Warfighter Support: Continued Actions Needed by DOD to Improve and Institutionalize Contractor Support in Contingency Operations
Released: 2010-03-17T00:00:00

Letter

Background

The U.S. military has long used contractors to provide supplies and services to deployed U.S. forces, and more recently contractors have been involved in every major military operation since the 1991 Gulf War. However, the scale of contractor support DOD relies on today in Iraq and throughout Southwest Asia has increased considerably from what DOD relied on during previous military operations, such as Operations Desert Shield/Desert Storm and those in the Balkans. At the end of the first quarter of fiscal year 2010, DOD estimated the number of contractors in Iraq to be about 100,000 and the number in Afghanistan about 107,000. In both Iraq and Afghanistan, U.S. citizens constitute a minority of the total contractor workforce. In Iraq, approximately 72,000 contractors are third country or Iraqi nationals, and in Afghanistan approximately 81,000 contractors, or 75 percent, are Afghan nationals. However, these numbers do not reflect the thousands of contractors in Kuwait and elsewhere who support operations in Iraq and Afghanistan. By way of contrast, an estimated 9,200 contractor personnel supported military operations in the 1991 Gulf War. Factors that have contributed to the increase include reductions in the size of the military, an increase in the number of operations and missions undertaken, and DOD’s use of increasingly sophisticated weapons systems.

DOD uses contractors to meet many of its logistical and operational support needs during combat operations, peacekeeping missions, and humanitarian assistance missions. Today, contractors located throughout the Middle East and Southwest Asia provide U.S. forces with such services as linguistic support, equipment maintenance, base operations support, and security support. In Iraq and Afghanistan, contractors provide deployed U.S. forces with communication services; interpreters who accompany military patrols; base operations support (e.g., food and housing); weapons systems maintenance; intelligence analysis; and a variety of other types of support. Contractors provide logistics support that includes parts and equipment distribution, ammunition accountability and control, port support activities, and support to weapons systems and tactical vehicles. For example, in Kuwait, Iraq, Qatar, and Afghanistan, the Army uses contractors to refurbish, repair, and return to the warfighters a variety of military vehicles.

Oversight of contracts—which can refer to contract administration functions, quality assurance surveillance, corrective action, property administration, and past performance evaluation—ultimately rests with the contracting officer, who has the responsibility for ensuring that contractors meet the requirements as set forth in the contract. Frequently, however, contracting officers are not located in the contingency area or at the installations where the services are being provided. As a result, contracting officers appoint contract monitors, who are responsible for monitoring contractor performance. For some contracts, such as LOGCAP, AFCAP, or theater-wide service contracts like the Afghan trucking contract, contracting officers may delegate contract oversight to the Defense Contract Management Agency (DCMA) to monitor contractor performance. In Iraq and Afghanistan, these teams include administrative contracting officers, who direct the contractor to perform work, and quality assurance representatives, who ensure that the contractors perform work to the standards written in the contracts and oversee the Contracting Officer’s Representatives (CORs) assigned to DCMA- administered contracts. The DCMA team also includes property administrators and subject matter experts who advise the agency on technical issues such as food service, electrical engineering, and air traffic control procedures. These subject matter experts augment the DCMA staff and provide expertise not inherent to DCMA’s workforce and normally outside of DCMA’s core competency area of oversight responsibilities. Unless the contracting officer delegates the administrative contract management and oversight functions to DCMA, the contracting officer is responsible for the administrative oversight and management of the contract.

Regardless of whether or not DCMA provides administrative oversight of a contract, contracting officers generally appoint CORs. These individuals provide much of the day-to-day oversight of a contract during a contingency operation. They are typically drawn from units receiving contractor-provided services, they are not normally contracting specialists, and often their service as contracting officer’s representatives is an additional duty. They cannot direct the contractor by making commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract. Instead, they act as the eyes and ears of the contracting officer and serve as the liaison between the contractor and the contracting officer. In Iraq and Afghanistan, CORs who have been appointed as contracting officer’s representatives for contracts administered by DCMA report their oversight results to DCMA personnel. For contracts not administered by DCMA, CORs provide oversight information to the contracting officer, who may be located in Iraq, Afghanistan, or outside the theater of operations.

DOD guidance requires that trained CORs be appointed prior to the award of a service contract. In Iraq and Afghanistan, the Joint Contracting Command requires that its contracting officers appoint CORs for all contracts valued at more than $2,500 and having significant technical requirements that require on-going advice and surveillance from technical/requirements personnel. The contracting officer may exempt service contracts from this requirement when the following three conditions are all met: 1. The contract is awarded using simplified acquisition procedures; 2. The requirement is not complex; and 3. The contracting officer documents the file, in writing, as to why the appointment of a COR is unnecessary.

DOD Continues to Face Challenges in Providing Management and Oversight of Contractors in Ongoing Operations

Based on preliminary observations from our ongoing work in Iraq and Afghanistan, we found that DOD continues to be faced with five challenges related to providing management and oversight of contractors in ongoing operations. First, DOD continues to be challenged in having an adequate number of personnel to provide oversight and management of contracts. While DOD has acknowledged shortages of personnel and has made some efforts to address them, these efforts are in the early stages of implementation. Second, training non-acquisition personnel such as CORs and unit commanders to work with contractors continues to be a problem. For example, we found some instances in which a lack of training raised concerns over the potential risk of military commanders directing contractors to perform work outside the scope of the contract—something commanders lack the authority to do. Third, DOD continues to face badging and screening challenges, particularly of local national and third- country national contractor personnel. Fourth, DOD lacks reliable tracking data on contractor personnel in Iraq and Afghanistan. Fifth, DOD faces challenges in identifying its operational contract support requirements for ongoing operations in Iraq and Afghanistan. For instance, officials from U.S. Forces-Afghanistan’s logistics staff appeared to be unaware of their responsibility as defined by DOD guidance to identify contractor requirements or develop the contract management and support plans required by guidance.

Challenges in Providing an Adequate Number of Contract Oversight and Management Personnel in Deployed Locations Are Likely to Continue to Hinder DOD’s Oversight of Contractors

As we noted in several of our previous reports, having the right people with the right skills to oversee contractor performance is crucial to ensuring that DOD receives the best value for the billions of dollars spent on contractor-provided services supporting contingency operations. Additionally, as our previous work has shown, poor contract oversight and the poor contractor performance that may result can negatively affect the military’s mission. Although we could find no DOD guidelines regarding the appropriate number of personnel needed to oversee and manage DOD contracts at a deployed location, several reviews by GAO and DOD organizations have consistently found significant deficiencies in DOD’s oversight of contractors due to having an inadequate number of personnel to carry out these duties. In 2004, 2006, and again in 2008, we reported on DOD’s inability to provide an adequate number of oversight personnel in CENTCOM’s theater of operation, and our ongoing work in Afghanistan and Iraq demonstrates that this problem has not been resolved. For example, During our December 2009 trip to Afghanistan, officials at a contracting command told us that their workload required them to devote all their efforts to awarding contracts, and as a result they could not provide contract oversight.

During that same trip, the commander of a maintenance battalion in Afghanistan expressed concern over having an inadequate number of personnel available to provide oversight of a key maintenance contract used to support the increase of troops in Afghanistan. He noted that the lack of sufficient quality assurance personnel and technical experts was an identified problem they were working to correct, but that the additional civilian personnel were slow to arrive. Furthermore, he expressed concern that the expanding U.S. mission in Afghanistan would require additional technical experts and quality assurance personnel to oversee the increased number of contractors expected to be needed to support the increased vehicle maintenance and repair requirements.

In preliminary findings concerning the drawdown of forces from Iraq, we noted that an Army unit in Kuwait that was responsible for ensuring the steady flow of equipment out of Kuwait and for conducting certain maintenance tasks had 32 government personnel to provide oversight for 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 assigned to conduct retrograde-specific tasks—for example, receiving, accounting for, sorting, and moving equipment— necessary to prevent equipment backlogs in Kuwait. In July 2009 this unit identified the lack of oversight personnel as a significant concern with respect to successfully moving equipment out of Kuwait. According to contracting officials, the unit had requested an increase in civilian oversight personnel. However, we have previously reported on the Army’s difficulties in filling civilian personnel vacancies in Kuwait.

In a June 2009 report, the Commission on Wartime Contracting in Iraq and Afghanistan found that DOD had insufficient logistics subject matter experts in Iraq and Afghanistan. In the department’s response to the June 2009 report, DOD noted that DCMA had in March 2009 requested 57 subject matter experts for food, water, medical, fire, and petroleum services, but only 40 of the 57 positions had been filled. Furthermore, according to DCMA as of January 2010, only 19 of the 40 personnel had arrived in theater. During our December 2009 trip to Afghanistan, DCMA officials stressed to us the need for more subject matter experts, and they have requested an additional 47 subject matter experts, but officials do not know when these positions will be filled. To help mitigate the shortfall of subject matter experts, DCMA intends to use contractors to provide the needed expertise, according to DCMA officials.

Since 2004, we and others have reported that DOD has a lack of contract oversight officials, including CORs, to provide contract oversight and management in contingency operations. During operations in Iraq and Afghanistan, the shortage of CORs has been particularly acute for DCMA- administered contracts. For example, in June 2009 DCMA had a requirement for 1,252 CORs in Iraq but had only 985 in place. Similarly, in June 2009 DCMA in Afghanistan had a COR requirement of 576 but had less than half (or 253) of the needed CORs in place. In October 2009 DCMA announced a new risk-based approach toward assigning CORs. According to DCMA officials, it had been DCMA’s policy that a COR would be designated for each contractor-provided service at the location of the service. According to DCMA officials and documentation, DCMA now recommends that units assign CORs only to key services—which they define as high- and medium-risk services that could put health, life, and safety at risk if not executed in a manner consistent with the contract.

Examples of high- and medium-risk services include food service, power generation, and postal services. Services such as morale, welfare and recreation are considered low risk. Services that are not designated as “key services” do not require CORs, but are monitored on a quarterly basis by a quality assurance representative. Since implementing this policy, DCMA has reduced the requirement for CORs to oversee its contracts in Iraq from 1,100 in October 2009 to 580 in January 2010, and DCMA officials in Iraq anticipate that they will be able to reduce the COR requirement further as they continue to designate additional services as low-risk. In January 2010 DCMA reported that it had 88 percent of its required CORs in place in Afghanistan. We have not evaluated the effectiveness of this risk- based management program at this time.

In an effort to build economic capacity within Iraq and Afghanistan, Congress has authorized and DOD has developed programs to encourage the use of local contractor firms. However, these programs, the Iraq First Program and the Afghan First Program, further strain the availability of personnel to provide contract management and oversight. According to officials from the Joint Contracting Command-Iraq/Afghanistan local national contractors frequently require more oversight than U.S. firms because they lack experience, have limited capacity, are frequently less capable then 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. For example, according to DOD officials, buildings constructed by Afghan contractors have had to be re-wired when the LOGCAP program assumed responsibility for them because the LOGCAP contractors responsible for maintenance lacked assurance that that the electrical work was done correctly. Other officials described receiving poor quality office furniture, while still others noted that trucking companies contracted to move U.S. goods often failed to meet delivery schedules. Without a sufficient number of contract oversight personnel in place, including subject matter experts, DOD may not be able to obtain reasonable assurance that contractors are meeting their contract requirements efficiently and effectively at each location, and that health and safety concerns have been addressed.

Actions to Improve Availability of Oversight Personnel

Several individual organizations or services within DOD have taken actions to help mitigate the problem of not having enough personnel to oversee and manage contractors in Afghanistan and Iraq. For example, the Army issued an Execution Order on CORs in December 2009. In the order, the Army Chief of Staff directed the commanders of deploying units to coordinate with the unit they will replace in theater to determine the number of CORs they will need to designate prior to deployment. The order states that if the commander is unable to determine specific COR requirements, each deploying brigade should designate and train 80 CORs prior to deployment.

In addition, a deploying Marine Expeditionary Force has created an operational contracting support cell within the logistics element of its command headquarters. The members of the cell will assist subordinate units with contracting oversight and guidance on policy, and they will act as contracting liaisons to the Joint Contracting Command-Iraq/Afghanistan and as conduits to the regional contracting commands should any issue arise. The Marines were prompted to set up this cell by lessons learned from their deployment to Operation Iraqi Freedom, where problems arose as a result of a lack of expertise and personnel to help oversee and manage contractors. In addition, the Marine Expeditionary Force trained approximately 100 Marines as CORs prior to its deployment to Afghanistan this spring. While not all personnel have been designated as CORs for the upcoming deployment, all could be called upon to serve as CORs should the need arise.

While we recognize the efforts DOD has under way to develop long-term plans intended to address its personnel shortages, the problems we have identified in the past continue. In previous reports we have recommended that DOD develop strategies to address its oversight problems, and noted that unless DOD takes steps to address its current shortages, the department will continue to be at risk with regard to its assurance that contractors are providing their required services in an effective and efficient manner.

Training of CORs and Non- Acquisition Personnel, Such as Unit Commanders, to Provide Contract Oversight and Management Remains an Issue

Equally important as having enough CORs is having CORs who are properly trained to provide contract oversight. According to the Army Chief of Staff’s Execution Order, the lack of personnel in theater who are sufficiently trained in COR responsibilities is hindering effective oversight and management of contracts in support of operations in Afghanistan and Iraq. In addition, a lack of CORs with the right skills can make it more difficult to resolve contractor performance issues.

The Defense Federal Acquisition Regulation Supplement requires that CORs be qualified by training and experience commensurate with the responsibilities to be delegated to them. Specifically, DOD requires that potential CORs complete courses (which are available on line) that include training on specific COR duties, an awareness course on trafficking in persons to help combat this practice and ethics training. In 2006 we reported that individuals deployed without knowing that they would be assigned as CORs, thus precluding their ability to take the required training prior to deployment. Individuals we spoke with noted that it was difficult to set aside the time necessary to complete the training once they arrived in Iraq. During our recent visit to Afghanistan we found that units continue to deploy without nominating CORs beforehand, and as a result the personnel assigned to serve as CORs have to take the required training upon arrival in theater. Because training is offered through online courses, staff officers at a combined joint command as well as at an Army sustainment command in Afghanistan told us that technical limitations, including a lack of bandwidth, make it difficult to access the training from Afghanistan. In November 2009 DOD acknowledged concerns regarding web-based COR training due to connectivity issues.

We also found that although CORs and other oversight personnel are responsible for evaluating the technical aspects of a contractor’s performance, these oversight personnel often lack the technical knowledge and training needed to effectively oversee certain contracts. For example, in Afghanistan, officials from various organizations expressed concern to us that there were not enough CORs trained in trades such as electrical wiring and plumbing to provide oversight over all the construction contracts, and that this problem will only worsen as the number of construction projects continues to grow. Also, in a November 2009 analysis, a DOD task force acknowledged the importance of having CORs with the right skills, noting that units nominating CORs should consider the technical aspects, monitoring frequency, and monetary value of the contract to ensure that CORs’ subject matter expertise and availability are commensurate with the requirement.

An additional, long-standing training challenge hindering management and oversight of contractors supporting deployed forces is the lack of training for military commanders and other non-acquisition personnel, such as senior leaders who need contractors to execute their mission. As we testified in 2008, limited or no pre-deployment training on the use of contractor support can cause a variety of problems for military commanders in a deployed location, such as being unable to adequately plan for the use of those contractors, or confusion regarding the military commanders’ roles and responsibilities in managing and overseeing contractors. Currently, military commanders and other unit leaders are not required to complete operational contract support training prior to deployment. In Afghanistan we continued to find that some commanders had to be advised by contract oversight personnel that they had to provide certain support, such as housing, force protection, and meals to the contractors they were overseeing. In addition, having limited or no pre- deployment training for military commanders on the use of contractor support to deployed forces can result in confusion regarding their roles and responsibilities in managing and overseeing contractors. For example, we found some instances in which a lack of training raised concerns over the potential risk of military commanders directing contractors to perform work outside the scope of the contract—something commanders lack the authority to do.

According to several contract oversight personnel, some commanders did not understand the command and control relationship between themselves and the contractor, and were unclear as to whether they could direct the contractor to perform work. Similarly, in a January 2010 acquisition conference, DCMA noted as a challenge the education of unit commanders on working with contractors. These challenges include educating the commanders on the value of contractors as a force multiplier, the unit’s role in providing oversight, and distinguishing between command and contractual authority. The commander of the operational contract support cell at a Marine Expeditionary Force headquarters noted that he considered educating commanders to be one of his key challenges as his unit prepared to deploy. Without a clear understanding of the command and control relationship for contractors, commanders and other key leaders run the risk of directing the contractor to perform work beyond what was called for in the contract. As Army guidance makes clear, when military commanders try to direct contractors to perform activities outside the scope of the contract, this can cause the government to incur additional charges because modifications would need to be made to the contract. In some cases, the direction may potentially result in a violation of competition requirements.

While we continue to observe issues regarding training on the use of contractor support, initiatives have been taken to implement and emphasize enhanced training for contract management and oversight personnel. For example, the Army’s December 2009 Execution Order directs the Army’s Training and Doctrine Command to develop additional training, including training to familiarize CORs with LOGCAP. It also requires brigade commanders to identify and train individuals as CORs prior to deployment, and it requires that training scenarios for CORs be incorporated into mission rehearsal and mission readiness exercises. In an independent effort in Afghanistan, two sustainment units provided training that incorporated a set of contract-related scenarios prior to their deployment to Afghanistan. One of the units also sent an officer to the new 2-week Operational Contract Support course conducted by the Army Logistics Management College. Ninety soldiers from one of the units also attended COR training, either through the Defense Acquisition University or through equivalent training. In another example, one of the Marine Corps’ expeditionary forces preparing to deploy to Afghanistan identified Marines who may have contract oversight roles in Afghanistan and brought in an instructor from the Defense Acquisition University to provide three sessions of COR training prior to their deployment. In addition, DCMA has begun reaching out to deploying units to provide them with pre-deployment training on what to expect when they arrive in Afghanistan, particularly with regard to LOGCAP. Officials responsible for overseeing a contract for linguist services also stated that their CORs received contract-specific training prior to deployment. However, these efforts do not address the concerns about CORs lacking the technical skills required to provide oversight on more technical contracts, specifically construction-related contracts. While these training efforts are promising, they have been driven by individual services and units.

We have been discussing the need for better pre-deployment training on the use of contractors to support deployed forces since the mid-1990s, and have accordingly made several recommendations that DOD improve its training. For example, in 2003 we recommended that DOD develop training courses for commanding officers and other senior leaders who are deploying to locations with contractor support, and in 2006 we expanded on our recommendation and recommended that operational contract support be included in professional military education and pre-deployment training. In both instances DOD agreed with our recommendations but has not fully implemented them. Furthermore, in 2008, Congress mandated that DOD policies provide for contingency contracting training for certain non-acquisition personnel, including operational commanders expected to have acquisition or contract oversight responsibilities. However, these policies have not yet been finalized, and consequently the training required has not been institutionalized throughout DOD.

DOD Continues to Face Badging and Screening Challenges

In Iraq and Afghanistan military commanders and other military officials have expressed concerns about the risks that contractor personnel, particularly third country and local nationals, pose to U.S. forces due to limitations in the background screening process. In 2006 we first reported on the challenges that DOD faced in ensuring that contractor personnel had been thoroughly screened and vetted. In July 2009 we reported that DOD had not developed department-wide procedures to screen local national and third-country national contractor personnel, in part because two offices within the department—–that of the Under Secretary of Defense for Intelligence and that of the Under Secretary of Defense for Acquisition, Technology, and Logistics—could not agree on the level of detail that should be included in background screening for third country and local national employees, and therefore lacked assurance that all contractor personnel were properly screened. To resolve this issue we recommended that the Secretary of Defense designate a focal point at a sufficiently senior level and possessing the necessary authority to ensure that the appropriate offices in DOD coordinate, develop, and implement policies and procedures to conduct and adjudicate background screenings in a timely manner.

DOD has still not developed a department-wide policy on how to screen local national and third-country national contractor personnel, and as a result it continues to face challenges in conducting background screening of these personnel. As we reported in July 2009, absent a DOD-wide policy, commanders develop their own standards and processes to ensure that contractor personnel have been screened. In Iraq, U.S. Forces-Iraq, the U.S. led military organization responsible for conducting the war in Iraq, has developed a command-wide policy for screening and badging contractors. However, in Afghanistan, U.S. Forces-Afghanistan (USFOR- A) has not established a command-wide policy for screening and badging contractors. Instead, each base is responsible for developing its own background screening and base access procedures, resulting in a variety of different procedures. Moreover, requirements differ between U.S. bases and NATO bases. The lack of guidance also affects the ability of force protection officials to determine the sufficiency of their background screening procedures. For example, at one base, force protection officials told us that while they require contractor personnel to provide valid background screening from their home countries, they had not received guidance on how to interpret those screenings, and did not know whether the screenings they received were valid or not. Officials stated that they rely on a biometric system, also used in Iraq, to screen local national and third-country national contractor personnel. However, as we reported in July 2009, the name-checks and biometric data collection associated with issuing badges rely primarily upon U.S.-based databases of criminal and terrorist information. In 2006, we reported that background checks that are reliant upon U.S.-based databases, such as the biometric system used in Iraq and Afghanistan, may not be effective in screening foreign nationals who have not lived or traveled to the U.S. Further, some DOD contracts require contractors to conduct background screenings of their personnel. In July 2009 we reported that contracts for private security services often contained unrealistic background screening requirements. For example, the requirements directed contractors to use data sources to which private firms may not have access, such as databases maintained by the Federal Bureau of Investigation and the Central Intelligence Agency. We continue to find that some DOD contracts include unrealistic background screening requirements similar to those identified in our July 2009 report. As we concluded in July 2009, without a coordinated DOD-wide effort to develop and implement standardized policies and procedures to ensure that contractor personnel—particularly local nationals and third-country nationals—have been screened, DOD cannot be assured that it has taken all reasonable steps to thoroughly screen contractor personnel and minimize any risks to the military posed by these personnel.

DOD Lacks Reliable Data on the Number of Contractor Personnel in Iraq and Afghanistan

Since 2002, we have reported on the challenges faced by commanders and other leaders to obtain accurate information on the number of contractors and the services they are providing in contingencies and have made recommendations to improve DOD’s ability to obtain contractor information. For example, in December 2006 we reported that commanders had limited visibility of contractors because information on the number of contractors at deployed locations or the services they provide was incomplete, unreliable, and not aggregated within any one DOD organization, a limitation that can inhibit planning, increase costs, and introduce unnecessary risks. Although DOD has recognized the need for commanders and other leaders to have reliable data on the number of contractors and the services they provide, DOD continues to face challenges in tracking contracts and contractor personnel in Iraq and Afghanistan. Absent complete and accurate information on contractors supporting contingency operations, the agencies are limited in their ability to develop a complete picture of their reliance on contractors, the tasks being performed, and their associated costs. Reliable and meaningful data on contractors and the services they provide are a starting point for agency discussions about when and how to effectively use contractors; support contractors in terms of housing, security, and other services; and ensure that contractors are properly managed and overseen.

In January 2007, DOD designated the Synchronized Pre-deployment and Operational Tracker (SPOT) as its primary system for collecting data on contractor personnel deployed with U.S. forces, and it directed contractor firms to enter personnel data for contracts performed in Iraq and Afghanistan. The SPOT database is designed to provide accountability of contractor personnel by name, a summary of the services being provided, and information on government-provided support.

Our reviews of SPOT have highlighted shortcomings in DOD’s implementation of the system in Iraq and Afghanistan. Most important, we found that as a result of diverse interpretations as to which contractor personnel should be entered into the system, the information in SPOT does not present an accurate picture of the total number of contractor personnel in Iraq and Afghanistan. For example, in Iraq, DOD officials stated that the primary determinant of whether contractor personnel were entered into SPOT was a contractor’s need or lack of need for a SPOT- generated letter of authorization. Contractor personnel need SPOT- generated letters of authorization to, among other things, enter Iraq, receive military identification cards, travel on U.S. military aircraft, or, for security contractors, receive approval to carry weapons. However, not all contractor personnel in Iraq, and particularly local nationals, need letters of authorization, and agency officials informed us that such personnel were not being entered into SPOT. Similarly, officials with one contracting office in Afghanistan stated that the need for a letter of authorization determined whether someone was entered into SPOT, resulting in Afghans not being entered. However, officials from another office stated that that office was following DOD’s 2007 guidance on the use of SPOT and entering local nationals into the system.

Because of the varying practices for entering personnel into SPOT, there are inconsistencies and gaps in the data generated by the system. For example, while DOD officials expressed confidence that the SPOT data were relatively complete for contractor personnel who need a letter of authorization, they acknowledged that SPOT does not fully reflect the number of local nationals working on contracts. Tracking local nationals in SPOT presents particular challenges because their numbers tend to fluctuate due to the use of day laborers, and because local firms do not always keep track of the individuals working on their projects. DOD officials also explained that they have had to develop workarounds to get around the SPOT requirement of a first and last name to be entered for each individual, along with a birth date and unique identification number. The officials noted that many Afghan laborers have only one name, do not know their birth dates, and lack identification numbers.

Because of the short-comings of SPOT, DOD has conducted quarterly censuses to obtain information on the number of contractor personnel in Iraq and Afghanistan. DOD officials have regarded the census as the most complete source of contractor personnel data, but they acknowledged that the census numbers represent only a rough approximation of the actual number of contractor personnel working in either country. We found that census data were sometimes incomplete, while in other cases personnel were doubly counted. Because of these and related limitations, we determined that the census data should not be used to identify trends or draw conclusions about the number of contractor personnel in either Iraq or Afghanistan.

Challenges in Identifying Operational Contract Support Requirements in Iraq and Afghanistan

DOD guidance highlights the need to plan for operational contract support early in an operations planning process because of the challenges associated with using contractors in contingencies. These challenges include overseeing and managing contractors in contingency operations. In previous reports and testimonies we have noted that DOD has not followed long-standing guidance on planning for operational contract support. Specifically, joint guidance calls for DOD to identify contract support requirements as early as possible, to ensure that the military receives contract support at the right place, at the right time, and for the right price. Other guidance directs the combatant commander or joint task force commander to identify operational contract support requirements as well as develop plans to obtain and manage contract support and include them in operation plans, operation orders, or fragmentary orders. Our preliminary observations from ongoing work continue to show that DOD has not fully planned for the use of contractors in support of ongoing contingency operations in Iraq and Afghanistan.

On December 1, 2009, the President announced that an additional 30,000 U.S. troops would be sent to Afghanistan to assist in the ongoing operations there, and the Congressional Research Service estimates that between 26,000 and 56,000 additional contractors may be needed to support the additional troops. However, during our December 2009 trip to Afghanistan, we found that only limited planning was being done with regard to contracts or contractors. Specifically, we found that with the exception of planning for the increased use of LOGCAP, USFOR-A had not begun to consider the full range of contractor services that might be needed to support the planned increase of U.S. forces. More important, officials from USFOR-A’s logistics staff appeared to be unaware of their responsibility as defined by DOD guidance to identify contractor requirements or develop the contract management and support plans required by guidance. However, we did find some planning being done by U.S. military officials at Regional Command–East. According to planners from Regional Command–East, the command had identified the types of units that are being deployed to their operational area of Afghanistan and was coordinating with similar units already in Afghanistan to determine what types of contract support the units relied on. Furthermore, according to operational contract support personnel associated with a Marine Expeditionary Force getting ready to deploy to Afghanistan, the staff offices within the Marine Expeditionary Force headquarters organization were directed to identify force structure gaps that could be filled by contractors prior to deployment and begin contracting for those services. For example, one section responsible for civil affairs identified the need to supplement its staff with contractors possessing engineering expertise because the needed engineers were not available from the Navy.

In addition, although U.S. Forces-Iraq has taken steps to identify all the LOGCAP support they will need for the drawdown, they have not identified the other contracted support they may need. According to DOD joint doctrine and service guidance, personnel who plan, support, and execute military operations must also determine the contracted support needed to accomplish their missions. Such personnel include combat force commanders, base commanders, and logistics personnel. In particular, these personnel 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. Multi-National Force-Iraq’s (MNF-I) drawdown plan, however, delegated the responsibility for determining contract support requirements to contracting agencies, such as the Joint Contracting Command-Iraq/Afghanistan, rather than to operational personnel. Joint Contracting Command-Iraq/Afghanistan officials told us, however, that they could not determine the theater-wide 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 service 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 contractor 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 U.S. Forces-Iraq (USFOR-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.

Insufficient planning may also lead to shortages in contractor personnel available to perform key functions affecting contractor responsiveness. For instance, during our December visit to Afghanistan, multiple DOD officials, including the commander of a base, told us that the current LOGCAP contractor had pulled many of its skilled workers off the job, which led to issues such as electrical problems that remained unresolved for longer than desired periods of time. Furthermore, a maintenance battalion commander told us that without the assistance of soldiers and civilian mechanics from the Red River Army Depot, the contractor would not have had enough personnel to maintain and repair the vehicles and equipment necessary to meet the mission. Additionally, in December 2009, an official from USFOR-A-South told us that in Kandahar military personnel were called upon to augment the operations of a supply facility because the contractor had not fully staffed the operation. In response to a DCMA letter of concern regarding contractor personnel shortages, the contractor agreed to have a full complement of contractor personnel in place by the middle of February 2010.

Timely planning is critical to avoiding potential waste and ensuring that critical services are available when needed as the United States increases troops in Afghanistan and withdraws them from Iraq. In a January 2008 statement before Congress we again highlighted the need for the department to follow its long-standing planning guidance regarding the use of contractors to support deployed forces. In that testimony we called upon DOD leadership to take steps to ensure compliance with existing guidance. Insufficient planning for requirements may lead to other poor outcomes, such as increased cost, lengthened schedules, underperformance, and delays in receiving services. We continue to believe that the department should take steps to ensure that it adheres to the guidance detailed in both joint and service publications.

While DOD Has Taken Some Actions to Institutionalize Operational Contract Support, Much Remains to Be Done

In response to congressional direction and GAO recommendations, DOD has taken some actions to institutionalize operational contract support, however much remains to be done. The department has appointed a focal point to lead in these efforts, has issued some new guidance, and has begun to determine its reliance on contractors, but it has yet to finalize the policies required by Congress in the National Defense Authorization Acts for Fiscal Years 2007 and 2008. In addition, the department needs to take additional actions to improve its planning for operational contract support for future operations.

DOD Has Taken Some Department-wide Steps to Institutionalize Operational Contract Support

In October 2006, the Deputy Under Secretary of Defense for Logistics and Materiel Readiness established the office of the Assistant Deputy Under Secretary of Defense (Program Support) to act as a focal point for leading DOD’s efforts to improve contract management and oversight at deployed locations. That office has, for example established a community of practice for operational contract support comprising subject matter experts from the Office of the Secretary of Defense, the Joint Staff, and the services, and this community may be called upon to work on a specific task or project. Additionally, the office has established a Council of Colonels, which serves as a “gatekeeper” for initiatives, issues, or concepts, as well as a Joint Policy Development General Officer Steering Committee, which includes senior commissioned officers or civilians designated by the services. The committee’s objective is to guide the development of Office of the Secretary of Defense, Joint Staff, and service policy, doctrine, and procedures to adequately reflect situational and legislative changes as they occur within operational contract support. The Program Support office is also developing an Operational Contract Support Concept of Operations, and it has provided the geographic combatant commanders with operational contract support planners to assist them in meeting contract planning requirements.

To provide additional assistance to deployed forces, the department and the Army introduced several handbooks to improve contracting and contract management in deployed locations. For example, In 2007 the department introduced the Joint Contingency Contracting Handbook, which provides tools, templates, and training that enable a contingency contracting officer to be effective in any contracting environment. The handbook also contains resources for contracting officers to promote uniform contracting practices, including standardized contract forms and language for terms and conditions The handbook is currently being updated and the department expects it to be issued in July 2010.

In 2008 the Army issued the Deployed Contracting Officer’s Representative Handbook. This handbook provides the basic tools and knowledge needed for use in conjunction with formal COR training. The handbook was designed to address the realities that CORs face when operating outside the United States in a contingency operation.

Additionally in October 2008, the department issued Joint Publication 4-10, “Operational Contract Support,” which establishes doctrine and provides standardized guidance for planning, conducting, and assessing operational contract support integration, contractor management functions, and contracting command and control organizational options in support of joint operations.

Finally, in 2008, the Joint Staff (J-4), at the direction of the Chairman, undertook a study to determine how reliant the department was on contractors in Iraq. The intent of the study was to (1) better understand contracted capabilities in Iraq, to determine areas of high reliance or dependence; (2) determine where the department is most reliant, and in some cases dependent, on contractor support, to inform longer-term force structure and potential “buy back” implications; and (3) guide the development of future contingency planning and force development. According to the Joint Staff their initial findings suggest that in Iraq the department was highly dependent on contractors in four of the nine joint capability areas, including Logistics. For example, the study showed that in the third quarter of fiscal year 2008, over 150,000 contractors were providing logistical support, while slightly more than 31,000 military personnel were providing similar support. Having determined the level of dependency and reliance on contractors in Iraq, the Joint Staff plans to examine ways to improve operational contract support planning, including the development of tools, rules, and refinements to the existing planning process.

DOD Has Yet to Finalize Operational Contract Support Guidance to Meet Congressional Direction

In 2006 Congress directed the Secretary of Defense, in consultation with the Chairman of the Joint Chiefs of Staff, to develop joint policies by April 2008 for requirements definition, contingency program management, and contingency contracting during combat and post-conflict operations. In 2008, Congress amended this requirement by directing that the joint policies also provide for the training of military personnel outside the acquisition workforce who are expected to have acquisition responsibilities, including oversight of contracts or contractors during combat operations, post-conflict operations, and contingency operations. It also directed that GAO review DOD’s joint policies and determine the extent to which those policies and the implementation of such policies comply with the statutory requirements. In November 2008 we reported that the department had yet to finalize several key documents designed to meet the requirements established by Congress. We also noted that DOD was developing an Expeditionary Contracting Policy to address the requirement to develop a joint policy on contingency contracting, and was revising the October 2005 version of DOD Instruction 3020.41, Contractor Personnel Authorized to Accompany the US Armed Forces, to meet the congressional direction to develop a joint policy on requirements definition; program management, including the oversight of contractor personnel supporting a contingency operation; and training. At the time of our 2008 report, the draft Instruction directed combatant commanders and service component commanders to conduct planning to identify military capability shortfalls that require acquisition solutions in commanders’ operational plans, and combatant commanders to integrate operational contract support issues into training simulations, mission rehearsals, and exercises. The draft Instruction also directed the service to include requirements of the Instruction in their training.

As of March 2010, the department had yet to issue either of these documents. According to the Assistant Deputy Under Secretary of Defense (Program Support), the revisions to DOD Instruction 3020.41 have been held up in the review process. The current plan is to post the proposed revisions in the Federal Register and issue the revised instruction in the summer of 2010. Until the DOD instruction is revised and issued, the department’s overarching policy document will not reflect the department’s current approach to operational contract support. Furthermore, the provisions of the draft instruction that were intended to meet the congressional requirement for joint policy applicable to combatant commanders and the military services have not been established. Regarding the expeditionary contracting policy, the department has determined that it will not issue the expeditionary policy because the practitioners do not believe a joint policy is necessary.

Plans for Future Operations Lack Information on Contractor Support Requirements

DOD also faces challenges incorporating operational contract support issues in its operation plans for potential future contingencies. Since 2003, we have identified the need for the department to ensure that specific information on the use and roles of contract support to deployed forces is integrated into its plans for future contingency operations. DOD guidance has long recognized the need to include the role of contractors in operation plans and, since early 2006, this guidance has required planners to include an operational contract support annex—known as Annex W—in the combatant commands’ most detailed operation plans. Our ongoing work has found that the department has made some progress in both meeting this specific guidance and, more generally, in incorporating contract requirements in its operation plans. However, additional steps are needed to fully implement DOD guidance.

First, we found that four operation plans with Annex Ws have been approved, and planners have drafted Annex Ws for an additional 30 plans. However, according to combatant command officials, most of the annexes drafted to date restate broad language from existing DOD guidance on the use of contractors to support deployed forces and included few details on the type of contractors needed to execute a given plan—despite guidance requiring Annex Ws to list contracts likely to be used in theater. This was due to several factors, including a lack of information within the operation plans on matters such as the size and capabilities of the military force involved. According to combatant command planners, this information is needed to enable them to identify the details on contracted services and capabilities needed to support an operation. In addition, shortcomings in guidance on how and when to develop these annexes have resulted in a mismatch in expectations between senior DOD leadership and combatant command planners regarding the degree to which Annex Ws will contain specific information on contract support requirements. We found that several senior DOD officials have the expectation that most combatant command plans should at least identify the capabilities that contractors may provide, regardless of the level of plan. However, the contract support planners and other officials responsible for developing the Annex Ws disagreed, stating that given the limited amount of information on military forces in most operation plans, the expected level of detail was difficult if not impossible to achieve. In most cases, we found that Annex Ws did not contain the level of detail expected by senior DOD leadership and envisioned in current guidance, thus limiting the utility of the Annex W as a planning tool to assess and address contract support requirements.

Second, in discussion with combatant command officials responsible for developing operation plans, we found that detailed information on operational contract support requirements is generally not included in other sections or annexes of these plans. Although the Annex W is intended to be the focal point within an operation plan for discussing operational contract support, DOD guidance underscores the importance of addressing contractor requirements throughout an operation plan. However, we found that non-logistics personnel tend to assume that the logistics community will address the need to incorporate operational contract support throughout operation plans. For example, combatant command officials told us they were not aware of any assumptions specifically addressing the potential use or role of operational contract support in their base plans. Assumptions are used to focus attention of senior DOD leadership on factors that could present risks to mission success. Similarly, according to DOD planners, there is a lack of details on contract support in other parts of most base plans or in the non-logistics (e.g., communication or intelligence) annexes of operation plans. DOD guidance for these annexes directs planners to identify the means or capabilities necessary for meeting mission requirements. Although this guidance does not specifically mention contractors, contractors provide significant support in these areas.

The lack of details on contract support requirements in Annex Ws, along with the limited discussion of contractors in other portions of operation plans, can hinder the ability of combatant commanders to understand the extent to which their plans are reliant on contractors. Moreover, senior decision makers may incorrectly assume that operation plans have adequately addressed contractor requirements. As a result, they risk not fully understanding the extent to which the combatant command will be relying on contractors to support combat operations, and being unprepared to provide the necessary management and oversight of deployed contractor personnel.

Concluding Observations

In closing, DOD has taken positive steps in recognizing its reliance on contractors to support operations both now and in the future, and it has emphasized the need for increased oversight and management over these contractors. However, more work is needed to address the long-standing challenges I have discussed today. Many of the challenges I have identified, particularly those related to contract management, oversight, and planning, stem from DOD’s inability to institutionalize operational contract support by accepting contractors as an integral part of the total force. Reforming the way DOD approaches operational contract support will require a fundamental cultural change for the department. As part of the effort to bring about such changes, DOD will need to continue to evaluate the role that contractors play in contingency operations to determine the appropriate balance of contractors and military forces and institutionalize operational contract support at all levels of professional military education as well as in predeployment training and exercises.

Mr. Chairman, this concludes my statement. I would be happy to answer any questions.

GAO Contacts and Acknowledgments

For further information about this statement, please contact William Solis at (202) 512-8365 or solisw@gao.gov. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to this statement are Carole Coffey, Assistant Director; Vincent Balloon, Laura Czohara, Melissa Hermes, Guy LoFaro, Emily Norman, Jason Pogacnik, James Reynolds, and Cheryl Weissman.

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