Operation Iraqi Freedom: Actions Needed to Facilitate the Efficient Drawdown of U.S. Forces and Equipment from Iraq
Published: 2010-04-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The drawdown from Iraq is a complex operation of significant magnitude. Established drawdown timelines dictate a reduction in forces to 50,000 troops by August 31, 2010, and a complete withdrawal of U.S. forces from Iraq by December 31, 2011. While DOD has made progress toward meeting these goals, a large amount of equipment, personnel, and bases remain to be drawn down. Moreover, escalating U.S. involvement in Afghanistan may increase the pressure on DOD to efficiently execute the drawdown. Due to broad congressional interest in drawdown issues, GAO performed this work under the Comptroller General's Authority. GAO examined (1) the extent to which DOD has planned for the drawdown from Iraq in accordance with set timelines, and (2) factors that may impact the efficient execution of the drawdown. To evaluate these efforts GAO reviewed documents and interviewed officials from over 20 DOD organizations in the U.S., Kuwait, and Iraq.
section_title: What GAO Found
paragraphs: Several DOD organizations have issued coordinated plans for the execution of the drawdown and created new organizations to oversee, synchronize, and ensure unity of effort during the drawdown. To date, DOD reports that its drawdown efforts have exceeded its goals. For example, in January 2010, DOD reported that it had exceeded its target figure for withdrawing wheeled and tracked combat vehicles in Iraq, among other items, by over 2,600 pieces, yet a large amount of personnel, equipment, and bases remain to be drawn down. However, DOD has not (1) fully included contracted support in its operational planning for the drawdown, (2) allowed sufficient time in its guidance to ensure that all contracted services can be put on contract in a responsible manner, or (3) clearly defined the roles and responsibilities of various contract validation review boards. Several other issues may impede the efficient execution of the drawdown from Iraq. First, challenges associated with the planned simultaneous transition of several major contracts may lead to the interruption of vital services. Second, DOD has not determined whether the benefits of transitioning its major base and life support contract in Iraq outweigh the costs and risks of doing so. Third, shortages of contract oversight personnel may increase the risk of fraud, waste, and abuse. Fourth, key decisions concerning equipment that will be retrograded from Iraq have yet to be made. And finally, DOD lacks precise visibility over its inventory of equipment and shipping containers. While DOD has begun to address some of these issues, GAO has not fully assessed DOD's actions.

section_title: Letter
paragraphs: On November 17, 2008, the United States and the Government of Iraq  On November 17, 2008, the United States and the Government of Iraq  signed a Security Agreement that took effect on January 1, 2009, which  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  includes a timeline and requirements for the drawdown of U.S. forces from  Iraq. In addition, on February 27, 2009, President Obama announced that  Iraq. In addition, on February 27, 2009, President Obama announced that  by August 31, 2010, the U.S. military mission will change from combat to  by August 31, 2010, the U.S. military mission will change from combat to  supporting the Iraqi government and its security forces. In light of these  supporting the Iraqi government and its security forces. In light of these  developments, Multi-National Force-Iraq (MNF-I) issued a phased plan  developments, Multi-National Force-Iraq (MNF-I) issued a phased plan  aligned with goals and time frames set forth by the Security Agreement  aligned with goals and time frames set forth by the Security Agreement  and the President, including a transition in mission, the reduction of U.S.  and the President, including a transition in mission, the reduction of U.S.  troops to 50,000 by August 31, 2010, and a complete withdrawal of forces  troops to 50,000 by August 31, 2010, and a complete withdrawal of forces  by the end of 2011.  by the end of 2011.
The drawdown is one of several tasks U.S. forces in Iraq are conducting  The drawdown is one of several tasks U.S. forces in Iraq are conducting  concurrently in a continuously evolving environment during a period of  concurrently in a continuously evolving environment during a period of  Iraqi political uncertainty. For example, besides overseeing operations in  Iraqi political uncertainty. For example, besides overseeing operations in  Iraq, MNF-I and its subordinate headquarters merged into a single  Iraq, MNF-I and its subordinate headquarters merged into a single  headquarters called United States Forces-Iraq (USF-I) in January 2010. In  headquarters called United States Forces-Iraq (USF-I) in January 2010. For example, according to the USF- insurgency in Iraq remains dangerous.
Many of the initiatives discussed in this report were undertaken before the transition from  MNF-I to USF-I. Actions or initiatives undertaken before January 2010 will be attributed to  MNF-I or one of its subordinate commands as appropriate. Actions or initiatives taken after  January 2010 or that are currently ongoing will be attributed to USF-I.
DOD, Measuring Stability and Security in Iraq: Report to Congress in Accordance with  the Department of Defense Supplemental Appropriations Act 2008, Section 9204, Public  Law 110-252 (July 23, 2009). announced his decision to send an additional 30,000 troops to Afghanistan,  a decision that may impact efforts to draw down U.S. forces from Iraq.
In addition to its military forces, DOD relies on thousands of contractor  personnel in Iraq and Kuwait to perform a wide range of tasks essential for  the drawdown including repairing military vehicles, providing trucks and  drivers for logistics convoys, and maintaining airfields necessary for the  retrograde of equipment. According to DOD, there were over 110,000  contractor personnel in Iraq as of fourth quarter fiscal year 2009.  According to DOD data, approximately 52 percent of these contractor  personnel are working under the Logistics Civil Augmentation Program  (LOGCAP), the largest single contract supporting operations in Iraq and  Kuwait.
When we reported in September 2008 on the progress of planning for the  drawdown from Iraq, we concluded that DOD had not adequately  delineated roles and responsibilities for executing the drawdown, resulting  in a variety of disparate teams engaged in retrograde operations without a  unified or coordinated chain of command. In light of the findings  presented in that report, we recommended that the Secretary of Defense,  in consultation with U.S. Central Command (CENTCOM) and the military  departments, take steps to clarify the chain of command over logistical  operations in support of the retrograde effort. DOD generally concurred  with this recommendation, and took steps to remedy the unclear chain of  command. Since the publication of our September 2008 report, we have  continued to monitor DOD’s progress in planning for and executing the  drawdown and have communicated our preliminary findings in briefings to  several congressional committees. We also communicated our preliminary  findings during testimony before the Commission on Wartime Contracting  in Iraq and Afghanistan in November 2009. This report is based upon our  continued analysis and observation of DOD’s progress in planning for and  executing the drawdown from Iraq. Our specific objectives were to  determine (1) the extent to which DOD has planned for the drawdown  from Iraq in accordance with timelines set by the Security Agreement and  presidential direction and (2) factors that may impact the efficient  execution of the drawdown.
The planning for and execution of the drawdown has and may continue to  change rapidly due to evolving logistics considerations, new rules for the  management of certain types of equipment, the uncertain Iraqi political  and security environment, and developments elsewhere in the region,  particularly Afghanistan. For example, fluid security conditions in Iraq  may influence the order in which bases are transferred to the Government  of Iraq and the rate of equipment retrograde. Moreover, the Iraqi elections  initially planned for January 16, 2010, did not occur until March 7, 2010, a  development that could impact drawdown timelines because DOD’s  planned troop withdrawal is contingent upon the completion of Iraqi  elections and the formation of a new government.
This rapidly changing situation and corresponding evolution in DOD’s  drawdown planning and execution also impacts our reporting on this  issue. For example, in this report we do not discuss two issues raised  during our earlier testimony. First, in November 2009 we reported that  MNF-I’s timely execution of the drawdown from Iraq depends on its  obtaining clear guidance as to what equipment can and will be provided to  the Government of Iraq and the identification of the mechanisms that will  be used for such transfers. According to DOD testimony before Congress,  recommendations on equipment that will be transferred to the  Government of Iraq and the mechanisms for executing the transfers are  complete. However, future progress in executing the transfers may depend  in large part on the outcome of ongoing discussions between DOD and the  Government of Iraq. Second, we reported two data system weaknesses  that hindered DOD’s ability to efficiently retrograde equipment. Officials  reported that solutions to the issues we identified have been developed  and implemented although, according to one DOD official, problems with  the data systems may continue to surface and require attention.
To determine the extent to which DOD planned for the drawdown and  how these plans conform to the established timelines, we reviewed  relevant documents to include DOD, MNF-I, and USF-I plans, command  briefings, the Security Agreement, and transcripts of speeches and  congressional testimony by U.S. officials. Additionally, we spoke with  DOD officials throughout the chain of command in the United States,  Kuwait, and Iraq that were involved in the development and execution of  drawdown plans. We also drew from our body of previously issued work  examining Iraq and drawdown-related issues in order to identify areas in  which DOD made improvements to its drawdown plans. Throughout the  engagement, the team also relied upon staff working from our Baghdad  Field Office to conduct interviews with officials in theater and to  periodically refresh key information.
To identify factors that may impact the efficient execution of the  drawdown, we reviewed and analyzed briefings, e-mail correspondence,  orders, plans, joint doctrine, DOD guidance, and other data obtained from  DOD organizations in the United States, Kuwait, and Iraq. Using this  information, we determined the way processes are supposed to work as  well as any challenges encountered. While in Kuwait and Iraq, we also  visited locations at which various aspects of the redeployment and  retrograde process are performed and spoke with local commanders, on- site supervisors, staff officers, among others, about their experiences and  challenges. Following our trip to Kuwait and Iraq, we followed up with  relevant DOD organizations and officials in the United States and  CENTCOM’s area of responsibility, to include the USF-I commanding  general and his staff, to obtain updated information. Again, we also relied  upon our staff working from GAO’s Baghdad Field Office to conduct  follow-up interviews with officials, observe a drawdown rehearsal  exercise in Kuwait, and periodically update key information.
We conducted our work from January 2009 through March 2010 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. Appendix I includes more detailed  information on our scope and methodology.
subsections: section_title: Background
paragraphs: The drawdown of equipment and personnel from Iraq is a highly complex  operation of significant magnitude. According to DOD, as of February  2010, there were approximately 98,100 U.S. military personnel in Iraq,  spread among 228 bases throughout the country. Additionally, as of  February 2010, the Army reported that there were approximately 3.1  million pieces of equipment in Iraq, worth almost $28 billion, about 20  percent of which is DOD owned, theater provided equipment, which is a  pool of permanent stay behind equipment that has accumulated in Iraq  since combat operations began in 2003. Theater provided equipment  includes both standard and non-standard equipment. Standard equipment  refers to those items authorized on a military unit’s modified table of  organization and equipment. Non-standard equipment refers to equipment  issued to units that is not authorized on their modified table of  organization and equipment, and includes a wide range of items such as  construction equipment, materiel handling equipment, flat screen  televisions, certain types of radios, and Mine Resistant Ambush Protected  vehicles (MRAP). Figure 1 provides a more detailed breakdown of the U.S.  Army equipment in Iraq.
The logistics infrastructure supporting the redeployment and retrograde  effort in the Iraqi theater of operations is large and complex, consisting of  military organizations operating in both Iraq and Kuwait, and it is through  Kuwait’s three seaports and two airports that the majority of U.S. forces,  materiel, and equipment flow from the theater of operations. Moreover,  myriad logistics organizations in both Iraq and Kuwait also support these  operations, including elements of CENTCOM, U.S. Transportation  Command, the Defense Logistics Agency, U.S. Army Central (ARCENT),  the 1st Theater Sustainment Command, Army Materiel Command, U.S.  Marine Corps Central Command, U.S. Naval Forces Central Command,  U.S. Air Forces Central Command, and U.S. Special Operations Command.  According to our previous reports and testimonies on Operations Desert  Shield and Desert Storm, the retrograde of materiel and equipment is  likely to consume the most time and resources throughout the drawdown  effort.
We have also reported extensively on the use of contractor personnel for  combat and logistics support and the need for improvements in the  management of contractors used to support military operations. DOD  contracted services needed in Iraq and Kuwait as the drawdown  progresses fall under two general categories: (1) services that will need to  be decreased as the U.S. military presence declines and (2) services for  which demand may temporarily increase due to drawdown-specific needs,  such as transporting equipment for retrograde. Contracted services can be  further categorized as those services provided under LOGCAP, including  the majority of base and life support in Iraq such as meals, sleeping  arrangements and laundry services, transportation within Iraq, and postal  services, and those not provided by LOGCAP, such as security guards for  bases.
section_title: Coordinated Plans and New Organizations Have Facilitated Progress in the Drawdown from Iraq, but DOD Has Yet to Plan for All Contracted Support Needed During the Drawdown
paragraphs: A number of DOD organizations have issued plans outlining a phased  drawdown from Iraq that meet time frames set forth in the Security  Agreement and presidential guidance while being responsive to security  conditions on the ground. Furthermore, in accordance with these plans,  DOD created several organizations to facilitate the retrograde of  equipment and support unity of effort, and established goals and metrics  to track its progress. According to DOD, these efforts to date contributed  to the meeting or exceeding of targets for drawing down forces and  retrograding equipment. However, while DOD has made significant  progress executing the drawdown, there remains a large amount of  personnel, equipment, and bases yet to be drawn down within the  established timelines. Moreover, DOD has yet to fully plan for contracted  services needed during the drawdown.
subsections: section_title: DOD Has Issued Plans for the Drawdown, Taken Steps Toward Executing Them, and Exceeded Some Targets
paragraphs: Beginning in May 2009, MNF-I and its subordinate command responsible  for executing the drawdown from Iraq, Multi-National Corps-Iraq (MNC-I);  Headquarters, Department of the Army; and USF-I issued coordinated  plans outlining how the drawdown of military and contractor personnel,  equipment, and bases should be managed over time. These plans support  DOD’s goals for reducing, by August 31, 2010: (1) the number of military  personnel to 50,000, (2) the number of contractor personnel to 55,000  while increasing the proportion of Iraqi contractor personnel, and (3) the  number of bases to 134. In addition, to mitigate the risk of bottlenecks of  equipment during the later phases of the drawdown, commanders were  directed to identify organizational equipment and theater provided  equipment no longer essential for ongoing operations and turn it in for  retrograde. Accordingly, MNC-I set a goal of retrograding 1,500 non- mission essential items of rolling stock per month until April 2010, and  2,500 per month after this date to reach a level of 16,500 of these items  remaining in Iraq by the change-of-mission date. Similarly, MNC-I set a  goal of drawing down 3,000 containers full of other equipment through  April 2010, and then 3,800 containers per month after that date, leaving  17,000 containers worth of non-rolling stock in Iraq.
In support of its plans DOD created several organizations to oversee the  drawdown and ensure unity of effort. In September 2008, we reported that  the variety of organizations exercising influence over the retrograde  process and the resultant lack of a unified or coordinated command  structure was not consistent with joint doctrine, which led to confusion  and inefficiencies in the retrograde process. To bolster unity of effort,  MNF-I established a new organization, the Drawdown Fusion Center, 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 the drawdown. Assisting the  Drawdown Fusion Center was ARCENT’s Support Element-Iraq, a liaison  element established to enhance synchronization and coordination among  MNF-I; MNC-I; ARCENT; Headquarters, Department of the Army; and  Army Materiel Command. This organization also generated theater and  Department of the Army disposition guidance for all forces and materiel  redeploying and retrograding out of Iraq. USF-I has subsequently  integrated the Drawdown Fusion Center, ARCENT’s Support Element-Iraq,  and the MNF-I and MNC-I logistics offices into one organization under the  USF-I Logistics Directorate. Moreover, it has established a Drawdown  Synchronization Center as the single entity within USF-I responsible for  synchronizing, analyzing, and capturing drawdown data and then  disseminating the data to the appropriate DOD organizations. Finally, in  order to assist with the provision of disposition instructions for materiel  retrograding out of Iraq and synchronize those instructions with the reset  of Army equipment, the Department of the Army, with Army Materiel  Command as the lead agency, created a Responsible Reset Task Force.
The drawdown from Iraq commenced with the publication of MNF-I’s plan  in May 2009. According to the metrics DOD established to track drawdown  progress, efforts to reduce personnel and retrograde equipment in the  initial months of the drawdown exceeded targeted goals. For example,  according to USF-I, as of February 8, 2010, there were just over 98,100  servicemembers in Iraq, approximately 3,200 fewer than had been  projected. In addition, as of January 2010, DOD retrograded 2,610 more  pieces of rolling stock than projected and, as of December 2009, 5,195  more containers of equipment than projected.
While DOD’s progress since May 2009 exceeded some of 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,  USF-I must reduce its present force by almost 50 percent by this summer.  Furthermore, to meet other drawdown targets for August 31, 2010, USF-I  must draw down 45 percent of its contractor personnel workforce,  retrograde 46 percent of its rolling stock, and close 41 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 August 31, 2010  to December 31, 2011, during which time some of the largest bases in Iraq  will also have to be closed or transferred to the Government of Iraq, a task  the commanding general of USF-I stated could take 9 to 10 months to  complete. Figure 2 illustrates the numbers of U.S. forces, contractor  personnel, rolling stock, containers, and bases that have already been  drawn down; what must be drawn down before the August 31, 2010  change-of-mission date; and what will remain to be drawn down before  December 31, 2011.
section_title: While DOD Has Planned for Some Contracted Services Needed to Support the Drawdown, Challenges Remain
paragraphs: DOD took some steps to plan for and source contracted services needed  during the drawdown. For instance, DOD planned for some LOGCAP  requirements needed during the drawdown, including the number of  transportation systems, Army post offices, and logistics support services  required at specific bases. According to DOD documentation, operational  commands in Iraq validated these requirements for LOGCAP at the bases  that will remain open past August 31, 2010, and communicated these  requirements to the LOGCAP program office which, in turn, took steps  toward awarding the LOGCAP task orders. Additionally, other supporting  contracting organizations in Iraq took steps to meet the needs for non- LOGCAP services that were identified as required by military units or  other deployed organizations. For example, the Joint Contracting  Command-Iraq/Afghanistan, an organization that manages non-LOGCAP  service contracts, which comprise about 20 percent of all contracts in Iraq,  plans to expand its use of theaterwide contracts to provide food services,  medical support, fire protection, facilities and housing, and other base and  life support needs.
Despite these steps, limited operational planning for contracted support  has challenged USF-I’s ability to identify the full range of its needs for  contracted services to support the drawdown. According to joint doctrine  and service guidance, operational personnel who plan, support, and  execute military operations must also determine the contracted support  needed to accomplish their missions. In Iraq and Kuwait, these operational  personnel include combat force commanders, base commanders, and  logistics personnel, among others, who are responsible for determining the  best approach to accomplish their assigned tasks and, if the approach  includes contractors, identifying the types and levels of contracted  support needed. Army guidance also states that planning for contracted  support must be integrated early in the deliberate planning process to  ensure that it is adequately considered and that it must include specific  requirements identified by operational personnel, such as the  identification of the full extent of contractor involvement and how and  where contracted support should be provided. MNF-I’s drawdown plan,  however, delegated the responsibility for determining contracted support  requirements to contracting agencies, such as the Joint Contracting  Command-Iraq/Afghanistan, rather than to operational personnel. But  according to Joint Contracting Command-Iraq/Afghanistan officials, they  could not determine the theaterwide levels of contracted services  required, or plan for mandated reductions based on those needs, because  they lack sufficient, relevant information on future requirements for  contracted services, information that should have been provided by  operational personnel. For example, according to MNF-I documentation,  during an October 2009 meeting between operational personnel and  contracting officials, MNF-I reiterated that the levels of contracted  services ultimately needed in Iraq during the drawdown were unknown.  This is consistent with an overarching weakness identified by a Joint Staff  task force, which recognized limited, if any, visibility of contracted  support and plans and a lack of requirements definition. As a result, rather  than relying on information based on operationally driven requirements  for contracted services, MNF-I planned for, and USF-I is subsequently  tracking, the reduction of contracted support in Iraq using historical ratios  of contractor personnel to servicemembers in Iraq, which may not  accurately reflect the actual levels of contracted support needed during  the drawdown. Although several DOD officials have stated that  uncertainties associated with the changing operational environment in  Iraq hinders DOD’s ability to project the full range of contracted services  needed, joint doctrine emphasizes that planning entails making logical and  realistic assumptions and does not demand certainty, and that plans can  be adjusted to reflect changes on the ground. Without incorporating  appropriately specific details on contract support in its operational  planning for the drawdown, USF-I risks hindering the communication of  contract-related decisions to those who must implement and execute  them, including decisions about funding, deployment and redeployment,  operational and life support, force protection, and the location of  contractors on the battlefield. Further, this may continue to limit USF-I’s  ability to plan for the full range of contracted services needed during the  drawdown and jeopardize its ability to provide the right service at the right  place and time.
Timely planning for contracted services needed to support the drawdown  is also critical in order to avoid potential waste and ensure continuity of  services. USF-I guidance, however, may not allow sufficient time for all  contracted services needed during the drawdown to be put on contract in  a responsible manner. Sound business practices specify that the full  definition of requirements for contracted services should occur as early as  possible to ensure the personnel responsible for putting the needed  services on contract can do so on time and at the agreed-upon cost. If  operational personnel fail to communicate their needs for contracted  services with enough lead time for contracting officials to put these  services on contract responsibly, DOD may incur unnecessary costs by  authorizing undefinitized contract actions, as it has in the past, which  allow contractors to begin work before reaching a final agreement on  contract terms and conditions, including price. While a contract action  remains undefinitized, the contractor has little incentive to control costs,  creating the potential for waste. In addition, a lack of timely planning for  contract support may lead to other poor outcomes, such as increased cost,  lengthened schedules, underperformance, and service delays. According  to MNF-I’s plan and the former Joint Contracting Command- Iraq/Afghanistan commander, DOD’s need for contracted services in Iraq,  such as security, transportation, engineers, and materiel handling teams,  may temporarily increase during the drawdown. Officials have also  acknowledged that additional contractor personnel will be needed to  provide services currently being provided by U.S. forces as these forces  redeploy. For example, DOD officials stated that they contracted for  airfield painting in Iraq and Kuwait because the servicemembers normally  responsible for this task had redeployed, and that similar requirements  regularly surface. As a result, senior contracting officials in Iraq expressed  concern that the needs for some services may increase beyond levels  available under existing contracts as the drawdown progresses. Because  increasing the level of existing services or adding new ones may  necessitate new contracts, additional time may be necessary to obtain  these services. For example, contracting officials in Iraq stated that  obtaining additional contracted security services outside of existing  contracts would take about five months, compared to about three months  necessary to increase the levels of services already on contract. Further,  USF-I’s goal to increase the proportion of Iraqi contractors may entail  greater lead time to put these vendors’ services on contract because it may  take longer to review Iraqi vendor proposals. Yet USF-I’s standard  operating procedures for requirements validation in Iraq only state that  personnel should submit requirements for contracted services at least 90  days prior to the date funding is needed. Without directing operational  personnel in Iraq to identify requirements for services with enough time  for contracting officials to responsibly put them on contract, DOD  increases its risk of not being able to obtain these services on time, or  employing inefficient contracting practices such as undefinitized contract  actions.
Although DOD has established new organizations that are intended to  facilitate efficient contracting during the drawdown, it has not clarified  how these contracting organizations differ from one another or specified  how they fit into the requirements identification and validation process. In  accordance with joint doctrine and Army guidance, when planning for  contractor support, planners must be aware of the operational principle of  centralized contracting management to achieve unity of effort.  Centralized management can be achieved through means intended to  synchronize and coordinate all contracting support actions being planned  for and executed in the operational area. The MNF-I drawdown plan called  for the Joint Logistics Procurement Support Board, composed of senior  operational personnel and contracting officials, to reduce costs and  redundant contracting and develop and promote strategies for  coordinating approaches to common or similar requirements. However,  MNF-I’s drawdown plan also referred similar functions to the Strategic  Sourcing Board, which also includes members from both the operational  and contracting communities. Officials’ statements and DOD  documentation illustrate differing views of the composition, roles, and  responsibilities of these boards, such as the extent to which these boards  review requirements for contracted services. For example, senior  contracting officials told us that the Joint Logistics Procurement Support  Board is responsible for collecting contract requirements as they emerge,  yet one of these officials later told us that this board does not gather  contract requirements. Moreover, USF-I’s process by which operational  personnel and contacting officials review and validate requirements for  contracted services includes two other boards—the Joint Facilities and  Acquisition Review Board and the Contract Review Board— yet it is  unclear how the previously mentioned Joint Logistics Procurement  Support Board or the Strategic Sourcing Board fit into USF-I’s process, nor  how these boards differ from one another. As a result, the specific  functions of the Joint Logistics Procurement Support Board and the  Strategic Sourcing Board, and the relationship of these boards to USF-I’s  established processes, are unclear. Without clarifying the responsibilities  of these boards and how they fit into the existing requirements validation  process, DOD may not be able to ensure contracting unity of effort so that  its requirements for contracted services needed during the drawdown are  effectively consolidated and prioritized.
section_title: Several Additional Challenges May Affect the Efficient Execution of the Drawdown
paragraphs: Efficient execution of the drawdown from Iraq may be complicated by  several challenges. First, challenges associated with the planned  simultaneous transition of several key contracts may lead to the  interruption of vital services and wasteful contracting practices. Second,  insufficient analysis to quantify the costs and benefits of transitioning the  LOGCAP contract in Iraq prevents DOD from ensuring that the transition  will be beneficial to the government. Third, persistent shortages of  contract oversight personnel may increase the potential for fraud, waste,  and abuse. Fourth, a lack of clarity concerning the extent to which and for  how long equipment retrograded from Iraq may be staged in Kuwait or  other locations in southwest Asia may affect DOD’s plans for reset and  equipping. And lastly, DOD lacks complete visibility over its inventory of  equipment and shipping containers. DOD is aware of and has begun  addressing some of these issues. For example, DOD is in the process of  implementing new systems and procedures to improve its equipment  disposition process. In addition, units in Iraq were required to complete a  100 percent inventory of their equipment, identify equipment that can be  immediately retrograded, and account for previously undocumented  equipment. Despite these efforts, however, challenges remain.
subsections: section_title: Near-Simultaneous Transition of Key Contracts Creates Risk for Interruption of Services
paragraphs: Lessons learned and documented during the LOGCAP transition in Kuwait  indicate that other upcoming major contract transitions may be  problematic. With the exception of the LOGCAP contract for Iraq, which is  discussed in more detail below, four other major service contracts in Iraq  and Kuwait, which provide field support maintenance, base and life  support, and convoy trucking services, have reached their expiration  dates. According to USF-I and Joint Contracting Command- Iraq/Afghanistan leadership, the services provided under these contracts,  particularly in areas like maintenance and convoy trucking, are critical to  mission success, highlighting the need to ensure continuity of these  services during the drawdown. These four contracts, plus LOGCAP III in  Iraq, are scheduled to be transitioned to new contracts or task orders  between January 2010 and January 2012. According to Army Sustainment  Command officials, DOD has re-competed one of the maintenance  contracts and made an award in October 2009. However, it has not yet  awarded new contracts for two other contracts which have already  expired, and the first task order to be awarded under the new LOGCAP  was delayed.
Contract transition can be a time-consuming process requiring careful  planning and management, and lessons learned during the LOGCAP  transition in Kuwait indicate that the upcoming major contract transitions  may be problematic. In light of the transition from LOGCAP III to LOGCAP  IV in Kuwait, which occurred between February and June 2009, the Army,  in conjunction with the Defense Contract Management Agency, created a  lessons learned document to help inform planners of potential challenges  they may face in managing future contract transitions. These lessons are  particularly relevant given that contract management officials predict that  the challenges experienced during the earlier transitions will likely be  magnified during those scheduled to occur during the drawdown.  According to Army guidance on the lessons learned process, lessons  learned, which can result from an evaluation or observation of a positive  finding worthy of continuing or emulating, should be integrated into  planning activities in order to better prepare for future operations.
One of the main lessons learned during the LOGCAP transition in Kuwait  is that communication is the most essential element of the transition  process. Accordingly, the Kuwait LOGCAP transition lessons learned  document lists 10 practices used successfully during the transition in  Kuwait to ensure effective communication between the government,  outgoing contractor, and incoming contractor. For example, during the  LOGCAP transition in Kuwait, representatives of the government, outgoing  contractor, and incoming contractor formed an integrated planning team  to ensure a common understanding of their respective roles,  responsibilities, and approaches for executing the transition. In light of the  positive results which could be achieved through these practices, the  lessons learned document contains 11 recommendations to ensure  continued effective communication that are applicable to future contract  transitions. Accordingly, Army Material Command’s LOGCAP transition  plan references the lessons learned document and establishes a  synchronized methodology for ensuring effective information exchange  and a common operational picture, such as by requiring kick-off meetings  and rehearsal of concept drills. However, information from Army officials  indicates that the plans for transitioning other major contracts may not be  as extensive. Without extensive planning, to include steps necessary to  establish and maintain effective communications such as those outlined in  the lessons learned document, DOD may be unable to ensure that major  contracts in Iraq will transition smoothly as the drawdown progresses.
Transferring personnel between contracts is another key challenge  identified in the lessons learned document. Certain contracted positions  require specialized skills and experience. For example, operating the  material handling equipment used to bring containers to wash racks for  cleaning and customs inspection requires a materiel handling equipment  license. Because the supply of personnel with this skill and qualification  is limited, incoming contractors rely on hiring personnel who worked  under the outgoing contract rather than hiring new personnel. Moreover,  according to the lessons learned document, during the LOGCAP transition  in Kuwait the incoming contractor intended to hire at least 80 percent of  the outgoing contractor’s personnel to begin providing services according  to schedule. Yet the outgoing contractor needed to retain its employees to  continue to provide the services for which it was contracted. As a result,  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. For example, according to the  lessons learned document, a shortage of personnel available to operate  large machinery in Kuwait forced officials to shut down the wash racks,  which are critical to maintaining the flow of equipment out of Kuwait.  According to a DOD report, analogous problems arising from an  insufficient number of properly skilled and experienced workers have also  been experienced during the LOGCAP transition in Afghanistan. A senior  contracting official in Iraq expressed concern that similar challenges will  occur during the drawdown as other contracts transition. Moreover,  although the LOGCAP transition plan specified steps to facilitate the  transfer of the outgoing contractors’ pool of trained individuals to the  incoming vendor should these personnel decide to seek employment, it  does not assess the risk of an insufficient number of these personnel  deciding to work for the incoming contractor. Furthermore, the extent to  which any of these issues are addressed for the other contracts scheduled  for transition is unclear. Joint doctrine states that effective contract  support planning must be based on a thorough mission analysis, including  an assessment of risks. Without assessing the risk of an insufficient  number of properly skilled and experienced contractor personnel  available under each of the new contracts and developing appropriate  mitigation strategies, DOD may not be able to ensure the full performance  of tasks critical to the drawdown during the upcoming contract  transitions.
Issuing credentials to contractor personnel was another major challenge  experienced during the LOGCAP transition in Kuwait. Of all contract  transition issues, the need for timely credentialing, which includes badges  such as common access cards and other location-specific badges, has  caused some of the greatest concerns, according to DOD officials.  According to those officials, DOD requires new badges for contractor  personnel following contract transitions, regardless of whether a new  contractor wins the award, because credentials are tied to specific  contracts. According to the lessons learned document, this credentialing  process can take between two and three weeks to complete.  Consequently, contractors experienced delays in credentialing their  employees during the LOGCAP transition in Kuwait. This may be  exacerbated during contract transitions in Iraq because of the planned  increase in the proportion of Iraqi nationals working under contract and  the fact that obtaining credentials for them typically takes more time than  it does for contractor personnel of other nationalities. Moreover, the  contractor responsible for operating the credentialing office in Kuwait is  also transitioning as a part of the Kuwait base and life support services  contract, which may, in turn, create additional delays and illustrates a  potential difficulty in conducting multiple, near-simultaneous contract  transitions. Although the LOGCAP transition plan includes a process for  facilitating the credentialing process for contractor personnel, neither this  plan nor DOD’s other planning documents address possible stresses on  credentialing offices that might occur during these contract transitions.  Without fully incorporating the risks inherent to conducting multiple  contract transitions concurrently into its planning for each contract  scheduled to transition, including options to mitigate those risks derived  from key lessons learned during the LOGCAP transition in Kuwait, DOD  may be unable to effectively manage the timely transition of these  contracts and prevent the interruption of key services needed to facilitate  mission success during the drawdown. This is especially true because  these transitions may need to occur within compressed time frames due to  delays in awarding key contracts.
section_title: DOD Has Not Determined Whether the Potential Benefits of Transitioning LOGCAP in Iraq Outweigh the Potential Costs and Risks
paragraphs: Although the current active LOGCAP contract in Iraq, LOGCAP III, does  not expire until after U.S. forces are scheduled to leave Iraq, officials plan  to transition LOGCAP III to other means of contracted support in the  midst of the drawdown. Specifically, USF-I plans to transition base and life  support, logistics, transportation, and postal functions currently provided  by LOGCAP III to other contracts, including LOGCAP IV, the Air Force  Contract Augmentation Program, and individual sustainment contracts  with Iraqi contractors. These transitions are expected to be completed by  December 2010, although, according to LOGCAP officials, some of the  locations at which base and life support services will transition remain  uncertain. And while the LOGCAP transition in Iraq is intended to produce  certain benefits, these benefits may not be fully attainable within the  drawdown timelines, and may be outweighed by costs and risks that could  be incurred during the transition. An analysis of whether the potential  benefits of this transition outweigh the potential costs and risks is part of  the planning and review process for transitioning to LOGCAP IV and other  service contracts. Acquisition planning is intended to “ensure that the  Government meets its needs in the most effective, economical, and timely  manner.” To this end, acquisition plans should include an examination of  costs, risks, and other considerations, such as feasible alternatives and the  impact of prior acquisitions. Further, DOD guidance states that service  acquisitions should receive adequate planning and management, including  senior level reviews and in some instances independent management  reviews, to achieve required cost, schedule, and performance outcomes.
Although officials anticipate benefits from making the LOGCAP transition  in Iraq, these benefits may not be fully realized. Senior DOD officials have  stated that the rationale for making the transition away from LOGCAP III  in Iraq includes reducing the cost of base and life support services,  mitigating the risks associated with relying on a single contractor to  provide essential services, and bolstering the Iraqi economy by  transitioning services to local Iraqi vendors. However, these anticipated  benefits may not be fully realized since DOD will have only until December  31, 2011, to realize potential cost savings before the U.S. military  completely withdraws. This may leave insufficient time to recoup  transition costs, compensate the government for taking on risk, and  provide value to the government.
In addition to the uncertainty regarding the realization of anticipated  benefits from the LOGCAP transition in Iraq, DOD will likely incur  additional costs and risks during the transition. Costs may increase  because the outgoing and incoming contractors will need to perform work  simultaneously to avoid the interruption of services, thereby increasing  the number of contractor personnel needed to facilitate the transition. The  LOGCAP transition in Iraq may also increase the contract management  and oversight responsibilities for operational commanders, who play a  significant role in the management and oversight of the LOGCAP  contractor. For example, the Army requires commanders to periodically  evaluate their contractors’ performance and provide feedback to the  contractor during monthly performance evaluation boards. Because the  Army intends to award several task orders for base and logistics services,  possibly to multiple contractors, the number of monthly evaluations could  increase for some commanders. Furthermore, an increase in the number  of contracts and contractors during the transition may complicate  commanders’ abilities to obtain essential contracted support. 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 task of determining  how to obtain particular services and correcting service problems may  divert commanders’ limited resources from other responsibilities.  Therefore, should the upcoming LOGCAP transition in Iraq proceed as  planned, commanders will need to overcome challenges on which we have  previously reported, such as inexperience in dealing with contractors,  uncertainty regarding oversight responsibilities, and the inability to  dedicate resources for oversight, or DOD risks having inadequate  management and oversight.
The planned LOGCAP transition in Iraq may also impact the continuity and  quality of service provided to the warfighter. While service disruptions like  those experienced during the transition to LOGCAP IV in Kuwait caused  only temporary inconveniences, similar service disruptions in a  continuously evolving environment like Iraq have a greater potential for  negatively impacting 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, since it  could require a new contractor to assume the mission just as the  department undertakes a significant troop level reduction planned for  March-April 2010. Executing the rapid movement of troops and equipment  out of Iraq will require significant truck assets, and transitioning the  mission to a new contractor that must be immediately capable of  providing 23,000 trucks and accompanying crews could be daunting.  Transitioning contracts to local vendors may also impact the quality of  services provided to the warfighter. Commanders in Iraq have already  noted that some base and life support services that were being provided to  U.S. forces through newly transitioned contracts managed by local  vendors have not met the level of quality U.S. forces expect. Service  interruptions and inefficiencies have also been experienced in Kuwait as a  result of transitioning to local vendors.
Finally, 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 requires 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 will be an added responsibility for the Defense Contract  Management Agency, which is also responsible for the day-to-day  management and administration of the LOGCAP III contractor, private  security contracts, and the Air Force Contract Augmentation Program. A  Defense Contract Management Agency official expressed concern about  conducting LOGCAP transitions at multiple locations simultaneously  throughout Iraq because this will require a greater number of oversight  personnel than consecutive transitions at single locations. 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. According to DOD documentation, similar difficulties in  managing government property are currently complicating the transition  of LOGCAP III to LOGCAP IV in Afghanistan.
During its planning and review process for the planned transition from  LOGCAP III to LOGCAP IV and other service contracts in Iraq, DOD has  not determined whether the benefits of the transition will outweigh the  costs and risks that could be incurred as a result. DOD has, during its  acquisition planning, analyzed potential benefits and risks of transitioning  the overarching LOGCAP IV contract worldwide. In addition, it has taken  some steps to mitigate the risk of transitioning LOGCAP in Iraq, such as  planning to transition base and life support from LOGCAP III to LOGCAP  IV mainly on the bases that will remain under U.S. control after August 31,  2010. However, according to DOD officials, DOD has not analyzed the  benefits of transitioning LOGCAP specifically for the major task orders it  plans to award in Iraq. Given the unique circumstances in Iraq, where the  anticipated benefits of making the LOGCAP transition may not be fully  realized due to drawdown timelines and additional costs and risks the  transition will incur, the current plan for LOGCAP transition in Iraq  warrants additional consideration through DOD’s planning and review  process. This is particularly important in light of the fluid nature of  ongoing operations in Iraq, and the significant congressional interest in  LOGCAP issues. In fact, according to CENTCOM, external pressure based  on expectations of enhanced competition and reduced costs is the driving  force behind the transition. Without adequate planning and review to  identify and weigh the potential benefits, costs, and risks of making the  LOGCAP transition in Iraq, DOD cannot ensure the transition will meet  benefit expectations while minimizing the impacts of additional costs and  risks.
section_title: Long-Standing Contract Oversight Personnel Shortages Could Increase Potential for Fraud, Waste, and Abuse during the Drawdown
paragraphs: DOD’s long-standing inability to provide an adequate number of trained  oversight personnel in deployed locations will continue to challenge the  department as it proceeds through the drawdown in Iraq despite apparent  improvements in the number of contracting officer’s representatives  (COR) assigned to contracts administered by the Defense Contract  Management Agency. Joint doctrine emphasizes that commanders must  ensure appropriate administration and oversight personnel are in place  when using contractors. Although contracting officers are responsible for  providing contract oversight, day-to-day oversight of contractors is  generally the responsibility of CORs, who ensure that the government  receives the agreed-upon services at the agreed-upon quality, avoids poor  outcomes, and minimizes fraudulent practices. According to DOD  documentation, it had been the Defense Contract Management Agency’s  policy for the LOGCAP contract that a COR would be designated for each  contractor-provided service at the location of the service. According to  Defense Contract Management Agency officials and documentation, in  recognition that units in Iraq were unable to provide all the needed CORs  to oversee all aspects of the LOGCAP contract, the Defense Contract  Management Agency now recommends that units assign CORs only to key  services—which they define as high- and medium-risk services.  Conversely, the new policy does not require units to provide CORs for  services it considers low risk to mission success. Since implementing this  policy, the Defense Contract Management Agency has reduced its  requirement for CORs in Iraq from 1,000 in October 2009 to 580 in January  2010, and anticipates that it will be able to reduce the COR requirement  further as it continues to designate additional services as low risk.  Although the percentage of filled LOGCAP COR requirements has  increased from 85 percent in November 2009 to 94 percent in January 2010  because of this policy, we have not evaluated the effectiveness of this risk- based approach to contract oversight. However, because this policy is  specific to Defense Contract Management Agency oversight of LOGCAP, it  does not apply to contracts awarded by the Joint Contracting Command- Iraq/Afghanistan, which in a recent update to USF-I’s drawdown plan, was  given the goal of maximizing the use of Iraqi firms in its contracting efforts  for drawdown-related requirements. According to senior officials in Iraq,  local national contractors frequently require more oversight than U.S.  firms because, as the former Joint Contracting Command-Iraq/Afghanistan  commander explained, Iraqi firms lack experience, have limited capacity,  are less capable than their U.S. counterparts, are unfamiliar with U.S.  quality standards and expectations, and lack the quality control processes  that U.S. firms have in place. Furthermore, according to DOD documents,  some services, such as ice production, cannot be reduced despite a  reduction in force levels, yet when force levels decrease, so does the pool  of available CORs since CORs are drawn from military units. In addition,  in some cases, USF-I is likely to require additional contract services to  replace capabilities previously provided by the military. In its drawdown  plan, for example, MNF-I anticipated an increase in the use of private  security contractors, an increase that could require additional CORs  depending on the types of services being provided and the location of the  services. Without adequate contract oversight personnel in place to  monitor its many contracts during the drawdown, DOD may not be able to  obtain reasonable assurance that contractors are meeting their contract  requirements efficiently and effectively at each location, especially given  its planned increased reliance on Iraqi contractors.
Shortages in available contract oversight personnel may also increase the  risk of wasteful practices as the drawdown progresses. For example, an  Army unit in Kuwait responsible for ensuring the steady flow of equipment  out of Kuwait and for conducting certain maintenance tasks has 32  government personnel but oversees more than 3,000 contractor personnel.  In January 2010, Army Materiel Command requested funding to double, to  approximately 800, the number of this unit’s contractor personnel that  conduct retrograde-specific tasks, including receiving, accounting for,  sorting, and moving equipment, necessary to prevent equipment backlogs  in Kuwait. In addition, according to contracting officials, this unit has  requested a concurrent increase in oversight personnel. In July 2009, this  unit identified the lack of oversight personnel as a significant concern to  successfully moving equipment out of Kuwait. Given that these services  will transition to a new contract which has not yet been awarded, it is  unclear whether the current request will represent the total increase in  contractor personnel needed during the drawdown, and thus whether  sufficient oversight personnel will be in place as the drawdown  progresses. Further, until the current request is filled, this unit risks not  having the necessary oversight personnel in place, as has been the case in  the past. In January 2008, we reported that this unit did not have adequate  staff to conduct oversight of an equipment maintenance contract in  Kuwait. As a result of the vacant oversight positions, its personnel were  unable to fully monitor contractor performance. Further, we noted that  poor contractor performance resulted in this unit spending $4.2 million to  rework items that were initially presented to the Army as meeting contract  standards but subsequently failed inspection. We have reported on DOD’s  inability to provide an adequate number of oversight personnel in  CENTCOM’s theater since 2004. For example, in 2008 we reported that  the Army assigned seven CORs to provide oversight for about 8,300  linguists in 120 locations across Iraq and Afghanistan. In one case, a single  person provided oversight 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 CORs to  effectively oversee the contract.
section_title: Improvements to the Equipment Disposition Process Have Been Made but Some Decisions Yet Remain
paragraphs: According to DOD officials, it is essential that equipment move out of Iraq  and Kuwait at a steady pace to accommodate the large amount of  equipment needing to be retrograded within the drawdown time frames.  This was underscored in a DOD report to Congress that stated that the  successful removal, demilitarization, or transfer by the end of December  2011 of all items belonging to DOD is contingent upon the timely receipt of  disposition instructions, among other factors. Hence, the issuance of  disposition instructions, which dictate where a specific piece of equipment  will be shipped after it is no longer needed in Iraq, is a critical component  of the retrograde process, a fact we highlighted in our September 2008  report. Ensuring timely equipment disposition has therefore been a focus  for officials in Iraq and Kuwait as they plan for and execute the drawdown.  Specifically, their planning assumes that 90 percent of theater provided  equipment being retrograded will have disposition instructions before it  leaves Iraq, which they consider an essential step toward ensuring this  equipment does not sit idle for long periods of time in Kuwait.
Partly in response to our September 2008 report, representatives from 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, including the issuance of disposition  instructions. Results from the Lean Six Sigma studies influenced the  development of a new data system—the Theater Provided Equipment  Planner—which is intended to automate the issuance of disposition  instructions for theater provided equipment while the equipment is still in  Iraq, and to document all decisions for centralized visibility. Although its  implementation was initially delayed, according to USF-I the system  became fully operational on January 11, 2010, following a successful test  during which disposition instructions were issued for over 25,000 items of  equipment. Complementing the Theater Provided Equipment Planner is a  second system, the Materiel Enterprise Non-Standard Equipment  database, into which the Army’s Life Cycle Management Commands are  cataloging all types of non-standard equipment in Iraq in order to facilitate  its retrograde. According to USF-I, the Materiel Enterprise Non-Standard  Equipment database has improved management and accountability of non- standard equipment, although we have not assessed this claim.
From the perspective of ARCENT, Army Materiel Command, and  Headquarters, Department of the Army, responsibly drawing down forces  from Iraq requires maintaining a steady flow of equipment through Kuwait  and onward to other locations. For example, the Army Materiel Command  commander defines success as the smooth, efficient redeployment and  redistribution of materiel to sources of repair or disposal facilities, which  will enable regeneration of combat power for the Army. This view  corresponds with Army Materiel Command’s mission and responsibilities,  and reflects limiting factors in Kuwait such as storage capacity. According  to senior logistics officials from the Office of the Secretary of Defense,  they are looking to the military departments to ensure the smooth onward  movement and redistribution of their retrograded equipment to meet  current mission needs, rebalance their respective services, or satisfy  future requirements. For example, Army officials told us that there are no  plans to store any equipment, including MRAPs, in Kuwait. In fact, the  Army has a preliminary strategy for incorporating MRAPs into its manned  ground vehicle fleet, which may likely include adding these vehicles to  transportation, medical, and explosive ordnance disposal unit modified  tables of organization and equipment, while other MRAPs are to be  shipped to military installations for use during predeployment training.  However, given the amount of equipment that is and will continue to flow  out of Iraq and through Kuwait, it is important that DOD develop  contingency plans for the staging of this equipment or pursue alternative  retrograde hubs. This is imperative to avoid equipment build-up in Kuwait  as equipment awaits onward movement to its designated final destination.  According to Army officials, much of this planning has been accomplished  or is currently underway, although we have not yet assessed these plans.
Decisions that have not yet been made about the Army’s future  composition and equipment reset contribute to the current lack of final  disposition instructions for some equipment being retrograded out of Iraq.  For example, the Army has not decided what equipment and how much of  each type of equipment it will transfer to Army Prepositioned Stocks and  Theater Sustainment Stocks. Similarly, its strategy for incorporating  MRAPs into its manned ground vehicle fleet is still pending final approval.  In addition, Army officials stated they are considering changing one or  more heavy brigade combat teams into Stryker brigade combat teams, a  decision that will have a direct effect on equipment allocation. 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 its condition. Finally, until  recently, decisions were not finalized on the exact quantities and types of  equipment that will be transferred from Iraq to Afghanistan to meet surge  requirements. Given the amount of equipment being retrograded out of  Iraq, and the uncertainty arising from the decisions listed above, there is a  degree of risk associated with the potential build-up of equipment in  Kuwait, which, as stated above, requires planning for the temporary  staging of this equipment. For example, during our July 2009 visit to  Kuwait, officials in charge of a retrograde lot stated that the lot was close  to its capacity for holding tactical wheeled vehicles, which occurred in  part due to limited capacity to process these vehicles elsewhere. Although  the number of tactical wheeled vehicles in this lot has since decreased, the  Army has directed the shipment of relatively few tactical wheeled vehicles  from Kuwait to other locations, leaving a significant number of vehicles to  be retrograded from Kuwait. Without the necessary contingency plans to  stage equipment retrograded from Iraq, DOD may not be able to ensure  that equipment required elsewhere is available when needed.
section_title: DOD’s Lack of Precise Visibility Over Its Inventory of Equipment and Shipping Containers May Inhibit the Retrograde or Transfer of Equipment
paragraphs: The execution of the drawdown from Iraq in accordance with established  timelines may also be affected by the lack of a complete and accurate  inventory of three broad types of equipment: contractor acquired  property, non-standard equipment, and shipping containers. According to  Army data, contractor acquired property and non-standard equipment  comprise at least 30 percent of the total DOD property in Iraq as of  February 2010. In order to establish a more complete and accurate record  of equipment in Iraq, MNF-I directed its subordinate units to complete a  100 percent inventory of their equipment, identify equipment that can be  immediately retrograded, and account for previously undocumented  equipment by June 27, 2009. According to MNF-I guidance as well as  several DOD officials, meeting 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.
DOD officials have stated that overall accountability for property in Iraq  has improved since 2006, especially with regard to theater provided  equipment. In addition, officials stated that the MNF-I order calling for a  100 percent inventory by July 2009 was intended to account for  undocumented items, which would then be entered onto unit property  books, thereby making commanders responsible for them. The intent was  to facilitate drawdown planning and execution by providing commanders  an incentive to take action on items that otherwise may not have been  factored into their retrograde plans. However, although DOD states that  the inventory is complete, previously undocumented equipment continues  to be found every month. Although USF-I’s current projections indicate  that the amount of equipment that still needs to be brought to record is not  sufficient to alter projected transportation requirements, we have not  assessed this.
During our visit in July 2009, officials in Iraq and Kuwait stated that, of all  categories of equipment, they had the least visibility over contractor  acquired property. As of February 2010, records indicate that 19 percent of  total Army equipment in Iraq is contractor acquired property. However,  officials have stated that although they have high confidence in the  accountability of LOGCAP contractor acquired property, they have lower  confidence in the accountability of non-LOGCAP contractor acquired  property. This is because while contractors are typically required under  the terms of their contract to maintain accountability over contractor  acquired property, there is no standardized process for doing so, limiting  DOD’s accountability and visibility over this equipment and frustrating  officials’ efforts to establish and maintain such visibility. As a result, the  total sum of contractor acquired property in Iraq is unknown which may,  in turn, adversely affect DOD’s ability to efficiently retrograde or transfer  this equipment to the Government of Iraq.
In July 2009, ARCENT officials noted they have low confidence in  accountability and visibility of non-standard equipment in Iraq, adding  another potential risk to their ability to efficiently retrograde this  equipment out of Iraq in accordance with established timelines. Moreover,  despite recent initiatives such as the implementation of the Materiel  Enterprise Non-Standard Equipment database, Army and ARCENT  officials stated 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. In  addition, according to ARCENT officials, even when these items are  entered onto unit or theater property books, personnel responsible for  making these entries have not done so in a consistent format. Not knowing  the precise amount and types of non-standard equipment in Iraq further  contributes to planning uncertainty for the organizations tasked with  executing the drawdown, and also complicates the task of determining  disposition using the Materiel Enterprise Non-Standard Equipment  database, as discussed earlier.
Although DOD has taken steps to improve its visibility over shipping  containers available to retrograde equipment from Iraq, the number of  containers in Iraq remains uncertain. Containers are unique in that not  only are they items that have to be retrograded from Iraq, they are also a  primary means of shipping non-rolling stock out of Iraq. During our July  2009 visit to Kuwait, ARCENT officials responsible for overseeing and  managing containers in Iraq and Kuwait told us that the data system in  place to track containers is inaccurate and incomplete primarily because  unit personnel in Iraq had not updated the system every time a container  left or arrived at a particular location. These officials also explained that  units did not always have personnel available to monitor container flows  and update the data system and that those personnel who were available  received this tasking as an extra duty, which limited proper data entry. As  a result, a September 2009 DOD report based on the data from this system  indicated that the system was, at best, 25 percent accurate; that the  location of 7,000 containers remained unverified; and that the  serviceability—the extent to which the containers were seaworthy and  thus available to retrograde equipment—of 39 percent was also unknown.  Moreover, many containers in Iraq have been used for storage, office  space, and living quarters, among other purposes, yet had not been  documented as such. In an effort to improve visibility over containers, in  May 2009, MNC-I issued an order directing a 100 percent inventory of  containers in Iraq, including instructions for reporting their serviceability.  According to DOD data, as of September 21, 2009, approximately 53,000  containers had been physically inventoried, which was more than 24,000  fewer than the number of containers entered into the data system.  Subsequently, in an update to its drawdown plan USF-I added a container  management plan which directed the appointment of container control  officers at multiple levels of command to ensure accountability through  monthly inventories, among other responsibilities, and established a list of  prohibited container uses, including using them as offices and living  quarters. Although this plan calls for container control officers to record  the movements of containers as they enter or leave a location and  establishes procedures to locate containers in case these movements are  not properly recorded, it requires that only some of these officers be  appointed container control officers as a primary duty. As a result, USF-I’s  container management plan may not fully alleviate the root cause, as  identified by ARCENT officials, of poor container accountability. Further,  the monthly container inventory requirement existed prior to the new  USF-I container management plan yet, during our visit to Kuwait in July  2009, we observed that these inventories were not always completed as  directed. Finally, according to CENTCOM, personnel in Iraq and Kuwait  report different levels of container accountability system accuracy,  although these personnel are working together to rectify the  discrepancies. Until these efforts are complete, the number of containers  available to retrograde equipment from Iraq remains uncertain.
DOD has taken steps to mitigate uncertainty regarding the number of  containers it will need to retrograde equipment from Iraq and adjust its  tracking of container retrograde. For example, to ensure that it has  sufficient containers available to retrograde equipment, DOD operates two  container repair facilities in Iraq and Kuwait that repair damaged  containers to a standard at which they can be used to ship equipment. In  July 2009, we visited a container repair facility in Kuwait that could repair  between 15 and 20 containers per day that otherwise would remain  unavailable for use. According to USF-I, its present container repair  capability has increased to 3,000 containers per month. Additionally,  officials have stated that DOD can buy additional containers as needed for  the drawdown. Specifically, officials stated that, if needed, DOD could  purchase about 30,000 containers and have them available for use in less  than 2 months. Finally, in its metrics to track the retrograde of non-rolling  stock, USF-I no longer uses containers as a unit of measure, focusing  instead on the movement of individual pieces of equipment, which officials  believe will provide them with greater operational flexibility and greater  fidelity in forecasting transportation requirements. As a result of these  efforts, USF-I anticipates that it will have sufficient containers on hand to  complete the drawdown from Iraq. While DOD’s efforts to ensure the  availability of containers for the drawdown and track their retrograde  appear to be positive steps, their effects are still somewhat uncertain.
Poor unit container loading practices and insufficient efforts to document  some containerized equipment have also presented challenges. During our  visit to Kuwait in July 2009, U.S. Navy customs officials told us that about  60 percent of unit owned containers shipped from Iraq to Kuwait must be  unloaded and repacked in Kuwait because units in Iraq did not affix or fill  out the proper customs documentation. As a result, customs officials had  to unpack, re-inspect, and then repack the containers, which slowed the  flow of equipment through the retrograde process in Kuwait and required  significant man-hours, unnecessarily taxing an already limited pool of  available experienced customs inspectors. In addition, during our July  2009 visit to Kuwait, officials stated that a large proportion of equipment  sent to a retrograde lot for unserviceable items was not properly  documented. As a result, the process of unloading and sorting the contents  of these containers took longer than it otherwise would have, and  although the process for unloading and documenting the items appeared  orderly and the lot was nearly empty, personnel expected the flow of such  containers to increase significantly as the drawdown progressed. This was  underscored during a subsequent GAO visit to Kuwait in December 2009,  when we observed undocumented containers and unidentified equipment  that had filled a large portion of the staging area at a parts warehouse.  While commands in Iraq and Kuwait have noted that improved process  controls and additional training have been implemented, we have not  evaluated these controls nor have we received updated information on the  magnitude of containers with improper documentation. Further, USF-I has  issued new guidance to improve container packing discipline. Although  this guidance is a positive step in that it requires proper container  packaging to avoid damage during shipment, it does not ensure that unit  personnel properly document equipment or, for equipment shipped to the  United States, affix the correct customs documentation to the containers.
section_title: Conclusions
paragraphs: The drawdown of equipment and personnel from Iraq is a highly complex  operation of significant magnitude that is being conducted in a  continuously evolving environment during a period of Iraqi political  uncertainty. It is also an operation governed by timelines set by the  Security Agreement and the President and requires for its execution the  involvement of several DOD organizations. Moreover, it is an operation  that may be impacted by the President’s decision, announced in December  2009, to increase the size of the U.S. force in Afghanistan by an additional  30,000 troops, a decision that will require the development of  synchronized plans addressing operations in both countries.
Much has been done to facilitate the drawdown from Iraq. For example, to  ensure unity of effort, the DOD organizations most closely associated with  the drawdown have issued coordinated plans outlining the specific means  by which their respective drawdown-related tasks will be accomplished.  Furthermore, several new DOD organizations have been created to  oversee and help synchronize the effort, and goals and metrics have been  established to measure progress. According to DOD reports, these efforts  to date have contributed to the meeting or exceeding of established goals  for drawing down forces and retrograding equipment.
However, while DOD has made significant progress executing the  drawdown, there remains a large amount of personnel, equipment, and  bases yet to be drawn down, and several actions needed to facilitate this  are incomplete. For example, while DOD has taken some steps to plan for  its needs for contracted services as the drawdown progresses, the full  extent of contracted services needed during the drawdown remains  uncertain. Without an awareness of the spectrum of contracted services  available and planning for the necessary contracted services during the  drawdown, DOD may not be able to efficiently arrange for the contracted  services necessary to support the drawdown, which may result in service  gaps or opportunities for wasteful contracting practices. Moreover,  without addressing challenges related to contract transitions and contract  oversight, DOD increases the potential for fraud, waste, and abuse. And  finally, a failure to efficiently manage and retrograde equipment from Iraq,  especially high-demand items such as MRAPs, will likely impact DOD’s  ability to get that equipment to wherever it is needed next. If these  challenges delay the movement of equipment out of Iraq, the 50,000 U.S.  forces remaining in Iraq after August 31, 2010, will likely have a greater  workload than currently anticipated, which may strain logistics and  transportation systems and thereby impact their ability to close bases,  oversee contractors, provide security, train the Iraqi security forces, and  complete equipment retrograde. While DOD has begun to address some of  these issues, none of them has yet been fully resolved.
section_title: Recommendations
paragraphs: To facilitate DOD’s ability to efficiently conduct the drawdown of U.S.  forces and equipment from Iraq in accordance with established timelines,  we recommend that the Secretary of Defense direct the appropriate  authorities to:    Ensure that joint doctrine regarding operational planning for contract  support is followed and that operational personnel identify contract  support requirements in a timely manner to avoid potential waste and  abuse and facilitate the continuity of services;    Ensure unity of effort in contract management is attained through the  clarification of the roles and responsibilities of the various contract  review boards in the CENTCOM theater;    Assess and develop options to mitigate the risks associated with the  upcoming simultaneous contract transitions in Iraq and Kuwait;    Conduct an analysis of the benefits, costs, and risks of transitioning  from LOGCAP III to LOGCAP IV and other service contracts in Iraq  under current withdrawal timelines to determine the most efficient and  effective means for providing essential services during the drawdown;    Evaluate the risk of having too few qualified contract oversight  personnel in light of the planned proportional increase in the number  of Iraqi contractors during the drawdown and take steps to rectify, if  needed;    Clarify in existing planning the extent to which Kuwait and other  locations in southwest Asia can support the temporary staging of  equipment and materiel retrograded from Iraq while DOD is finalizing  the disposition instructions for certain types of equipment.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD concurred with our  first five recommendations listed above, but did not concur with an earlier  version of our last recommendation. In its comments regarding the first  five recommendations, the department highlighted a number of corrective  actions it is taking to (1) improve contract support and contract  management in the CENTCOM theater and (2) mitigate the risks  associated with upcoming concurrent contract transitions, including the  planned transition from LOGCAP III to LOGCAP IV in Iraq. Regarding our  first recommendation, DOD commented that it recognizes that  improvements can be made to DOD’s planning for contractor support and  stated that the Joint Staff is working to improve strategic guidance,  processes and tools available to plan for contracted support through the  Chairman’s Operational Contract Support Task Force. DOD also  commented that it recognizes the need for better synchronization between  operational needs and contractor activities and, to that end, CENTCOM  has taken steps to increase visibility and synchronization of operational  contract support through initiatives such as the creation of the Joint  Theater Support Contracting Command, instituting a Joint Contracting  Support Board, and collaborating with the Joint Staff to improve guidance.   DOD also agreed with our second recommendation and commented that  the importance of unity of contract management through clarification of  roles and responsibilities cannot be overstated. DOD further commented  that, although the functions of various boards are articulated in Joint  Publication 4-10, Operational Contract Support, the Joint Staff is  recommending that new guidance on the roles and responsibilities of the  various boards be incorporated in CENTCOM’s pending fragmentary order  that will establish the Joint Theater Support Contracting Command. With  regard to our third recommendation, DOD stated that a soon-to-be- released fragmentary order will require the standup of a Joint Contracting  Support Board, with participation by all those delivering or executing  contracted support in Iraq, Afghanistan, Kuwait, and Pakistan, and expects  that this forum will help mitigate risks associated with contract  transitions. In response to our fourth recommendation, DOD stated that  the Army has completed an analysis of the benefits, costs, and risks of  transitioning from LOGCAP III to LOGCAP IV inn Iraq and is in the process  of assessing options to ensure that essential services are provided in the  most effective and efficient manner.  DOD also stated that the risk factors  of going from LOGCAP III to LOGCAP IV will be based on operational  conditions on the ground, and it will direct the appropriate authorities to  provide the results of its analysis and corresponding courses of action to  the CENTCOM commander to ensure operational risks are taken into  account before going forward. Finally, regarding our fifth  recommendation, DOD commented that the Contingency Contracting  Administration Services Executive Steering Group has identified that the  risk of having too few qualified contract oversight personnel in light of the  planned proportional increase in the number of Iraqi contractors during  the drawdown is a concern and has established a working group to study  the matter and provide recommendations to mitigate the risks.
In its comments regarding a previous version of our last recommendation  that the Secretary of Defense direct the appropriate authorities to clarify  in existing planning the extent to which Kuwait and other locations in  southwest Asia can support the storage of equipment and materiel  retrograded from Iraq, including the types of equipment and length of time  it can be stored given possible requirements for the equipment elsewhere,  DOD did not concur and commented that this recommendation was based  on what it believed was a misinterpretation of statements made by senior  DOD officials, taken out of context. Specifically, DOD commented that the  section in our draft report that discussed the equipment disposition  process for moving equipment out of Iraq and Kuwait misstated DOD’s  policy regarding the speed at which equipment would be evacuated from  Kuwait, and what GAO saw as the potential equipment build-up and long- term equipment storage in Kuwait that could result. As a result of DOD’s  comments and subsequent meetings with senior officials from the Office  of the Secretary of Defense and Department of the Army, we revised this  section of the report, other related references throughout the report, and  the related recommendation. Specifically, we revised these sections of the  report to reflect the department’s position that, although equipment will be  temporarily staged in Kuwait prior to its shipment elsewhere, there are no  plans for long-term storage of equipment in Kuwait other than equipment  stored in the Army’s Prepositioned Stocks. These officials subsequently  commented that the information contained in this final report, as revised,  is both accurate and reflective of the views of senior DOD officials.
The department also provided a number of general and technical  comments that we considered and incorporated, as appropriate. A  complete copy of DOD’s written comments is included in appendix II.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; the Secretaries of the Army, the  Navy, and the Air Force; and the Commandant of the Marine Corps. We  will also make copies available to others on request. In addition, the report  will be available at no charge on the GAO Web site at http://www.gao.gov.
Should you or your staff have any questions on the matters discussed in  this report, please contact me at (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 letter. GAO staff who made  key contributions to this report are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the extent to which DOD has planned for the drawdown and  how these plans conform to the established timelines, we reviewed and  analyzed the major plans that guide the execution of drawdown, including  those published by CENTCOM, MNC-I, Headquarters, Department of the  Army, MNF-I, and USF-I. We also reviewed other relevant documents,  including command briefings, the Security Agreement between the United  States and the Republic of Iraq, and transcripts of speeches in which the  president established timelines for the drawdown of forces from Iraq.  Additionally, we spoke with officials at many levels of the chain of  command involved in the preparation and execution of drawdown plans to  include: the Office of the Secretary of Defense, which worked with  commanders in Iraq to weigh the merits of contending plans for the  drawdown; the Joint Staff; U.S. Transportation Command; CENTCOM;  ARCENT; MNF-I; USF-I; and MNC-I. We also spoke with officials from  myriad supporting commands including Army Materiel Command, Army  Sustainment Command; Joint Contracting Command-Iraq/Afghanistan; the  Defense Contract Management Agency; the Defense Logistics Agency;  Army Contracting Command; and the LOGCAP Program Executive Office.  In support of this effort, we traveled to Kuwait and Iraq in July 2009, where  we reviewed documents and interviewed DOD officials most directly  involved with the execution of drawdown plans. We spoke with officials  and reviewed documents from new organizations created to oversee,  synchronize, and ensure unity of effort for the retrograde of equipment,  including the Drawdown Fusion Center; U.S. ARCENT’s Support Element- Iraq; and Army Materiel Command’s Responsible Reset Task Force.  Moreover, we observed the processes instituted to facilitate the  drawdown, including the Theater Provided Equipment Planner and the  Materiel Enterprise Non-Standard Equipment system. Throughout the  engagement, the team relied upon staff working from our Baghdad Field  Office to conduct interviews with officials in theater and to periodically  refresh key information.
To identify factors that may impact the efficient execution of the  drawdown we reviewed DOD plans and interviewed officials in the United  States, Iraq, and Kuwait on issues that may hamper the progress of the  drawdown. In Iraq and Kuwait, we conducted over 60 interviews in which  we learned about potential obstacles to the efficient execution of  drawdown. We spoke with officials from: MNF-I, USF-I, MNC-I, Multi- National Security Transition Command-Iraq, Joint Contracting Command- Iraq/Afghanistan, ARCENT, U.S. Marine Corps Central, U.S. Air Force  Central, U.S. Navy Central, U.S. Army Corps of Engineers, and the MRAP  Program Executive Office. We also interviewed officials in the United  States, including officials from CENTCOM, Army Sustainment Command,  Army Materiel Command, and U.S. Transportation Command, to further  inquire about challenges that may compromise the efficient execution of  the drawdown, and to corroborate observations we made while in Kuwait  and Iraq. We also obtained and analyzed relevant documents, including  those pertaining to equipment transfers between the United States and the  Government of Iraq, the retrograde of certain types of non-standard  equipment, and the management and oversight of contract personnel. Our  travel also enabled us to observe key elements of the retrograde process,  including customs inspections, container repair facilities, systems used to  issue disposition instructions, Retrograde Property Assistance Team  yards, central receiving and processing lots, and management of Defense  Reutilization Marketing Offices. Again, we also relied upon staff working  from our Baghdad Field Office to conduct follow-up interviews with  officials, travel to Kuwait to observe a drawdown rehearsal exercise, and  periodically update key information. Finally, we used our body of issued  work examining Iraq and drawdown-related issues as a basis of  comparison to identify areas in which DOD has made improvements to its  drawdown planning, as well as areas in which it continues to face  challenges.
We conducted our audit from January 2009 through March 2010 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.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, individuals who made key  contributions to this statement include Vincent Balloon, John Bumgarner,  Carolynn Cavanaugh, Carole Coffey, Timothy DiNapoli, Laurier Fish,  Walker Fullerton, Guy LoFaro, Greg Marchand, Emily Norman, Jason  Pogacnik, Mark Pross, David Schmitt, Cheryl Weissman, Gerald Winterlin,  and Gwyneth Woolwine.