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The Curious Case of the Unnoticed Congressional Hearing

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Rather like the curious case of the dog in the stables that did not bark in Sherlock Holmes' Silver Blaze case, there was a congressional hearing this past Thursday to which nobody paid any attention. They should have, as it nicely illustrates the difficulties of both doing effective government oversight on private military contractors and implementing actions being taken to try and improve the situation.

The March 11 hearing was held by the Defense Acquisition Reform Panel of the House Armed Services Committee.

The lead witness was Ashton B. Carter, the Pentagon's Under Secretary of Defense for Acquisition, Technology & Logistics. In his written statement he testified:

A third area of responsibility connected to the two wars is contingency contracting. It is a fact of life that for every soldier we field, approximately one contractor also joins the effort. That is an unavoidable consequence of the way our country is waging today's wars.

Contingency contracting is an enormous effort to manage, and it is fair to say we have not managed it as well as we might have in the first eight years of the current campaigns. I think part of the reason is because of the novelty of the task; part of it is just the exigency of war, and part of it is that we refused to admit to ourselves that we were going to be doing this for a long time, and that we had to get good at it. But we have made that admission now, and Secretary Gates is insistent that we learn the lessons of Iraq in Afghanistan, and that we learn the lessons of Afghanistan quickly because Iraq is not Afghanistan.

The public and all of us as taxpayers are justifiably insistent that contractor support be provided economically and there are a number of congressional oversight bodies who are sifting through what we are doing in Afghanistan. We are working down the same list they are to improve our performance and accountability. At the same time, however, we must retain a sense of balance between perfect and auditable on the one hand, and being effective and agile on the other.

To his credit Carter acknowledges the obvious, which is that past governmental oversight of private contractor performance leaves much to be desired. So what does he propose to do about it?

I believe this Panel has highlighted an area that we have not adequately addressed--acquisition of services. This area is where the money is and where we can do better. I agree with the Panel's finding that in order to assess whether we are indeed obtaining the best value, we must use meaningful metrics in the categories of cost, quality, and delivery.

"Metrics"? Isn't that what Donald Rumseld wrote about in his famed 2003 memo on the war on terrorism, i.e., "Today, we lack metrics to know if we are winning or losing the global war on terror."?

One could very well say we still don't have the metrics in place to comprehensively measure the utility and effectiveness of private military contractors, although the recent GAO report on the cost-effectiveness of private security contractors was a good, albeit long overdue, step forward.

The Director of Defense Procurement and Acquisition Policy has developed and implemented a comprehensive architecture for the acquisition of services. My acquisition team is validating adherence to that architecture through the review and approval of acquisition strategies submitted for services acquisitions valued at $1 billion or more. For example, we are using this opportunity to shape these programs to severely curtail the use of new time and materials contracts, to limit service contract periods of performance to three to five years, ensure requiring organizations dedicate sufficient resources to performance oversight, and to demand competition for task orders on indefinite delivery, indefinite quantity (IDIQ) contracts. Military departments and defense agencies are to employ the same set of service acquisition tenets and associated review criteria for contracts valued less than the $1 billion OSD threshold.

Management and oversight of contractors performing service functions demands a
different approach than that used to oversee contractors developing our weapon systems. The decentralized nature of service functions requires a cadre of military members and government civilians to perform contracting officer representative (COR) duties. CORs are the eyes and ears of the government to monitor contractor performance.

We have recognized that inadequate surveillance of services contracts has left us
vulnerable to the potential that we are paying full price for less than full value. Therefore, over the past year, we have developed COR certification and training standards to legitimize this vital function and instill rigor in the management and oversight process. Once formalized, this initiative will build upon the mandate issued by the Deputy Secretary to require appointment of trained CORs prior to contract award and to require COR duties to be considered during personnel annual performance assessments.

This month, we are deploying as a pilot a web-based tool that will enable military departments and defense agencies to manage nomination, training and tracking of their respective cadres of CORs. These actions, coupled with the COR courses developed over the past year by Defense Acquisition University (DAU), will improve the capability of the Department to provide effective surveillance of service contracts.

Robert Hale, the Undersecretary of Defense (COMPTROLLER) said, "DOD's enormous size and geographical distribution greatly complicates this task. We just can't afford to hire an army of accountants. We have too many people, we're spread around too much. Think of trying to do audits in Afghanistan or Iraq. It just wouldn't work."

This is a reasonable statement as far as it goes. The alternative is to rely on automated financial management systems. But as anyone who has ever looked at the issue in any detail knows, the Pentagon's financial information systems are numerous, are frequently non-interoperable, and in many cases are legacy systems, which should have been retired decades ago.

As Hale himself noted in his written statement, "Our systems are old and handle or exchange information in ways that do not pass current audit standards. Our legacy systems tend to be non-standard and sometimes do not have good financial controls."