>> i'm asking you about their figure. i know you don't accept their figure. was your figure for this just 27 million? >> i do not know the answer. >> okay. here's a question you shouldn't mind that much and that's -- you heard testimony that there's a business case analysis that would stop cold the competition for logcap for common services in iraq that's going on now. i'm going to ask you to prong question. number one, he must have your proposal in the works and i just wanted to hear if you think you have a very good and attractive proposal considering that she recently in iraq one ctp competition. and do, if your proposal one because it was attractive to the government, do you think there would be that much turmoil and

transitioning do you to you, transitioning kbr under logcap iii in logcap for. keep in mind you're doing that now under ctp. >> first off, i always believe we have a winning proposal or it wouldn't submit it. that's just the way it is. we work very hard on our proposals and we try to win work. the problem with this proposal from your perspective, mr. commissioner, is that the solution patient states that the country will be split in half, north and south and there will be two different companies on baseplate support. so regardless of how it turns out, we are either going to transition have the company to somebody -- country to somebody else or we're going to transition all the countries to somebody else.

and so the current plan that we are preparing for tells us that that's going to have been and will have to do it while we're cascading down and closing camps. >> nighttime is quite limited here to let me ask one other thing. i believe your plan says, as dcaa, your drawdown plan, says that which you envision as a final head count in august for supported people in august, this is where the troops not to come down to 50,000. there'd be 50,000 troops in including them they would be about 189,000 people supported. that's your view of the final stage in august, yes? >> no, commissioner. our plan -- the planning factors in our plan for the upstate population to be supported by planning numbers that we have received for a multinational

force. >> okay. >> we're working with the army's estimates. those are not our numbers. through that you're working with a 189,000 is what you're saying. thank you. my times up. >> thank you. mr. horn and mr. laboa. i don't know why you feel inclined to say this, but i sent you have a real chip on your shoulder, mr. horn and i want to explain something to you. and this commission i've never seen an inch, a fraction of partisanship. i have a tough time in my brain was republican or democrat. on this commission where former control at dod. we have an inspector general for both state and homeland security, former number two at dcaa, assistant secretary of va who is the chief financial officer and also the deputy controller at dod. we have been sorry one member of congress. we have a high ranking gao official who was project manager and part of the senior executive

order. we have another member who is a dod national security and a number three state department. and we have a contract law professor. we take our joffrey sincerely. we have not ever seen any partisanship. and i want to say that your company in the end finds a way to cooperate with us. but sometimes we feel like we take you kicking and dragging to the altar. that's just our opinion. we rarely have to deal with an attorney in another office, but we have to more than often than do not deal with an attorney in your operations. as if that's the only way we can communicate with you. you have been very helpful and cooperative in having our people come down and we appreciate that. but on a scale of one to 10, you are somewhere in the middle of the cooperation compared to some of the other contract is.

my point in asking you to start in the third page of your document is we wanted to get inside the meat of your point. i fully am the commission fully respects your 29.5 years of service to the military. and mr. laboa, you're 35 years. i'd travel to iraq because i got addicted to being in the presence of people like you. their members on the commission and i am one of them who have continually, we all point out that contractors are an essential part of this operation. we couldn't do without them. and then a lot of them were former service people. i was at a public hearing when you have blackwater totally criticized and i would like to provide some balance. as to how many people they ever lost in the last nine of the people they protect protected. if the company of your people did you lose? they set dirty. every one of them was former navy, former air force, former

army, former marines. they're all military people. they just happen to work for a private company. so you don't have an enemy on this site, but we start to react when we think that you should know things that you don't know. and i just want to put it in depth. and the perspective i'm trying to have you understand is you got an incredibly low mark, not just from dcaa, but from the inspector general as it related to one part of your operations. it was a well marked like a 10% and less. it would strike me given that she knew that dcaa was going to come here that she would be. to answer. the fact is your people should have reviewed and told you what they had submitted in the dialog. the fact they didn't is telling to me and if they did and you are kind of pointing out what is the first time you heard about it. that strikes me. i become suspicious, candidly. so i just want to say to you,

does it matter and should it matter to you that on that part there was such a load utilization of 10%? and i'm talking specifically about the clss and i'm talking about the maintenance facility at balad. does it matter to you? mr. horn? >> mr. commissioner, it matters very much to us what our contractual requirements are and what our delivery of those requirements are. it matters to us whether we are meeting our internal standards and whether we're meeting army standards. the element i tried to point out was this data was collect dead from one data collection element, the sand system which is not a totally competent

system of all the work that's done. but more particularly, this work and much of this work was be prepared type work for you are on standby, on-call with the capability to be prepared, which is difficult in evaluating -- normally comecome a few abatements units, they're in the motor pool and they're working from eight in the morning and so whenever they close. >> mr. horn, but we just -- i'm going to yield my time as i need to pursue this. so we're going to cover it because you deserve to the commissioner. i would've found a more healthy and reassuring to say we're not perfect, we made some mistakes. this is an area we made a mistake on ayn rand top of it. but instead, he you want almost get us into a dialogue as to whether both dcaa and the inspector general were found. and i don't know why you would go in that direction. the bottom line is it was sent 85 and 65. it was 85, 10, 10% utilization.

there's too much a margin for it seems to me to have you want this to be where you're going to have your line of battle. how do you just simply said to us, it's underutilized and this is why it happened and this is where we think it shouldn't happen. i would think that would be more healthy response. you choose not to go that way. i'm dumbfounded by it. explain to me why 10% is acceptable. >> mr. commissioner -- >> and all have mr. laboa jump in. >> mr. commissioner, i'm a taxpayer, too. and it is not -- you know, it was not acceptable to us and that's why we went to the military and said look guys, we are concerned. we got all these people here.

we don't have work. here's the data appeared within a july 2008 and said, here's the data. then we would've back in either august or september and said here's my data. we are still concerned. >> so your testimony is as you are aware of it and not a surprise and he went to the government to say you got a problem. what was their reaction? >> serve, their reaction to my knowledge was we got it, we understand and we are studying it. as far as i know -- i personally was involved in the communications because i wasn't there then, but in january we did the same thing again. we went back to the government and said look, it's underutilized. and not only are we concerned about it, but we want to sit down and talk about a better way to utilize this workforce. you know, we get contractual

requirement to provide it. we were just as concerned as you are that they weren't -- that we were not using that capability. and as i've said before, i don't know when i don't want to second-guess what the military knew that we didn't about future operations, about capability they wanted to retain and whether or not they specifically excepted the excess or not. >> mr. horn, which you disagree with what mr. laboa has said to us? >> i agree with what mr. laboa has said. the position i was taking was to try to clarify the nature of what's being measured. you can go down that same road if you tried to evaluate firemen. if firemen are not fighting a fire, they're utilization rates will look good. but they have to be there -- >> it's a difficult story.

mr. horn, you're almost arguing against her argument. mr. laboa told dod there is a problem here there's underutilizing and are coming back and saying we need that utilization. if dod says they want 85% utilization, why would you make a argument to them that 10% is acceptable? >> no, i did not say is acceptable. but i said, mr. commissioner, was the basis -- the basis of what you are measuring needs to take into account that part of our work was to be on call, much in the way that firemen are on call. >> well, i'm hearing to messages from both of you. i'm hearing mr. laboa take the position i think it's a valid one, that we were totally underutilized, we didn't meet the 85%. we told dod. uncomfortable except enough. now i'm hearing you make an

argument that basically says we were underutilized, but like firemen we need to be able to meet whatever needs in place. and yet, the contract was clear he needed 85%. and that they just quickly give you the opportunity to explain the last paragraph of your kbr letter. kbr is willing to discuss the management and cost efficiencies described in her briefing on december 8, 2000 night and in this letter during the coming discussion of contract interpretation issues that have arisen from usg audit activities pending these discussions, kbr asks that you advised dcma intime logcap to stand down and discounting kbr's cost stewardship to the kbr, tell me about that. that last paragraph.

>> the last paragraph, mr. commissioner, was referencing the fact that kbr believes that in certain locations we are being given incorrect direction to separate step through elements of work rather than d. scoping work into work itself. and during the period of time of that letter where it elevated the issue to the contracting officer, we would not respond down at the lower level with cost estimates to what we believe for incorrect procedures. >> to think it's proper for you to ask the army contracting command to tell dcaa and teen logcap to stand down. do you think that's proper for you as a contractor to do that? >> i was asking, mr. commissioner, i was asking the government to direct those particular a ceos to not hold against us in a negative way.

their evaluation of our performance while we were seeking clarification. their performance is based on timeliness of response of information. >> i read it to delay. overture basically saying that they needed to stop and desist, it is close. mr. thibault coming of the floor. stack thank stack thank you, mr. shays. for fear of beating a dead horse and my horse is going to get pulverized bit oddly what i want to go back to mr. laboa and i think he said it well because i understood it. in this discussion about what you do, you said when asked what your responsibility, you said the statement delineates a number of people at paypal first major confederate. he said the second one is unique communication from the military to the aco to that some form of direction, it don't need the capability. and then we are not and this is

wearing beating the poor horse to say that four times and then you clarified it and you give communications and use it to write knowledge because i didn't understand the qualifier. but for the record, can you please provide off for of those notifications, the nature of them and you gave them? if your e-mails, great. then it's just a note. if there was verbal, favorable by someone so to someone so because i realized notification can take a lot of reform. so i have that request. >> of the gentleman gentlemen to sell them at one point? >> of course. >> i was just what i given that you knew this would be an issue at the hearing that you would just be able to hand it to us all right now. i'm just -- >> sir, i didn't know that was the right thing to do. >> just to be prepared to deal to do that. >> i know what the data is. we will do that. >> okay, building on that,

mr. laboa, you know, we got tens of thousands of kbr contractor employees that she went through a couple hundred locations, maybe more. i can't believe that this is the only case out there. i don't believe it. i believe that this isn't a shooting star. if it is, i'd like you to tell you that this is an anomaly that samad happened when they looked at it. so i'm interested, for the record, because i think it's really important and i know you said you don't want to make a dig deal about it. i kind of do because your point throughout this has been my hands are tied sometimes. not that i'm hearing and i could go back and spend a long time. let me finish my question. what i would like from you and if you don't have it on the top, you've got in terms of communication and really effective organization. i've seen that demonstrated good

as i do know -- i think some kind of statement coming out, we've been able to locate 26 other cases where we've tightly notified the government that we had have situations that warranted their attention is utterly critical. because you've also, and the collective statement, mr. horn's statements that we've got to work together. and so, to me, that's really important because you heard me this morning say that the company, i believe, has an equal obligation as a signatory to do these types of things. and like i told the army, they're making ground on what they're trying to do. and if we can see evidence with the company is making ground on what it trying to do, then at that point you maybe able to stand back for a brief period, which is kind of what we've done in a world of course on the train because you have to give them time to do it. but i'm going to hang onto this efficiency and make it personal

just because to me as quality control and i'll say for the record, every time i've gone out and of course we ask, are the biggest company and see how the quality control? forget the electric -- the electrocutions and you can't, but in terms of me that aside has been very, very positive. but the cost control has always been our time on the efficiency, the economy another. so that's where i think if you've offered to give us an education, that's one where if you want to come back with an array would like to educate about them arrived and it's mr. shays point. can mr. shays would like to see the documentation, the evidence coming forward that shows -- you know, it's the old story about the pot to wash her feet is your worst heard with the words are there appeared to see where your feet are gone. and i would just be very helpful. can i ask that? >> yes, sir. i'd be happy to do that. and part of that documentation

on the meetings were within the dod ig report, but we will pull that out and provided as used request. >> will get a group out there know personally, if i realize these days you live in theater? >> sir, i live in theater, yes, sir. >> baby sometime in the coming onto greater management we can all sit together. he went okay, sir. i look forward to that. >> by thank you both. note that this is going to be easy and it wasn't. i'll yield you the rest of my time. >> thank you, mr. henke. you going to pass? ms. schinasi? >> we talked before about the uncertainty associated with the job done in the military doesn't want to have the final idea of what the end state is going to look like or when. it seems to me that's always the case in contingencies or

bitterness contingency we also saw that twice. we thought first in the initial invasion into iraq and then on the side again with the surge, where there was uncertainty about what was going to happen, what kind of services were going to need, what department, how quickly needed to get there. is there any way you approach the straw down differently with respect to uncertainty. i mean one is ramping up and one is rated down. both cases it seems to me are operating under the same kinds of positions not knowing what the end state is going to be. >> man madam chair -- none commissioner, this is very different now. this time we have a specific specified task, which is to conduct logistic support to the draw down. much like before with the site task to give since that report

the search. what's different this time is for having to develop and set up and the ability to transition this contract across to two other companies while it's ongoing. and so, not a having had any other direction, we have had to fold that into this and it has made it very complex. >> okay, thank you. so just say which are seen as you're prepared to transition because that's been part of what you're -- what you're planning to do. >> madam commissioner, we've successfully transitioned every element of logcap iv to date. >> mr. horn, the last time we talked, mr. tiefer and i were in theater and you were are back early in the morning at your kbr officers. and at the time we just become aware and i think you personally had just become reasonably aware that 7100 people at the subcontractor level in iraq that

should not previously been aware of. and u.s. does for some time to figure out what exactly had happened. so i'm going to put the question to you now. i think some five weeks later. can you tell if a little bit about how the commission came to be neither particularly to know how it was raised to your attention. >> yes, commissioner. or at the contract we have provided contract deliverable reports, which we abbreviate to call see roles. we give a daily personal report to the government on the status of our personal strengths across all sites and publications. we've been doing that since the beginning of the contract. procedural asked for the people doing work and that's what we have been doing. when we started analyzing the camps for job done and we got into the life-support areas the verse of contractors and analyzed there can't make up in

their camp components for java down, we realized that the subcontractors have their own overhead elements residual within their camps, taking care of their internal business. they are not taking care of the specific deliverables of our work and they had -- those bodies had not been shown up on our procedurals. as soon as we realize the discrepancy reported up to the government and we said, okay, here is a group of people inside each of the subcontractors populations in the theater that are in fact nsn spare overhead and we have not been aware of their population strengths. we legally had a discussion of the government about it. we discover the right thing to do was take control and accountability of those people. that number has driven down from what we roughly cast initially was 7000. that number has gone down to write a 4000 assets this week.

and so that is what has been. i believe were proactive in bringing it to the army's attention when they discovered it and we are tracking it as a teacher of report item from now on. >> is that 4000 because 3000 people have left for the original? through that part of it is for subcontractor work that has left, but the majority of it was getting really clear headcounts of who was due and there was fire. the initial 7000 member wasn't accurate. >> and you have -- to put it on the u.s. to recommend to the government that you do that? did they have to direct each do that? we told them without the right thing to do was to account for these people because when you conduct a drawdown would do to make sure they get out of the theater. government decree and we've inculcated it into a report. >> is that a practice that you would expect to be a good

business practice going forward? >> we believe it's the right thing to do. and i just want to point out, it's not a cost impact to the government. >> write, understand that. it's one of the things that were trained to understand is what sort of visibility as possible and what sort of disability do you need. and some case you've heard all about the spy database and try and understand how many contractors are working for the u.s. government. verifications other than custom vacations come but i take your point. thank you. my time is up. >> mr. chairman, chalet -- my turned? >> mr. ervin. >> tonight. i have just a couple of questions. mr. warren, hostility to this november 20, 2009 what are the kbr from todd bishop to dcaa any reference to anything both of the dead in the last round of questioning that kbr brought to the government specifically said

to's attention that under utilization of class and that there were numerous communications are unique to the government that affect in the city provide all that to us. essentially, what was -- did you get a response from dcma and what was its response? >> i do not know that we got a response. >> mr. laboa? >> mr. ervin, there were discussions. i do not looking back over all the data see a formal response. and we, to my knowledge, did not make a formal written letter. these were briefings that were taken to the third expeditionary support command and discussed. >> so is discussed at lower levels which are seen? it was never elevated to the attention of higher authorities? >> it was discussed at the right level because the third ese, expeditionary support command is

the group that makes the position or provides the data to other personnel to acs on exactly what they need to do their mission. so it was that the right level. the discussion was at the right level. and there were more, as i say, as i explained to mr. shays, i believe, there were four opportunities for these discussions occurred. >> immature legal position that irrespective of whether there were several response to your premium is to the government's attention that you didn't have the legal unilateral right to descope, that's her legal position? >> i don't know about the legal position. i think it is from our understanding of our contract and our ability to do what we've got to do, we must have direction from the government,

okay, to take those off, to take it off. >> now, bring cost-saving to the government is a contrary unto an award saving. >> yes, sir. >> and how much in the way of award fee has kbr got over the course of logcap iii on the basis of the criteria cost saving, proximally? >> sir, i don't know that. i'm a double-a to do that. >> do you know, mr. horn? >> for the life of the contract? >> just approximately. you have a ballpark figure. have you gotten any? >> yes, sir. >> can you hazard your gas? >> sir, i prefer to not hazard to guess. but i will be happy to get you the exact details and forward them to you. >> i'd like you to hazard to guess. >> are not going to make a guess because i'll be held accountable hor that guest of the cows come