oversight

Contingency Contracting: Agency Actions to Address Recommendations by the Commission on Wartime Contracting in Iraq and Afghanistan

Published by the Government Accountability Office on 2012-08-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States Government Accountability Office
Washington, DC 20548


   August 1, 2012

   The Honorable Claire McCaskill
   Chairman
   The Honorable Kelly Ayotte
   Ranking Member
   Subcommittee on Readiness and Management Support
   Committee on Armed Services
   United States Senate

   The Honorable Jim Webb
   United States Senate

   Subject: Contingency Contracting: Agency Actions to Address Recommendations by the
   Commission on Wartime Contracting in Iraq and Afghanistan

   Over the past decade, the Department of Defense (DOD), Department of State (State), and U.S.
   Agency for International Development (USAID) have relied extensively on contractors to help
   carry out their missions in Iraq and Afghanistan. Between fiscal year 2002 and fiscal year 2011,
   these agencies reported combined obligations of approximately $159 billion for contracts with a
   principal place of performance in either country. Contractor personnel have provided a range of
   services related to supporting troops and civilian personnel and to overseeing and carrying out
   reconstruction efforts, such as interpretation, security, weapon systems maintenance,
   intelligence analysis, facility operations support, advice to Iraqi and Afghan ministries, and road
   and infrastructure construction. The use of contractors in contingency operations such as these
   is not new, but the number of contractors and the type of work they are performing in Iraq and
   Afghanistan represent an increased reliance on contractors to support agency missions.

   Congress established the Commission on Wartime Contracting in Iraq and Afghanistan (CWC)
   in 2008 to assess contracting in Iraq and Afghanistan and provide recommendations to
   Congress to improve the contracting process. 1 The CWC was directed by Congress to assess
   contracting in Iraq and Afghanistan for reconstruction, logistics, and security functions; examine
   the extent of waste, fraud, and abuse; and provide recommendations to Congress to improve
   various aspects of contingency contracting, including defining requirements and identifying,
   addressing, and providing accountability for waste, fraud, and abuse.

   Led by six commissioners appointed by congressional leadership and two commissioners
   appointed by the president, the CWC conducted its work between 2008 and 2011. 2 In a series
   of interim and special reports and in a culminating final report, the CWC made multiple




   1
       National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 841.
   2
       The CWC ceased operations on September 30, 2011, 30 days after issuing its final report.



            Page 1                                                     GAO-12-854R Contingency Contracting
recommendations about contracting practices in current and future contingency environments. 3
The recommendations in the final report were organized into 15 strategic areas related to
improvements in contingency contracting. Some recommendations were made specifically to
DOD, State, USAID; others were made to Congress; and the remaining recommendations were
not made to a specific entity. Only one recommendation from the final report included a date by
which implementation should be completed, with the CWC noting that some reforms will take
many years for agencies to fully implement because of the complexity of the issues involved.

DOD, State, and USAID have taken different management approaches for addressing the
CWC’s recommendations. For example, at DOD, the Under Secretary of Defense (Acquisition,
Technology, and Logistics) established a senior-level board that used a formal process for
determining which recommendations DOD would address and assigning responsibility for
addressing them to specific DOD offices. The board also monitors the status of efforts to
implement the recommendations. At State, officials told us that the Office of the Under
Secretary for Management has general responsibility for coordinating the department’s efforts to
address the CWC’s recommendations. These officials explained that when the CWC’s final
report was issued, the Office of the Under Secretary for Management assigned responsibility to
bureaus and offices with related portfolios for determining and reporting on how the department
was addressing the recommendations at a strategic level. They explained, however, that State
does not have a formal process for assigning responsibility for or monitoring the implementation
of the specific recommendations. USAID has taken a decentralized approach to the CWC
recommendations. The agency does not have an office designated for addressing or monitoring
the efforts to address the CWC’s recommendations. According to a senior USAID official, the
Office of Acquisition and Assistance is responsible for addressing recommendations related to
agencywide procurement policy. However, USAID officials explained that efforts to respond to
other CWC recommendations are more appropriately addressed at the individual mission level,
as each country has specific needs and circumstances.

In response to your request, we determined whether DOD, State, and USAID have taken or
planned actions that directly align with recommendations the CWC made in its final and last two
special reports—including those recommendations directed to one or more of the agencies and
those recommendations not directed to a specific entity but that one or more of the agencies
considered applicable to them. We also described agency positions on recommendations the
CWC made to Congress when the agencies provided their positions to us.

For our review, we analyzed the CWC’s final report and last two special reports to identify the
total number of recommendations made. That total comprises the (1) 48 recommendations that
the CWC made in the August 2011 final report, some of which were based on recommendations
the CWC made in its interim and special reports and (2) 3 recommendations that the CWC
made in Special Report 4 (issued in March 2011) that related to the transition to a civilian-led



3
 Commission on Wartime Contracting in Iraq and Afghanistan, Interim Report—At What Cost? Contingency
Contracting in Iraq and Afghanistan (June 10, 2009); Interim Report 2—At What Risk? Correcting Over-Reliance on
Contractors in Contingency Operations (Feb. 24, 2011); Special Report 1: Defense Agencies Must Improve Their
Oversight of Contractor Business Systems to Reduce Waste, Fraud, and Abuse (Sept. 21, 2009); Special Report 2:
Lowest-Priced Security Not Good Enough for War-Zone Embassies (Oct. 1, 2009); Special Report 3: Better Planning
for Defense-to-State Transition in Iraq Needed to Avoid Mistakes and Waste (July 12, 2010); Special Report 4: Iraq—
A Forgotten Mission? (Mar. 1, 2011); Special Report 5: Sustainability: Hidden Costs Risk New Waste (June 3, 2011);
and Transforming Wartime Contracting: Controlling Costs, Reducing Risks, Final Report to Congress (Aug. 31,
2011).




      Page 2                                                     GAO-12-854R Contingency Contracting
presence in Iraq. 4 Of these 51 total recommendations, 19 were directed to DOD, State, and/or
USAID; 15 were directed to Congress; and 17 were not directed to a specific entity. For the
recommendations not directed to a specific entity, we relied on each agency to identify which
recommendations were applicable to it. In total, 30 recommendations were identified as
applicable to DOD; 27 as applicable to State; and 25 as applicable to USAID. We did not
evaluate the CWC’s recommendations; our focus was on the actions the agencies took related
to the recommendations. Specifically, we categorized the agencies’ respective efforts to
address each applicable recommendation as either (1) “actions taken or planned that directly
align with the specific recommendation” or (2) “no actions taken or planned that directly align
with the specific recommendation.” To determine whether each agency had taken or planned
actions that directly aligned with each applicable recommendation, we collected the agencies’
self-reported information using a data collection template; corroborated reported actions with
related documentation, when available; and conducted structured interviews with
knowledgeable agency officials to clarify responses. We categorized the agencies’ efforts as
“actions taken or planned that directly align with the specific recommendation” even when the
agencies’ actions (1) were started or completed before the issuance of the CWC’s final or last
two special reports or (2) only partially addressed the recommendation, such as when an
agency took an action that directly aligned with the recommendation in either Iraq or
Afghanistan but not agencywide, or when an agency took an action that directly aligned with a
portion of a recommendation but did not address another portion of the recommendation. For
instances in which agencies reported not having taken or planned actions that directly align with
a specific recommendation, we documented the rationale for this course of action and reviewed
available documentation. However, we did not assess the appropriateness or sufficiency of any
actions taken or planned by the agencies. Finally, we did not assess the agencies’ positions on
the CWC’s recommendations to Congress, although we included the agencies’ positions on
those recommendations when the agencies provided them to us.

We conducted this performance audit from February 2012 to August 2012 in accordance with
generally accepted government auditing standards. These standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.

In summary, DOD reported having taken or planned actions that directly align with about half of
the CWC recommendations applicable to it, and State and USAID each reported having taken
or planned actions that directly align with about one-third of the recommendations applicable to
each of them. Officials from the three agencies explained that for the remaining
recommendations no actions were taken or planned that directly aligned with the specific
recommendation. This was because, for example, the agencies had determined that existing
policies or practices already meet the intent of the recommendations or had disagreed with the
recommendations. The following are examples of actions that DOD, State, and USAID have
taken or planned that directly align with specific CWC recommendations:

•   DOD issued a final rule to amend the Defense Federal Acquisition Regulation Supplement
    (DFARS) in February 2012 to improve the oversight of contractor business systems,
    including the ability to withhold a percentage of payments on certain covered contracts when
    a contractor’s business systems contain significant deficiencies. This action aligns with the


4
 The recommendations from the CWC’s Special Report 5 were incorporated into the final report. Therefore, we have
not counted recommendations from Special Report 5 separately.



      Page 3                                                    GAO-12-854R Contingency Contracting
       CWC’s recommendation to strengthen authority to withhold contract payments for
       inadequate business systems. 5
•      State issued guidance in October 2011 describing a process for drafting a determination
       memorandum each time the potential need to suspend or debar a contractor arises,
       including for those cases in which no action against the contractor is ultimately
       recommended. This guidance aligns with a CWC recommendation to strengthen
       enforcement tools by requiring a written rationale for not pursuing a proposed suspension
       and debarment. 6
•      USAID issued guidance in January 2012 that requires sustainability analysis for all projects
       and developed a tool that contains questions, issues, and examples to help USAID project
       design teams think through project sustainability objectives and maximize sustainable
       outcomes. This guidance aligns with a CWC recommendation related to project
       sustainability (i.e., ensuring that host nations will be able to operate and maintain U.S.-
       funded projects on their own). 7

The following are examples of instances in which DOD, State, and USAID reported not having
taken or planned actions that directly align with specific CWC recommendations:

•      The three agencies generally have not and do not plan to elevate the positions and expand
       the authority of officials responsible for contingency contracting as recommended by the
       CWC. Officials from DOD, State, and USAID explained that they regard existing
       organizational structures as meeting the recommendations’ intent. For example, DOD
       officials stated that the CWC’s recommendation to create a new directorate for contingency
       contracting is not needed because DOD already has a significant amount of senior
       leadership involvement and support for operational contract support. Similarly, State officials
       stated that there were no plans to establish a separate bureau led by an Assistant Secretary
       for Acquisition as recommended by the CWC because their current organizational structure,
       in which contingency contracting is overseen by the Assistant Secretary for Administration in
       coordination with the Under Secretary for Management, is sufficient to meet the
       department’s needs. USAID officials stated that there were no plans to make the chief
       acquisition officer position a non-career appointment as recommended because they believe
       that having a career foreign service officer in that role provides the necessary knowledge of
       the agency’s unique mission and acquisition needs.
•      None of the three agencies agree with the recommendation requiring performance
       incentives and performance assessments as tools for preventing human trafficking by
       contractors. Officials from each agency explained that contractors should not need
       incentives to comply with anti-trafficking laws and other ongoing initiatives, such as training
       for contract administration personnel, were better tools to help combat human trafficking.

In enclosure I, we list the 51 CWC recommendations and describe and categorize DOD’s,
State’s, and USAID’s specific efforts to address each applicable recommendation as either
(1) “actions taken or planned that directly align with the specific recommendation” or (2) “no
actions taken or planned that directly align with the specific recommendation.” We also


5
    DFARS; Business Systems-Definition and Administration (Case 2009-D038). 77 Fed. Reg. 11,355 (Feb. 24, 2012).
6
 Department of State Office of the Procurement Executive, Procurement Information Bulletin 2012-01, Contractor
Suspension and Debarment, October 3, 2011.
7
 USAID Automated Directives System Section 200.3.1.5, Policy Directives and Required Procedures, Build in
Sustainability from the Start (Feb. 10. 2012).




         Page 4                                                  GAO-12-854R Contingency Contracting
summarize the positions provided by the agency for these recommendations and for the
recommendations to Congress for which the agencies provided positions.

Agency Comments

We requested comments on a draft of this report from DOD, State, and USAID. The three
agencies informed us that they had no comments on the draft’s findings and provided us with
technical comments that we incorporated into the final report as appropriate.




We are sending copies of this report to the Secretary of Defense, the Secretary of State, and
the Administrator of the U.S. Agency for International Development, as well as interested
congressional committees. In addition, the report will be available at no charge on the GAO
website at http://www.gao.gov.

If you or your staff have any questions, please contact us at (202) 512-4841 or huttonj@gao.gov
or (202) 512-5431 or russellc@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report. Key contributors to this
report are listed in enclosure II.




John P. Hutton
Director
Acquisition and Sourcing Management




Cary B. Russell
Acting Director
Defense Capabilities and Management




Enclosures—2




     Page 5                                            GAO-12-854R Contingency Contracting
Enclosure I: Summary of Agency Actions Related to Commission on Wartime
Contracting Recommendations

Between March 2011 and August 2011 the Commission on Wartime Contracting in Iraq and
Afghanistan (CWC) issued two special reports and a culminating final report to Congress,
making multiple recommendations about contracting practices in current and future contingency
environments. 8 In the March 2011 Special Report 4, the CWC addresses the transition to a
civilian-led presence in Iraq and makes 3 recommendations. In August 2011, the CWC issued
its final report in which it built on recommendations made in the interim and special reports it
had issued since 2009, including recommendations made in Special Report 5, which it issued in
June 2011. 9 In the final report, the CWC made 48 recommendations across 15 strategic areas.
Of the 51 total recommendations that the CWC made in Special Report 4 and in the final report,
19 were directed to the Department of Defense (DOD), the Department of State (State), and/or
the U.S. Agency for International Development (USAID); 15 were directed to Congress; and the
remaining 17 were not directed to a specific entity. For the recommendations not directed to a
specific entity, we relied on each agency to identify which recommendations were applicable to
it. In total, 30 recommendations were identified as applicable to DOD; 27 as applicable to State;
and 25 as applicable to USAID.

In this enclosure, we summarize the actions that DOD, State, and USAID took that are related
to the CWC recommendations. We did not evaluate the CWC’s recommendations; our focus
was on the actions the agencies took related to the recommendations. Specifically, we
categorize the agencies’ efforts as either: (1) “actions taken or planned that directly align with
the specific recommendation” or (2) “no actions taken or planned that directly align with the
specific recommendation.” To determine whether each agency had taken or planned actions
that directly aligned with each applicable recommendation, we collected the agencies’ self-
reported information using a data collection template; corroborated reported actions with related
documentation, when available; and conducted structured interviews with knowledgeable
agency officials to clarify responses. We categorized the agencies’ efforts as “actions taken or
planned that directly align with the specific recommendation” even when the agencies’ actions
(1) were started or completed before the issuance of the CWC’s final or last two special reports
or (2) only partially addressed the recommendation, such as when an agency took an action
that directly aligned with the recommendation in either Iraq or Afghanistan but not agencywide,
or when an agency took an action that directly aligned with a portion of a recommendation but
did not address another portion of the recommendation. For instances in which agencies
reported not having taken or planned actions that directly align with a specific recommendation,
we documented the rationale for this course of action and reviewed available documentation.
However, we did not assess the appropriateness or sufficiency of any actions taken or planned
by the agencies. We also summarize any agency positions on recommendations the CWC
made to Congress if they were provided to us, but we did not assess these positions.


8
 Commission on Wartime Contracting in Iraq and Afghanistan, Special Report 4: Iraq—A Forgotten Mission? (Mar. 1,
2011); Special Report 5: Sustainability: Hidden Costs Risk New Waste (June 3, 2011); and Transforming Wartime
Contracting: Controlling Costs, Reducing Risks, Final Report to Congress (Aug. 31, 2011).
9
 Commission on Wartime Contracting in Iraq and Afghanistan, Interim Report—At What Cost? Contingency
Contracting in Iraq and Afghanistan (June 10, 2009); Interim Report 2—At What Risk? Correcting Over-Reliance on
Contractors in Contingency Operations (Feb. 24, 2011); Special Report 1: Defense Agencies Must Improve Their
Oversight of Contractor Business Systems to Reduce Waste, Fraud, and Abuse (Sept. 21, 2009); Special Report 2:
Lowest-Priced Security Not Good Enough for War-Zone Embassies (Oct. 1, 2009); Special Report 3: Better Planning
for Defense-to-State Transition in Iraq Needed to Avoid Mistakes and Waste (July 12, 2010).




      Page 6                                                   GAO-12-854R Contingency Contracting
In tables 1 through 15, below, we:
    • list the 48 recommendations the CWC made in its final report, grouped by the
        15 strategic areas identified by the CWC;
    • note the entity to which the recommendation is directed;
    • indicate when a recommendation is not applicable to a particular agency, either because
        the recommendation was directed to Congress, the recommendation was specifically
        directed to another agency, or the agency reported the recommendation was not
        applicable to it; and
    • summarize related information provided by the agencies.



Table 1: CWC Strategic Area 1—Use Risk Factors in Deciding whether to Contract in Contingencies

Recommendation                               DOD                                State                              USAID
directed to agency heads
involved in a contingency
1a                                Actions taken or planned         No actions taken or planned        No actions taken or planned
Issue and ensure                 that directly align with the       that directly align with the       that directly align with the
implementation of policy         specific recommendation            specific recommendation            specific recommendation
guidance for using risk         DOD has issued guidance for        State officials did not identify   USAID officials did not identify
factors such as those listed    operational contract support       actions taken or planned that      actions taken or planned that
above, as well as those         planning applicable to             directly align with this           directly align with this
described in the Office of      contingency settings,              recommendation but stated          recommendation. According
Federal Procurement Policy      providing for risk assessments     that existing guidance and         to USAID officials, the agency
(OFPP) draft policy letter of   as part of the operational         practice meets the intent.         is reviewing its policies on
March 2010 and                  planning process. Specifically,    State issued guidance in May       inherently governmental
Department of Defense           considerations for contracting     2012 on inherently                 functions in light of the OFPP
Instruction 1100.22 to          risks, such as proper vetting,     governmental functions that        policy letter. However, USAID
provide guidance on what        are included in joint doctrine     the department considers           officials stated that they do
                                                        b
functions are appropriate to    and DOD instructions. DOD          applicable to both non-            not expect any changes to
contract for in a               also established the Joint         contingency and contingency        their policies will be specific to
                    a
contingency setting             Contingency Acquisition            contracting, although the          contingency settings.
                                Support Office in part to assist   guidance does not directly
                                combatant commands in              address the risk factors cited
                                                                                  c
                                planning for and assessing         by the CWC. Department
                                risk of contracted support.        officials further noted that
                                                                   measures have been
                                                                   incorporated into contract
                                                                   terms and operating
                                                                   procedures that address risk
                                                                   factors. For example, State
                                                                   officials noted that the
                                                                   department’s Worldwide
                                                                   Protective Services contract,
                                                                   awarded in September 2010,
                                                                   includes contract terms, such
                                                                   as standards of conduct and
                                                                   training, aimed at improving
                                                                   professionalism and lessening
                                                                   the risk of offending the
                                                                   sensibilities of the local
                                                                   population.




       Page 7                                                        GAO-12-854R Contingency Contracting
1b                                 Actions taken or planned         No actions taken or planned        No actions taken or planned
Provide funding and               that directly align with the       that directly align with the       that directly align with the
direction for agencies            specific recommendation            specific recommendation            specific recommendation
involved in contingency          DOD officials stated that the      State officials did not identify   USAID officials did not identify
operations to identify a         department established a           actions taken or planned that      actions taken or planned that
trained, experienced, and        working group in February          directly align with this           directly align with this
deployable cadre for             2012 to address deployable         recommendation but stated          recommendation but stated
stabilization-and-               cadre manpower                     that the department’s existing     that the agency’s existing
reconstruction functions in      requirements using civilians in    organizational structure meets     organizational structure meets
areas of contingency             support of contingency             the intent. State identified its   the intent. Specifically, a
operations so that the           operations. The goal is for this   establishment of the Bureau        senior official noted that
government has an                civilian workforce to be pre-      of Conflict and Stabilization      USAID’s Bureau for
alternative to contracting for   identified, trained, cleared,      Operations in November 2011        Democracy and Humanitarian
performance of critical or       equipped, and ready to deploy      to focus on conflict               Assistance’s Office of Civilian
sensitive functions              to the extent practical in         prevention, crisis response,       Response provides for
                                 support of combat operations       and stabilization activities as    reconstruction and
                                 by the military; contingencies;    responsive to the                  stabilization support.
                                 emergency operations;              recommendation, although
                                 humanitarian missions;             officials noted that State does
                                 disaster relief; restoration of    not plan to formally establish
                                 order; drug interdiction; and      a deployable cadre as
                                 stability operations.              recommended by the CWC.
                                 Implementation of this civilian    State officials added that they
                                 program model is set to begin      do not believe that the
                                 in fiscal year 2013.               department’s contracting for
                                                                    support in Iraq or Afghanistan
                                                                    has resulted in a loss of
                                                                    organic capability.




       Page 8                                                         GAO-12-854R Contingency Contracting
1c                                 Actions taken or planned          No actions taken or planned        No actions taken or planned
Provide a strategic plan for      that directly align with the        that directly align with the       that directly align with the
deploying these cadres that       specific recommendation             specific recommendation            specific recommendation
includes provisions for          DOD officials stated that the       State officials did not identify   USAID officials did not identify
mandatory deployability of       development of this strategic       actions taken or planned that      actions taken or planned that
civilian members, and is         plan would be considered as         directly align with this           directly align with this
supported by a back-up           part of the related effort          recommendation but stated          recommendation but stated
capability for rapidly making    identified above in 1b.             that the department’s existing     that the agency’s existing
temporary hires for large-                                           practices meet the intent.         organizational structure meets
scale or long-term                                                   State officials noted that while   the intent. Specifically, a
contingency operations                                               the department is not              senior official noted that
                                                                     developing a specific strategic    USAID’s Bureau for
                                                                     plan, all foreign service          Democracy and Humanitarian
                                                                     personnel can be deployed to       Assistance’s Office of Civilian
                                                                     contingency locations.             Response provides for
                                                                                                        reconstruction and
                                                                                                        stabilization support.

Source: GAO analysis of agency documents and interviews with agency officials.
a
 In its final report, the CWC outlined characteristics of risk in contracting for a contingency, focusing on the broad
areas of operational, political, and financial risk. According to the CWC, operational, political, and financial risk factors
include risks to: (1) maintaining agencies’ critical organic or core capabilities; (2) U.S. goals and objectives, such as
from behavior that injures innocent members of the local population or outrages their sensibilities; (3) the
government’s ability to control costs, waste, fraud, abuse, and conflicts of interest, among others. In its final report,
the CWC also outlined situational risks, which it described as factors that could affect risk assessment and should be
considered by the government along with operational, political, and financial risks. Situational risks include:
(1) operating in a combat zone or insurgent-threat area; (2) lack of effective federal oversight in the area of
operations; and (3) inadequate accounting, financial, and business systems among contractors and subcontractors,
among others. See also, OFPP Policy Letter 11-01: Performance of Inherently Governmental and Critical Functions,
76 Fed. Reg. 56,227 (Sept. 12, 2011). Department of Defense Instruction 1100.22, Guidance for Determining
Workforce Mix, April 6, 2007.
b
 International Security Assistance Force Joint Command Operations in Afghanistan, Construction Contracting
Guidelines for Afghanistan (Oct. 9, 2010); Chairman, Joint Chiefs of Staff, Joint Publication 4-10, Operational
Contract Support (Washington, D.C.: Oct. 17, 2008); Chairman of the Joint Chiefs of Staff Notice 4130.01, Guidance
for Combatant Commander Employment of Operational Contract Support Enabler—Joint Contingency Acquisition
Support Office (Dec. 20, 2011).
c
Department of State Office of the Procurement Executive, Procurement Information Bulletin No. 2012-11, Preventing
Contractor Performance of Inherently Governmental Functions, May 9, 2012.




       Page 9                                                           GAO-12-854R Contingency Contracting
Table 2: CWC Strategic Area 2—Develop Deployable Cadres for Acquisition Management and Contractor
Oversight

Recommendation                                 DOD                                   State                          USAID
directed to agency heads
2a                                 Actions taken or planned          No actions taken or planned        No actions taken or planned
Provide funding and               that directly align with the        that directly align with the       that directly align with the
direction to establish a          specific recommendation             specific recommendation            specific recommendation
trained, experienced, and        DOD officials stated that           State officials stated the         USAID officials did not identify
deployable cadre for             resourcing and direction to         department does not plan to        actions taken or planned that
acquisition-management           establish a deployable cadre        implement this                     directly align with this
and contractor-oversight         for acquisition-management          recommendation. A State            recommendation but stated
functions in areas of            and contractor-oversight            official testified in September    that the agency’s existing
contingency operations so        functions is currently being        2011 that the department           organizational structure meets
that the government has an       considered as part of the           does not see a separate            the intent. USAID officials
alternative to relying on        related effort identified in 1b     contingency contracting            stated that the agency’s
contractors for acquisition      above and will be addressed         acquisition cadre as an            contracting and agreement
management and oversight         in a comprehensive                  efficient or necessary model       officers currently have the
                                 operational contract support        and the department’s existing      capability to be deployed and
                                 action plan, scheduled for          acquisition structure and          work in contingency
                                 completion in September             working capital fund provide       environments. The Office of
                                 2012, to guide capital              sufficient expertise and           Acquisition and Assistance
                                 planning and budget                 funding for contingency            maintains a foreign operations
                                 preparation.                        operations.                        unit responsible for supporting
                                                                                                        overseas contracting efforts,
                                                                                                        and USAID’s preference is to
                                                                                                        strengthen this unit rather
                                                                                                        than direct resources
                                                                                                        elsewhere.

Source: GAO analysis of agency documents and interviews with agency officials.



Table 3: CWC Strategic Area 3—Phase out the Use of Private Security Contractors for Certain Functions

Recommendation not                             DOD                                   State                           USAID
directed to specific entity
3a                                 Actions taken or planned                      Not applicable            Actions taken or planned
                                  that directly align with the                                            that directly align with the
Phase out the use of host-        specific recommendation                                                 specific recommendation
nation private security
contractors in Afghanistan       Pursuant to Afghan                  State officials stated that this   Officials from the Office of
for the convoys on high-         government requirements, the        recommendation is not              Acquisition and
volume roads that the            department is in the process        applicable because they            Assistance/Afghanistan
insurgency controls or           of transitioning selected           interpreted it being directed      reported that as of March 20,
contests                         private convoy security             towards DOD.                       2012, all USAID awardees are
                                 contracts to the Afghan Public                                         required to use the Afghan
                                                    a
                                 Protection Force.                                                      Public Protection Force for all
                                                                                                                           a
                                 Additionally, DOD officials                                            security services.
                                 stated that U.S. Central
                                 Command and U.S. Forces-
                                 Afghanistan policies and
                                 guidance require
                                 consideration of the likelihood
                                 of private security contractors
                                 becoming involved in combat
                                 or situations likely to escalate
                                 into combat when determining
                                 the appropriateness of using
                                 contractors.




      Page 10                                                           GAO-12-854R Contingency Contracting
3b                               No actions taken or planned                     Not applicable                  Not applicable
                                  that directly align with the
Evaluate each static-             specific recommendation
security site to assess the
risk associated with the use     DOD officials did not identify       State officials stated that this   USAID officials stated that this
of contractors. Where the        actions taken or planned that        recommendation is not              recommendation is not
military commander               directly align with this             applicable because they            applicable. They explained
determines there is a high       recommendation. While DOD            interpreted it being directed      that the protection of USAID
risk, use military forces.       officials stated that the            towards DOD.                       personnel and facilities is
Where the commander              department expects contract                                             managed by State’s Bureau of
determines the high risk is      static security guards to                                               Diplomatic Security, and the
specifically the result of       transition to the Afghan Public                                         agency does not directly
using local-national             Protection Force in 2013 and                                            contract for security services.
contractors, use military        that U.S. Forces-Afghanistan
forces or third-country          is monitoring the transition
national private security        effort, officials did not identify
contractors for security         specific efforts to evaluate
                                 each static security site to
                                 determine whether military
                                 forces should provide security
                                 at specific, high-risk sites.

Source: GAO analysis of agency documents and interviews with agency officials.
a
 In August 2010, the President of Afghanistan issued Presidential Decree 62 (PD 62), which directed the dissolution
of private security contractors. In the wake of the decree, a bridging strategy was developed to facilitate the transition
away from private security contractors in Afghanistan to the Afghan Public Protection Force (APPF), which existed
within the Ministry of Interior prior to PD 62. The APPF is a Ministry of Interior security force organized under the
Deputy Minister and consists of a national headquarters and seven zone headquarters. As a fee-for-service
government owned and operated security force, it secures international, governmental, and non-governmental
operations, sites, and facilities.



Table 4: CWC Strategic Area 4—Improve Interagency Coordination and Guidance for Using Security
Contractors in Contingency Operations

Recommendation                                 DOD                                   State                           USAID
directed to entity
specified
4a                                 Actions taken or planned           No actions taken or planned        No actions taken or planned
Hold the ambassador,              that directly align with the         that directly align with the       that directly align with the
USAID mission director,           specific recommendation              specific recommendation            specific recommendation
and military commanders
                                 In July 2009, DOD published          State officials stated the         USAID officials did not identify
responsible for making,
                                 guidance for all U.S.                department does not plan to        actions taken or planned that
publicizing, and revising
                                 government private security          implement this                     directly align with this
their determinations of
                                 contractors working in               recommendation. Department         recommendation. Officials
security-contracting
                                 contingency operations. The          officials explained that           explained that security issues
appropriateness as
                                 guidance, updated in August          contracting decisions are          at the mission level are the
conditions change, giving
                                 2011, requires Geographic            made with input from across        responsibility of State’s
particular consideration to
                                 Combatant Commanders in              the department, including the      Bureau of Diplomatic Security.
the geographic, temporal,
                                 contingency environments to          ambassador and the Bureau
and organizational
                                 issue guidance and                   of Diplomatic Security.
proximity to armed conflict
                                 procedures for the selection,
                                 training, accountability, and
                                 equipping of private security
                                             a
                                 personnel.




      Page 11                                                            GAO-12-854R Contingency Contracting
4b                                 Actions taken or planned         Actions taken or planned              Not applicable
When private security or          that directly align with the     that directly align with the
other contractors are to be       specific recommendation          specific recommendation
armed, they should be            In 2007, DOD designated the      Under State policy, all          USAID officials stated that this
overseen by government           Synchronized Predeployment       applicable contracts for         recommendation is not
employees and tracked in a       and Operational Tracker          private security in Iraq and     applicable because the
centralized system, as is        system as its primary system     Afghanistan are required to      agency does not directly
done in Iraq                     for collecting data on           include a clause requiring       contract for security services.
                                 contractor personnel deployed    personnel to be entered into
                                 with U.S. forces. Currently,     the Synchronized
                                 DOD requires the use of the      Predeployment and
                                                                                               b
                                 system for all personnel         Operational Tracker system.
                                 performing private security      State contract oversight
                                 functions in Iraq or             planning documents also call
                                 Afghanistan. Additionally,       for these contractors to be
                                 DOD policies generally           operationally supervised by
                                 discuss the oversight of         direct hire government
                                 private security and other       personnel.
                                 contractors by military or DOD
                                 civilian personnel.
4c                                 Actions taken or planned         Actions taken or planned              Not applicable
Reliance on private security      that directly align with the     that directly align with the
contractors should be             specific recommendation          specific recommendation
accompanied by greater           DOD has issued and updated       Officials from State’s Bureau    USAID officials stated that this
use and emphasis on              DOD Instruction 3020.50,         of Diplomatic Security stated    recommendation is not
vetting, training, authorizing   which provides instructions to   that all of State’s private      applicable because the
arms, and weapons control;       geographic combatant             security contractor personnel    agency does not directly
post-convoy debriefing,          commanders on their              working under its Worldwide      contract for security services.
locational tracking, and         requirements to address          Protective Services contract
video monitoring; and more       some of the issues specified     are vetted and must be
                                                           a
thorough and                     in the recommendation.           trained in accordance with the
comprehensive                    Additionally, DOD directed       terms of the contract.
management                       use of a new quality             According to the department,
                                 management standard for          operational control and
                                 private security contractor      monitoring exceeds the CWC
                                 operations that includes         recommendation.
                                 specific measurable elements
                                 for vetting, training, and
                                 procurement and
                                 management of weapons.
                                 Further, in June 2012, DOD
                                 finalized a regulation that
                                 establishes minimum
                                 processes and requirements
                                 for the selection,
                                 accountability, training,
                                 equipping and conduct of
                                 personnel performing private
                                 security functions under DOD
                                            c
                                 contracts.




      Page 12                                                        GAO-12-854R Contingency Contracting
4d                            No actions taken or planned        No actions taken or planned      No actions taken or planned
Execute an interagency         that directly align with the       that directly align with the     that directly align with the
agreement to provide           specific recommendation            specific recommendation          specific recommendation
guidance on security          DOD officials did not identify     State officials stated the       USAID officials did not identify
contracting                   actions taken or planned that      department does not plan to      actions taken or planned that
                              directly align with this           implement this                   directly align with this
                              recommendation. However,           recommendation. Officials        recommendation.
                              DOD officials stated that the      explained that State does not
                              recommendation has been            concur that an interagency
                              addressed through Section          agreement is necessary to
                              159 of Title 32 of the Code of     provide guidance on security
                              Federal Regulations, which         contracting. Department
                              requires coordination between      officials stated that the
                              DOD and State to establish         Overseas Security Policy
                              processes for the selection,       Board, which State chairs and
                              training, equipping, and           of which both DOD and
                              conduct of private security        USAID are members, was a
                              personnel in combat                more appropriate forum for
                              operations or other significant    addressing the use of security
                                                   d
                              military operations. These         contractors in future
                              provisions are applicable to all   contingencies.
                              future areas of operations that
                              require enhanced
                              coordination of private
                              security contactor personnel.
4e                            No actions taken or planned        No actions taken or planned      No actions taken or planned
DOD, State, and USAID          that directly align with the       that directly align with the     that directly align with the
should develop and enter       specific recommendation            specific recommendation          specific recommendation
into a standing interagency   DOD officials did not identify     State officials stated the       USAID officials did not identify
memorandum of                 actions taken or planned that      department does not plan to      actions taken or planned that
agreement, incorporating      directly align with this           implement this                   directly align with this
lessons and best practices    recommendation. However,           recommendation. According        recommendation.
learned in Iraq and           DOD officials stated that the      to officials, a specific
Afghanistan, to provide       recommendation has been            memorandum of agreement is
guidance in use of private    addressed through Section          not necessary to share best
security contractors in       159 of Title 32 of the Code of     practices, lessons learned, or
future contingencies          Federal Regulations, which         other information between
                              requires coordination between      agencies colocated overseas.
                              DOD and State to establish         The department stated that
                              processes for the selection,       existing mechanisms, such as
                              training, equipping, and           the Overseas Security Policy
                              conduct of private security        Board, and standing working
                              personnel in combat                groups integral to overseas
                              operations or other significant    missions, such as the Country
                                                   d
                              military operations. These         Team and Emergency Action
                              provisions are applicable to all   Committees, provide effective
                              future areas of operations that    forums for the sharing of
                              require enhanced                   information, best practices,
                              coordination of private            and lessons learned.
                              security contactor personnel.




      Page 13                                                       GAO-12-854R Contingency Contracting
4f                               No actions taken or planned         No actions taken or planned      No actions taken or planned
This standing memorandum          that directly align with the        that directly align with the     that directly align with the
of agreement should be            specific recommendation             specific recommendation          specific recommendation
modified within 90 days of a     DOD officials did not identify      State officials stated the       USAID officials did not identify
declared combat operation        actions taken or planned that       department does not plan to      actions taken or planned that
or other contingency to          directly align with this            implement this                   directly align with this
specifically address the         recommendation. However,            recommendation. As noted         recommendation.
needs and circumstances          DOD officials stated that the       above, department officials
of that operation                recommendation has been             stated that a specific
                                 addressed through Section           memorandum of agreement is
                                 159 of Title 32 of the Code of      not necessary to share best
                                 Federal Regulations, which          practices, lessons learned, or
                                 requires coordination between       other information between
                                 DOD and State to establish          agencies colocated overseas
                                 processes for the selection,        and that existing mechanisms
                                 training, equipping, and            for sharing of information,
                                 conduct of private security         best practices, and lessons
                                 personnel in combat                 learned are sufficient.
                                 operations or other significant
                                                      d
                                 military operations. These
                                 provisions are applicable to all
                                 future areas of operations that
                                 require enhanced
                                 coordination of private
                                 security contactor personnel.

Source: GAO analysis of agency documents and interviews with agency officials.
a
 DOD Instruction 3020.50, Private Security Contractors (PSCs) Operating in Contingency Operations, Humanitarian
or Peace Operations, or Other Military Operations or Exercises, July 22, 2009. The regulation was updated in August
2011 to incorporate changes made in the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009,
Pub. L. No. 110-417, § 853 (2008) and the Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub.
L. No. 111-383, § 832.
b
 Department of State Office of the Procurement Executive, Procurement Information Bulletin No. 2008-15, Use of
Synchronized Predeployment and Operational Tracker (SPOT) for Contractors Supporting and Diplomatic or
Consular Mission Outside the United States, March 25, 2008.
c
 Defense Federal Acquisition Regulation Supplement (DFARS); Contractors Performing Private Security Functions
(Case 2011-D023). Final Rule, 77 Fed. Reg. 35,883 (June 15, 2012).
d
    32 C.F.R. § 159.




         Page 14                                                        GAO-12-854R Contingency Contracting
Table 5: CWC Strategic Area 5—Take Actions to Mitigate the Threat of Additional Waste from
Unsustainability

Recommendation                             DOD                               State                              USAID
directed to officials at
DOD, State, and USAID
5a                            No actions taken or planned          Actions taken or planned          Actions taken or planned
Examine both completed         that directly align with the       that directly align with the      that directly align with the
and current projects for       specific recommendation            specific recommendation           specific recommendation
risk of sustainment failure   DOD officials did not identify     Although State did not identify   According to a senior
and take appropriate          actions taken or planned that      any departmentwide efforts        development official at the
action to cancel or           directly align with this           that directly align with this     Embassy in Kabul, in response
redesign programs and         recommendation but stated          recommendation, the Embassy       to Afghan-specific
projects that have no         that existing policies meet the    in Kabul has taken such           sustainability guidance issued
credible prospect of          intent. For example, while it      actions. Specifically, the        in June 2011, USAID
being sustained               has not examined completed         Embassy has taken steps to        conducted an analysis of
                              or current projects, DOD has       identify projects that need to    67 different projects for
                              addressed sustainability           be sustained in order to          sustainability in Afghanistan,
                              considerations in joint doctrine   position itself to make           which should be finalized by
                                                                                                                         b
                              published between 2009 and         decisions about which projects    the summer of 2012. For this
                              2011 on stability operations,      will be sustained and how they    sustainability analysis, officials
                              counterinsurgency, and foreign     will be sustained going           from USAID’s Office of
                                                        a
                              humanitarian assistance.           forward. Department officials     Afghanistan and Pakistan
                                                                 stated that State does not        Affairs reported that the
                                                                 generally have large              agency identified operating
                                                                 construction or infrastructure    and maintenance costs,
                                                                 projects that would lend          prospects for sustainability by
                                                                 themselves to an analysis of      the Afghan government, and
                                                                 sustainability.                   options for cost recovery.
                                                                                                   These officials stated that if
                                                                                                   projects did not appear
                                                                                                   sustainable, USAID
                                                                                                   considered options to cancel
                                                                                                   or provide additional
                                                                                                   assistance. Officials from the
                                                                                                   Office of Iraq and Arabian
                                                                                                   Peninsula Affairs reported on a
                                                                                                   recent analysis the Iraq
                                                                                                   Mission completed for
                                                                                                   Congress that highlights
                                                                                                   Government of Iraq
                                                                                                   contributions to ongoing
                                                                                                   USAID projects.




      Page 15                                                        GAO-12-854R Contingency Contracting
5b                               Actions taken or planned             Actions taken or planned            Actions taken or planned
Ensure that any new             that directly align with the         that directly align with the        that directly align with the
requirements and                specific recommendation              specific recommendation             specific recommendation
acquisition strategies for    DOD officials stated that by         Although State did not identify      USAID updated its agencywide
projects or services to be    early 2013 the department            any departmentwide efforts           project design guidance in
handed over to a host         plans to establish clarifying        that directly align with this        January 2012 to require
nation include a detailed     policy and guidance for setting      recommendation, the                  sustainability analysis for all
assessment of long-term       acquisition strategies that must     department has taken such
                                                                                                                  c
                                                                                                        projects. It also developed a
costs and of host nations’    include long-term project            actions in Iraq. Specifically,       tool that contains questions,
ability and willingness to    sustainability for the host          guidance was implemented in          issues, and examples to help
meet those costs              nation. Additionally, DOD            Iraq in 2009 that generally          USAID project design teams
                              officials stated that the            required cost-sharing with the       think through project
                              department follows                   Government of Iraq for new           sustainability objectives and
                              International Security               projects. The guidance also          maximize sustainable
                              Assistance Force Contracting         generally required the               outcomes.
                              Guidelines issued in October         development of advance
                              2010 that require Afghan             agreements with the
                              National Security Forces             Government of Iraq to ensure
                              facilities to be sustainable in      the host nation is able and
                              accordance with Afghan               willing to contribute financially
                              construction and maintenance         to projects and to establish
                              capabilities.                        plans for transitioning
                                                                   responsibility for projects to the
                                                                   Government of Iraq or other
                                                                   Iraqi entities. Embassy officials
                                                                   in Afghanistan stated that they
                                                                   do not have such guidance.
5c                             No actions taken or planned          No actions taken or planned           Actions taken or planned
Report to Congress by           that directly align with the         that directly align with the        that directly align with the
December 31, 2011, and          specific recommendation              specific recommendation             specific recommendation
annually thereafter, on       DOD officials stated the             State officials stated the           USAID is currently required to
analysis and proposed         department does not plan to          department does not plan to          certify to the Committees on
actions for mitigating        implement this                       implement this                       Appropriations before certain
sustainability risks          recommendation unless                recommendation unless                funds appropriated in the
                              directed to do so by Congress,       directed to do so by Congress.       Consolidated Appropriations
                              citing concern over the number       Department officials stated that     Act, 2012 may be obligated for
                                                                                                                                    d
                              of existing reporting                State does not generally have        assistance to Afghanistan.
                              requirements and                     large construction or                Also, according to officials,
                              congressional inquiries.             infrastructure projects that         USAID briefed its committees
                                                                   would lend themselves to an          of jurisdiction on analysis and
                                                                   analysis of sustainability.          proposed actions for mitigating
                                                                                                        sustainability risks in its
                                                                                                        Afghanistan programs in 2011
                                                                                                        and in its Iraq programs in May
                                                                                                        2012.

Source: GAO analysis of agency documents and interviews with agency officials.
Note: The CWC’s Special Report 5, Sustainability: Hidden Costs Risk New Waste included the same
recommendations. Therefore, we have not listed recommendations from Special Report 5 separately.
a
 Chairman, Joint Chiefs of Staff, Joint Publication 3-07, Stability Operations (Washington, D.C.: Sept. 29, 2011); Joint
Publication 3-24, Counter-insurgency Operations (Washington, D.C.: Oct. 5, 2009); Joint Publication 3-29, Foreign
Humanitarian Assistance (Washington, D.C.: Mar. 17, 2009).
b
    USAID, Administrator’s Sustainability Guidance for USAID in Afghanistan (June 2011).
c
 USAID Automated Directives System Section 200.3.1.5, Policy Directives and Required Procedures, Build in
Sustainability from the Start (Feb. 10. 2012).
d
    Consolidated Appropriations Act, 2012, Pub. L. No. 112-74 § 7046 (2011).




         Page 16                                                        GAO-12-854R Contingency Contracting
Table 6: CWC Strategic Area 6—Elevate the Positions and Expand the Authority of Civilian Officials
Responsible for Contingency Contracting at DOD, State, and USAID

Recommendation                            DOD                              State                     USAID
directed to entities as
specified below
6a                                  Not applicable                    Not applicable             Not applicable
The CWC endorsed the         While this recommendation
House version of the         relates to a congressional
National Defense             action, DOD officials stated
Authorization Act for        they do not believe that
Fiscal Year 2012, which      consolidation of operational
would have amended           contract support responsibility
section 138(b) of Title 10   in an Office for Contingency
U.S.C, in part by (1)        Contracting or an Assistant
establishing an Assistant    Secretary of Defense for
Secretary of Defense for     Contingency Contracting is
Contingency Contracting;     necessary because each DOD
and (2) establishing an      organization brings unique
Office for Contingency       subject matter expertise to the
Contracting headed by        oversight of contingency
the Assistant Secretary of   contracting. Additionally, DOD
Defense for Contingency      officials stated that senior
Contracting                  leadership acknowledge the
                             importance of operational
                             contract support and are taking
                             steps to communicate that
                             message throughout the
                             organization, with the
                             Undersecretary of Defense
                             (Acquisition, Technology, and
                             Logistics) monitoring progress.
6b                                  Not applicable             No actions taken or planned       Not applicable
State should:                                                   that directly align with the
                                                                specific recommendation
(1)  establish a separate
Bureau of Acquisition led                                      State officials stated the
by an assistant secretary                                      department does not plan to
for acquisition who has a                                      implement this
background as a qualified                                      recommendation. Officials
acquisition professional                                       explained that the
and who would be                                               department’s current structure,
designated as the                                              in which contingency
agency’s chief acquisition                                     contracting is overseen by the
officer, (2) ensure that                                       Assistant Secretary for
the new bureau would                                           Administration in coordination
have acquisition as its                                        with the Under Secretary for
singular focus and                                             Management, is sufficient to
primary mission, and (3)                                       meet the department’s needs.
establish additional
Senior Executive Service
positions to support the
bureau’s work.




      Page 17                                                      GAO-12-854R Contingency Contracting
6c                                     Not applicable                       Not applicable     No actions taken or planned
The chief acquisition                                                                           that directly align with the
officer within USAID                                                                            specific recommendation
should be a non-career                                                                         USAID officials stated the
appointment at an                                                                              agency does not plan to
organizational level so as                                                                     implement this
to facilitate advising and                                                                     recommendation. The USAID
assisting the agency                                                                           chief acquisition officer is a
head                                                                                           career appointment, and
                                                                                               officials reported on no plans
                                                                                               to change this arrangement,
                                                                                               citing the institutional
                                                                                               expertise, overseas
                                                                                               experience, and organizational
                                                                                               continuity provided by a senior
                                                                                               foreign service career
                                                                                               designation.
6d                                     Not applicable                       Not applicable             Not applicable
Congress should amend                                                                          While this recommendation is
41 USC 1702 to provide                                                                         directed to Congress, USAID
that the chief acquisition                                                                     officials noted that the chief
officer’s duties include                                                                       acquisition officer currently
managing policy and                                                                            manages policy and monitors
monitoring contingency                                                                         contingency contracting in
contracting                                                                                    practice. A senior USAID
                                                                                               official disagreed with codifying
                                                                                               the acquisition organization of
                                                                                               USAID in statute, explaining
                                                                                               that doing so would reduce the
                                                                                               agency’s flexibility to make
                                                                                               future adjustments.
6e                                     Not applicable                       Not applicable       Actions taken or planned
To elevate the role of                                                                          that directly align with the
contingency contracting                                                                         specific recommendation
within USAID, the chief                                                                        According to officials, USAID
acquisition officer                                                                            plans to update its
should be identified as a                                                                      organizational chart to formally
“direct adviser” to the                                                                        reflect the “dotted line”
Administrator, a similar                                                                       reporting relationship in which
position to that of the                                                                        the chief acquisition officer is a
chief financial officer and                                                                    direct advisor to the USAID
the chief information                                                                          Administrator, similar to the
officer                                                                                        reporting relationships for the
                                                                                               chief financial officer and chief
                                                                                               information officer. Officials
                                                                                               noted, however, that the chief
                                                                                               acquisition officer will continue
                                                                                               to formally report to the
                                                                                               Assistant Administrator for
                                                                                               Management.

Source: GAO analysis of agency documents and interviews with agency officials.




      Page 18                                                           GAO-12-854R Contingency Contracting
Table 7: CWC Strategic Area 7—Elevate and Expand the Authority of Military Officials Responsible for
Contingency Contracting on the Joint Staff, the Combatant Commanders’ Staffs, and in the Military Services

Recommendation                             DOD                                   State                 USAID
directed to DOD
7a                           No actions taken or planned                  Not applicable            Not applicable
Extract operational           that directly align with the
contract support and          specific recommendation
other contract-support       DOD officials did not identify
duties and                   actions taken or planned that
responsibilities from J4     directly align with this
(Logistics) and create a     recommendation but stated
J10 Directorate of           that the department’s existing
Contingency                  organizational structure meets
Contracting at the Joint     the intent. The department
Staff in order to better     stated it does not believe
support contracting in       additional staff structure is
other directorates and       needed due to already having
missions such as             a significant amount of senior
intelligence,                leadership involvement and
communications,              support for operational
linguistic support, and      contract support. According to
security                     DOD, this leadership and
                             support has resulted in
                             guidance on operational
                             planning, doctrine, policy, and
                             resources being applied to
                             institutionalization of
                             operational contract support.
7b                           No actions taken or planned                  Not applicable            Not applicable
Create functional             that directly align with the
alignment by                  specific recommendation
establishing similar J10     DOD officials stated the
organizations at the         department does not plan to
combatant commands           implement this
and in the four military     recommendation.
services
Source: GAO analysis of agency documents and interviews with agency officials.



Table 8: CWC Strategic Area 8—Establish a New, Dual-Hatted Senior Position at the Office of Management
and Budget (OMB) and the National Security Council (NSC) Staff to Provide Oversight and Strategic Direction

Recommendation                             DOD                                   State                 USAID
directed to Congress
8a                                   Not applicable                       Not applicable            Not applicable
Congress should create
a position in the
Administration for a
single dual-hatted
official to serve at OMB
and on the NSC staff




      Page 19                                                           GAO-12-854R Contingency Contracting
8b                                   Not applicable                       Not applicable            Not applicable
Congress should create
a position in the
Administration for a
single dual-hatted
official to ensure that
each relevant agency
has the necessary
financial resources and
policy oversight, as
appropriate, to carry out
its contingency-related
mission, and that
agencies' budgets are
complementary rather
than duplicative or
conflicting. In OMB, this
official should be a
deputy director and thus
a presidential appointee
confirmed by the Senate
8c                                   Not applicable                       Not applicable            Not applicable
Congress should create
a position in the
Administration for a
single dual-hatted
official to oversee and
ensure coordination of
interagency contingency
operations, including
contracting-related
matters. At NSC, this
senior official shall
attend and participate in
the meetings of the NSC
as the principal advisor
to the NSC on
interagency contingency
operations. This official
should be a deputy
national security adviser
and deputy assistant to
the President

Source: GAO analysis of agency documents and interviews with agency officials.




      Page 20                                                           GAO-12-854R Contingency Contracting
Table 9: CWC Strategic Area 9—Create a Permanent Office of Inspector General for Contingency Operations

Recommendation                             DOD                                   State                          USAID
directed to Congress
9a                                   Not applicable                       Not applicable                    Not applicable
Congress should                                                  While this recommendation is        While this recommendation is
establish and fund a                                             directed to Congress, State         directed to Congress, USAID
permanent inspector                                              officials reported that they have   officials stated that other
general for contingency                                          concerns about the                  agencies can provide the
operations to operate                                            establishment of a new              necessary oversight, and as
with a small staff in                                            inspector general with              such, a new inspector general
collaboration with                                               responsibilities that overlap       office would serve a redundant
agency inspectors                                                existing oversight entities         function.
general to regularly                                             because the same functions
assess the adequacy of                                           can be performed more
agency planning and                                              effectively and efficiently
readiness for                                                    through the coordinated efforts
contingencies, to be                                             of existing agency inspectors
ready to deploy at the                                           general.
outset of a new
contingency, and to
expand as necessary
9b                                   Not applicable                       Not applicable                    Not applicable
Congress should
establish and fund a
permanent inspector
general for contingency
operations to exercise
audit and investigative
authority over all
functions (such as
logistics, security, and
reconstruction) and
across DOD, State,
USAID, and other
agencies participating in
contingency operations
9c                                   Not applicable                       Not applicable                    Not applicable
Congress should
establish and fund a
permanent inspector
general for contingency
operations to develop,
plan, and, as
appropriate, deliver
investigative and
oversight training
targeted to contingency
operations

Source: GAO analysis of agency documents and interviews with agency officials.




      Page 21                                                           GAO-12-854R Contingency Contracting
Table 10: CWC Strategic Area 10—Set and Meet Annual Increases in Competition Goals for Contingency
Contracts

Recommendation                          DOD                                State                               USAID
directed to agency heads
10a                           Actions taken or planned          Actions taken or planned             Actions taken or planned
                             that directly align with the      that directly align with the         that directly align with the
Require competition          specific recommendation           specific recommendation              specific recommendation
reporting and goals for
contingency contracts       In February 2012, DOD             Pursuant to a requirement in         Pursuant to a requirement in
                            established the contingency       Section 835 of the Ike Skelton       Section 835 of the Ike Skelton
                            competition goals as required     National Defense                     National Defense
                            by Section 844 of the National    Authorization Act for Fiscal         Authorization Act for Fiscal
                            Defense Authorization Act for     Year 2011, State reports             Year 2011, USAID reports
                                                a
                            Fiscal Year 2012. To              jointly with DOD and USAID           jointly with DOD and State on
                            facilitate the tracking of        on the extent of competition         the extent of competition for
                            contingency contracts and         for its Iraq and Afghanistan         its Iraq and Afghanistan
                                                                          b                                    b
                            ability to report on              contracts. State officials           contracts. USAID officials
                            competition, DOD recently         stated the department does           stated the agency does not
                            established a unique code in      not plan to implement the            have or plan to establish
                            the Federal Procurement Data      section of the                       separate competition goals for
                            System-Next Generation for        recommendation that pertains         contingency contracts since
                            capturing contractual actions     to competition goals. Officials      the agency’s existing policy
                            in support of DOD’s efforts in    stated they have and track           on exceptions to competition
                            Afghanistan. According to         competition goals throughout         applies across the majority of
                            DOD officials, the department     the department but do not            USAID’s operating
                            also has an interagency           think a specific breakout for        environments, including
                            memorandum of agreement           contingency contracts is             Critical Priority Countries such
                            that enables it to create other   necessary.                           as Iraq and Afghanistan, with
                            such unique codes for any                                              limited exceptions.
                            future contingencies.
10b                           Actions taken or planned                Not applicable               No actions taken or planned
                             that directly align with the                                           that directly align with the
Break out and compete        specific recommendation                                                specific recommendation
major subcontract
requirements from omnibus   In February 2012, DOD             State officials stated that this     USAID officials did not identify
support contracts           mandated a review of              recommendation is not                actions taken or planned that
                            omnibus contingency               applicable because the               directly align with this
                            contracts in support of           department does not have             recommendation but stated
                            Operation Enduring Freedom        large omnibus support                that the agency’s existing
                            as required by Section 844 of     contracts. Department officials      policies meet the intent.
                            the National Defense              noted, however, that                 Officials reported that the
                            Authorization Act for Fiscal      contingency operations               agency’s current acquisition
                                        a
                            Year 2012.                        require the flexibility to craft a   planning policies and
                                                              contracting strategy that fits       practices are sufficient to
                                                              the existing environment             guide decisions related to
                                                              rather than mandating a              contract scope. Officials
                                                              single solution such as              further explained that the
                                                              “compete major                       agency does not regularly use
                                                              subcontracts.”                       omnibus support contracts in
                                                                                                   practice.




      Page 22                                                    GAO-12-854R Contingency Contracting
10c                         No actions taken or planned        No actions taken or planned        No actions taken or planned
Limit contingency task-      that directly align with the       that directly align with the       that directly align with the
order performance periods    specific recommendation            specific recommendation            specific recommendation
                            DOD officials stated the           State officials stated the         USAID officials stated the
                            department does not plan to        department does not plan to        agency does not plan to
                            implement this                     implement this                     implement this
                            recommendation. Officials          recommendation. Officials          recommendation. USAID
                            explained that a statutory limit   explained that State awards        acquisition officials reported
                            of 10 years for task order         task order contracts with          task order performance
                            contracts with defined             option periods and                 periods are generally
                                                       c
                            exceptions already exists.         determinations are made to         determined on a case-by-case
                                                               exercise contract options          basis based on the conditions
                                                               based on the best interests of     of the specific situation in
                                                               the government. According to       conjunction with longer-term
                                                               department officials,              development goals.
                                                               mandating shorter periods
                                                               than required would increase
                                                               the amount of contracting
                                                               effort in contingency
                                                               operations when resources
                                                               are most constrained,
                                                               resulting in a continuous cycle
                                                               of solicitation and award.
10d                         No actions taken or planned        No actions taken or planned          Actions taken or planned
                             that directly align with the       that directly align with the       that directly align with the
Reduce one-offer             specific recommendation            specific recommendation            specific recommendation
competitions
                            DOD officials did not identify     State officials did not identify   USAID developed a Vendor
                            actions taken or planned that      actions taken or planned that      Communication Plan in 2012
                            directly align with this           directly align with this           that establishes greater
                            recommendation. While DOD          recommendation. According          outreach efforts to the partner
                            recently revised regulations to    to State officials, State’s        community to, in part,
                            address acquisitions using         Bureau of Administration is        increase the number of
                            competitive procedures in          still discussing the best          potential offerors and build in
                            which only one offer is            approach on this issue.            competition at the early
                            received, exemptions to this                                          stages of designing
                            regulation include acquisitions                                       requirements and
                                                                                                                e
                            in support of contingency                                             solicitations.
                                         d
                            operations. Officials stated
                            they plan to assess the impact
                            that the revised regulatory
                            coverage has on competition
                            in fiscal year 2012 to
                            determine if additional
                            changes are needed for
                            contingency operations or
                            otherwise.




      Page 23                                                     GAO-12-854R Contingency Contracting
10e                              No actions taken or planned         No actions taken or planned        No actions taken or planned
                                  that directly align with the        that directly align with the       that directly align with the
Expand competitions when          specific recommendation             specific recommendation            specific recommendation
only one task-order offer is
received                         DOD officials did not identify      State officials stated the         USAID officials stated the
                                 actions taken or planned that       department does not plan to        agency does not plan to
                                 directly align with this            implement this                     implement this
                                 recommendation. While DOD           recommendation. State              recommendation. Officials
                                 recently revised regulations to     reported in its June 2011          reported that such a policy
                                 address acquisitions using          response to the CWC’s              would be disruptive in a
                                 competitive procedures in           interim report that the            contingency environment and
                                 which only one offer is             determination to award a task      is unnecessary in fair and
                                 received, exemptions to this        order should be left to the        open competitions.
                                 regulation include acquisitions     contracting officer. The
                                 in support of contingency           department noted that when
                                              d
                                 operations. Officials stated        all task order contract holders
                                 they were unaware of any            have been offered a fair
                                 forthcoming guidance that           opportunity to bid on a task
                                 would address contingencies.        order and only a single offer is
                                                                     received, re-solicitation of the
                                                                     task order is unlikely to result
                                                                     in additional offers.

Source: GAO analysis of agency documents and interviews with agency officials.
a
 Pub. L. No. 112-81 (2011). Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics)
Contingency Competition Goals and Competition Reviews of Certain Omnibus Contracts, February 17, 2012.
b
    Pub. L. No. 111-383.
c
 10 U.S.C. § 2304a(f).
d
    DFARS; Only One Offer (Case 2011-D013). 77 Fed. Reg. 39,126 (June 29, 2012).
e
    USAID, USAID Partner Community Outreach Plan, September 2011 to September 2012.



Table 11: CWC Strategic Area 11—Improve Contractor Performance-Data Recording and Use

Recommendation for                           DOD                                 State                             USAID
Congress to direct
agency heads to
11a                                    Not applicable                       Not applicable                     Not applicable
Allow contractors to           While this recommendation is        While this recommendation is         While this recommendation is
respond to, but not            directed to Congress, DOD           directed to Congress, State          directed to Congress, USAID
appeal, agency                 officials stated that a             officials noted that they agreed     officials stated that they
performance                    contractor should have some         with the recommendation but          agreed with the
assessments                    right of appeal to a past           suggested that any change to         recommendation but that
                               performance assessment at a         the performance assessment           implementation would require
                               level above the contracting         appeal process should be             a governmentwide change.
                               officer, especially to protect      governmentwide.
                               against an erroneous
                               assessment.




         Page 24                                                        GAO-12-854R Contingency Contracting
11b                                    Not applicable                       Not applicable                     Not applicable
Align past-performance        While this recommendation is         While this recommendation is        While this recommendation is
assessments with              directed to Congress, DOD            directed to Congress, State         directed to Congress, USAID
contractor proposals          officials stated they are            officials noted that they were      officials noted that they have
                              concerned that the CWC’s             concerned that the CWC’s            concerns that implementation
                              intent to limit the consideration    intent to limit the consideration   of this recommendation may
                              of contractors’ past-                of contractors’ past-               negatively affect the ability of
                              performance references to            performance references to           contractors without past
                              only those contracts that have       only those contracts that have      performance on U.S.
                              been recorded in the                 been recorded in the                government contracts to
                              government’s past                    government’s past                   compete for new contract
                              performance database would           performance database may            awards.
                              disadvantage certain groups of       prevent consideration of
                              contractors, such as non-            relevant past performance,
                              incumbent contractors, and           such as work conducted by
                              prevent consideration of all         contractors for foreign
                              relevant past performance            governments.
                              information.
11c                                    Not applicable                       Not applicable                     Not applicable
Require agencies to           While this recommendation is         While this recommendation is        While this recommendation is
certify use of past-          directed to Congress, DOD            directed to Congress, State         directed to Congress, USAID
performance database          noted that it is unclear who         officials noted that contractor     officials stated that they were
                              would certify the use of this        past performance reporting          not certain who would certify
                              data or the value that               must first be improved so the       use of the past performance
                              certification would provide.         database is usable. State           database or the benefits that
                              However, officials agreed that       officials added that the            certification would provide.
                              contractor past performance          department has taken steps to       They noted that overall, they
                              data need substantial                improve data inputs by              agreed with the need to
                              improvement and plan to              centralizing its past               improve the past performance
                              measure compliance with              performance reporting               assessment process and data.
                              existing past performance            process.
                              reporting requirements.

Source: GAO analysis of agency documents and interviews with agency officials.




      Page 25                                                           GAO-12-854R Contingency Contracting
Table 12: CWC Strategic Area 12—Strengthen Enforcement Tools

Recommendation not                          DOD                                 State                              USAID
directed to specific
entity
12a                           No actions taken or planned            Actions taken or planned           Actions taken or planned
(1) Revise regulations to      that directly align with the         that directly align with the       that directly align with the
lower procedural barriers      specific recommendation              specific recommendation            specific recommendation
to suspensions and            DOD officials stated the             State issued guidance in           Officials reported that in
debarments and (2)            department does not plan to          October 2011 describing a          February 2011, USAID
require a written rationale   implement this                       process for drafting a             established the Compliance
for not pursing proposed      recommendation. While DOD            determination memorandum           Division within its Office of
suspensions and               reported it supports                 each time the potential need to    Acquisition and Assistance to
debarments                    strengthened enforcement             suspend or debar a contractor      handle suspensions and
                              tools, officials stated that they    arises, including for those        debarments and work with
                              disagreed with the CWC’s             cases in which no action           USAID’s Inspector General to
                              specific recommendation.             against the contractor is          address procedural barriers
                                                                                              a
                              DOD officials noted that they        ultimately recommended.            the agency had identified
                              have concerns about requiring        State reported it disagrees that   related to evidence gathering
                              a written rationale for not          procedural barriers are an         for potential suspensions or
                              pursuing proposed suspension         issue but suggested any            debarments. Officials reported
                              and debarments, stating this         related actions should be          that USAID’s practice is to
                              provision might have a               taken through the Interagency      prepare a memo for all
                              negative effect on the               Suspension and Debarment           administrative actions,
                              suspension and debarment             Committee to ensure                including for decisions not to
                              official’s discretion or result in   consistency across agencies.       pursue suspensions, proposed
                              de facto debarments, thereby                                            debarments, and debarments
                              potentially increasing the risk                                         but did not cite a specific policy
                              of litigation.                                                          that required documenting
                                                                                                      such decisions.
12b                             Actions taken or planned           No actions taken or planned                Not applicable
Make consent to U.S.           that directly align with the         that directly align with the
civil jurisdiction a           specific recommendation              specific recommendation
condition of contract         DOD officials stated that due        State has not taken or planned     USAID officials stated that they
award                         to the complexity of the legal       actions that directly align with   interpret this recommendation
                              issues related to this               this recommendation and            as being directed to Congress
                              recommendation, they have            officials stated a                 based on the direction of the
                              tasked a team to consider the        governmentwide change would        same recommendation to
                              recommendation. They also            be required. The officials         Congress in the CWC’s
                              noted that Section 834 of the        added that they are not sure       second interim report. USAID
                              Ike Skelton National Defense         how this recommendation,           officials added that, assuming
                              Authorization Act for Fiscal         which the CWC noted would          the intent of the
                              Year 2011 provided the               allow for private parties to       recommendation is to establish
                              Secretary of Defense authority       recover on certain claims          jurisdiction beyond what is
                              to apply contract remedies in        arising out of conduct related     currently in place for
                              certain cases where                  to government contracts,           contractors and sub-
                              contractors are not subject to       would be enforced if               contractors, implementing it
                                                b
                              U.S. jurisdiction.                   implemented.                       will require governmentwide
                                                                                                      changes.




      Page 26                                                          GAO-12-854R Contingency Contracting
12c                                 Not applicable                      Not applicable                      Not applicable
Expand the power of         DOD officials stated that this      State officials stated that this    USAID Office of Inspector
inspectors general          recommendation is not               recommendation is not               General officials stated that
                            applicable because they             applicable because they             this recommendation is not
                            interpret it as being directed to   interpret it as being directed to   applicable because a formal
                            Congress.                           Congress.                           expansion of the inspectors’
                                                                                                    general powers would require
                                                                                                    congressional action. They
                                                                                                    explained their office has
                                                                                                    engaged both USAID and
                                                                                                    congressional staff on issues
                                                                                                    related to suspension and
                                                                                                    debarment and trafficking in
                                                                                                    persons and proposed ways to
                                                                                                    enhance oversight by the
                                                                                                    inspector general when
                                                                                                    necessary.
12d                         No actions taken or planned         No actions taken or planned         No actions taken or planned
Amend acquisition            that directly align with the        that directly align with the        that directly align with the
regulations to require       specific recommendation             specific recommendation             specific recommendation
contracting officer         DOD officials stated the            State has not taken or planned      USAID officials did not identify
consent for the award of    department does not plan to         actions that directly align with    actions taken or planned that
subcontracts valued at or   implement this                      this recommendation as State        directly align with this
above $300,000 to           recommendation. Officials           officials stated a                  recommendation but stated
foreign companies when      reported that DOD has               governmentwide change would         that the agency’s existing
performance will            considered the topic of             be required. The officials          practices meet the intent.
predominately be            subcontracting limits and           explained that they agree that      Officials reported the agency
conducted overseas in       concluded such limits would         contracting officers should         adheres to relevant Federal
support of contingency      not be workable and have the        require that a contractor obtain    Acquisition Regulation
operations                  potential to increase               consent to subcontract under        provisions related to consent
                            contracting actions, which          certain conditions and a            to subcontract. In addition, as
                            could negatively impact the         change to the governmentwide        part of the Accountable
                            workload of the contracting         Federal Acquisition Regulation      Assistance for Afghanistan
                            and oversight workforce.            should be made.                     initiative, contracting officers in
                                                                                                    Afghanistan may restrict
                                                                                                    implementing partners from
                                                                                                    having more than two
                                                                                                    subcontract tiers without
                                                                                                    USAID approval.




      Page 27                                                        GAO-12-854R Contingency Contracting
12e                            No actions taken or planned          No actions taken or planned      No actions taken or planned
Incentivize contingency         that directly align with the         that directly align with the     that directly align with the
contractors to end              specific recommendation              specific recommendation          specific recommendation
trafficking in persons by     DOD officials stated the             State officials stated the        USAID officials stated the
labor brokers and             department does not plan to          department does not plan to       agency does not plan to
subcontractors by             implement this                       implement this                    implement this
requiring prime contracts     recommendation. Officials            recommendation. Officials         recommendation. Officials
to include performance        stated that the department is        stated that State does not        explained that while they
incentives and mandate        committed to combating               agree that incentivizing          would support assessing
that performance              trafficking in persons and           contractors with additional       contractor performance as it
assessments include           implementing the department’s        payments is the best way to       pertains to management of
management of                 “zero tolerance” policy but          accomplish the goals of the       trafficking in persons, there is
trafficking in persons        does not intend to incentivize       recommendation. Instead,          no need to incentivize
                              contractors to do so. DOD            State issued additional           contractors to comply with the
                              identified numerous initiatives      guidance and took action to       law. They explained that all
                              underway in this area,               strengthen anti-trafficking       USAID contracts and grants
                              including policy mandates and        efforts. For example,             already contain the standard
                              awareness initiatives. For           State issued detailed contract    Federal Acquisition Regulation
                              example, in November 2011,           administration guidance and       provisions related to human
                              DOD published additional             developed training for            trafficking and that the agency
                              contract administration duties       contracting officer               has issued additional guidance
                              to maintain surveillance over        representatives on how to         and directives. Also, USAID
                              contractor compliance with           monitor contractor compliance     established a working group
                              trafficking in persons               with countering trafficking in    for continued oversight of
                                                                                            d
                              requirements for all DOD             persons requirements.             trafficking issues and
                                         c
                              contracts.                           State also collaborated on the    enforcement, which is
                                                                   development of                    developing updated training for
                                                                   governmentwide training on        contracting officers and
                                                                   trafficking in persons            contracting officer
                                                                   prevention responsibilities for   representatives.
                                                                   acquisition professionals.
                                                                   Further, State created and
                                                                   issued a new contract clause
                                                                   on recruitment and housing of
                                                                   non-professional third country
                                                                              e
                                                                   nationals. The clause requires
                                                                   recruitment plans, fair
                                                                   recruitment practices, and, as
                                                                   appropriate, a plan to provide
                                                                   adequate housing conditions
                                                                   for workers.
Source: GAO analysis of agency documents and interviews with agency officials.
a
 Department of State Office of the Procurement Executive, Procurement Information Bulletin 2012-01, Contractor
Suspension and Debarment, October 3, 2011.
b
    Pub. L. No. 111-383.
c
 DFARS § 242.302.
d
 Department of State Office of the Procurement Executive, Procurement Information Bulletin 2011-09, Combating
Trafficking in Persons, March 24, 2011.
e
 Department of State Office of the Procurement Executive, Procurement Information Bulletin 2012-10, Contractor
Recruitment of Third Country Nationals, February 28, 2012.




         Page 28                                                        GAO-12-854R Contingency Contracting
Table 13: CWC Strategic Area 13—Provide Adequate Staffing and Resources, and Establish Procedures to
Protect the Government’s Interests

Recommendation not                        DOD                             State                             USAID
directed to specific entity
13a                             Actions taken or planned      No actions taken or planned       No actions taken or planned
Strengthen authority to        that directly align with the    that directly align with the      that directly align with the
withhold contract payments     specific recommendation         specific recommendation           specific recommendation
for inadequate business       In February 2012, DOD           State has not taken or            USAID officials did not identify
systems                       issued a final rule to amend    planned actions that directly     actions taken or planned that
                              the DFARS to improve the        align with this                   directly align with this
                              oversight of contractor         recommendation, and officials     recommendation. According
                              business systems, including     stated a governmentwide           to officials, they are reviewing
                              the ability to withhold a       change would be required.         USAID’s current authority to
                              percentage of payments on       According to State officials,     withhold contract payments
                              certain covered contracts       consistent governmentwide         for inadequate business
                              when a contractor’s business    rules are required in this area   systems.
                              systems contain significant     since, unlike DOD, other
                                             a
                              deficiencies. Additionally,     agencies lack specific
                              DOD reported that Defense       authority to withhold
                              Contract Audit Agency           payments for inadequate
                              business system audits have     business systems.
                              identified deficiencies that
                              have been or are in the
                              process of being corrected.
13b                             Actions taken or planned      No actions taken or planned       No actions taken or planned
Amend access-to-records        that directly align with the    that directly align with the      that directly align with the
authority to permit broader    specific recommendation         specific recommendation           specific recommendation
government access to          Section 842 of the National     State has not taken or            USAID officials did not identify
contractor records            Defense Authorization Act for   planned actions that directly     actions taken or planned that
                              Fiscal Year 2012 provides a     align with this                   directly align with this
                              mechanism for the               recommendation, and officials     recommendation. According
                              department to obtain access     stated a governmentwide           to officials, they are reviewing
                              to certain contractor and       change would be required.         specific limitations on
                              subcontractor records in the    Officials stated that the         USAID’s current authority to
                              U.S. Central Command’s          government should be              access contractors’ records.
                                                     b
                              theater of operations.          consistent in this area, since
                              According to DOD officials,     standards need to be clear for
                              the department worked with      agencies to deal with multiple
                              Congress to obtain this         layers of subcontractors in
                              statutory provision.            overseas environments.




      Page 29                                                    GAO-12-854R Contingency Contracting
13c                                Actions taken or planned            Actions taken or planned           Actions taken or planned
Increase agencies' staff          that directly align with the        that directly align with the       that directly align with the
and resources to enable           specific recommendation             specific recommendation            specific recommendation
adequate management of           DOD officials stated in             State is using resources from      USAID officials stated that the
all aspects of contingency       February 2012 that the              the Defense Contract               agency will have added
contracting: financial           department was establishing         Management Agency and the          95 contracting officers by the
management, acquisition          a working group to address          Defense Contract Audit             summer of 2012, more than
planning, business-system        staffing and resource               Agency to augment its              doubling the number of field
reviews, source selection,       challenges related to               contract management and            contracting officers in the last
incurred-cost audits,            contingency contracting.            administration capabilities.       3 years under the
performance management,          Officials noted that staffing       Officials also stated that since   Development Leadership
property management,             and resourcing continue to be       its working capital fund was       Initiative program.
contract payment, and            the department’s biggest            established in February 2008,
contract close-outs              challenges and they are             in part to fund the hiring of
                                 concerned that future budget        contracting personnel, State
                                 cuts could affect progress          has hired 66 direct-hire
                                 made to date.                       employees and was in the
                                                                     process of hiring another
                                                                     19 government employees as
                                                                                    c
                                                                     of June 2012.

Source: GAO analysis of agency documents and interviews with agency officials.
a
    DFARS; Business Systems-Definition and Administration (Case 2009-D038). 77 Fed. Reg. 11,355 (Feb. 24, 2012).
b
    Pub. L. No. 112-81 (2011).
c
22 U.S.C. § 2684.




Table 14: CWC Strategic Area 14—Congress Should Provide or Reallocate Resources for Contingency
Contracting Reform to Cure or Mitigate the Numerous Defects Described by the Commission

Recommendation                                 DOD                                State                             USAID
directed to Congress
14a                                      Not applicable                      Not applicable                    Not applicable
Congress should provide or
reallocate resources for
contingency contracting
reform to cure or mitigate
the numerous defects
described by the CWC

Source: GAO analysis of agency documents and interviews with agency officials.




         Page 30                                                        GAO-12-854R Contingency Contracting
Table 15: CWC Strategic Area 15—Congress Should Enact Legislation Requiring Regular Assessment and
Reporting of Agencies’ Progress in Implementing Reform Recommendations

Recommendation                             DOD                        State                    USAID
directed to Congress
15a                                    Not applicable             Not applicable            Not applicable
This legislation should        While this recommendation is
require the Secretaries of     directed to Congress, DOD
Defense and State and the      reported that it does not
Administrator of USAID to      intend to submit a report to
submit reports detailing       Congress but plans to
their plans for                integrate applicable
implementation of CWC          recommendations into a
recommendations,               comprehensive operational
commencing 180 days from       contract support action plan
enactment of the               and continue to track
legislation, with annual       implementation progress and
reporting thereafter           have working groups and
                               forums to further address
                               contracting issues in current
                               and future contingency
                               operations.
15b                                   Not applicable              Not applicable            Not applicable
This legislation should
require that agencies'
reports shall be submitted
to congressional
committees of jurisdiction;
to the inspectors general of
the Departments of
Defense and State, and of
USAID; and to the officials
holding the proposed new
positions at OMB/NSC and
the permanent inspector
general for contingency
operations, all of whom
would be required to review
and validate the reports




      Page 31                                                  GAO-12-854R Contingency Contracting
15c                                      Not applicable                      Not applicable          Not applicable
This legislation should
require reporting
requirements that
include: (1) actions taken or
planned to implement
recommendations,
including an implementation
schedule with milestones
and assignments of
responsibility; (2)
explanations for non-
implementation of
recommendations,
including counter-measures
for barriers to
implementation; and (3)
evaluation within 120 days
by the Comptroller General
and agency inspectors
general (and the permanent
contingency IG when
available) of the agencies'
reports and their
compliance with
requirements

Source: GAO analysis of agency documents and interviews with agency officials.

In table 16, we list the recommendations that the CWC made to Congress, State, and DOD in
Special Report 4, which related to the transition to a civilian-led presence in Iraq, and
summarize agency positions on them if the agencies provided their position to us.



Table 16: CWC’s Recommendations in Special Report 4

Recommendation                                 DOD                               State                  USAID
directed to entity
specified
1                                        Not applicable                      Not applicable          Not applicable
Congress ensure adequate
funding to sustain State
operations in critical areas
of Iraq, including its greatly
increased needs for
operational contract support




      Page 32                                                           GAO-12-854R Contingency Contracting
2                                        Not applicable                Actions taken or planned       Not applicable
State expand its organic                                              that directly align with the
capability to meet                                                    specific recommendation
heightened                                                           In 2008, State began using a
needs for acquisition                                                working capital fund to fund
personnel, contract                                                  increases in the acquisition
                                                                                 a
management, and                                                      workforce. Officials stated
contractor oversight                                                 that since February 2008
                                                                     when the fund was
                                                                     established, the department
                                                                     has hired 66 direct-hire
                                                                     employees, and was in the
                                                                     process of hiring another
                                                                     19 government employees as
                                                                     of June 2012. The department
                                                                     also noted that its Bureaus of
                                                                     International Narcotics and
                                                                     Law Enforcement Affairs and
                                                                     Diplomatic Security, the two
                                                                     bureaus most heavily involved
                                                                     in overseas contingency
                                                                     contracting, have both
                                                                     significantly increased
                                                                     resources to support contract
                                                                     administration.
3                                  Actions taken or planned            Actions taken or planned       Not applicable
The Secretaries of State          that directly align with the        that directly align with the
and Defense extend and            specific recommendation             specific recommendation
intensify their collaborative    According to DOD officials,         In February 2011, the
planning for the transition,     the Secretary of Defense            Secretary of State appointed
including executing an           appointed a senior-level Iraq       an Iraq Transition
agreement to establish a         Transition Coordinator and          Coordinator. According to the
single, senior-level             the Chairman, Joint Chiefs of       department, the Iraq
coordinator and decision-        Staff also appointed a senior       Transition Coordinator has
maker to guide progress          military officer as his Iraq        been responsible for
and promptly address major       Transition Coordinator. For         coordinating all State-related
issues whose resolution          the Iraq transition effort, in      aspects of the U.S. transition
may exceed the authorities       September 2010 DOD and              from military to civilian
of departmental working          State established a Senior          operations in Iraq, working
groups                           Executive Steering Group            closely with the U.S.
                                 focused on coordinating the         Ambassador to Iraq, the U.S.
                                 materiel and support aspects        military, and other U.S.
                                 of the transition. According to     departments and agencies.
                                 DOD officials, this group           DOD and State also
                                 reported to the Under               established a Senior
                                 Secretary of State for              Executive Steering Group to
                                 Management and the Acting           focus on coordinating and
                                 Under Secretary of Defense          synchronizing the materiel
                                 (Acquisition, Technology, and       and support aspects of the
                                 Logistics) on a regular basis       transition.
                                 to ensure that milestones
                                 were met and address any
                                 issues that may impact the
                                 transition. The officials noted
                                 that this group also
                                 established working groups as
                                 necessary.

Source: GAO analysis of agency documents and interviews with agency officials.
a
 22 U.S.C. § 2684.




      Page 33                                                           GAO-12-854R Contingency Contracting
Enclosure II: GAO Contacts and Staff Acknowledgments


GAO Contacts

John P. Hutton, (202) 512-4841 or huttonj@gao.gov
Cary B. Russell, (202) 512-5431 or russellc@gao.gov

Acknowledgments

In addition to the contacts named above, Johana R. Ayers, Assistant Director; Alissa Czyz,
Assistant Director; Jacob Leon Beier; Carole Coffey; Jennifer Dougherty; David Hancock;
Melissa L. Hermes; Mae Jones; Hynek Kalkus; Julia Kennon; Anne McDonough-Hughes;
Christopher J. Mulkins; Alyssa Weir; and Natasha Wilder made key contributions to this report.




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