Operation Iraqi Freedom: Preliminary Observations on DOD Planning for the Drawdown of U.S. Forces from Iraq
Published: 2009-11-02T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The United States and the Government of Iraq have signed a Security Agreement calling for the drawdown of U.S. forces from Iraq. Predicated on that agreement and U.S. Presidential guidance, Multi-National Force-Iraq (MNF-I) has issued a plan for the reduction of forces to 50,000 U.S. troops by August 31, 2010, and a complete withdrawal of forces by the end of 2011. The drawdown from Iraq includes the withdrawal of approximately 128,700 U.S. troops, over 115,000 contractor personnel, the closure or transfer of 295 bases, and the retrograde of over 3.3 million pieces of equipment. Today's statement will focus on (1) the extent to which the Department of Defense (DOD) has planned for the drawdown in accordance with timelines set by the Security Agreement and presidential directive; and (2) factors that may impact the efficient execution of the drawdown in accordance with established timelines. This statement is based on GAO's review and analysis of DOD and MNF-I plans, and on interviews GAO staff members conducted with DOD officials in the United States, Kuwait, and Iraq. It also draws from GAO's extensive body of issued work on Iraq and drawdown-related issues.
section_title: What GAO Found
paragraphs: While DOD's primary focus remains on executing combat missions and supporting the warfighters in Iraq, several DOD organizations have issued coordinated plans for the execution of the drawdown within designated time frames. In support of these plans, processes have been established to monitor, coordinate, and facilitate the retrograde of equipment from Iraq. DOD's organizations have reported that their efforts to reduce personnel, retrograde equipment, and close bases have thus far exceeded targets; since May 2009, for example, DOD reports that the number of U.S. servicemembers in Iraq has been reduced by 5,300, and another 4,000 are expected to be drawn down in October. However, many more personnel, equipment items, and bases remain to be drawn down. For U.S. forces, contractor personnel, selected vehicles, and bases, the graphic below depicts drawdown progress since May 2009, as well as what remains to be drawn down by August 31, 2010 and December 31, 2011, respectively. Efficient execution of the drawdown from Iraq, however, may be complicated by crucial challenges that, if left unattended, may hinder MNF-I's ability to meet the time frames set by the President, the Security Agreement, and MNF-I's phased drawdown plan. First, DOD has yet to fully determine its future needs for contracted services. Second, the potential costs and other concerns of transitioning key contracts may outweigh potential benefits. Third, DOD lacks sufficient numbers of contract oversight personnel. Fourth, key decisions about the disposition of some equipment have yet to be made. Fifth, there are longstanding incompatibility issues among the information technology systems that may undermine the equipment retrograde process. And sixth, DOD lacks precise visibility over its inventory of some equipment and shipping containers. While much has been done to facilitate the drawdown effort, the efficient execution of the drawdown will depend on DOD's ability to mitigate these challenges. We will continue to assess DOD's progress in executing the drawdown from Iraq and plan to issue a report.

section_title: Letter
paragraphs: I appreciate the opportunity to be here today to discuss issues related to  the drawdown of U.S. forces from Iraq. When GAO last reported on the  progress of planning for the Department of Defense’s (DOD) drawdown  from Iraq in September 2008, the pace and overall extent of drawdown had  yet to be determined, although various defense commands had already  begun planning toward that end. Since then, the United States and the  Government of Iraq have signed a Security Agreement that took effect on  January 1, 2009, which includes a timeline and requirements for the  drawdown of U.S. forces from Iraq. In addition, on February 27, 2009,  President Obama announced that by August 31, 2010, Multi-National  Force-Iraq’s (MNF-I) mission will change from combat to supporting the  Iraqi government and its security forces. In light of these developments,  MNF-I has issued a phased plan aligned with goals and time frames set  forth by the Security Agreement and the President, including a transition  in mission, the reduction of forces to 50,000 U.S. troops by August 31,  2010, and a complete withdrawal of forces by the end of 2011.
The drawdown effort has already begun. It is, however, one of several  tasks U.S. forces in Iraq are conducting concurrently in a continuously  evolving environment during a period of Iraqi political uncertainty. For  example, besides overseeing operations in Iraq, MNF-I and its subordinate  headquarters are also merging into a single headquarters, called United  States Forces-Iraq, which is scheduled to become mission capable on  January 1, 2010, and includes a 40 percent reduction of headquarters  personnel. Moreover, brigade combat teams are being replaced by  relatively new Advise and Assist Brigades that will focus primarily on  training Iraqi security forces while retaining the capability to conduct full- spectrum operations. Finally, although DOD has reported that enemy  activity has decreased markedly since its highest point in June 2007, the  insurgency in Iraq remains dangerous.
As of August 31, 2009, there were approximately 128,700 U.S. military  personnel in Iraq, spread among 295 bases throughout the country.  Additionally, there were over 3.3 million pieces of Army equipment in Iraq  worth $45.8 billion, 18 percent of which is theater provided equipment,  which is a pool of permanent, stay behind equipment that has accumulated  in Iraq and Kuwait since combat operations began in 2003. Although much  of this theater provided equipment has remained in theater as units rotate,  the withdrawal timelines in the Security Agreement will compel DOD to  make critical decisions regarding the future of this equipment. Figure 1  below provides a more detailed breakdown of the U.S. Army equipment in  Iraq. In addition, DOD reported over 119,000 contractor personnel in Iraq  as of third quarter fiscal year 2009. Contractor personnel in Iraq and  Kuwait perform a wide range of tasks essential for drawdown including  repairing military vehicles, providing trucks and drivers for logistics  convoys, and providing transportation assets and personnel necessary for  the retrograde of equipment. In addition, contractor personnel working on  the Logistics Civil Augmentation Program (LOGCAP) provide the majority  of base and life support in Iraq.
You asked us to provide our preliminary observations concerning DOD’s  progress in planning for the drawdown of materiel from Iraq, and  challenges that may affect the smooth execution of the drawdown. My  statement today will focus on: (1) the extent to which DOD has planned  for the drawdown from Iraq in accordance with timelines set by the  Security Agreement and presidential directive, and (2) factors that may  impact the efficient execution of the drawdown in accordance with  established timelines. Additionally, we will continue to assess DOD’s  progress in executing the drawdown and plan to issue a report.
My statement is based on our review and analysis of DOD and MNF-I  plans, and interviews GAO staff members conducted with DOD officials in  the United States, Kuwait, and Iraq. Additionally, I have drawn from our  body of issued work examining Iraq and drawdown-related issues. This  work was conducted in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives. We provided  copies of a draft of this statement to the Department of Defense for its  review and comment. We considered and incorporated its comments, as  appropriate.
subsections: section_title: DOD Organizations Have Issued Coordinated Plans and Established Processes and New Organizations to Facilitate the Drawdown from Iraq
paragraphs: A number of DOD organizations have issued orders outlining a phased  drawdown from Iraq that meet the time frames set forth in the Security  Agreement and presidential guidance, while being responsive to security  conditions on the ground. Additionally, much has been accomplished to  prepare for the retrograde of materiel from theater, including establishing  processes to monitor, coordinate, and facilitate the flow of equipment out  of Iraq. Furthermore, several organizations have been created to facilitate  the retrograde of equipment and support unity of effort. To date, these  efforts have contributed to MNF-I meeting or exceeding its targets for  drawing down forces, retrograding equipment, and closing bases. While  DOD has made significant progress executing the drawdown, there  remains a large amount of personnel, equipment, and bases that must be  drawn down within the established timelines.
Headquarters, Department of the Army, MNF-I, and its subordinate  command responsible for executing the drawdown in Iraq—Multi-National  Corps-Iraq (MNC-I)—have issued plans outlining how the drawdown  should be managed over time. These plans also endeavor to provide  flexibility to commanders on the ground to conduct ongoing combat  operations while simultaneously executing the drawdown. For example, in  order to balance operational needs with the requirement to meet  drawdown goals, commanders have the discretion to choose which of  their equipment is no longer essential for ongoing operations, and can  therefore be retrograded. Subsequent phases will see an increase in the  flow of equipment retrograded from Iraq as the pace of the drawdown  quickens.
In support of these plans, processes have been established to monitor,  coordinate, and facilitate the retrograde of equipment out of Iraq. As we  reported in September 2008, MNF-I had processes in place to manage the  retrograde of various types of equipment from Iraq. Since that time these  processes have been refined and new elements have been established to  improve them. For example, partly in response to our previous work,  representatives from the Office of the Secretary of Defense’s Lean Six  Sigma office conducted six reviews to optimize theater logistics, one of  which focused on the process for retrograding equipment from Iraq. This  work informed the development of a new data system, referred to as the  Theater Provided Equipment Planner, which is intended to streamline the  retrograde process by facilitating the issuance of disposition instructions  for theater provided equipment while it is still in Iraq. In addition, a second  new data system, Materiel Enterprise Non-Standard Equipment, has also  been developed to facilitate the issuance of disposition instructions for  non-standard equipment.
In addition to refining the retrograde processes, several organizations have  been created to oversee, synchronize, and ensure unity of effort for the  retrograde of equipment from Iraq. In September 2008, GAO reported that  the variety of organizations exercising influence over the retrograde  process and the resulting lack of a unified or coordinated command  structure was not consistent with joint doctrine, led to increased  confusion and inefficiencies in the retrograde process, and inhibited the  adoption of identified mitigation initiatives. To bolster unity of effort,  MNF-I has created a Drawdown Fusion Center, the mission of which is to  provide a strategic picture of drawdown operations, identify potential  obstacles, address strategic issues, and assist in the development of policy  and guidance related to several aspects of drawdown. To accomplish this  mission, the Drawdown Fusion Center provides guidance on the  disposition of materiel, monitors and advises on transportation options,  tracks and monitors the capabilities of ports through which materiel is  shipped, tracks logistics actions that impact disposition during drawdown,  and acts as a focal point for all external agencies and the Government of  Iraq in matters related to the drawdown. Assisting the Drawdown Fusion  Center is U.S. Army Central’s Support Element-Iraq, a liaison element  established to enhance synchronization and coordination among MNF-I;  MNC-I; U.S. Army Central; Headquarters, Department of the Army; and  Army Materiel Command. It also generates theater and Department of the  Army disposition guidance for all forces and materiel redeploying and  retrograding out of Iraq. Finally, the Department of the Army, with Army  Materiel Command as the lead agency, created a Responsible Reset Task  Force to facilitate the provision of disposition instructions for materiel  retrograding out of Iraq and synchronize those instructions to facilitate the  reset of Army equipment.
DOD organizations reported that their efforts to reduce personnel,  retrograde equipment, and close bases in the initial months of the  drawdown have exceeded targets. First, according to the MNF-I  commanding general, U.S. forces have already begun drawing down in Iraq  without compromising security. For example, since May 2009, the number  of U.S. servicemembers in Iraq has been reduced by 5,300. Furthermore,  the MNF-I commander testified on September 30, 2009, that another 4,000  servicemembers will likely be drawn down in October 2009—earlier than  originally planned—due to improvements in Anbar province. Second, as of  August 2009, the Army reported that it has exceeded its target figure for  the retrograde of rolling stock by 1,800 pieces. Finally, the Army has  reported that as of August 2009, it had closed three more bases than  originally planned.
While DOD’s progress since May 2009 has exceeded its targets, a large  amount of personnel, equipment, and bases remain to be drawn down  within the established timelines. To meet the presidential target of  reducing the number of U.S. forces in Iraq to 50,000 by August 31, 2010,  MNF-I must reduce its forces by almost 60 percent by next summer.  Furthermore, to meet the other targets established by MNF-I and the Army  for August 2010, MNF-I must draw down 32 percent of its contractor  personnel workforce, retrograde over 50 percent of its tracked and  wheeled vehicles, and close 67 percent of its bases in Iraq. The remaining  forces, contractor personnel, and equipment will have to be drawn down  during the final 16 months, from September 2010 to December 31, 2011,  during which time some of the largest bases in Iraq will also need to be  closed or transferred to the Government of Iraq, a task the commanding  general of MNF-I stated could take 9 to 10 months to complete. Figure 2  below illustrates the numbers of U.S. forces, contractor personnel, tracked  and wheeled vehicles, and bases that have been drawn down since the  initiation of drawdown; that must be drawn down by the August 31, 2010,  change of mission date; and that must be drawn down before December  31, 2011.
section_title: Efficient Execution of the Drawdown Requires the Resolution of Several Key Issues
paragraphs: Efficient execution of the drawdown from Iraq may be complicated by  crucial challenges regarding several unresolved issues that, if left  unattended, may hinder MNF-I’s ability to meet the time frames set by the  President, the Security Agreement, and MNF-I’s phased drawdown plan.  These challenges include:    contract services that have not been fully identified;    potential costs and other concerns of transitioning key contracts that may  outweigh potential benefits;  longstanding shortages of contract oversight personnel;    some key decisions about the disposition of equipment that have not yet  been made;  longstanding information technology system weaknesses; and    a lack of precise visibility over some equipment.
Some of these issues are outside MNF-I’s purview and require action by  the Office of the Secretary of Defense and the Military Departments.
Others require a coordinated effort by MNF-I, U.S. Army Central, and other  DOD organizations supporting the drawdown effort.
section_title: Contract Services Needed to Support the Drawdown Have Not Been Fully Identified
paragraphs: DOD has not fully defined the additional contracted services it will need to  successfully execute the drawdown and support the remaining U.S. forces  in Iraq. Experience has shown that requirements for contracted services  will likely increase during the drawdown and joint guidance states that  planners should work closely with contracting officers to determine the  best approach for purchasing contract services. In Iraq, such efforts may  be hampered because contracting officials in Iraq do not have full visibility  over the approximately 52,000 contracts in theater. Officials at Joint  Contracting Command-Iraq/Afghanistan, the organization responsible for  coordinating contract support during the drawdown, are currently trying  to get the full picture of operational contract support in Iraq. However,  DOD lacks a centralized repository of the specific services available on the  various contracts. For example, there are several contracts for trucking  services currently being used to transport materiel in support of the  drawdown, but planners may lack the details necessary to allocate these  services efficiently as drawdown progresses. Joint guidance also calls for  DOD to identify contracted support requirements as early as possible to  ensure that the military receives contracted support at the right place, at  the right time, and for the right price. In particular, for the drawdown of  forces to occur according to the timelines, commanders will need to  determine their contract support requirements and communicate these to  contracting officers several months in advance. Although the MNF-I  drawdown order anticipates an increase in its need for contracted services  through September 1, 2010, as of July 2009 commanders had not identified  the specific types and levels of contracted services they will need during  the drawdown. For example, Army officials in Kuwait responsible for the  retrograde of theater provided equipment had not defined the specific  level of contracted services needed to perform functions such as repairing  vehicles and requesting disposition instructions.
In planning for the contractor presence needed during the final phase of  the drawdown, MNF-I has made assumptions in the absence of defined  requirements or full visibility over contracted services that may contribute  to wasted resources and may hinder the timely execution of drawdown.  Even though it anticipates an increase in contracted services needed  during the drawdown, MNF-I has set a target for reducing the number of  contractor personnel in Iraq to 75,000 by September 1, 2010. According to  MNF-I officials, this target was based on the historic ratio of contractor  personnel to servicemembers in Iraq, rather than requirements for  contracted support. However, as GAO has previously reported, the  drawdown of forces may create additional requirements for contracted  support, and officials in Iraq have acknowledged that additional contractor  personnel will be needed to provide services currently being provided by  U.S. forces. For example, according to DOD, in the third quarter of fiscal  year 2009 the number of armed private security contractors in Iraq went  from 10,743 to 13,232, a 23 percent increase. This increase in private  security contractors was due, in part, to an increased need for private  security contractors as the military began drawing down its forces.  Without identifying the level and types of contractor support needed to  facilitate the drawdown, the actual number of contractor personnel  needed remains unknown. Unless commands in theater define and  communicate contract requirements with sufficient lead time, DOD risks  not having the right contracted services in place to meet drawdown  timelines and may resort to contracting methods that could cost the  government more and that may be conducive to waste. Moreover, in  determining the best means to meet commanders’ requirements, planners’  limited visibility over the range of contracted services available may  contribute to decisions based on incomplete information, buying services  that are already on contract, experiencing difficulty in enforcing priorities,  and using limited contracting resources inefficiently. These outcomes may  impact the timely execution of the drawdown. In 2006, we reported that a  lack of visibility over contracted support negatively impacted MNF-I and  MNC-I planning for base closure, among other things.
section_title: Near-Simultaneous Transition of Key Contracts Creates Risks for Interruption of Services
paragraphs: The transition of key contracts that are scheduled to expire during the  height of the drawdown presents the potential for the interruption of vital  services. With the exception of LOGCAP, major contracted services in Iraq  and Kuwait, including those for base and life support, convoy support, and  equipment maintenance will soon reach their expiration date and are  scheduled to be re-competed and re-awarded. If contracts are awarded to  new contractors, outgoing and incoming contractors would be required to  transition within a certain time period to continue vital services. If these  contracts are re-awarded as scheduled, major contracted services in Iraq  and Kuwait will be transitioning nearly simultaneously during the height of  the drawdown, increasing the risk that services will be interrupted.  According to a DOD lessons learned document, during the transition from  LOGCAP III to LOGCAP IV in Kuwait which concluded in June 2009, the  incoming contractor intended to hire at least 80 percent of the outgoing  contractor’s personnel to begin providing services according to schedule.  However, the outgoing contractor needed to retain its employees in order  to continue to provide the services for which it was contracted. Although  the incoming and outgoing contractors agreed to a protocol for  transferring employees, poor execution at some sites led to staffing  shortages and some service interruptions. To prevent similar service  interruptions when other key contracts transition, it will be critical that  DOD ensures that the outgoing contractor release personnel to the  incoming contractor as anticipated. Furthermore, if contractor personnel  choose not to transfer to the new contractor, the transition may result in  greater-than-anticipated costs and delays as the contractor hires, screens,  and deploys new personnel. Additionally, a lack of experienced personnel  may also lead to service interruption. For example, according to the  lessons learned document, a shortage of personnel available to operate  large machinery in Kuwait forced officials to shut down operations critical  to the drawdown. In addition, offices responsible for issuing credentials to  employees were not prepared to handle the large volume of employees  needing to obtain new badges, a situation exacerbated by the provision of  inaccurate employee lists by the incoming contractor, resulting in a further  disruption of services. As of July 2009, officials had not considered  possible stresses on these offices that might occur during the upcoming,  near-simultaneous contract transitions expected to occur during the  drawdown. Finally, the outgoing contractor refused to provide, and in one  case erased, data it was required to provide to the government.  Government officials confirmed that these data would have facilitated a  more efficient transition process. Contract management officials stated  that challenges experienced during the transition from LOGCAP III to  LOGCAP IV in Kuwait will likely be magnified during the upcoming  contract transitions in Iraq, given the scope of contract transitions during  the height of the drawdown.
Even though LOGCAP III in Iraq does not expire during the drawdown  time frame, DOD plans to undertake a complex transition to other means  of contracted services despite concerns that the potential benefits of doing  so may not be fully realized. According to DOD officials, MNF-I plans to  transition base and life support and logistics functions currently provided  by LOGCAP III to other contracts, including LOGCAP IV, the Air Force  Contract Augmentation Program (AFCAP), and individual sustainment  contracts with Iraqi contractors. However, unlike convoy support and  maintenance contracts in Iraq and Kuwait, LOGCAP III does not expire  until January 2012. A senior DOD official has stated that the rationale for  making the transitions includes reducing the cost of base and life support  services and mitigating the risks associated with relying on a single  contractor to provide essential services. However, this official and others  have raised concerns, indicating that these potential benefits may not be  fully realized. For example, while cost savings may result from  transitioning from LOGCAP III to other contracts, the senior DOD official  with whom we spoke has conceded that costs may actually increase  during the transition when both the incoming and outgoing contractors  have duplicative personnel, including large transition teams. These costs  may offset potential savings, in part because the new contracts would  have, at most, about a year to realize their potential benefits, given the  time needed to conduct the transition and the date that the Security  Agreement states U.S. forces must be out of Iraq. Moreover, according to  Army officials, there has been no formal cost-benefit analysis to weigh  potential benefits against risks such as cost increases. In the absence of a  robust cost-benefit analysis, the benefits of making the transition remain  uncertain.
The upcoming LOGCAP transition in Iraq will potentially increase the  contract management and oversight responsibilities of the combat forces  and impact the quality of service provided to the warfighter. Unit  commanders, as customers of LOGCAP, play a significant role in the  management and oversight of the LOGCAP contractor. For example,  customers are required by the Army to periodically evaluate the  contractor’s performance. Currently, units provide feedback to the  contractor during monthly performance evaluation boards. Because the  Army intends to award several task orders for services for base and  logistics services—possibly to multiple contractors—it is possible that the  number of monthly evaluations would increase for some commanders.  Furthermore, while service disruptions like those experienced in Kuwait  during the transition to LOGCAP IV between February and June of 2009  may have amounted to temporary inconveniences, in a continuously  evolving environment like Iraq they have a greater potential to negatively  impact ongoing operations. For example, according to a senior Defense  Contract Management Agency official responsible for contract  management and oversight in Iraq, there is concern about DOD’s plan to  begin transitioning the theater transportation mission at the beginning of  2010, since it could require a new contractor to assume the mission just as  the department undertakes a significant troop-level reduction that is  planned for March-April 2010. Executing the rapid movement of troops  and equipment out of Iraq will require significant truck assets.  Transitioning the mission to a new contractor and requiring the new  contractor to provide 23,000 trucks and crews could be daunting.  Additionally, this official expressed concerns about the ability of a new  LOGCAP IV contractor to quickly obtain the necessary staff to execute the  mission if the transitions from LOGCAP III are done as currently planned.  As we noted above, if an incoming contractor needs to hire a significant  number of new personnel, service interruptions could result.
For commanders in the field already tasked with conducting complex  counterinsurgency operations and the drawdown of forces, among other  responsibilities, it is important to know who is responsible for providing  particular services. However, increasing the number of contracts in Iraq,  as is planned to occur during the upcoming transition, may complicate  commanders’ abilities to obtain essential contracted support. For example,  under the current LOGCAP III contract in Iraq, commanders generally  need to speak with one program manager to obtain the full range of  contracted services. Under LOGCAP IV, however, services may be divided  among multiple contractors for any particular location. As a result, the  tasks of determining how to obtain essential services and correcting  service problems may divert commanders’ limited resources from other  responsibilities, which potentially increases risk to the mission.
In addition, complex transitions to local contractors may impact the  quality of services provided to the warfighter. For example, commanders  in Iraq noted that some base and life support services being provided to  U.S. forces through a newly transitioned contract managed by local  sustainment contractors were not meeting the level of quality that U.S.  forces had come to expect. We also found that a similar strategy in Kuwait  resulted in service interruptions, including inefficiencies at key storage  areas that led to expanses of disorderly materiel such as tires and  cylinders. Should the upcoming LOGCAP transition in Iraq proceed as  planned, the need for commanders to overcome challenges on which we  have previously reported, such as inexperience in dealing with  contractors, uncertainty regarding oversight responsibilities, and inability  to dedicate resources for oversight, would be particularly acute.
Limited oversight resources coupled with a projected significant increase  in oversight demands during the LOGCAP transition in Iraq heightens the  risk of waste. The successful transition from LOGCAP III to multiple base  and life support contractors will require a large number of government  oversight personnel, as the transition from LOGCAP III to LOGCAP IV in  Kuwait demonstrated. However, overseeing the LOGCAP transition in Iraq  would be an added responsibility for the Defense Contract Management  Agency, which will continue to be responsible for the day-to-day  management and administration of the LOGCAP III contractor, private  security contracts, and other large contracts in Iraq. A Defense Contract  Management Agency official expressed concern about conducting  LOGCAP transitions at multiple locations simultaneously throughout Iraq  because this would require a greater number of oversight personnel than a  consecutive transition. For example, Defense Contract Management  Agency officials cited insufficient numbers of property administrators  available to transfer billions of dollars worth of property from LOGCAP III  to one of several dozen possible contracts. These personnel shortages may  delay the transfer of property, such as materiel handling equipment critical  for loading, unloading, and moving containers which, in turn, may inhibit  the timely retrograde of equipment from Iraq. Contract oversight  requirements would further increase following the transition. Specifically,  the Defense Contract Management Agency may go from overseeing one  LOGCAP contractor to having to oversee three LOGCAP contractors and  the AFCAP contractor. In addition, the contracts for specific base services  that the Joint Contracting Command-Iraq/Afghanistan plans to award to  Iraqi contractors could increase the workload for contracting officers from  this command. Furthermore, as the number of contracts increase at an  installation, commanders will be required to increase the number of  personnel to ensure responsible oversight of contractor personnel. As a  result, the number of personnel available for other operations will  decrease.
section_title: Longstanding Contract Oversight Personnel Shortages May Increase the Likelihood of Wasteful Practices During the Drawdown
paragraphs: DOD’s longstanding challenge to provide an adequate number of trained  oversight personnel in deployed locations will continue to plague the  department as it proceeds through the drawdown. Since 2004 we have  reported on DOD’s inability to provide an adequate number of oversight  personnel in CENTCOM’s theater. Joint doctrine emphasizes the  importance to commanders of ensuring that appropriate administration  and oversight personnel are in place when using contractors. While MNF- I guidance recognizes the need to ensure oversight, DOD is likely to find it  difficult to meet the oversight requirement as forces are withdrawn and  the pool of personnel available for oversight decreases. Historically, as  forces decrease, the need for contracted services increases. The oversight  challenge in Iraq and Kuwait is exacerbated by the competing need to  provide professional contract management and oversight personnel from  agencies like the Defense Contract Management Agency to meet the  increased oversight requirements in Afghanistan. DOD officials at all levels  have expressed concern about the department’s ability to provide the  required number of oversight personnel. For example, an Army unit in  Kuwait with 32 government personnel that is currently providing oversight  for more than 3,000 contractor personnel anticipates doubling its  contractor workforce, but is not anticipating a concomitant increase in  oversight personnel. The unit has identified the lack of oversight personnel  as a significant concern to successfully moving equipment out of Kuwait.
As we noted in several of our previous reports, having the right people  with the right skills to oversee contractor performance is crucial to  ensuring that DOD receives the best value for the billions of dollars spent  each year on contractor-provided services supporting forces deployed to  Iraq. For example, we reported in 2004 that the Defense Contract  Management Agency could not account for $2 million worth of tools  purchased using the AFCAP contract, in part because of a lack of contract  management and oversight personnel in CENTCOM’s theater. In January  2008, we reported that the Army did not have adequate staff to conduct  oversight of an equipment maintenance contract in Kuwait. We have  found in the past that, as a result of the vacant oversight positions, the  Army was unable to fully meet the oversight mission including fully  monitoring contractor performance. In that same report we noted that  poor contractor performance resulted in the Army spending $4.2 million to  rework items that were presented to the Army as meeting contract  standards but failed Army inspection. We have also noted that an  inadequate number of oversight personnel results in some contracts  receiving insufficient oversight. For example, in 2008 we reported that the  Army assigned seven contracting officer’s technical representatives to  provide oversight for about 8,300 linguists in 120 locations across Iraq and  Afghanistan. In one case, a single oversight person was responsible for  linguists stationed at more than 40 different locations spread throughout  the theater of operations. Officials responsible for the contract agreed that  there were not enough contracting officer’s technical representatives to  effectively oversee the contract. Having too few contract oversight  personnel precludes DOD from being able to obtain reasonable assurance  that contractors are meeting their contract requirements at every location  where the work is being performed. Without adequate contract oversight  personnel in Iraq and Kuwait during the drawdown, DOD risks not  receiving the level and quality of service it needs to effectively and  efficiently meet the goals of the drawdown.
section_title: Execution of the Drawdown Is Dependent Upon Key Decisions over the Disposition of Equipment
paragraphs: MNF-I’s execution of the drawdown from Iraq in accordance with  established timelines depends on its obtaining clear guidance as to what  equipment can and will be provided to the Government of Iraq and what  will be retained by the U.S. military; identification of the mechanisms that  are to be used to transfer equipment to the Government of Iraq;  determinations of what will be done with certain types of non-standard  equipment, such as Mine Resistant Ambush Protected vehicles (MRAP);  and resolution of other decisions related to the Army’s modernization and  reset plans.
DOD plans to transfer military equipment to the Government of Iraq in  order to achieve U.S. objectives in Iraq, but decisions still need to be made  by DOD on what can and will be transferred to the Government of Iraq,  contributing to planning uncertainty. Multi-National Security Transition  Command-Iraq, an MNF-I subordinate command responsible for training  and equipping the Iraqi security forces, has prepared a list of equipment it  believes will enable the Government of Iraq to provide for its own security  after U.S. forces have left Iraq. This list comprises about 1.5 percent of  the estimated 3.3 million pieces of equipment in Iraq, with a projected  value of about $600 million. This list is currently undergoing progressively  higher levels of review within DOD, for potential approval by the Military  Department Secretaries and the Secretary of Defense. Until this list is  approved, and an appropriate transfer mechanism determined, the  equipment that will be transferred to the Government of Iraq remains  uncertain. Currently, no decision has been made as to what authorities will  be used to transfer these items to the Government of Iraq. While certain  authorities exist that may permit the transfer of excess defense articles,  DOD has also requested additional authority to transfer non-excess  defense articles. Section 1234 of the National Defense Authorization Act  for Fiscal Year 2010 provides an additional authority, requested by the  Department of Defense, under which the Secretary of Defense, with the  concurrence of the Secretary of State, may transfer certain equipment to  the Government of Iraq without the Military Departments declaring it  excess to their needs. Because this provision does not specify a  mechanism for reimbursing the Military Departments for the transfer of  non-excess equipment, the loss of which may affect unit readiness, senior  Army officials expressed concern about it prior to its passage, and the  conference report accompanying the Act urged the Secretary of Defense to  develop a plan to reimburse the Military Departments for such items. In  addition, other DOD officials expressed strong reservations about section  1234 prior to its passage, arguing that existing authorities, such as those  which underpin Foreign Military Sales, are sufficient to transfer U.S.  military equipment to the Government of Iraq, but are not fully understood  within the department. Clarification of authorities to be used for  transferring equipment to the Government of Iraq will help facilitate  decisions on which equipment will be transferred, and will assist in  ensuring that DOD will meet its stated timelines.
The complexity of issues surrounding transfer authorities has already  presented obstacles to transferring equipment to the Government of Iraq.  For example, beginning in May 2009, MNC-I undertook an initiative to turn  over the Ibn Sina hospital, located in the International Zone, to the  Government of Iraq as a fully equipped, fully operational hospital.  However, 100 of the approximately 9,800 pieces of equipment in the  hospital, such as intensive care unit beds, trauma centers, and patient vital  signs monitoring equipment, were ineligible for transfer because,  according to Army officials, the Army could not declare them as excess to  the needs of the Army. As a result, officials had to seek alternate means  to transfer or sell the remaining pieces of equipment necessary to outfit  the hospital. Ultimately, the hospital was transferred to the Government of  Iraq on schedule. However, Army officials stated that after exhausting all  legal options for transferring or donating the remaining equipment, the  hospital was transferred without these 100 pieces of important equipment.
According to the Army, disposition for nearly all currently identified non- standard equipment in Iraq has been determined, but all items needing  disposition have not yet been identified. Non-standard equipment is mainly  theater provided equipment that has been issued to units that is not listed  on their modified table of organization and equipment. Non-standard  equipment includes a wide range of items such as construction equipment,  materiel handling equipment, flat screen televisions, certain types of  radios, and MRAPs. To facilitate the retrograde of non-standard  equipment, the Army is implementing a new process in which the Life  Cycle Management Commands are cataloguing all types of non-standard  equipment in Iraq for entry into a new database. The Army then  determines the location to which each type of item will be shipped upon  retrograde from Iraq. Army officials state that they have determined  disposition for the majority of types of non-standard equipment already  identified in Iraq. However, these officials also state that additional types  of non-standard equipment are still being entered into the database as  efforts to gain accountability over non-standard equipment continue. Until  this effort is complete, the disposition of some types of non-standard  equipment in Iraq may be delayed.
Decisions on the disposition of MRAPs also have not been finalized, and  DOD faces challenges in retrograding the large number of these vehicles  that remain in Iraq. MRAPs are a unique type of non-standard equipment  that were initially procured specifically for use in Iraq to better protect  servicemembers from improvised explosive devices. As the drawdown  progresses, DOD officials acknowledge that most of the MRAPs  retrograded from Iraq will return to the United States, and that only some  of these vehicles are suitable for use in Afghanistan. According to Army  officials, the Army, which manages most of the MRAP fleet, has issued  preliminary disposition instructions for MRAPs to be retrograded from  Iraq, but service-wide requirements for MRAPs have not yet been finalized.  Moreover, although in January 2008, DOD designated the Red River Army  Depot and Marine Corps Logistics Command bases in Albany and Barstow  as the depots that would repair MRAPs in the United States, Headquarters,  Department of the Army only recently issued a message directing the  shipment of 200 MRAPs from Kuwait to Red River Army Depot as part of  an MRAP Reset Repair Pilot Program. To date, all MRAPs retrograded  from Iraq have passed through the MRAP Sustainment Facility in Kuwait  for repair. However, at the time of our July 2009 visit to the CENTCOM  area of operations, this facility could process only 20 MRAPs per week,  contributing to a build-up of nearly 900 MRAPs in a retrograde lot in  Kuwait. The officials who manage this lot stated that it was nearing full  capacity for holding MRAPs. However, data provided by U.S. Army Central  indicate that DOD’s capacity to process and ship MRAPs out of Kuwait  exceeded the relatively few numbers of additional vehicles that left Iraq  since our visit, decreasing the total number of MRAPs that are sitting in  the retrograde lot to under 800 as of October 2009. Nevertheless,  according to U.S. Army Central, over 8,000 MRAPs remain in Iraq. To  remove MRAPs from Iraq according to the timeline set by the Security  Agreement, the pace of their retrograde will need to significantly increase  as the drawdown progresses, which heightens the potential for  bottlenecks.
The disposition of equipment in theater may also be affected by other  decisions that have not been made related to the Army’s future  composition and equipment reset needs. For example, the Army has not  decided what equipment and how much of each type of equipment will be  transferred to Army Prepositioned Stocks and Theater Sustainment  Stocks. Also, the Army is currently drafting an “Equipping White Paper”  that describes how the Army plans to allocate equipment in accordance  with future force structure designs. For example, Army officials stated that  they are considering changing one or more heavy brigade combat teams  into Stryker brigade combat teams. Other factors also add uncertainty to  the disposition of equipment. For example, while the Army has taken steps  to streamline the reset induction process for equipment in Iraq, disposition  for reset depends on when the equipment is retrograded from Iraq and the  condition of the equipment. In addition, the extent to which equipment  may be stored in Kuwait is unclear. Specifically, some officials from the  Office of the Secretary of Defense told us that some equipment may be  stored at depots or in Kuwait while decisions about disposition are made,  while Army officials told us that the Army has no plans to store equipment  in Kuwait. Finally, decisions have not been finalized on what additional  equipment will be transferred from Iraq to Afghanistan.
section_title: Longstanding Information Technology System Weaknesses May Compromise the Timely Retrograde of Equipment
paragraphs: Weaknesses in data systems used to retrograde equipment from Iraq that  we cited in our September 2008 report remain uncorrected, and a new  problem has surfaced. In our September 2008 report, we noted that when  theater provided equipment reached Kuwait, the 401st Army Field Support  Brigade, which received the equipment, had to undertake two concurrent  manual data entry processes in separate logistics information systems to  establish accountability and visibility for the equipment. We also reported  that the process for requesting disposition instructions was lengthy and  involved sending spreadsheets populated with equipment data from  Kuwait to the appropriate Life Cycle Management Command in the United  States and then back to Kuwait. According to DOD officials we  interviewed in Iraq and Kuwait in July 2009, the manual manipulation of  data and extensive reliance on spreadsheets still occurs while other DOD  officials stated that any problems that delay equipment from being  retrograded can be problematic given the rapid pace of the drawdown. In  addition, during our recent field visits we identified another data system  problem that prevented the timely issuance of disposition instructions for  equipment identified for retrograde from Iraq. Specifically, due to a data  corruption error that occurs during data transfer between two legacy  Army systems, Army officials in Kuwait were unable to issue orders to  move the equipment to its designated destination. Officials stated that this  problem had a negative effect on their ability to retrograde equipment, and  officials in the United States and Kuwait worked together during regularly  scheduled meetings to discuss issues delaying the transmission of these  instructions. To fix the problem in the system, programmers had to  implement manual fixes for each individual set of disposition instructions.  According to Army officials, a solution to correct the data corruption error  has been implemented since our visit. However, we have not been able to  validate this claim and, according to Army officials, similar problems with  legacy systems occur regularly.
Higher projected flows of theater provided equipment during later phases  of the drawdown may also put the timely issuance of disposition  instructions at risk. We reported in 2008 that receipt of disposition  instructions for some rolling stock took anywhere from three to nine  months, resulting in equipment being held in Kuwait awaiting disposition  instructions. Although officials told us during our July 2009 visit to Kuwait  that this situation had improved, the data used to support that claim may  be unreliable. With increased flows of equipment, inefficiency resulting  from the reliance on the entry of data by hand will be magnified. The  higher volume of equipment requiring disposition instructions may stress  the manual processes currently being used, thereby increasing the risk  that more time will be necessary to request and receive disposition  instructions, which may again cause equipment to sit idle in Kuwait. While  the Theater Provided Equipment Planner may improve retrograde process  efficiency by automating the issuance of disposition instructions that  would otherwise need to be issued through the existing manual process,  the extent to which items will be retrograded using the new system,  especially as the volume of equipment being retrograded increases during  later phases of the drawdown, is unclear. In addition, the increased  volume of equipment projected for the later phases of the drawdown will  require additional contractor personnel to make the manual entries made  necessary by the system incompatibility issues.
section_title: DOD’s Lack of Precise Visibility Over Its Inventory of Equipment and Shipping Containers Inhibits Planning for Retrograde from Iraq
paragraphs: The execution of the drawdown may also be affected by the lack of a  complete and accurate inventory of three broad types of equipment. These  three types of equipment include contractor acquired property, non- standard equipment, and shipping containers. According to Army data,  these three types of equipment comprise 28 percent of the total DOD  property in Iraq. To facilitate a more complete and accurate record of  equipment in Iraq, MNF-I required its subordinate units to complete a 100  percent inventory of their equipment, identify excess equipment that can  be immediately retrograded, and account for previously undocumented  equipment by June 27, 2009. Undocumented equipment, however,  continues to be identified and added to the inventory.
According to MNF-I guidance, the command’s ability to meet drawdown  requirements and timelines depends upon establishing an accurate and  complete inventory of the amount and types of equipment that will have to  be retrograded from Iraq. In that vein, MNF-I ordered a 100 percent  inventory of all U.S. government owned equipment in Iraq. Overall, DOD  officials stated that property accountability has improved in Iraq since  2006, especially with regard to theater provided equipment. The guidance  calling for completion of an inventory by June 27, 2009 was intended to  account for undocumented items. When these previously undocumented  items are entered onto property books, commanders become accountable  for them. The intent is to facilitate drawdown planning and execution by  providing an incentive for commanders to take action on previously  undocumented items that otherwise may not be factored into the  retrograde plans. However, although MNC-I states that the inventory is  complete, previously undocumented equipment continues to be found  every month. Until all undocumented equipment is included in the  inventory, DOD’s information on the number of items requiring retrograde  remains incomplete, which adds risk to meeting the drawdown timelines.
During our visit to the CENTCOM area of operations in July 2009, officials  in Iraq and Kuwait stated that, of all categories of equipment, they had the  least visibility over contractor acquired property. Army officials stated,  however, that as of October 2009, this situation had improved. While  contractors are typically required under the terms of their contract to  maintain property accountability over this equipment, there is no  standardized process for doing so, limiting MNF-I’s and U.S. Army  Central’s accountability and visibility over this equipment. During the  drawdown, accountability of contractor acquired property is important to  ensure the efficient allocation of the transportation assets used to  retrograde this equipment.
U.S. Army Central officials also noted that they lack full accountability and  visibility over non-standard equipment in Iraq, adding another potential  risk to their ability to efficiently retrograde this equipment out of Iraq.  Army officials have estimated that there could be as many as 360,000  pieces of non-standard equipment in Iraq, but concede that they have low  confidence in property accountability for non-standard equipment.  Moreover, Army and U.S. Army Central officials note that obtaining an  accurate inventory of non-standard equipment is complicated by the fact  that many of these items have multiple identification numbers and that  commanders have significant flexibility in accounting for this equipment.  For example, a piece of non-standard equipment that is valued at greater  than $5,000 must be recorded on a military unit’s property book, but after  the value of that item depreciates below the $5,000 threshold, it is left to  the individual commander’s discretion whether to continue recording the  property. Not knowing the precise amount of non-standard equipment in  Iraq that will need to be retrograded contributes to planning uncertainty  for the organizations tasked with executing the drawdown, and may put at  risk the ability to position transportation assets and personnel to manage  the many aspects of the retrograde process in time to facilitate a steady  flow of equipment from Iraq.
Another factor compounding planning uncertainty is the lack of an  accurate accounting of the quantity and serviceability of shipping  containers in Iraq. Containers are unique in that not only are they items  that have to be retrograded from Iraq, they are also a primary vehicle for  shipping other types of equipment out of Iraq. According to U.S. Army  Central officials, the data system in place to track containers is inaccurate  and incomplete because, among other factors, it must be manually  updated every time a container arrives at or leaves a specific location.  Reports based the data from this system indicate that the system is at best  25 percent accurate. Furthermore, updates to the location and status of  containers may not occur routinely because of personnel shortages. For  example, according to officials in charge of container management, 200  containers listed as located in Iraq were, in fact, in Afghanistan. Moreover,  in addition to inaccurate data on the number of containers and their  locations, officials also lack data on the serviceability of containers. In an  effort to rectify this problem, MNC-I issued an order directing a 100  percent inventory of containers, including instructions for reporting the  serviceability of the containers. Subsequent reports indicate that  approximately 54,000 containers had been physically inventoried as of  August 2009, which was almost 25,000 fewer than the number of  containers in the data system. Out of these containers entered in the data  system, the location of over 7,000 could not be verified and the  serviceability of 39 percent remained unknown. Moreover, many  containers in Iraq are being used for storage, office space, and living  quarters, among other purposes, yet are not documented as such, and may  not immediately be available for retrograde. Due to limited container  accountability, MNF-I and U.S. Army Central’s ability to plan for the steady  flow of equipment out of Iraq necessary to meet the drawdown timelines  may be at risk.
subsections: section_title: Concluding Observations
paragraphs: As I have stated today, much has been done in Iraq and Kuwait to facilitate  the drawdown effort. However, the effective execution of the drawdown  may be compromised by several complex challenges: notably,  identification of contractor requirements needed for the drawdown, and  development of plans to address the challenges created by key contract  transitions and to mitigate the risk of waste caused by an inadequate  number of trained oversight personnel that would aid the successful  management of contract services. Additionally, the effective execution of  the drawdown is dependent upon decisions about what equipment can and  will be transferred to the Government of Iraq, the clear establishment of  transfer mechanisms, and final decisions on the disposition of non- standard equipment. Moreover, longstanding data information system  incompatibility issues and a less-than-comprehensive inventory of some  types of equipment in Iraq may hamper the drawdown.
section_title: GAO Contacts and Acknowledgments
paragraphs: For further information about this statement, please contact William M.  Solis (202) 512-8365 or solisw@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals who made key contributions to this  statement include Vincent Balloon, Carolynn Cavanaugh, Carole Coffey,  Timothy DiNapoli, Laurier Fish, Walker Fullerton, Guy LoFaro, Greg  Marchand, Jim Melton, Emily Norman, Jason Pogacnik, David Schmitt,  Cheryl Weissman, Gerald Winterlin, and Gwyneth Woolwine.
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