speier, ranking member. 

Ms. SPEIER. Thank you, Madam Chair. Deputy Inspector General 

Wicecarver, this is not the first report that has been done on DLA 

to suggest that they are not doing their job is it? 

Ms. WICECARVER. No, ma’am, we have issued several reports. 

Ms. SPEIER. How many? 

Ms. WICECARVER. We have 16 reports that we issued over a number of years on the parts and inventory area. 

Ms. SPEIER. And in your estimation has DLA been responsive to 

these reports? 
12 

Ms. WICECARVER. They have tried in the most part, yes. 

Ms. SPEIER. In your review this time, you looked at just a few 

parts. Wasn’t it just about 65 parts that you arbitrarily picked out 

of the 5 million? 

Ms. WICECARVER. We actually did a statistical sampling and 

came up with 65. That is so that we could get our arms around, 

if you will, what we are going to audit. We try to do them in a 

timely manner and so we do statistical sampling so we can project 

across the whole of the parts. 

Ms. SPEIER. So 5 million lines of parts, you took 65. And of those 

65, you were able to determine that at least one in particular was 

so defective that it could put at risk those pilots flying planes because this part had been determined to be defective when, these 

straps? 

Ms. WICECARVER. I don’t recall. I would have to take that for the 

record exactly when the Edwards Air Force Base maintenance 

group found it. I would have to take that back. 

[The information referred to can be found in the Appendix on 

page 131.] 

Ms. SPEIER. Was it, I mean, a year ago, do you think, 3 years 

ago? 

Mr. LILLI. In 2012. 

Ms. WICECARVER. In 2012, Mr. Charlie says, so—— 

Ms. SPEIER. Okay. So 2012 we were made aware that this is a 

defective part; that it could place our pilots at risk. And by happenstance, Deputy Inspector General Wicecarver does the statistical 

sample which includes these straps, finds out it is still in the supply chain. That, to me, is frightening. How long have you been in 

your post, Mr. Lilli? 

Mr. LILLI. Three years. 

Ms. SPEIER. Three years. 

Mr. LILLI. Yes, ma’am. 

Ms. SPEIR. So certainly, it was already deemed defective when 

you came into your post. Correct? 

Mr. LILLI. Correct. 

Ms. SPEIER. And nothing had happened relative to this item until 

the inspector general did a report and now you are taking steps. 

Do we need a report from the inspector general to get the Department of Defense DLA to take defective parts out of the supply 

chain? 

Mr. LILLI. No, ma’am. We have procedures in place. 

Ms. SPEIR. Well, why didn’t these get removed? 

Mr. LILLI. As I stated, we—in 2008, all of these parts were frozen 

in inventory. 

Ms. SPEIR. What does frozen mean? 

Mr. LILLI. It means that we code them. It is a code in our distribution system computers that prevents any issuing of that material so if a customer requisitions it, it is from DLA stock. It is not 

allowed to be issued. It prevents it. There is no way it could happen. 

So what I mentioned earlier was that in 2008, this part along 

with several other parts manufactured by that same company, was 

frozen in stock. There were 16,000 of those straps issued before the 

first quality deficiency report was received. Those were in the cus-
13 

tomer inventory. We alerted in 2008 all supply customers of the 

fact that these straps and other sizes, in addition, were potential 

defective parts. And at that time that material was screened and 

the materials should have been returned back. 

If a sailor, or a soldier, or an airman had some stock in their bin 

and missed the lot screening, that is possible. Maybe that material 

stayed in the supply system. But once again, as a result of the 

audit, we reissued those notifications to ensure that, and asked our 

service partners to go and search their inventory to ensure that 

nothing—this material would be removed, if possible. 

Ms. SPEIER. Mr. Lilli, I don’t have a lot of confidence in DLA’s 

response, generally. I think the fact that the inspector general has 

done all of these reports and there are still problems, should make 

us all pause. As it relates to the $12.3 million that is due the taxpayers in restitution for these faulty parts, I would like for you to 

report back to this committee on a regular basis until we know confidently that restitution has been sought and received for all of 

these defective parts. 

Inspector General Sopko, you said in previous congressional testimony that data was missing from the hard drive provided by 

DOD and forensic accountants were reviewing to determine if the 

data had been manipulated. Has that review been concluded? 

Mr. SOPKO. Yes, it has. And although we can’t tell if it was manipulated, we think we don’t have all of the data. And it could just 

be that the records are so poor at TFBSO that they just don’t have 

the data. 

Ms. SPEIER. When the TFBSO program wasn’t doing well for a 

number of years, and yet, it was on autopilot, it seems to me based 

on your report, from your perspective, how do we prevent the 

wasteful spending of almost a $1 billion on a program like TFBSO, 

when, you know, a quarter of the way through, half of the way 

through, it is clear that it is not working? 

Mr. SOPKO. You know, that is a very good question, and I don’t 

have a great answer for it. Reports were filed with Congress. I am 

not certain that those reports were accurate and were truthful and 

really reflected what was going on. And I am certain, having 

worked in Congress myself as a staffer, you are inundated with reports. I don’t even know if anybody even noted those reports. 

I think a critical problem you had with TFBSO was it was a new 

mission for the Department of Defense and nobody planned for 

having extra oversight over that new mission. And it was almost 

like a perfect storm. That program reported to the Secretary of Defense’s office. 

Now, the Secretary of Defense has many things on his plate, but 

operating a $1 billion program is usually not something he is going 

to focus or she is going to focus on. Later they moved it down to 

the Deputy Secretary of Defense for reporting. Again, he doesn’t 

really run day-to-day operations. So it was reporting to the wrong 

spot in DOD. Lastly, they moved it down to report to the policy 

shop, the Under Secretary of Defense for Policy. Again, maybe very 

good in policy, but normally the policy shop does not oversee dayto-day operations of an agency. And I think that was one of the 

critical problems. 
14 

And nobody really read the reports and the warning signs. I 

know somebody—I mean I know the House Armed Services Committee raised some concerns about this program early on, and then 

some of the legislation raised those concerns. But apparently, it fell 

through the cracks. 

Ms. SPEIER. Well, we somehow sometimes think that we are 

doing our job when we put report language in, and then they don’t 

report to us, and nothing transpires. 

This gas station that cost $43 million, the one in Pakistan cost 

between $200,000 and $300,000, we then actually equipped some 

Afghan vehicles so that they could take CNG [compressed natural 

gas]. Is that correct? 

Mr. SOPKO. That is correct, ma’am. 

Ms. SPEIER. But what a harebrained idea when to retrofit these 

vehicles is equivalent to the salary for an Afghani for a year. 

Mr. SOPKO. That is correct, ma’am. And again, it goes back to 

common sense. 

Ms. SPEIER. Which this program didn’t have. 

Mr. SOPKO. Do a cost-benefit analysis. I am sorry, but do a costbenefit analysis. And it doesn’t seem like anyone did a real costbenefit analysis on this program. You would have seen there were 

inherent problems. Everyone had written, you have to have an infrastructure in place. There is no infrastructure in Afghanistan. 

You have to have a market. There is no market. And that is just 

repetition we have seen through almost all of the TFBSO programs. 

Ms. SPEIER. My last question. In your comments you said this is 

one of the worst programs that you have investigated in Afghanistan. I believe you said, the most waste, the most fraud, when were 

you first made aware of it? 

Mr. SOPKO. I think I started to hear complaints almost when I 

started the job 4 years ago, but it was a relatively small program 

in comparison. Remember, we have spent $113 billion here. So we 

had put it on our audit schedule a couple of years ago and we came 

out with our first audit, I believe, on the mineral section and we 

did two audits on that. So it has been in our view for at least 2 

or 3 years. 

Ms. SPEIER. Again, thank you both, Inspector General Sopko and 

Deputy Inspector General Wicecarver, for your great service. I yield 

back. 

Mrs. HARTZLER. Thank you. Mr. Scott. 

Mr. SCOTT. Thank you, Madam Chair. Mr. Lilli, thank you for 

straightening out what I was discussing with Mr. Conaway over 

here, and that at a penny apiece, it sure sounded like a zip tie to 

me, something that most of us probably have. You could walk down 

to Walmart or a CVS, or pretty much certainly any hardware store 

would have them. 

So $523.14 worth of zip ties, by my calculation, 52,314 at a 

penny apiece. I am sorry that you are getting browbeaten over a 

zip tie or 52,000 of them, to be honest with you. I just wonder how 

much money—this has gone on over these zip ties since 2008. Is 

that right? 

Mr. LILLI. Correct, sir. 
15 

Mr. SCOTT. We have five Members of Congress, staff, we have 

three of you here and we are talking about zip ties. I mean, if I 

put one on something and it breaks, I would simply put two of 

them on the next time if it wouldn’t hold. I mean, the people that 

I know that work in the Air Force, that are pilots, that get our men 

and women and aviators ready to roll, they are smart enough to 

know if one zip tie won’t work, maybe you use two. Maybe you use 

a different size one. How much money—is it possible to calculate 

how much money the government has spent, the taxpayers have 

spent over $523 worth of zip ties in trying to find them? 

Mr. LILLI. Oh, I can’t answer that. We could probably come up 

with an estimate. It is a lot of money. 

Mr. SCOTT. Would you agree with me that you could buy a zip 

tie at any hardware store out there? 

Mr. LILLI. Well, sir, you can get those zip ties at any hardware 

store, but because of the regulations in our FAR [Federal Acquisition Regulation] and the processes we have to do to ensure that we 

buy them from qualified sources, we probably wouldn’t go to 

Lowe’s. We would have to follow the FAR. But you are right. It is 

the same type of zip tie that is out there. 

Mr. SCOTT. And I just wonder, you know, how much—as a pri- vate business owner, I would never spend $10,000, or $100,000 or 

however much money has been spent from 2008 to 2014 over $523 

worth of zip ties. I am somewhat taken back that we are even discussing zip ties here. 

Anyway, Mr. Sopko, the full financial audit for TFBSO activities 

has it begun, and if so, when can we expect that audit to be complete? And is it going to go so far that it is going to identify parts 

that are a penny apiece and maybe how much money was spent 

trying to find zip ties? 

Mr. SOPKO. Well, I don’t think we are going to be looking at zip 

ties. The full financial audit is—— 

Mr. SCOTT. Would you agree, obviously, someone has spent an 

awful lot of money, more money has been spent searching for the 

zip ties than the zip ties cost. 

Mr. SOPKO. It appears that way, sir. Remember, I am not doing 

the zip tie investigation. 

Mr. SCOTT. I am glad to know that. 

Mr. SOPKO. On TFBSO, we were asked by Senator Ayotte on the 

Senate side to conduct a financial audit as well as a program audit. 

The program audit, I believe, we are putting that together and if 

it hasn’t started it is about ready to start. 

And then we are going to just, you know, a program audit is a 

little different than a financial audit. The financial audit, I don’t 

believe we have started that yet. We have also been joined or asked 

by Senator Grassley to conduct both of those. So there is a lot of 

interest on the other side. 

Mr. SCOTT. Well, I look forward to seeing that and I will yield 

the remainder of my time. I am under a minute. 

Mrs. HARTZLER. Thank you, gentlemen. Now we go to Ms. 

Graham. 

Ms. GRAHAM. Thank you, Madam Chairwoman. Thank you all 

very much for being here today. My question is in the category of 

lessons learned. 
16 

Inspector General Sopko, you mentioned in your written testimony that a major source of TFBSO’s issues in Afghanistan, is that 

it didn’t implement any changes based on the experience in Iraq. 

Mr. SOPKO. That is correct. 

Ms. GRAHAM. Is there now a formal system for capturing lessons 

learned and what are your recommendations for ensuring that they 

are incorporated into future protocol? 

Mr. SOPKO. Some agencies of the government have a formal 

structure to capture lessons learned. The Department of Defense is 

probably the best one for doing that, and the various agencies of 

the Department of Defense, so the Air Force, the Army, the Marines, will be doing their lessons learned and hopefully those will 

be applied. 

The biggest problem we see, Congresswoman, is that there is no 

whole-of-government approach to lessons learned. If one thing we 

learned in Afghanistan and Iraq, it is not only that DOD is going 

to be there, State Department is going to be there, AID is going 

to be there, and our allies. And no one is doing that. 

And actually, we are doing that at the recommendation of General Allen. I remember him coming over and saying, laying that out 

to me. He says, DOD will do a pretty good job, but the next time 

we do this, when you are going to a provincial reconstruction team, 

there will be spots for AID and State and all of the other government entities, but nobody has that jurisdiction. We are stovepiped. 

DOD will do their lessons learned, but nobody is doing the whole 

of government. So we are actually embarking upon that at the suggestion of General Allen and other people. And we are hoping to 

do that. 

The other thing I would seriously consider is neither State or 

AID have the system of doing lessons learned in their budget as 

well as the staffing to do it like DOD does. And that is going to 

be an inherent problem. 

Ms. GRAHAM. I would agree with you. In every facet of life, you 

need to learn from the past and do better in the future. Well, thank 

you, I guess. 

Mr. Lilli, I would ask the same question of you. It is not your 

fault, by the way. I understand the inspector general. Is there a 

formal process by which DLA has incorporated lessons learned into 

its processes and procedures? 

Mr. LILLI. As a result of our audit, we learned a lot, and so we 

have five recommendations that we have been—that we are implementing. As I mentioned earlier, in DLA Aviation, we have taken 

and reviewed all the PQDRs to make sure that we recover all the 

money, and we will report back as we were asked. We have also 

frozen and made sure that that stock is frozen and so it can’t be 

issued, and alerted our customers. But we have also established 

some new procedures as a result of that. 

So what we will be doing is creating a position called a PQDR 

coordinator in our supply center that will then track from the beginning to the end every time we receive one to ensure that we, 

number one, alert our customers as fast as possible, but then ensure that material is received and sent back to the suppliers for 

restitution. 
17 

We have also established some first-line supervisor and senior 

leader oversight to include checklists that will have to be signed as 

we go to ensure that that process is done correctly. In addition to 

that, we have some corporate metrics now that we track the opening and closure of each one, the total number, and the total age of 

those PQDRs. That report is provided by the coordinator to myself 

and the commanding general once a week. So we will be tracking 

that to ensure that never happens again. 

On a broader scale, those lessons that we have learned as a result of this audit and this review have been provided to the DLA 

headquarters. And as I have mentioned earlier in testimony, the 

DLA director has established a working group to take a look at the 

entire process across DLA. And through that working group, we 

will take the lessons we learned and incorporate them into the 

overall review and then come up with a revision of the process that 

will hopefully be better, and will allow us to have tighter control, 

and to execute our responsibilities for stewardship in a better manner. 

Ms. GRAHAM. Thank you for that. 

I hope, Mr. Inspector General, that we can learn from these lessons, and we need to be working together so we don’t repeat the 

mistakes of the past. I don’t know where to start with putting that 

in place, but seems to me that when we are working—as the 

United States of America is working overseas in various countries, 

all aspects of our country need to be working together to make sure 

we are doing it efficiently and effectively. So I am out of time, but 

if you want to respond. 

Mr. SOPKO. I agree wholeheartedly with you, and hopefully our 

Lessons Learned Program will help in that process. But remember, 

there is a difference between lessons observed and lessons learned. 

There are lot of reports on the shelves, but very few people sometimes read them, and they are not put into doctrine and put into 

the training. And before somebody goes back out to Afghanistan, 

whether he is a Foreign Service officer, an AID officer, or a captain 

in the Marines, he should be given a document which tells him 

what have we learned from Afghanistan before, what have we 

learned from Iraq, what have we learned from other experiences. 

And that is what people keep coming back to me. 

I mean, we do these audits. We do these reports, and I have been 

approached by many people in the administration and on the Hill 

saying, so what does it mean, and how do we do it? And I understand that frustration, and that is why we have this Lessons 

Learned Program we have put together, brought in some very 

bright people, and trying to get buy-in from the various agencies. 

That is what General Allen encouraged us to do, and so we are following on his guidance. Hopefully it will help. 

Ms. GRAHAM. Great. I remain ever hopeful. I appreciate it. 

Thank you. I yield back what time I do not have anymore. 

Mrs. HARTZLER. The lady’s time is expired. And that is one of the 

reasons we are having the hearing as well today, Mr. Sopko, is so 

that we can flush out the concerns that we have had and learn as 

we go forward. 

Now Mr. Conaway from Texas. 
18 

Mr. CONAWAY. Well, thank you. Just to make sure, I am a CPA 

[certified public accountant] and my license is still current, so I am 

one election from being back in public practice. I spent a lot of 

years auditing. 

Mr. Sopko, when you come to a circumstance like this filling station, gas station, it just absolutely makes no sense in hindsight. 

Did you have access to the documents that were prepared and put 

in place and the decisionmaking processes that were there to come 

to these conclusions? I mean, when you have a circumstance that 

makes no sense, we typically don’t have all the facts available to 

figure out how the decision makers who, unless you want to project 

malfeasance on them, were working to try to do the right thing. 

And did you look at how they got there, what their rationale was 

for it? 

Mr. SOPKO. To be honest with you, Congressman, we did not 

have full access to the records. 

Mr. CONAWAY. Okay. So the billion dollars spent, all of it was 

wasted? Is that your conclusion? 

Mr. SOPKO. No, not all of it. 

Mr. CONAWAY. So 50 percent? 

Mr. SOPKO. I mean, you know, we did build a gas station. 

Mr. CONAWAY. Well, that is a waste. 

Mr. SOPKO. Yeah. 

Mr. CONAWAY. That is a waste. 

Mr. SOPKO. But it was built, and there are—— 

Mr. CONAWAY. Okay. How well is it functioning today? 

Mr. SOPKO. Well, the—oh, I am sorry. 

Mr. CONAWAY. I am just trying to figure out there was 100 percent error. Great. Got that. 

Mr. SOPKO. Yeah. 

Mr. CONAWAY. But were there—did you find any successes whatsoever in the deal? 

Mr. SOPKO. We found a few successes. 

Mr. CONAWAY. Okay. 

Mr. SOPKO. But the problem is, you know, we measure inputs, 

outputs, and outcomes. The output was you got a gas station. The 

output was you actually got 400 taxi drivers, I believe about 400, 

got their cars converted at—— 

Mr. CONAWAY. Okay. 

Mr. SOPKO [continuing]. U.S. taxpayer expense. They are very 

happy. 

Mr. CONAWAY. I am not trying to defend this deal. 

Mr. SOPKO. Yeah. 

Mr. CONAWAY. I am just trying to make that sure we understand 

the circumstance. 

Ms. Wicecarver, total dollars spent over your audit, not you personally, but your auditing, how much money spent by DLA over 

those 16 audits that you made reference to, total dollars spent? 

Trillions? 

Ms. WICECARVER. Not a trillion, no, sir. We had about $300,000. 

Mr. CONAWAY. Just for example, my—dust off old audit stats 

stuff. You do a statistical sample in order to project the error rate 

across the bigger piece. 

Ms. WICECARVER. Yes, sir. 
19 

Mr. CONAWAY. So you found the error with the zip ties. Your 

overall conclusions on your statistical sample, what was the error 

rate throughout the entire universe of what you were auditing? 

Ms. WICECARVER. 90 to 95 percent, sir. 

Mr. CONAWAY. So 95 percent of what DLA spent, they spent 

wrong? 

Ms. WICECARVER. Of the sample that we collected. 

Mr. CONAWAY. So did you expand your sample? 

Ms. WICECARVER. No, sir. 

Mr. CONAWAY. Why not? 

Ms. WICECARVER. Because we had enough, we thought—— 

Mr. CONAWAY. So 90—make sure I get the record straight here. 

They spent half a billion dollars? 

Ms. WICECARVER. Not on these parts, sir. 

Mr. CONAWAY. No, no, no. Why would you do a statistical sample 

if you are not trying to extrapolate that over the bigger—you are 

not going to look at all 5 million parts? Is that what you said? How 

many parts were in your universe, ma’am? 

Ms. WICECARVER. 269. 

Mr. CONAWAY. And you audited 65 of it? 

Ms. WICECARVER. Yes, sir. 

Mr. CONAWAY. Okay. And of that, you are saying that of those 

269 parts that you audited, 95 percent of the money spent was 

spent incorrectly? 

Ms. WICECARVER. We weren’t talking about the dollars spent. We 

looked at actually the product deficiency reports that we were reporting and how it all equals dollars and cents. I understand that. 

But I would have to get back to the record specifically what it is 

we are talking about. We just projected because—— 

Mr. CONAWAY. So of the 269 parts, your conclusion would be that 

95 percent of those parts were deficient? 

Ms. WICECARVER. No, sir. We had a 95 percent confidence rate 

on our sampling, is what I am saying. 

Mr. CONAWAY. No, ma’am. That is not what you said. My question was, what was the overall projected error rate within the overall universe, and you said it was 95 percent. I understand the 95 

percent confidence, that your 65 percent is representative of the 

whole. What I am asking, of the 65 percent that was wrong, that 

you found wrong, how much of that do you say is in the full universe of 269 parts? Of the 65 that you audited, how many of those 

had problems? 

Ms. WICECARVER. I am sorry. How many of those had? 

Mr. CONAWAY. Had audit deficiencies that rose to this conclusion 

that the zip ties were out of whack? 

Ms. WICECARVER. Well, we had many examples in our report and 

in our audit. 

Mr. CONAWAY. I don’t—— 

Ms. WICECARVER. I will have to take it for the record. I guess I 

don’t understand all of that one. 

[The information referred to can be found in the Appendix on 

page 131.] 

Mr. CONAWAY. Are you an auditor yourself? 

Ms. WICECARVER. Yes, I am. 
20 

Mr. CONAWAY. Okay. Why would you use a statistical sample of 

the universe? What is the purpose of statistically sampling rather 

than looking at the whole universe? 

Ms. WICECARVER. Timeliness of the report so we can get the evidence out to the agency. 

Mr. CONAWAY. Isn’t it to look at a small sample, if you don’t have 

any errors in that small sample, you are 95 percent confident that 

the rest of the universe is okay? Isn’t that a better explanation of 

why you statistically sample something? And you statistically sampled 65, you picked 65 on a statistically sound basis so that you 

can say, all right, we are going to look at these 65 so we don’t have 

to look at all 269. We looked at the 65, and the error rates or whatever you want to call them, in this 65 leads us to believe that the 

universe of 269 is either good or bad. 

So what I am trying to figure out is you found the error with this 

one part, however insignificant it might be, but because it was statistically picked, it has a greater significance to the overall conclusions. Because if you can’t get the little things right, you are not 

going to get the big things right. So you looked at the 65. You got 

at least one, zip ties, that you had a problem with. What else did 

you find among the 65 that you then projected to the greater inventory? 

Ms. WICECARVER. As I said, we found many of the 69 that had 

problems. 

Mr. CONAWAY. Okay. I don’t have a clue—I don’t have a clue of 

what the word ‘‘many’’ means. I am asking you, of the 65, we have 

got a discrete universe of items you looked at. For the record, 

would you please get back to us with a better explanation on what 

the value of the statistical sample was? Because if you are not 

going to use it from a statistical sampling basis, why would you 

pick the top 10 most expensive parts and look at those as opposed 

to picking zip ties? You only picked zip ties because you are trying 

to get a—all right. 

[The information referred to can be found in the Appendix on 

page 131.] 

Mr. CONAWAY. On the failure of the zip ties—and I know I am 

past my time. Mr. Lilli, did the zip ties fail when it was snugged 

up against the—when did it fail, and what did that failure result 

in? Because when we use the words ‘‘warfighters are put at risk,’’ 

those are pretty inflammatory words. Those are words we ought to 

pay attention to. 

Help us put in context. There is an air hose coming off the helmet going to somewhere in the cockpit. You snug it up with a zip 

tie. What was the point of failure, that first snip—somewhere in 

the life of the zip tie being on there? 

Mr. LILLI. No, sir. Actually, the failure was discovered as they 

were putting the zip ties on the hose itself. So in the routine maintenance—I read the PQDR that was submitted, and in the routine 

maintenance of replacing the—— 

Mr. CONAWAY. All right. So the point of failure is known before 

the helmet goes on the pilot’s head—— 

Mr. LILLI. Yes. 

Mr. CONAWAY [continuing]. And before he takes off the ground? 

Mr. LILLI. In the case of this particular PQDR, exactly right. 
21 

Mr. CONAWAY. Okay. Well, if we can’t use—from a statistically 

valid standpoint, Ms. Wicecarver, if you can’t project that audit of 

that zip tie to a greater use than what appears to be the case, then 

I would have to agree with my colleague that we may have missed 

the boat. I would rather you look at the top 10 most expensive 

parts of your 269, rather than—and I yield back. I am sorry. I am 

a little frustrated. I yield back. 

Mrs. HARTZLER. The gentleman’s time has expired. 

Ms. McSally. 

Ms. MCSALLY. Thank you, Madam Chairwoman. And let me just 

follow up on the previous line of discussion. I was in the military 

for 26 years, and I often would call them lessons identified, not lessons learned. And when you say the military is the best at it, we 

have some significant shortcomings. 

You know, we are good at having conferences and maybe writing 

things down, but because of some of the things that were identified 

even in here because of high turnover and, you know, motivated 

people trying to bring their own bright ideas in the new assignment in, we are reinventing the wheel all the time in the military. 

When I read the testimony, when we look into the details of these 

failures, it is just infuriating to me, honestly. 

My last assignment was at U.S. Africa Command. We were intended to try and have a whole-of-government combatant command. We had members of USAID and Office of Foreign Disaster 

Assistance with us on the staff. We would often see how we in the 

military, we want to just, you know, go in there and just fix everything, whether it is a disaster, even though we have no idea what 

we are doing. Our job is to fight and win America’s wars, to kill 

people and break things, and somehow we find ourselves in these 

situations where we are doing things totally outside of our core 

competencies for a variety of different reasons. And it is infuriating 

to see that, after all we have learned over these years, we are still 

doing stupid things like this. 

And the waste of taxpayers’ money at a time when our military 

right now, our readiness, our force structure, our personnel, it is 

infuriating to see that this much money was wasted in the Department of Defense for bright ideas that are just absolutely failed. So 

what I don’t even understand, because I think about my time in 

Africa Command, it isn’t about lessons learned. It is about we are 

stovepiped on the front end. We don’t have the same chain of command. We don’t have the same funding lines. And so we can have 

a little love fest as we are coordinating things, but in reality, we 

don’t report to—you know, we don’t have the same title and lines 

of funding. And so I don’t even get like what the authorities were 

that allowed them to do this. 

Can you just explain to me how the Pentagon thought this was 

a good idea and under what authorities they had to do this, as opposed to letting the lead Federal agencies and those that are experts in these areas taking the lead? 

Mr. SOPKO. Congresswoman, I experience and feel your anger in 

the absurdity of some of these things. 

Ms. MCSALLY. Yeah. 

Mr. SOPKO. If it wasn’t the fact that we lost nearly 2,300 lives 

in Afghanistan, most of what we have found could probably appear 
22 

on Comedy Central. I mean, I cannot believe some of the things I 

have uncovered, and I am outraged too. 

Ms. MCSALLY. Yeah. 

Mr. SOPKO. And I worked on the Hill for 15 years for Sam Nunn, 

and I thought I saw some really boneheaded moves. But this—— 

Ms. MCSALLY. This is the ultimate bonehead. 

Mr. SOPKO. This is the ultimate. 

Ms. MCSALLY. Yeah. 

Mr. SOPKO. I wish I could answer your question on the authority 

because the authority is kind of mixed on the TFBSO. It started 

in Iraq as really not to do contracting, just to sort of fix things with 

the industry. Then it sort of morphed into actually a contracting 

role. And initially, the Secretary of Defense’s general counsel’s office raised concerns that this whole thing was illegal. 

Ms. MCSALLY. What is the funding stream? Is this OCO money? 

Mr. SOPKO. I believe it was OCO money. 

Ms. MCSALLY. How are we using OCO money to build villas and 

gas stations? This is—— 

Mr. SOPKO. We are trying to find it. We still haven’t found, there 

is a memo issued by the Office of the Secretary of Defense—and 

this is why I am so frustrated and your colleague has hit the frustration point. This program didn’t disappear in 1944. This isn’t like 

something that Harry Truman ran. This program went out of existence less than a year ago, and I could not find a soul in the Department of Defense who could explain any of these questions. 

I call this a rare case of amnesia in the Department of Defense. 

I had to fight to get those records which Congresswoman Speier 

has asked me about. The amount of records I got for TFBSO, fewer 

than one of my staff has on her cell phone, the gigabytes. 

Ms. MCSALLY. Right. 

Mr. SOPKO. So this is the most bizarre investigation I have done, 

and I have gotten so much pushback—— 

Ms. MCSALLY. Yeah. 

Mr. SOPKO [continuing]. From the Defense Department on this 

$1 billion program. 

Now, we have looked at some of the major parts of it, but I follow 

the lead of your colleague. You know, there is many more billions 

of dollars that have been wasted and at stake. So we did not want 

to focus on TFBSO. I did not want to turn this SIGAR into the 

TFBSO inspector general. There is many more problems out there. 

But every time we open a rock or uncover a rock, something crawls 

out which just sort of you can’t understand. This is a mystery to 

me how this program got into action and why it survived. 

Ms. MCSALLY. So if there were no authorities for spending this 

money, what accountability is happening? I mean, if somebody is 

illegally spending taxpayers’ money, where is the accountability on 

that? 

Mr. SOPKO. Well, it was added to, if I am not mistaken, to the 

Authorization Act. So it was authorized at one time. Initially, it 

came from OCO, and I think it was—and I don’t want to misspeak. 

I would have to ask my colleagues. 

Fiscal year 2011 I am told it was authorized in the NDAA [National Defense Authorization Act], prior to that. And it is interesting is that in fiscal year 2011, that is when the head of the orga-
23 

nization basically says we ought to shut the thing down, it can’t operate, and that was ignored. 

Ms. MCSALLY. Right. And then they are spending more. I know 

I am out of time. But how do we make sure here, and we can follow 

up for the record, that something like this never happens again, 

never, ever, ever happens again? Everybody needs to stay in their 

lanes. Fight and win America’s wars, military. USAID does development and economic stuff. We have got to make sure this never 

happens again. So we would love to follow up on that. And I am 

out of time. 

[The information referred to can be found in the Appendix on 

page 131.] 

Mr. SOPKO. We will try. 

Ms. MCSALLY. Thank you, Madam Chair. 

Mrs. HARTZLER. Thank you. I want to talk about that a little bit, 

authority. There was a Brian McKeon, the Principal Deputy Under 

Secretary of Defense for Policy, who was invited to attend today, 

and due to a family prearranged activity, he wasn’t able to be here. 

I believe he appeared before the Senate Armed Services Committee, but he did submit his testimony, which I have read. 

[The testimony from Mr. McKeon can be found in the Appendix 

on page 111.] 

And in there it talks about how in fiscal year 2014, Congress 

made an amendment to a law, you know, authorizing for this program to continue. So I think Congress has a role in this as well. 

So we, you know, need to, certainly as Members of Congress, in the 

future have a very important role in deciding whether we do something like this again or how we apply these lessons learned. But 

that is one reason we are having this hearing today, to go back and 

say, hey, you know, did it work? Is it wise, and should we ever do 

that again? 

I did want to also ask you, Mr. Sopko, about the amount of 

money spent. Because in Mr. McKeon’s testimony that I have read 

here, he says that there was $800 million that were obligated, $600 

million that were disbursed. So I would assume the Department of 

Defense would say that they spent around $600 million on this 

rather than the $1 billion that is being thrown around today in this 

hearing. So which is it? How much would you say is more accurate 

for how much was spent on the program? 

Mr. SOPKO. It is not a billion. I know that. 

Mrs. HARTZLER. $800 million was obligated, but only $600- was— 

I say only. That is still a lot of money. 

Mr. SOPKO. Our review was, as you said, $822 million was authorized, and $759 million was obligated. 

Mrs. HARTZLER. How much was disbursed of that, actually spent? 

Mr. SOPKO. We are actually doing the audit. We don’t have that 

number. 

Mrs. HARTZLER. Okay. So that is just something for us to be 

aware of. But that is still a tremendous amount of money. 

Secondly, we haven’t talked about the villas, and I wanted to ask 

you about that. Your testimony states that the TFBSO spent $150 

million to reside and operate out of the villas. And you have 

brought a picture of those here for us today. Did the TFBSO use 
24 

funding to build the villas, or did another government agency do 

the construction? 

Mr. SOPKO. No. The villas were not built by us. These are all 

rentals. We rented the villas from Afghans. 

Mrs. HARTZLER. Okay. What time period does the $150 million 

cost cover? 

Mr. SOPKO. Well, for almost as long as they were there. As soon 

as they came over from Iraq, they pursued using, living on the 

economy like that, and until—although Director Brinkley said to 

bring them back in August of 2011, they continued in the villas till, 

I believe, the end of the program, which would have been the end 

of 2014, if I am not mistaken. 

Mrs. HARTZLER. It seems like I read, perhaps in Mr. McKeon’s 

testimony, was it 3 years? 

Mr. SOPKO. That would be about right. 

Mrs. HARTZLER. About right. So $50 million a year, and that included the security as well as you talk about a lot of the amenities 

that were in there, which is a 27-inch flat screen TV, a queen-size 

bed, menus for the catering of two entrees every night, options, and 

options on site. So, you know, certainly not what I would think our 

soldiers would be eating and how they would be living over there, 

and I know it is not quite the same. 

How do you account for Paul Brinkley, the first director, saying 

that the task force should move back into our military facilities and 

not continue living in the rentals, and yet that was ignored? 

Mr. SOPKO. We are trying to get to the bottom of that. We don’t 

have an answer. We have his memorandum, which he says because 

of security reasons and also because of management problems, he 

wants to bring everybody back, and he orders them, I think by August of 2011, everyone will move back onto military bases. But we 

have no further information as to why that was ignored, and that 

is again a problem we have with TFBSO. The records are so abysmal. It is hard to figure out what they did and why they did it. 

Mrs. HARTZLER. Okay. Regarding the natural gas facility, the gas 

station, you just said a minute ago you have to have a market, and 

there is no market. And I think those are very wise words, is before 

you do any of these projects, there needs to be a marketing analysis done, and it wasn’t done. And you look at the list of the 

projects that were done there. And the average businessman or 

woman here in Missouri—well, here in the United States or from 

my State, Missouri, would just probably say, no, this isn’t wise that 

we invest here; we move forward. 

I wanted to mention, since Mr. McKeon isn’t here, in his testimony he does say on page 11, to be sure the average Afghan does 

not own a vehicle. So I think the Department of Defense also is, 

you know, bringing up that point. 

Now, he does say in there, though, that you had a question to 

the Department of Defense about whether the station was still operating. And he says: My staff contacted the operator of the CNG 

station by email on November 15th of last year. The operator indicated that the station was working normally, that 230 cars had 

been converted, and that every day approximately 160 cars obtained fuel from the station. 
25 

Do you think that is accurate? It is still open; it is operating; 

there are some cars that the taxpayer here in America paid for that 

are using it? 

Mr. SOPKO. It would make sense that they would use it. I mean, 

we gave them a free conversion kit. We converted their car for free. 

And using the compressed natural gas is cheaper than using gasoline in Afghanistan. The question is, is it sustainable? I mean, 

those are happy taxi drivers, just like there are happy goats in Afghanistan. But is any of this sustainable? 

The purpose of this program wasn’t to make a bunch of taxi drivers in Sheberghan rich at U.S. taxpayers’ expense. You have got to 

go back to the documents, and we do have some of the documents 

as to what the purpose was, and they didn’t attain it. 

So I go back to it. The input, we know how much was spent. The 

output was they did do a gas station, they did convert cars. But 

the outcome was to create a market all over northern Afghanistan, 

and that never occurred, and the reason is because no one ever 

looked. There was no infrastructure. 

Mrs. HARTZLER. Okay. So I just wanted to clarify because earlier 

in this hearing you said the project failed, in your opening comments. But yet you would not say—I mean, it is operating. So you 

are just using that terminology just based on—— 

Mr. SOPKO. What it was supposed to accomplish, you know. 

Mrs. HARTZLER. Okay. That is all. For the record, we should, you 

know, due diligence, clarify it. 

And I wanted to get into the testimony of the Department of Defense that was submitted regarding the cost because I know you 

and the Department of Defense have been disagreeing on that. The 

number, $43 million cost of the compressed natural gas station, you 

know, has been used. So did the gas station itself cost $43 million 

alone, or was that the cost of the entire compressed natural gas 

station infrastructure project that also included refurbishing the 

existing pipeline, purchasing new pipeline for installation, for funding? 

I will say that in Mr. McKeon’s testimony here that he submitted, he says the cost for the entire project was $5.1 million, and 

that is for actually the infrastructure. And then he alleges that you 

extrapolated the consulting costs over the entire country and projected all those overhead, the $30 million overhead costs for that, 

on to you. And I may be, you know, not adequately summarizing 

what he is saying there. But I would like for you to kind of share 

what your thoughts were on how you arrived at the $43 million 

cost. Is that really accurate? And how do you disagree or not with 

what the Department of Defense alleges it only cost? 

Mr. SOPKO. Well, I haven’t seen Mr. McKeon’s testimony, but I 

remember testifying with him before. The approximately $43 million number is not SIGAR’s number. We did not compile that. We 

found that in the records we uncovered, and it was records prepared by a contractor for TFBSO. We spoke to the contractor. He 

prepared an economic impact assessment for TFBSO, was paid $2 

million by TFBSO to do it. 

In his report when we interviewed him, he is the one who gave 

us the number. He broke the number down by direct costs, indirect 

costs, subject matter, expert costs, overhead costs. Those were his 
26 

numbers that he got from TFBSO. So first of all, those are the Department of Defense’s numbers, not ours. Secondly, when we interviewed him, he said and gave us records about a back and forth 

between his office and TFBSO over the preparing of the economic 

impact assessment. 

Many times that assessment was reviewed and approved by 

TFBSO way before we came in to do the audit. As a matter of fact, 

the director of TFBSO approved those numbers. The director actually changed other numbers related to the gas price, but never 

changed that $43 million number. This is the best number we 

have. We acknowledge that the records kept by TFBSO are abysmal. We actually interviewed a comptroller employee who Mr. 

McKeon sent over to try to review the records. And he said he 

thought the number was wrong, but he couldn’t come up with a 

better number either because the records are in such poor shape. 

So we are stuck with this number, but ultimately the taxpayer paid, U.S. taxpayer paid $43 million. Whether it included that gas 

station, whether the overhead numbers are correct or not, it is the 

best number we can come up with. If we can find a better number, 

we will report it. 

Ms. HARTZLER. Right. 

Mr. SOPKO. But so far, no one has given us a better number. 

Mrs. HARTZLER. Okay. Thank you for that explanation. 

Ranking Member Speier. 

Ms. SPEIER. Thank you, Madam Chairman. I am not interested in quibbling over whether it was $10 million or $43 million, when 

we know in Pakistan they built it for $200- or $300,000. The real 

question is, does TFBSO belong in the Department of Defense? 

Should the Department of Defense be engaged in doing economic 

development? And I think the examples that Mr. Sopko has provided us make it clear that we should not be in this business within DOD. It is not part of their expertise. 

Now, I do want to point out, I think that Brian McKeon tries his 

darnedest to try and defend the program, but in the end he does 

say, and I will quote, ‘‘I am skeptical that the Department of Defense is the natural home for this mission of promoting economic 

development.’’ So regardless of why he goes about trying to defend 

it, he comes to the conclusion that we shouldn’t be doing that. 

And Mr. Sopko as our Inspector General on Afghanistan Reconstruction has done an extraordinary job, I think, over these number 

of years pointing out where we fail. And to everyone’s point that 

has been made here, just pointing out is not good enough. We have 

got to clean it up. And my concern is that we see a problem, we 

have enough evidence, and we don’t shut it down. It continues to 

operate on auto pilot. 

Now, to Mr. Scott’s comments and also to others, I think in fairness to Ms. Wicecarver, it wasn’t just the zip ties that they looked 

at. And in her report she talks about the defective copilot control 

wheels for the C–5 aircraft valued at $35,000 each. The investigation determined that all 30 parts provided on the contract were defective and that the contractor was at fault. DLA Aviation searched 

the DLA distribution depot inventory in March 2014 and identified 

that 23 of the remaining defective control wheels were being stored 

at the DLA distribution depot in Warner Robins, Georgia. DLA in-
27 

structs the DLA distribution depot to ship the parts back to the 

contractor. However, DLA Aviation officials did not respond to our 

inquiries about the 23 control wheels, and DLA transaction data 

showed that the defective control wheels were never shipped from 

the DLA distribution depot in Warner Robins. 

According to DLA Aviation, could not produce any evidence that 

it received restitution for 23 of the 27 defective parts valued at 

$825,000. In addition, DLA Aviation did not notify the other customers who purchased the remaining 4 of the 27 defective control 

wheels. So it wasn’t just zip ties. We were looking at more expensive equipment. And there is a problem with defective parts not 

being returned to the contractor and that restitution is not recovered. 

Now, Ms. Wicecarver, this is just one area within DLA. Isn’t it 

true that you are now working in another area as well, and could 

you tell us about that? 

Ms. WICECARVER. Yes, ma’am. We have some ongoing audits on 

price reasonableness. We have some on inventory. Both those areas 

we have worked in the past, and we are working in the future on. 

Ms. SPEIER. Isn’t there one you are doing about marine parts 

that is underway? 

Ms. WICECARVER. We are looking at the land and maritime area 

in DLA, the same type audit, if you will, just on a different area, 

land and marine maritime. 

Ms. SPEIER. Besides zip ties and these wheels, are there other examples of parts that were in the chain, the supply chain, that restitution was not sought and that were continuing to reside within 

the supply chain? 

Ms. WICECARVER. Yes, ma’am. We had about six other examples 

in the report, switch and bracket parts, and the other one was— 

there are several of them. We have pictures, and that is in the full 

report that I put for the record. 

Ms. SPEIER. I yield back. 

Mrs. HARTZLER. Thank you. 

Mr. Scott. 

Mr. SCOTT. Thank you, Madam Chair. 

Sir, you testified on the zip tie issue that they were identified 

prior to being put in flight, so no crews ever lost oxygen or anything along those lines from those zip ties? 

Mr. LILLI. That is correct, sir. 

Mr. SCOTT. The report that I have before me reads: causing loss 

of oxygen to air crew members during flight. It doesn’t say could 

have potentially. It says: causing loss of oxygen to air crew members during flight. 

I ran up to my office. This is a zip tie. This is what we are talking about. It is a single-use item. When you do any type of work 

on the helmet, you would cut the old zip tie off, I would assume, 

and replace it with a new one. And if the new one didn’t hold, you 

would grab another one from the bin and put another one on it. Is 

that pretty much the way? 

Mr. LILLI. Yes, sir, that is the way. 

Mr. SCOTT. And I think the problem is, when you—one is I think 

your people should be commended for identifying the problem prior 

to putting it in flight. So thank you for that. And I know you have 
28 

got a lot of family in the military, and if I am not mistaken, spent 

some time yourself there, and I am glad to have you in the position 

you are in. 

I will tell you, the idea that this is—that 36,000 of these are specialized aviation parts is ridiculous. And I hope you don’t spend 

any time or waste any time looking for them. I hope you just get 

rid of them if they don’t work, and you can go buy some more 

somewhere. You have got to have the flexibility in anything that 

you do to discard things that are just not worth more than a penny. 

It doesn’t make sense to spend dollars tracking them down. No private business would do that. 

The other thing I will tell you is I will get the facts on the C– 

5 wheel. I know those people well. Robins Air Force Base is in my 

district. And those are very skilled people that work at that facility, 

and I have no doubt that if a part needed a minor modification, 

that they have not only the tools, but they have the talent to make 

a minor modification to anything that may have come in. And I will 

seek that out and find that myself. 

But I would like to know this, ma’am, when you—the zip ties, 

you identified that as 36,000 potential problems. Are the 36,000 zip 

ties identified as 36,000 individual potential problems? 

Ms. WICECARVER. No, sir. What I said was they were left in the 

inventory. 

Mr. SCOTT. Well, I will yield the remainder of my time. But I 

think that disposable parts, disposable parts that are worth a 

penny apiece shouldn’t be part of—what did you say? 

Ms. SPEIER. I said they should be able to buy them at Lowe’s too. 

Mr. SCOTT. I prefer Home Depot, Home Depot being a Georgia 

company. But I agree with you. I mean, the reason it costs so much 

to do anything for the government is because we micromanage 

every aspect of what the people at the DLA do. With that, I yield 

the remainder of my time. 

Mrs. HARTZLER. Thank you, gentleman. I think we have had a 

very, very good productive discussion today where our job is oversight and investigate how the taxpayer dollars are used. And we 

want to, while we are advocating for more money to our national 

defense because we see all the threats in the world, and we see the 

needs, and we see the cuts that have occurred and our readiness 

in jeopardy and modernization not where it needs to be, at the 

same time we need to make sure every dollar that is spent and authorized from this committee to the Department of Defense is spent 

wisely. And we need to make sure that our men and women in uniform are safe. 

And so I appreciate your work, Mr. Sopko. I appreciate, you 

know, the lessons learned that we are learning. And I agree with 

my colleagues as well as the gentleman, Mr. McKeon, from the Department of Defense. And I was going to bring up that same quote 

in my closing statement here, that we need to question whether the 

Department of Defense should do this again, should take on this 

mission, because there clearly was perhaps some mistakes made 

over there and some money that was spent that could have been 

spent more wisely. And so thank you for your work there. 

And thank you as well, Ms. Wicecarver and Mr. Lilli, for what 

you do. We want to make sure that parts—I am familiar with farm 
29 

equipment business, and there is parts and service, and it is important when there is a defective part, if it is something that—I appreciate my colleagues’ comments about zip ties. I think there is a lot 

of wisdom in that too. We ought to have common sense mixed in 

here. But if there are major parts that could endanger our warfighters, we need to make sure that they are not only returned, 

make sure they are not put back on to the airplanes or whatever 

the equipment is, but also that restitution is made. If there is a 

warranty, we need to turn it in. Get that money back for the taxpayer. Or if it is a defective part that is of major consequence 

where we could have it replaced, it needs to be followed through. 

So thank you, Mr. Lilli, for the efforts you are going to make. 

And I look forward to the reports that Ms. Speier requested and 

I agree with to keep us apprised of how this is going. So thank you 

all very much for participating. This hearing is adjourned. 

[Whereupon, at 10:35 a.m., the subcommittee was adjourned.] 

A P P E N D I X 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

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1SIGAR Testimony before the House Committee on Armed Services Subcommittee on Oversight and Investigations titled ‘‘DOD Task Force for Business and Stability Operations in Afghanistan: Review of Selected Expenditures Highlights Serious Management and Oversight 

Problems.’’—Statement of John F. Sopko, Special Inspector General for Afghanistan Reconstruction, April 15, 2016 (SIGAR 16–29–TY). 2Memorandum from Deputy Secretary of Defense Gordon England to the Secretaries of the 

Military Departments, et.al. June 22, 2006. 

RESPONSE TO QUESTION SUBMITTED BY MS. SPEIER 

Ms. WICECARVER. The sampled product quality deficiency report was submitted by 

the Edwards Air Force Base maintenance group in September 2012 and was one of 

several deficiency reports submitted by Air Force customers for the defective tie 

down straps delivered on the contract. The DLA product quality deficiency report 

investigation was completed and closed in January 2014. Our audit found that the 

DLA product quality deficiency report investigation did not account for all defective 

tie down straps in the DOD inventory. [See page 12.] 

RESPONSES TO QUESTIONS SUBMITTED BY MR. CONAWAY 

Ms. WICECARVER. The answer to the question, ‘‘What I’m asking, of the 65 percent 

that was wrong, that you found wrong, how much of that do you say is in the full 

universe of 269 parts? Of the 65 that you audited, how many of those had problems?’’ is as follows. Specifically, of the 65 sampled stock numbers, there were 57 

that had problems. These problems resulted in DLA Aviation receiving less than appropriate restitution. This projected to 269 of 312 stock numbers with problems in 

the population. [See page 19.] 

Ms. WICECARVER. Overall, we determined that DLA Aviation did not adequately 

perform the steps needed to obtain appropriate contractor restitution for 57 of the 

65 sample items and resulted in DLA Aviation receiving less than appropriate restitution. We calculated the difference between the restitution that DLA Aviation 

should have received versus what they actually received for the defective parts. The 

value of the defective parts associated with the 65 sample items was $4,180,479 and 

DLA Aviation only provided evidence that it received $287,330 in restitution. The 

OIG DOD’s analyst projected the audit findings to the population of defective parts 

and concluded that DLA Aviation did not recover at least $12.3 million in restitution for 269 of the 312 stock numbers that it identified contractors supplied defective parts. [See page 20.] 

RESPONSE TO QUESTION SUBMITTED BY MS. McSALLY 

Mr. SOPKO. As cited in SIGAR’s written testimony 1 before the subcommittee, 

‘‘TFBSO [Task Force for Business Stability Operations] was originally created in 

2006 by the Deputy Secretary of Defense to help revive the post-invasion economy 

of Iraq. The Task Force reported to the Office of the Secretary of Defense. At its 

inception, TFBSO was not envisioned to execute projects and programs, but rather 

to advise Department of Defense (DOD) entities on ways to improve contracting 

processes and procedures. The memorandum establishing the Task Force stated, 

‘‘The Task Force will not be responsible for contracting, but will advise existing 

DOD contracting offices on improved contracting processes and associated systems 

solutions consistent with applicable statutory and regulatory requirements as a 

means to create economic opportunity.’’ 2

Over time, TFBSO evolved to take a larger role in identifying economic development needs in Iraq and directly executed programs and projects in response to those 

needs. In 2009, the Secretary of Defense formalized a new TFBSO mission and 

called on the Task Force to leverage economic development in Iraq as a strategic 
132 

3Memorandum from Secretary of Defense Robert Gates to the Secretaries of the Military Departments, et al., March 11, 2009. 4See, Robert M. Gates, Secretary of Defense, Continuation of Task Force for Business and 

Stability Operations, March 25, 2010; GAO, DOD Task Force for Business and Stability Operations: Actions Needed to Establish Project Management Guidelines and Enhance Information 

Sharing, GAO–11–715, July 29, 2011. 5Statement of Brian P. McKeon, Principal Deputy Under Secretary of Defense For Policy, 

Submitted to the House Armed Services Subcommittee on Oversight and Investigations, April 

15, 2016. 6McKeon, Ibid. 

and operational tool.3 Late in 2009, TFBSO was redirected to Afghanistan, and it 

began operations there in early 2010.’’ 4

As referenced in Principal Deputy Under Secretary for Defense for Policy Brian 

McKeon’s written statement to the subcommittee, 

‘‘Later [in 2010], some uncertainty about the status of the Task Force arose with 

the Office of General Counsel cast doubt on the legal authority of the Department 

of Defense to conduct economic development activities in a foreign country, as they 

appeared to be inconsistent with the Department’s authorities. Many activities of 

the Task Force were suspended. Congress clarified the situation in the FY 2011 National Defense Authorization Act, providing statutory authority for activities of the 

Task Force in Afghanistan.’’ 5

TFBSO was authorized in section 1535 of the National Defense Authorization Act 

for Fiscal Year 2011 (P.L. 111–383) and reauthorized in subsequent fiscal years. The 

National Defense Authorization Act for Fiscal Year 2014 (P.L. 113–66) extended 

TFBSO’s authorization through December 31, 2014, at which time the Task Force 

ended its programs in Afghanistan, and ceased all operations on March 31, 2015. 

In regard to Representative McSally’s question about preventing similar circumstances in the future, I would point to Principal Deputy Under Secretary 

McKeon’s statement to the subcommittee on the ‘‘overarching question’’ for policy 

makers about promoting economic development during a contingency operation. ‘‘I 

am skeptical that the Department of Defense is the natural home for that mission,’’ 

he said.6

While I am hesitant to suggest legislative actions to the committee which authorized TFBSO, I would highlight two points. First, between 2006 and the DOD General Counsel’s 2010 opinion, DOD was using internal funds for TFBSO operations. 

Increased congressional oversight, or legislation prohibiting DOD from undertaking 

similar economic development missions in the future without congressional authorization, may be warranted. However, if the committee determines, as it did between 

2010 and 2014, that it supports DOD engaging in economic development in a contingency environment, then it should consider providing statutory authority as it did 

for TFBSO in Afghanistan. Such authority should include provisions providing for 

rigorous oversight, creating stringent project requirements, ensuring that qualified 

staff with regional and subject matter expertise are hired, mandating cost- benefit 

analyses, and requiring thorough record keeping. 

Finally, SIGAR recently initiated performance and financial audits of TFBSO’s activities in Afghanistan. These audits will provide additional insight into how the 

Task Force operated in Afghanistan and used U.S. taxpayer resources. We expect 

to issue these audits in late 2016 or early 2017 and we will report our findings to 

this committee. [See page 23.] 

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