Section 861 of the NDAA for FY2008 directed the Secretary of Defense, the Secretary of State, and the USAID Administrator to sign a memorandum of understanding (MOU) related to contracting in Iraq and Afghanistan. The law specified a number of issues to be covered in the MOU, including the identification of common databases to serve as repositories of information on contract and contractor personnel. The NDAA for FY2008 required the databases to track at a minimum: a brief description of the contract, its total value, and whether it was awarded competitively, and for contractor personnel working under contracts in Iraq or Afghanistan, total number employed, total number performing security functions, and total number who have been killed or wounded. In July 2008, DOD, State, and USAID signed an MOU in which they agreed the Synchronized Predeployment and Operational Tracker (SPOT) would be the system of record for the statutorily-required contract and contractor personnel information. The MOU specified SPOT would include information on DOD, State, and USAID contracts with more than 14 days of performance in Iraq or Afghanistan or valued at more than the simplified acquisition threshold, which the MOU stated was $100,000, as well as information on the personnel working under those contracts. While DOD is responsible for all maintenance and upgrades to the SPOT database, each agency agreed in the MOU to ensure that data elements related to contractor personnel, such as the number of personnel employed on each contract in Iraq or Afghanistan, are accurately entered into SPOT by its contractors. SPOT is designed to track contractor personnel by name and record information such as the contracts they are working under, deployment dates, and next of kin. Contract data elements, such as value and extent of competition, are to be imported into SPOT from the Federal Procurement Data System – Next Generation (FPDS- NG), the federal government’s system for tracking information on contracting actions. The need for information on contracts and contractor personnel to inform decisions and oversee contractors is critical given DOD, State, and USAID’s extensive reliance on contractors to support and carry out their missions in Iraq and Afghanistan. We have reported extensively on the management and oversight challenges of using contractors to support contingency operations and the need for decision makers to have accurate, complete, and timely information as a starting point to address those challenges. Although much of our prior work has focused on DOD, the lessons learned can be applied to other agencies relying on contractors to help carry out their missions. The agencies’ lack of complete and accurate information on contractors supporting contingency operations may inhibit planning, increase costs, and introduce unnecessary risk, as illustrated in the following examples: Limited visibility over contractors obscures how extensively agencies rely on contractors to support operations and help carry out missions. In our 2006 review of DOD contractors supporting deployed forces, we reported that a battalion commander in Iraq was unable to determine the number of contractor-provided interpreters available to support his unit. Such a lack of visibility can create challenges for planning and carrying out missions. Further, knowledge of who is on their installation, including contractor personnel, helps commanders make informed decisions regarding force protection and account for all individuals in the event of hostile action. Without incorporating information on contractors into planning efforts, agencies risk making uninformed programmatic decisions. As we noted in our 2004 and 2005 reviews of Afghanistan reconstruction efforts, when developing its interim development assistance strategy, USAID did not incorporate information on the contractor resources required to implement the strategy. We determined this impaired USAID’s ability to make informed decisions on resource allocations for the strategy. A lack of accurate financial information on contracts impedes agencies’ ability to create realistic budgets. As we reported in July 2005, despite the significant role of private security providers in enabling Iraqi reconstruction efforts, neither State, DOD, nor USAID had complete data on the costs associated with using private security providers. Agency officials acknowledged such data could help them identify security cost trends and their impact on the reconstruction projects, as increased security costs resulted in the reduction or cancellation of some projects. Lack of insight into the contract services being performed increases the risk of paying for duplicative services. In the Balkans, where billions of dollars were spent for contractor support, we found in 2002 that DOD did not have an overview of all contracts awarded in support operations. Until an overview of all contractor activity was obtained, DOD did not know what the contractors had been contracted to do and whether there was duplication of effort among the contracts that had been awarded. Costs can increase due to a lack of visibility over where contractors are deployed and what government support they are entitled to. In our December 2006 review of DOD’s use of contractors in Iraq, an Army official estimated that about $43 million was lost each year to free meals provided to contractor employees at deployed locations who also received a per diem food allowance. Many recommendations from our prior work on contractors supporting contingency operations focused on increasing agencies’ ability to track contracts and contractor personnel so that decision makers—whether out in the field or at headquarters—can have a clearer understanding of the extent to which they rely on contractors, improve planning, and better account for costs. While actions have been taken to address our recommendations, DOD, State, and USAID officials have told us that their ability to access information on contracts and contractor personnel to inform decisions still needs improvement. Specifically, information on contracts and the personnel working on them in Iraq and Afghanistan may reside solely with the contractors, be stored in a variety of data systems, or exist only in paper form in scattered geographical regions. These officials indicated that the use of SPOT has the potential to bring some of this dispersed information together so that it can be used to better manage and oversee contractors. DOD, State, and USAID have made progress in implementing SPOT. However, as we reported last month, DOD, State, and USAID’s on-going implementation of SPOT currently falls short of providing agencies with information that would help facilitate oversight and inform decision making, as well as fulfill statutory requirements. Specifically, we found that the agencies have varying criteria for deciding which contractor personnel are entered into the system and, as a result, not all required contractor personnel have been entered. While the agencies have used other approaches to obtain personnel information, such as periodic contractor surveys, these approaches have provided incomplete data that should not be relied on to identify trends or draw conclusions. In addition, SPOT, which was intended to serve as a central repository of information on contracts performed in Iraq or Afghanistan, currently lacks the capability to track required contract information as agreed to in the MOU. DOD, State, and USAID have been phasing in the MOU requirement to use SPOT to track information on contracts and the personnel working on them in Iraq and Afghanistan. In January 2007, DOD designated SPOT as its primary system for collecting data on contractor personnel deployed with U.S. forces and directed contractor firms to enter personnel data for contracts performed in Iraq and Afghanistan. State started systematically entering information for both Iraq and Afghanistan into SPOT in November 2008. In January 2009, USAID began requiring contractors in Iraq to enter personnel data into SPOT. However, USAID has not yet imposed a similar requirement on its contractors in Afghanistan and has no time frame for doing so. In implementing SPOT, DOD, State, and USAID’s criteria for determining which contractor personnel are entered into SPOT varied and were not consistent with those contained in the MOU, as the following examples illustrate: Regarding contractor personnel in Iraq, DOD, State, and USAID officials stated the primary factor for deciding to enter contractor personnel into SPOT was whether a contractor needed a SPOT- generated letter of authorization (LOA). However, not all contractor personnel, particularly local nationals, in Iraq need LOAs and agency officials informed us that such personnel were not being entered into SPOT. For Afghanistan, DOD offices varied in their treatment of which contractor personnel should be entered into SPOT. Officials with one contracting office stated the need for an LOA determined whether someone was entered into SPOT. As a result, since local nationals generally do not need LOAs, they are not in SPOT. In contrast, DOD officials with another contracting office stated they follow DOD’s 2007 guidance on the use of SPOT. According to that guidance, contractor personnel working on contracts in Iraq and Afghanistan with more than 30 days of performance and valued over $25,000 are to be entered into SPOT—as opposed to the MOU threshold of 14 days of performance or a value over $100,000. These varying criteria and practices stem, in part, from differing views on the agencies’ need to collect and use data on certain contracts and the personnel working on them. For example, some DOD officials we spoke with questioned the need to track contractor personnel by name as opposed to their total numbers given the cost of collecting detailed data compared to the benefit of having this information. However, DOD officials informed us that the agencies did not conduct any analyses of what the appropriate threshold should be for entering information into SPOT given the potential costs and benefits of obtaining such information prior to establishing the MOU requirements. As a result of the varying criteria, the agencies do not have an accurate or consistent picture of the total number of contractor personnel in Iraq and Afghanistan. Although officials from all three agencies expressed confidence that SPOT data were relatively complete for contractor personnel who need LOAs, they acknowledged SPOT does not fully reflect the number of local nationals working on their contracts. Agency officials further explained ensuring SPOT contains information on local nationals is challenging because their numbers tend to fluctuate due to the use of day laborers and local firms do not always track the individuals working for them. Absent robust contractor personnel data in SPOT, DOD, State, and USAID have relied on surveys of their contractors to obtain information on the number of contractor personnel.