Iraq and Afghanistan: Agencies Face Challenges in Tracking Contracts, Grants, Cooperative Agreements, and Associated Personnel
Published: 2010-03-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Departments of Defense (DOD) and State (State) and the U.S. Agency for International Development (USAID) have relied extensively on contractors, grantees, and cooperative agreement recipients to support troops and civilian personnel and carry out reconstruction efforts in Iraq and Afghanistan. This reliance increases the importance of agencies having reliable data to inform decision-making and oversee the work performed. To help increase oversight of activities supporting DOD, State, and USAID's efforts in Iraq and Afghanistan, the National Defense Authorization Act for Fiscal Year 2008, as amended, required the agencies to identify common databases of information on their contracts, grants, cooperative agreements, and associated personnel. In their July 2008 memorandum of understanding (MOU), the three agencies designated the Synchronized Predeployment and Operational Tracker (SPOT) as their system for tracking the required information. GAO's testimony addresses (1) how a lack of information hinders agencies' management and oversight of contracts, grants, cooperative agreements, and associated personnel, (2) the status of the agencies' continued efforts to implement SPOT, and (3) GAO's prior recommendation to improve SPOT's implementation. It is drawn primarily from GAO's prior work on contracting in contingency operations.
section_title: What GAO Found
paragraphs: GAO has reported extensively on the need for agencies to have reliable information to manage and oversee work being performed to address challenges related to using contracts and grants. The lack of such information may inhibit planning, increase costs, and introduce unnecessary risk. For example, GAO reported last year that by not having insight into contractor provided services, DOD may lack needed information to efficiently allocate contracted services to support remaining U.S. forces in Iraq. GAO also previously determined that by not considering contractor and grantee resources in developing an Afghan assistance strategy, USAID's ability to make resource allocation decisions was impaired. Many of GAO's prior recommendations on contractors supporting contingency operations focused on increasing agencies' ability to track contracts and contractor personnel. Agency officials have indicated that SPOT has the potential of consolidating dispersed information to help them better manage and oversee contractors. SPOT may offer the same potential for grants and cooperative agreements as information on them and their personnel are similarly dispersed. Although the agencies have made progress in implementing SPOT, the database falls short of providing information to facilitate oversight and fulfill statutory requirements. GAO reported in October 2009 that the criteria used to determine which personnel are entered into SPOT varied and not all personnel were being entered as required. In particular, the agencies cited the need for a SPOT-generated letter of authorization as the primary factor for deciding whether personnel were entered, but not all personnel, particularly local nationals, need this authorization. As a result, officials from the three agencies acknowledge that SPOT data are incomplete, with some questioning the need for detailed data on all contractors. Because of SPOT's limitations, the agencies have relied on other sources, such as periodic surveys, for data on contractor personnel, but we have found these sources to be unreliable. Although contract information is being entered into SPOT, the system continues to lack the capability to accurately import information from other sources as agreed to in the MOU. For example, because SPOT does not require users to enter contract information in a standardized manner, our work has shown that there will be challenges in identifying which contracts' dollar values and competition information should be imported. While our prior findings are specific to contracts and their personnel, together with our ongoing work they point to challenges the agencies will face in using SPOT to track similar data on grants, cooperative agreements, and their personnel. Last year GAO recommended that the agencies develop a plan for addressing the shortcomings identified in SPOT's implementation. While the agencies agreed coordination is important, they disagreed with the need for a plan. GAO continues to believe that a plan with timeframes that provides consistent criteria and standards is necessary for ensuring that SPOT meets statutory requirements and helping the agencies identify their information needs to manage and oversee contracts, grants, and cooperative agreements.

section_title: Letter
paragraphs: Thank you for inviting me here today to discuss efforts by the Department  of Defense (DOD), the Department of State (State), and the U.S. Agency  for International Development (USAID) to track information on contracts,  grants, cooperative agreements, and the personnel working under them in  Iraq and Afghanistan. Reliable, meaningful data related to contractors,  grantees, cooperative agreement recipients, and the services they provide  are a starting point for informing agency decisions and ensuring proper  management and oversight. The significant reliance on contracts, grants,  and cooperative agreements to support troops and civilian personnel and  to carry out reconstruction efforts in Iraq and Afghanistan increases the  importance of such data. Since 2008, GAO has reported on the three  agencies’ efforts to implement a database to reliably track statutorily- required data on contracts and contractor personnel in Iraq and  Afghanistan. While our past work focused on tracking contracts and  contractor personnel, we are currently reviewing the agencies’ efforts to  track grants, cooperative agreements, and associated personnel as part of  our annual mandated review of contracting in Iraq and Afghanistan. Our  prior findings along with our ongoing review provide insights into the  continued challenges the agencies face in implementing a database for  tracking information on contracts, grants, cooperative agreements, and  their associated personnel that can inform management decisions and  facilitate oversight.
My statement focuses on (1) how a lack of information hinders agencies’  management and oversight of contracts, grants, cooperative agreements,  and associated personnel and (2) the status of DOD, State, and USAID’s  efforts to track statutorily-required information on personnel and  contracts, grants, and cooperative agreements in Iraq and Afghanistan. I  will also provide some observations regarding our 2009 recommendation  to address shortcomings in the agencies’ efforts to track contracts and  contactor personnel. While informed by our ongoing work, this statement  is drawn from our prior work related to contracting in contingency  operations. Both our ongoing and prior performance audits have been  conducted in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audits to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe the  evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Section 861 of the National Defense Authorization Act for Fiscal Year 2008  (NDAA for FY2008) directed the Secretary of Defense, the Secretary of  State, and the USAID Administrator to sign a memorandum of  understanding (MOU) related to contracting in Iraq and Afghanistan. The  law specified a number of issues to be covered in the MOU, including the  identification of common databases to serve as repositories of information  on contract and contractor personnel. The NDAA for FY2008 required the  databases to track the following, at a minimum:  for each contract that involves work performed in Iraq or Afghanistan  for more than 14 days,    a brief description of the contract,   its total value, and    whether it was awarded competitively; and  for contractor personnel working under contracts in Iraq or  Afghanistan,  total number employed,  total number performing security functions, and  total number killed or wounded.
In July 2008, DOD, State, and USAID signed an MOU in which they agreed  the Synchronized Predeployment and Operational Tracker (SPOT) would  be the system of record for the statutorily-required contract and personnel  information. The MOU specified SPOT would include information on DOD,  State, and USAID contracts with more than 14 days of performance in Iraq  or Afghanistan or valued at more than the simplified acquisition threshold,  which the MOU stated was $100,000, as well as information on the  personnel working under those contracts.
Since the signing of the July 2008 MOU, the requirements of section 861  have been amended. The Duncan Hunter National Defense Authorization  Act for Fiscal Year 2009 added additional matters to be covered in the  agencies’ MOU to address criminal offenses committed by or against  contractor personnel. According to the law, the MOU was to be modified  by February 11, 2009. Additionally, the National Defense Authorization Act  for Fiscal Year 2010 (NDAA for FY2010) amended the original  requirements by redefining “contract in Iraq and Afghanistan” to include  grants and cooperative agreements and redefining “contractor” for these  purposes, to include grantees and cooperative agreement recipients. The  NDAA for FY2010 also revised the minimum threshold for tracking  contracts, task and delivery orders, grants, and cooperative agreements  from 14 days of performance in Iraq or Afghanistan to 30 days. DOD, State,  and USAID have drafted a new MOU to address the changes from the  NDAAs for FY2009 and FY2010.
SPOT is a Web-based system that was initially developed by DOD to  provide greater visibility over contractors deployed with U.S. forces. DOD  is responsible for all maintenance and upgrades to the database, but as   agreed in the July 2008 MOU, it is the responsibility of each agency to  require its contractors to accurately input data elements related to  contractor personnel, such as the number of personnel employed on each  contract in Iraq or Afghanistan. Although the law only directs the agencies  to track aggregate data, DOD configured SPOT in a manner that requires  users to manually enter detailed information for each covered person  working in Iraq or Afghanistan. SPOT tracks individuals by name and  records information such as contracts they are working under,  deployment dates, blood type, next of kin, and whether an individual has  been killed or injured. To track contract-related information, such as value  and extent of competition, the agencies agreed in the MOU to import data  into SPOT from the Federal Procurement Data System – Next Generation  (FPDS-NG), the federal government’s system for tracking information on  contracting actions.
section_title: Lack of Information on Contracts, Grants, and Cooperative Agreements and Associated Personnel Can Hinder Agencies’ Management and Oversight
paragraphs: DOD, State, and USAID’s significant reliance on contracts, grants,  cooperative agreements, and their associated personnel makes it critical  that agency officials have accurate and reliable information to inform  decision making and properly oversee work being performed in Iraq and  Afghanistan. We have reported extensively on the management and  oversight challenges of using contracts and grants to help agencies carry  out their missions during contingency operations. As our prior work has  shown, the agencies’ lack of complete and accurate information may  inhibit planning, increase costs, and introduce unnecessary risk:    Limited visibility over contractors obscures how extensively  agencies rely on them to support operations and carry out  missions. In our 2006 review of DOD contractors supporting deployed  forces, we reported that a battalion commander in Iraq was unable to  determine the number of contractor-provided interpreters available to  support his unit. This limited visibility can create challenges for  planning and carrying out missions. Further, a lack of visibility into the  extent to which agencies rely on contractors can hinder their ability to  plan for the role of contractors. For example, we reported in November  2009 that without insight into services provided by contractors as part  of the drawdown in Iraq, DOD planners may lack information  necessary to efficiently allocate contracted services to support the  remaining U.S. forces as the drawdown progresses.
Without incorporating information on contractors and grantees  into planning efforts, agencies risk making uninformed  programmatic decisions. As we noted in our 2004 and 2005 reviews  of Afghanistan reconstruction efforts, when developing its interim  development assistance strategy, USAID did not incorporate  information on the contractor and grantee resources required to  implement the strategy. We determined this impaired USAID’s ability  to make informed decisions on resource allocations for the strategy.
A lack of accurate financial information on contracts impedes  agencies’ ability to create realistic budgets. As we reported in July  2005, despite the significant role of private security providers in  enabling Iraqi reconstruction efforts, neither DOD, State, nor USAID  had complete data on the costs associated with using private security  providers. Agency officials acknowledged such data could help them  identify security cost trends and their impact on the reconstruction  projects, as increased security costs resulted in the reduction or  cancellation of some projects.
Lack of visibility into the services being performed increases  agencies’ risk of duplicative efforts. In our May 2009 review of  DOD funding for humanitarian and reconstruction projects in  Afghanistan, we found that DOD lacked visibility into development  projects being undertaken by USAID. In particular, by not having a  centralized, interagency database of all ongoing projects in  Afghanistan, the U.S. government may not be in a position to fully  leverage the resources available and risks duplicating reconstruction  efforts.
Many recommendations from our prior work on contractors supporting  contingency operations focused on increasing agencies’ ability to track  contracts and contractor personnel so decision makers—whether in the  field or at headquarters—can better understand the extent to which they  rely on contractors, better plan, and better account for costs. While they  have taken actions to address our recommendations, DOD, State, and  USAID officials told us access to information on contracts and associated  personnel still needs improvement. Specifically, information on contracts  and the personnel working on them in Iraq and Afghanistan may reside  solely with the contractors, be stored in a variety of data systems, or exist  only in paper form in scattered geographic regions. These officials  indicated SPOT has the potential to bring some of this dispersed  information together so it can be used to better manage and oversee  contractors. SPOT may offer the same potential for managing grants and  cooperative agreements since data on them and their associated personnel  in Iraq and Afghanistan are similarly dispersed.
section_title: Though SPOT Implementation Continues, Challenges Remain in Tracking Personnel and Contracts, Grants, and Cooperative Agreements
paragraphs: DOD, State, and USAID have made progress in implementing SPOT, but as  we reported in October 2009, the agencies’ ongoing implementation of  SPOT falls short of providing information that would help facilitate  oversight and inform decision making as well as fulfill statutory  requirements. Specifically, we found the criteria for deciding which  contractor personnel in Iraq and Afghanistan are entered into the system  varied and as a result, not all required personnel have been entered.  Additionally, information on contractor personnel killed or wounded in  either country still is not systematically tracked in SPOT. Because of  SPOT’s limitations, the agencies have relied on other sources, such as  periodic surveys, for information on contractor personnel, including those  that were killed or wounded, but we have found these sources to be  unreliable as well. Regarding contracts, we found SPOT lacks the  capability to track required contract information as agreed to in the MOU.  Although our prior findings are specific to tracking contracts they point to  challenges the agencies may face as they use SPOT to track similar  information on grants, cooperative agreements, and the personnel working  on them.
subsections: section_title: Tracking Information on Personnel Working in Iraq and Afghanistan
paragraphs: DOD, State, and USAID have been phasing in the July 2008 MOU  requirement to use SPOT to track information on contracts with  performance in Iraq and Afghanistan and the personnel working on them.  Specifically, all three agencies currently require their contractors in Iraq to  enter personnel data into SPOT. DOD and State contractors also have this  requirement for work performed in Afghanistan. However, USAID has not  yet imposed a similar requirement on its contractors in Afghanistan but is  developing a plan to do so.
Our prior work has shown that the criteria DOD, State, and USAID used  for determining which contractor personnel are entered into SPOT varied  and were not always consistent with the MOU. Specifically, DOD, State,  and USAID officials stated the primary factor, particularly in Iraq, for  deciding which contractor personnel were entered into SPOT was whether  a contractor needed a SPOT-generated letter of authorization (LOA). Not  all contractor personnel, particularly local nationals, need LOAs and  agency officials informed us that information on such personnel is  generally not entered into SPOT. Furthermore, in some instances we  found the determining factor for entering personnel into SPOT was the  result of other agency directives. For example, DOD officials from one  contracting command in Afghanistan stated they followed DOD’s 2007  guidance on the use of SPOT, which requires contractor personnel  working on contracts valued over $25,000 be entered into SPOT—as  opposed to the MOU’s $100,000 threshold—and as a result, local nationals  were being entered into the system despite not needing an LOA.
Officials from the three agencies expressed confidence that their SPOT  data were relatively complete for contractor personnel needing LOAs in  Iraq, with DOD and State expressing similar confidence for personnel in  Afghanistan. However, they acknowledged that since local nationals  generally do not need LOAs, they are generally not being entered into  SPOT. As a result, SPOT does not fully reflect the number of local  nationals working on the agencies’ contracts. Agency officials further  explained that ensuring SPOT contains information on local nationals is  challenging because their numbers tend to fluctuate due to the use of day  laborers and local firms do not always track the individuals working for  them. Further, USAID has not begun entering information on local  nationals into SPOT because of concerns that doing so could pose a threat  to local nationals’ safety, should the database be compromised. To help  address USAID’s security concern, DOD is currently testing a classified  version of SPOT and expects the system to be fully active this month.  However, USAID officials told us the agency’s limited access to classified  computers would make it difficult to use a classified system. To address  similar security concerns, State developed an alternative that assigns a  unique identification number for local nationals entered into SPOT in  place of using their names.
Varying criteria and practices about who to include in SPOT stem in part  from differing agency views on the need to collect detailed data on all  contractor personnel. SPOT collects data that is more detailed than what  was required by the NDAA for FY 2008 or what was agreed upon by the  agencies in the July 2008 MOU. USAID officials questioned the need for  entering detailed information into SPOT because personnel working on its  contracts, particularly in Afghanistan, typically have limited interaction  with U.S. government personnel or do not receive support services from  the U.S. government. Similarly, some DOD officials we spoke with  questioned the need to track individual personnel by name as opposed to  their total numbers given the high cost of collecting detailed data  compared to the minimal benefit of having this information. DOD officials  responsible for SPOT informed us the agencies did not conduct any  analyses of what information should be entered into SPOT prior to the  agencies’ designating it as the system of record in the MOU.
Even though DOD, State, and USAID agreed in their July 2008 MOU to use  SPOT for tracking contractor personnel, the agencies have relied on  periodic surveys of their contractors to obtain data on the number of  contractors in Iraq and Afghanistan. However, our prior work has shown  that data from these surveys are generally incomplete and unreliable, and,  therefore, should not be used to identify trends or draw conclusions about  the number of contractor personnel in each country. For example, while  U.S. Central Command’s quarterly census provides the most  comprehensive information on the number of DOD contractor personnel  in Iraq and Afghanistan, DOD officials acknowledged that it represents  only a rough approximation of the actual number contractor personnel in  each country. Officials from all three agencies stated that they lack the  resources to verify the information reported by the contractors,  particularly for work performed at remote sites where security conditions  make it difficult for U.S. government officials to regularly visit.
In addition to agreeing to use SPOT to track contractor personnel  numbers, the agencies agreed to use SPOT to track information on  contractor personnel killed or wounded. Although SPOT was upgraded in  January 2009 to track casualties, officials from the three agencies  informed us they are not relying on the database for this information  because contractors are generally not updating the status of their  personnel to indicate whether any of their employees were killed,  wounded, or are missing. In the absence of using SPOT to identify the  number of contractor personnel killed or wounded in Iraq and  Afghanistan, the agencies obtain these data from other sources.  Specifically, in response to requests made as part of our ongoing review,  State and USAID provided us with manually compiled lists of the number  of personnel killed or wounded, whereas DOD provided us with casualty  data for U.S citizens, but could not differentiate whether the individuals  identified were DOD civilian employees or contractors.
The agencies have begun implementing SPOT to obtain information on  personnel working under grants and cooperative agreements. Specifically,  prior to the NDAA for FY2010 changes, in January 2009, State issued a  directive requiring assistance award recipients with personnel deploying  to Iraq or Afghanistan to enter information into SPOT. Similarly, in April  2009, USAID issued a policy directive requiring all personnel deploying to  Iraq to work under grants and cooperative agreements meeting the July  2008 MOU criteria to be entered into SPOT. This directive specified that  information on Iraqi local nationals would not be entered into SPOT at this  time. While DOD also plans to use SPOT to track personnel working on  grants and cooperative agreements, DOD officials informed us that they do  not plan to issue specific guidance on entering these personnel into SPOT  because of DOD’s limited use of grants and cooperative agreements in Iraq  and Afghanistan. As the three agencies continue to implement SPOT for  personnel working on grants and cooperative agreements, our ongoing  work to date indicates that they will experience challenges similar to those  with contractor personnel, such as ensuring consistent criteria for whom  to enter and accounting for local nationals.
section_title: Tracking Information on Contracts, Grants and Cooperative Agreements with Performance in Iraq and Afghanistan
paragraphs: Although the agencies are entering information on contracts into SPOT,  the system continues to lack the capability to accurately import and track  the contract data elements as agreed to in the MOU. While the MOU  specifies that contract values, competition information, and descriptions  of services would be pulled into SPOT from FPDS-NG, this capability is  not expected to be available until October 2010. Even when a direct link  with FPDS-NG is established, our prior work has shown that pulling data  from FPDS-NG into SPOT may present challenges because SPOT users are  not required to enter information, such as contract numbers, in a  standardized manner. In our 2009 review of DOD, State, and USAID data,  we determined that at least 12 percent of the contracts in SPOT had  invalid contract numbers and, therefore, could not be matched to records  in FPDS-NG. Furthermore, using contract numbers alone may be  insufficient since specific task and delivery orders are identified through a  combination of the contract and order numbers, but SPOT users are not  required to enter task or delivery order numbers. For example, as we  stated in our October 2009 report, we reviewed one SPOT entry for a  contract with 12 orders placed against it. Because only the contract  number and no order numbers were included in SPOT, there was no way  to determine the correct value and competition information that should be  imported from FPDS-NG.
When using SPOT to track information on grants and cooperative  agreements, the agencies will face challenges similar to those faced with  contracts. For example, as part of our ongoing work, State and USAID  officials have informed us that complete information on their grants and  cooperative agreements is not available from a single source, like FPDS- NG, but instead they rely on multiple databases to record information on  their grants and cooperative agreements performed in Iraq and  Afghanistan. Therefore, the agencies will need to determine how the  information from multiple databases is to be entered or linked to SPOT.  Additionally, the information contained in these databases is generally not  maintained in a standardized manner, which may present additional  difficulties if the agencies were to pull these data into SPOT.
section_title: Prior Recommendation for Executive Action and Concluding Observations
paragraphs: To address the shortcomings of the agencies’ implementation of SPOT to  track contracts and contractor personnel, we recommended in October  2009 that the Secretaries of Defense and State and the USAID  Administrator jointly develop and execute a plan with associated  timeframes to continue implementing the NDAA for FY2008 requirements.  Specifically, we recommended    ensuring the agencies’ criteria for entering contracts and contractor  personnel into SPOT are consistent with the NDAA for FY2008 and  with the agencies’ respective information needs for overseeing  contracts and contractor personnel;  revising SPOT’s reporting capabilities to ensure they fulfill statutory  requirements and agency information needs; and    establishing uniform requirements on how to enter contract numbers  into SPOT so contract information can accurately be pulled from  FPDS-NG as agreed to in the MOU.
DOD, State, and USAID agreed that coordination among the three agencies  is important, but DOD and State disagreed that they needed a plan to  address the issues we identified. They cited their ongoing coordination  efforts and anticipated upgrades to SPOT as sufficient. USAID cited a  number of steps it has taken that would facilitate SPOT implementation  but did not address our recommendation.
We also believe continued coordination among the three agencies is  important as they attempt to obtain greater visibility into their reliance on  contractors, grantees, and cooperative agreement recipients in dynamic  and complex environments. However, continued coordination without  additional actions is not sufficient. By jointly developing and executing a  plan with specific time frames, the agencies can identify the concrete steps  needed to assess their progress in ensuring that SPOT collects the data  necessary to fulfill statutory requirements. In developing this plan, each  agency should further consider its respective information needs. By  working with potential users of SPOT data to better understand their  information needs, each agency can help ensure the information entered  into the system is sufficiently but not overly detailed and will assist it in  managing and overseeing contracts, grants, and cooperative agreements in  Iraq and Afghanistan. Otherwise, not only do the agencies risk not  collecting the information they need but also collecting detailed data they  will not use.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions you or other members of the subcommittee may  have.
section_title: GAO Contacts and Acknowledgement
paragraphs: For further information about this statement, please contact John P.  Hutton (202) 512-4841 or huttonj@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 Johana R. Ayers, Assistant Director; Noah Bleicher; Raj  Chitikila; Kathryn Edelman; David Greyer; Christopher Kunitz; Heather B.  Miller; and Morgan Delaney Ramaker.
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