Future overseas contingencies are inherently uncertain, but effective planning—at both the strategic and operational levels—can help DOD reduce the risks posed by those uncertainties. At a strategic level, planning is an important element in a results-oriented framework; it can help DOD clarify priorities and unify the department in pursuit of common goals for operational contract support. Similarly, at an operational level, effective planning can help better define contract support requirements to avoid potential waste and abuse and facilitate the continuity of services. In Iraq and Afghanistan, we previously reported that insufficient planning for operational contract support may lead to shortages in contractor personnel available to perform key functions, such as not having enough personnel to maintain and repair mission essential vehicles and equipment. Additionally, due in part to limited operational planning for contracted support, we previously reported that DOD faced challenges planning for certain aspects of contracting and contractor management in Iraq during the drawdown. DOD has recognized the need to improve its planning for operational contract support. In addition to the Secretary’s January 2011 memorandum, DOD has communicated and emphasized the importance of operational contract support at the strategic level through the issuance of new policy and guidance and ongoing efforts. For example: In December 2011, DOD issued regulations establishing policy, assigning responsibilities, and providing procedures for operational contract support. The regulations were issued as an interim final rule published in the Federal Register and as Department of Defense According to DOD officials, in 2011, the department revised its Guidance for Employment of the Force and the Joint Strategic Capabilities Plan to emphasize contractor management, and it is currently revising another core piece of guidance, Joint Publication 4- 10, to help further integrate operational contract support into planning efforts. In 2010, DOD established the Operational Contract Support Functional Capability Integration Board, which is responsible for a variety of tasks including conducting independent assessments and analysis of operational contract support capabilities of the military; advocating for operational contract support capability development in a variety of venues; and establishing and assessing ways to improve measures of performance, metrics, and processes for measuring operational contract support readiness. This board is drafting an Operational Contract Support Action Plan to outline steps the department plans to take to close identified gaps in operational contract support capabilities. Operational Contract Support, 76 Fed. Reg. 81,807 (Dec. 29, 2011) (to be codified at 32 C.F.R. pt. 158); Department of Defense Instruction 3020.41, Operational Contract Support (OCS) (Dec. 20, 2011). officials, most of the annexes that had been drafted at that time restated broad language from existing DOD guidance on the use of contractors to support deployed forces but included few details on the type of contractors needed to execute a given plan. We also found shortcomings in guidance for planners on how and when to develop contract support annexes, which resulted in a mismatch of expectations between senior DOD leadership and combatant command planners regarding the degree to which Annex Ws would contain specific information on contract support requirements. Overall, we found that requiring consideration of potential contract support requirements raised awareness of the importance of operational contract support and led to some improvements in planning for contract support. Nevertheless, we found that DOD still risked not fully understanding the extent to which it would be relying on contractors to support combat operations and being unprepared to provide the necessary management and oversight of deployed contractor personnel. One way to help address this risk is to ensure military commanders and senior leaders are cognizant of the roles contractors have in supporting DOD’s efforts, as well as the role that DOD military personnel have in managing and overseeing contractors. In 2006 and again in 2012, we recommended that operational contract support training, with a particular emphasis on contingency operations, be included in professional military education to ensure that all military personnel expected to perform contract or contractor management duties, including commanders and senior leaders, receive training prior to deployment. Military commanders and senior leaders have used contractors to perform a variety of services to help their units execute the mission, including life support, security, and communications support. We previously found that DOD officials in Afghanistan did not always receive training that adequately prepared them for their contract management and oversight duties, and according to DOD officials, the training did not necessarily make them sufficiently capable for their particular assignments. Further, contracting personnel have told us that commanders, particularly those in combat units, do not perceive operational contract support as a warfighter task. DOD has developed a program of instruction on contingency acquisition to be taught at some of the military and senior staff colleges. However, we have previously reported that commanders and senior leaders are not required to take these courses before assuming their contract management roles and responsibilities. In contingencies, having the right people, with the right skills, in the right numbers can make the difference between success and failure. These individuals—whether acquisition professionals or non-acquisition personnel, including military commanders—play critical roles in defining requirements, managing and overseeing contracts and contractors, and helping to ensure that the warfighter receives the goods and services needed in a timely manner while serving to mitigate the risks of fraud, waste, and abuse. Our work, as well as the work of others in the accountability community, has identified numerous instances in Iraq, Afghanistan, and elsewhere where these individuals were in short supply, were not properly trained, or were not fully aware of their responsibilities. For example, in 2010, we found that DOD relied on contractors to support contract administration functions in Iraq and Afghanistan, in part because of a shortage of government personnel to perform these functions. In March 2012, we reported that DOD oversight personnel in Afghanistan did not always receive adequate training for their contract management duties, and that DOD continued to lack a sufficient number of oversight personnel for contracts in Afghanistan, which in some cases resulted in projects being completed without sufficient government oversight and problems not being identified until projects were already completed. Further, we have found in the past 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 contractors. DOD leadership has recognized the need to rebuild, train, and support a highly qualified and knowledgeable acquisition workforce as a strategic priority. This workforce, which was downsized considerably through the 1990s, has faced increases in the volume and complexity of work because of increases in services contracting, ongoing contingency operations, and other critical missions. We reported in June 2012 that, according to DOD, the size of DOD’s civilian acquisition workforce increased from 118,445 in fiscal year 2009 to about 135,981 in December 2011, a gain of 17,536. According to DOD officials, 5,855 individuals were hired using the Defense Acquisition Workforce Development Fund with other growth attributed to hiring new staff using other funding sources, moving contracted work to government employees through insourcing, and reclassifying existing DOD staff as acquisition staff. For example, DOD provided $321 million from the fund to help support increasing the size of the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), two key contract oversight organizations. Last year, we reported that DCMA officials identified a number of ways deployments of DCMA personnel in support of contingencies—which more than tripled over the past 5 years—have affected the agency’s other missions, which include providing contract administration services for DOD buying activities and working directly with defense contractors to help ensure that goods and services are delivered on time, at projected cost, and that they meet performance requirements.years given its limited workforce and growing workload. DOD continues to face challenges in strategic workforce planning for its acquisition workforce. Further, DOD’s ability to effectively execute hiring and other initiatives has been hindered by delays in the Defense Acquisition Workforce Development Fund funding process and the absence of clear guidance on the availability and use of related funds. DCAA has also faced challenges in recent Similarly, while DOD has recognized the important role that non- acquisition personnel—those outside the defense acquisition workforce— play in the acquisition process, DOD continues to face a number of challenges in ensuring that these individuals are identified and have the training and resources needed to perform their roles, in particular as contracting officer’s representatives (CORs). CORs are generally military or civilian DOD personnel that manage and oversee contracts and serve as the liaisons between the contractor, the contracting officer, and the unit receiving support or services. While the contracting officer is ultimately responsible for ensuring that contractors meet the requirements set forth in the contract, CORs serve as the eyes and ears of contracting officers. However, earlier this year, we reported that DOD has experienced challenges ensuring that (1) it has a sufficient number of CORs and (2) the CORs have the subject-matter expertise and training needed to perform their contract management and oversight duties, in particular for construction projects. DOD has taken some actions to enhance training programs to prepare CORs to manage and oversee contracts in contingency operations. For example, DOD developed a new training course for CORs, with a focus on contingency operations and developed a more general certification program for CORs, including the contingency operations course as a training requirement when it is applicable. Continued attention in this area will help DOD ensure better contract management and oversight in future contingencies. DOD’s ability to effectively leverage operational contract support in contingency environments not only depends on having effective plans in place and having a skilled acquisition and oversight workforce, but also on having appropriate tools to account for contracts and contractor personnel. These tools can provide information that DOD can use to help mitigate risks associated with relying on contractors in contingency environments, including tracking which contracts DOD has awarded, where contractor personnel are located, and whether potential vendors or contractor personnel may pose a risk to U.S. interests. Our prior work has shown that a lack of complete and accurate information on contracts and contractor personnel may inhibit planning, increase costs, and introduce unnecessary risk in contingency environments. Our work has further shown that DOD faced significant contract management challenges as a result of not having the mechanisms or tools in place to obtain and track such information at the start of operations in Iraq and Afghanistan. DOD has made efforts to develop tools to improve its ability to account for contracts and contractors, but it is not certain that these efforts will result in long-term solutions that will be available at the start of future contingencies. For example, in 2008, DOD designated the Synchronized Predeployment and Operational Tracker (SPOT) as its system for tracking specific information on certain contracts and associated personnel in Iraq and Afghanistan. While recent efforts have been made to improve SPOT’s tracking of contractor personnel, in reports issued annually since 2008, including in a report we plan to issue today, we have consistently found that DOD has lacked reliable data and systems to report on its contracts and contractor personnel in Iraq and Afghanistan. Practical and technical challenges continue to affect SPOT’s ability to fully track certain information about contracts and contractor personnel. Additionally, DOD has experienced challenges in closing out contracts partly due to the fact that the contracting organization that awarded the majority of DOD’s contracts in Iraq lacked a contract writing and management information system between 2003 and 2008. This contributed to incomplete or inaccurate information that hindered management oversight of contracting activities. Although the contracting organization adopted an automated contract writing and management information system in fiscal year 2009 that officials stated improved the quality of data, DOD announced in October 2011 its goal to phase out the use of this system in part because of challenges associated with maintaining and updating it. Similarly, we previously reported on limitations in DOD policies and procedures related to vetting vendors and ensuring that contractor personnel—particularly local nationals and third-country nationals—have been screened. These policies and procedures can help ensure that DOD will be able to take reasonable steps, in both current and future contingencies, to minimize the risks to the military posed by contractor personnel. DOD’s U.S. Central Command established a vetting cell in 2010 to vet non-U.S. vendors in Afghanistan to minimize the risk of insurgents or criminal groups using contracts to fund their operations. However, we reported in 2011 that DOD’s then-current approach for selecting vendors to vet had gaps, such as not routinely vetting contracts below a certain dollar threshold. We also reported in 2009 that the system used in Iraq and Afghanistan to screen local and third-country national contractor personnel by checking names and biometric data relied primarily upon U.S.-based databases of criminal and terrorist information, which may not be effective in screening foreign nationals who have not lived in or traveled to the United States. Without attention to improving the tools needed to effectively account for contracts and contractor personnel, DOD may continue to face similar challenges in future contingencies. Having the tools with the requisite capabilities in place before the next contingency can help military and acquisition officials properly plan for, manage, and oversee contracts and contractors in future contingencies. For the past 10 years, DOD has focused its attention on contingency operations in Iraq and Afghanistan. The challenges encountered in those contingencies highlighted the need for better strategic and operational planning when it comes to the use of operational contract support, as well as to ensure that DOD’s workforce is sufficiently trained and staffed and has the tools needed to effectively account for contracts and contractors. As reflected in the Secretary’s January 2011 memorandum regarding operational contract support, DOD leadership has recognized that it is imperative for the department to learn from these experiences while they are still fresh and to set forth a commitment to encourage cultural change with respect to operational contract support throughout the department. We agree. The challenge for DOD is to sustain this effort over the long term, as effecting a cultural change is by no means easy and takes time. It will take the sustained commitment by DOD leadership to ensure that they continue down the path that they have set out for the department. As DOD’s current efforts in Afghanistan draw closer to a conclusion and DOD turns its attention to other challenges, DOD needs to guard against allowing the lessons from Iraq and Afghanistan to be forgotten. Focusing on the areas my statement highlighted today will better position DOD to effectively use contractors in future contingencies. Chairman McKeon, Ranking Member Smith, and Members of the Committee, this concludes my prepared statement. I would be happy to answer any questions that you may have at this time. For further information regarding this testimony, please contact Timothy J. DiNapoli at (202) 512-4841 or dinapolit@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 testimony are Alissa Czyz, Assistant Director; Johana Ayers; Rajiv D’Cruz; Melissa Hermes; Mae Jones; Anne McDonough- Hughes; Cary Russell; Michael Shaughnessy; Yong Song; and Alyssa Weir. The following is a list of related products. For a full list of the most recent publications related to Iraq and Afghanistan, see http://www.gao.gov/docsearch/featured/oif.html. Iraq and Afghanistan: Agencies Are Taking Steps to Improve Data on Contracting but Need to Standardize Reporting. GAO-12-977R (Washington, D.C.: Sept. 12, 2012). Iraq and Afghanistan: State and DOD Should Ensure Interagency Acquisitions Are Effectively Managed and Comply with Fiscal Law. GAO-12-750 (Washington, D.C.: Aug. 2, 2012). Contingency Contracting: Agency Actions to Address Recommendations by the Commission on Wartime Contracting in Iraq and Afghanistan. GAO-12-854R (Washington, D.C.: Aug. 1, 2012). Defense Acquisition Workforce: Improved Processes, Guidance, and Planning Needed to Enhance Use of Workforce Funds. GAO-12-747R (Washington, D.C.: June 20, 2012). Operational Contract Support: Management and Oversight Improvements Needed in Afghanistan. GAO-12-290 (Washington, D.C.: Mar. 29, 2012). Acquisition Workforce: DOD’s Efforts to Rebuild Capacity Have Shown Some Progress. GAO-12-232T (Washington, D.C.: Nov.16, 2011). Defense Contract Management Agency: Amid Ongoing Efforts to Rebuild Capacity, Several Factors Present Challenges in Meeting Its Missions. GAO-12-83 (Washington, D.C.: Nov. 3, 2011). Defense Acquisition Workforce: Better Identification, Development, and Oversight Needed for Personnel Involved in Acquiring Services. GAO-11-892 (Washington, D.C.: Sept. 28, 2011). Contingency Contracting: Improved Planning and Management Oversight Needed to Address Challenges with Closing Contracts. GAO-11-891 (Washington, D.C.: Sept. 27, 2011). Iraq Drawdown: Opportunities Exist to Improve Equipment Visibility, Contractor Demobilization, and Clarity of Post-2011 DOD Role. GAO-11-774 (Washington, D.C.: Sept. 16, 2011). Iraq and Afghanistan: DOD, State, and USAID Cannot Fully Account for Contracts, Assistance Instruments, and Associated Personnel. GAO-11-886 (Washington, D.C.: Sept. 15, 2011). Operational Contract Support: Actions Needed to Address Contract Oversight and Vetting of Non-U.S. Vendors in Afghanistan. GAO-11-771T (Washington, D.C.: June 30, 2011). Afghanistan: U.S. Efforts to Vet Non-U.S. Vendors Need Improvement. GAO-11-355 (Washington, D.C.: June 8, 2011). Contingency Contracting: Observations on Actions Needed to Address Systemic Challenges. GAO-11-580 (Washington, D.C.: Apr. 25, 2011). Iraq and Afghanistan: DOD, State, and USAID Face Continued Challenges in Tracking Contracts, Assistance Instruments, and Associated Personnel. GAO-11-1 (Washington, D.C.: Oct. 1, 2010). Warfighter Support: Cultural Change Needed to Improve How DOD Plans for and Manages Operational Contract Support. GAO-10-829T (Washington, D.C.: June 29, 2010). Operation Iraqi Freedom: Actions Needed to Facilitate the Efficient Drawdown of U.S. Forces and Equipment from Iraq. GAO-10-376 (Washington, D.C: Apr. 19, 2010). Contingency Contracting: Improvements Needed in Management of Contractors Supporting Contract and Grant Administration in Iraq and Afghanistan. GAO-10-357 (Washington, D.C.: Apr. 12, 2010). Warfighter Support: DOD Needs to Improve Its Planning for Using Contractors to Support Future Military Operations. GAO-10-472 (Washington, D.C.: Mar. 30, 2010). Iraq and Afghanistan: Agencies Face Challenges in Tracking Contracts, Grants, Cooperative Agreements, and Associated Personnel. GAO-10-509T (Washington, D.C.: Mar. 23, 2010). Warfighter Support: Continued Actions Needed by DOD to Improve and Institutionalize Contractor Support in Contingency Operations. GAO-10-551T (Washington, D.C.: Mar. 17, 2010). Contingency Contracting: DOD, State, and USAID Continue to Face Challenges in Tracking Contractor Personnel and Contracts in Iraq and Afghanistan. GAO-10-1 (Washington, D.C.: Oct. 1, 2009). Contingency Contract Management: DOD Needs to Develop and Finalize Background Screening and Other Standards for Private Security Contractors. GAO-09-351 (Washington, D.C.: July 31, 2009). Contingency Contracting: DOD, State, and USAID Contracts and Contractor Personnel in Iraq and Afghanistan. GAO-09-19 (Washington, D.C.: Oct. 1, 2008). Defense Management: DOD Needs to Reexamine Its Extensive Reliance on Contractors and Continue to Improve Management and Oversight. GAO-08-572T (Washington, D.C.: Mar. 11, 2008). This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. 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Summary: DOD has relied heavily on contractors to support its operations in Iraq and Afghanistan and is likely to continue to depend on contractors in future operations. For over 15 years, GAO has made recommendations intended to improve DOD's ability to manage and oversee operational contract support in deployed locations, which DOD has taken some actions to address. GAO has called for a cultural change within DOD to emphasize the importance of institutionalizing operational contract support across the department. As DOD's current efforts in Afghanistan draw closer to a conclusion and DOD turns its attention to other challenges, the department needs to guard against allowing the lessons from Iraq and Afghanistan to be forgotten. This testimony addresses three areas where sustained leadership is needed if DOD is to effectively prepare for the next contingency. These areas pertain to (1) planning for the use of operational contract support, (2) ensuring that DOD possesses the workforce needed to effectively manage and oversee contracts and contractors, and (3) improving DOD's ability to account for contracts and contractors. This statement is drawn from GAO's broad body of work on DOD's efforts to plan for operational contract support and manage and account for contractors in Iraq and Afghanistan--including work reflected in GAO's February 2011 high-risk update, GAO's related testimonies, and GAO's recent reports on operational contract support and other contracting issues. Future overseas contingencies are inherently uncertain, but effective planning for operational contract support can help reduce the risks posed by those uncertainties. The Department of Defense (DOD) has made an effort to emphasize the importance of operational contract support at the strategic level through new policy and guidance and ongoing efforts. For example, in January 2011, the Secretary of Defense issued a memorandum outlining actions and indicating a need to influence a cultural shift in how the department manages contracted support in a contingency environment. DOD has also recognized the need to translate strategic requirements into plans at the operational level, but GAO's past work has shown that DOD's progress in anticipating contractor support in sufficient detail in operation plans has been slow. As a result, DOD has risked not fully understanding the extent to which it will be relying on contractors to support combat operations and being unprepared to provide the necessary management and oversight of deployed contractor personnel. One way to help address this risk is to ensure military commanders and senior leaders are cognizant of the roles contractors have in supporting DOD's efforts and the role that military personnel have in managing and overseeing contractors. While DOD has taken steps to develop additional training, we have reported that commanders and senior leaders are not required to take these courses before assuming their contract management roles and responsibilities. In contingencies, DOD relies on a wide range of individuals to play critical roles in defining requirements, overseeing contractors, and helping to ensure that the warfighter receives the goods and services needed in a timely manner. GAO and others have identified numerous instances in Iraq and Afghanistan where these individuals were in short supply, were not properly trained, or were not fully aware of their responsibilities. DOD leadership has recognized the need to rebuild, train, and support a highly qualified and knowledgeable acquisition workforce. While DOD has made some progress in growing the workforce, it continues to face challenges in its strategic planning efforts. Further, in March 2012, GAO reported that although DOD had taken steps to enhance training for oversight personnel, the department continued to experience challenges ensuring that it had a sufficient number of oversight personnel with the subject-matter expertise and training needed to perform their contract management and oversight duties in Afghanistan. DOD's ability to effectively leverage operational contract support in contingency environments also depends on having appropriate tools to account for contracts and contractor personnel. These tools can provide information that DOD can use to help mitigate risks, including tracking which contracts DOD has awarded, where contractor personnel are located, and whether potential vendors or contractor personnel may pose a potential risk to U.S. interests. DOD has made efforts to develop such tools, but it is not certain that these efforts will result in long-term solutions. For example, while DOD has designated a system for tracking specific information on certain contracts and associated personnel in Iraq and Afghanistan, the department lacks reliable data sources to report on its contracts and contractor personnel. Without attention to improving the tools needed to effectively account for contracts and contractor personnel, DOD may continue to face challenges in future contingencies.