The effectiveness of contractor support of expanded U.S. operations in Afghanistan and other contingency operations could be compromised by the failure to extract and apply lessons learned from Iraq, according to a recent report from the Department of Defense Inspector General.
The Pentagon is the world's largest purchaser of goods and services. DOD spent $392 billion in FY 2008 and $366 billion in FY 2009 on contracts. Yet its acquisition and contracting community continues to face the stress of managing the increasing Defense budget with a smaller and less capable workforce. While this is not exactly breaking news it bears repeating. The size and skill of the DOD acquisition workforce has not kept pace with the growth of its contract oversight responsibilities.
To paraphrase Winston Churchill's famous saying about British pilots who won the Battle of Britain in 1940, i.e., "'Never in the field of human conflict has so much been owed by so many to so few'" the IG report might be read as saying never has so much contracting depended on so inexperienced and overburdened few
Effective oversight of the diverse functions performed under high dollar value logistics and support contracts requires a sizeable cadre of highly-trained Government contracting personnel with specialized knowledge and significant acquisition expertise. Collective results of work conducted throughout Southwest Asia have led the DOD IG to conclude that a relatively small number of inexperienced civilian or military contract administrators and support personnel were assigned far-reaching responsibilities for an unreasonably large number of contracts. In order to meet urgent warfighter needs in contingency operations, contracted procurements were expedited, contributing to less than prudent contracting practices.
A more appropriate analogy for current private contracting oversight would be how British Secretary of State for War Anthony Eden paraphrased Churchill's saying in North Africa, when the British were defeating the Italians before Rommel's arrival : Never in the field of human conflict was so much surrendered by so many to so few.
The objective of the report "Contingency Contracting: A Framework for Reform," dated May 14, was to provide DOD field commanders and contract managers with information on systemic contracting issues identified in DOD Inspector General products issued from October 1, 2007 through April 1, 2010, that involve high-risk areas of contract management and identify actions that need to be taken to correct these issues for future contracting.
One of the more intriguing aspects of the report deals with the "inherently governmental" debate. This refers to the issue that some functions are just too sensitive to be done by contractors and should always be done by government employees. This is harder to say than to do, as there is no consensus on what inherently governmental is. Yet Federal Acquisition Regulation (FAR) Subpart 37.114, "Special Acquisition Requirements," states that contractors working in situations where their contractor status is not obvious to third parties are required to identify themselves as contractors. This avoids creating an impression in the minds of members of the public or Congress that they are Government officials, unless, in the judgment of the agency, no harm can come from failing to identify themselves. Agencies must ensure that all contractor personnel attending meetings, answering Government telephones, and working in other situations where their contractor status is not obvious must identify themselves."
Most people agree that special operations forces frequently carry out tasks that should only be done by regular military forces. Yet the IG report found:
Special Operations Forces Support Activity management allowed contractors working for the Special Operations Forces Support Activity Business Management Division to perform inherently governmental functions. Specifically, management and contracting personnel allowed contractors to administer task orders, determine what supplies or services the Government required, and approve contractual documents. The contractors performing inherently governmental functions did not identify themselves as contractors. For example, in 3 of 46 task orders, valued at approximately $18 million, contractors working for the Special Operations Forces Support Activity signed contractual documents as a Special Operations Forces Support Activity representative. In addition, contracting personnel took direction and implemented contract changes from contractors working for their customers. These conditions occurred because the Special Operations Forces Support Activity lacked internal controls and standard operating procedures on the performance of inherently governmental functions. As a result, Special Operations Forces Support Activity may not have correctly administered and protected the best interests of the Government for approximately $82 million in task orders issued under the Special Operations Forces Support Activity contracts.
The DOD IG issued 34 reports and completed 19 investigations of fraud from October 1, 2007 through April 1, 2010, that pertain to the contracting process. It found 10 systemic issues related to contracting deficiencies with the top 5 issue areas being Requirements, Contract Pricing, Oversight and Surveillance, Property Accountability, and Financial Management.