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>> within the contracting community but may go further than that. we've heard today about shortage of contracting officers. the decrease over the last 15 years. and the simultaneous increase in the number of contracts and the value of contracts. we've been fooling around now in southwest asia for -- paycheck year. seven years, more depending on where you want to start. and it seems to me we're just getting our act together on a lot of these things. we're just beginning to take cors seriously and we're

beginning to take training and not training and acquisition personnel but our operational commanders seriously. we're just beginning to add people. we're beginning to talk about insourcing and i think all these things are great. i think you would probably all agree that we have never -- at least in my memory, and i've been fiddling around in this government in different departments for a long time -- we've probably never seen the emphasis on service contracting like you are seeing today. and why is that? well, it's to me obvious. we got a war going on. number one. you got folks like us that continue to pressure you and ask difficult questions. you've got i.g.s.

you've got s.i.g.i.r. and you've got s.i.g.a.r. my question is what happens when these incentives go away? what has when we're no longer in business. and s.i.g.a.r. and s.i.g.i.r. are no longer in business. how do we change the culture? how do we institutalize these things that we've been talking about and we'll continue to talk about so that we don't regress into the same situation that we've lived with for years? i would just like each of you to give me your opinion. how do we institutionalize this? because i think that's what's

important? >> let me just address the work force. and the changes, the remarkable changes that's going on within the department as it relates to the acquisition work force, both uniformed and civilian. that process has been going on for almost three years. this is not something that we woke up to yesterday. one of the things that the gao made very clear to us early on was that we didn't have a deliberative process to go through and look at work force. -- at our work force. well, we spent time doing that. we have 127,000 people in that work force soon to be 147,000. it is a five-year plan. it has been fully supported by the secretary of defense and dr. carter as well as the service chiefs. people recognize what it is that we need to do. i can assure you that we have

benefited from dr. gansler's commission, this commission and many of the oversight committees that continue to look at what we do every day. i don't think that they will all go away. i do think that we will -- we can and should have continuous oversight by commissions and committees as well as the gao. but i want to assure you, mr. green, that we are absolutely committed to this. it is institutionalized. there is no doubt within the department of defense that we are moving forward with significant change in not just how we do contracting but our acquisition work force in general. it's going to take some time. but we are making significant improvement. and we are meeting our goals. we met it in '09. we're meeting our hiring goals in '10.

we are ever vigilant to ensure that we maintain the quality of the people that we're hiring. dr. carter has been repeatedly emphasizing that to me. this is not just about numbers. but your point's well-taken. but i can assure you that if you look at the leadership development program that the army -- i think has done a very good job of putting into play on how they want to train not just their contracting professionals but their logistic professionals. >> what i'm talking about institutionalizing it. i agree. o.s.d., the army. they've done some gret things. -- great things. but when the incentive goes away. i've seen it happen time and time again. general harrington is not going to get those people that he so desperately needs. >> well, i can assure you that

the pb23s, our five-year plan for acquisition place is in place. that's institutionalized. now it does take -- you're absolutely right, year to year continued reinforcement and continued leadership to ensure that we, in fact, carry through on what -- >> why has it taken years to finally get to the point that we're paying attention to cors and cor training? >> i think in the case of cors, again, i think it's a recognition of the importance of executing our property oversight function. >> it's taken seven years to do that? >> well, it's -- you know, it's a question of resources and bringing it to bear. when you get the vice chief of staff of the army coming forward

and saying, you will, in fact, have trained cors, that's a very powerful mental. >> i agree. but it's taken years to get to that point? >> i agree it's taken some years. i agree that we had shortcomings in the past. but i think that there's been a significant recognition of those shortcomings. >> general phillips, general harrington, any quick comment on how we institutionalize this? >> sir, just a couple of comments. i absolutely agree with mr. assad and all that he has said. our army, i think, has done an extraordinary amount of work bringing the right kind of work force. not there yet. but it's important we institutionalize the lessens learned. i outlined thing i wanted to achieve in my year in iraq. he said there's one thing that's missing on your top 10 that i

added at the bottom as a banner. he said i want you to work hard on lessons learned in kuwait into afghanistan. and the first thing we started working on was contracting officer representatives because it was literally broken. and general dunwoody from army of material command and mr. pops from -- as the army acquisition executive met me in bagram, afghanistan, on the 28th of february. and we outlined a strategy to start to work on this. it's taken some time but we have the execution order on the 2nd of december. sir, that's one example how to go on fixing it. there's many more. we have the center on lessons learned that's working by my teams capturing lessons learned coming out of kuwait, iraq, and now afghanistan. we have to apply them because we owe that to you. we owe it to congress. and we owe it to the american people. >> ed, my time is up. but unless you've got a real

nugget -- >> sir, i'll pass, sir. and just agree with the two gentlemen to my right very strongly. it's a matter of leadership emphasis at every level. >> thank you. >> commissioner tiefer, please? >> thank you, mr. chairman. i mean, want to comment in light of the extensive attention that you gave this issue that logcap iv is of competition for iraq-based level services may be stopped, i want to -- i want to mention that i respect your long-standing leadership, hard-won expertise on the problem of logcap iii and its virtual soul-searching status for the last decade. back when there was just a lonely group of government officials trying to do something about logcap iii. there were a number of others besides you, but you were one of them. all right.

mr. harrington, as competition -- you're a competition advocate, yes? >> yes. you answered president obama's call for more competition and your own 2009 competition report speaks of, quote, increased efforts to scrutinize high value sole source procurements. i listened to these great statistics, 97% competitive, 99% competitive. and i hear often in the room somewhere there's a 800-pound gorilla. how do you manage with this single award logcap iii award which was $30 billion to reach these high figures. and to reach up to task order 161 on that contract. am i right that you were viewing in what you call competitive logcap iii, although there hasn't been a contract on logcap iii since before 9/11?

>> sir, i'm not sure of your question. could you -- could you help me -- >> are you counting logcap iii as when you say that 97, 98% of your contracting is competitive? >> yes, sir. that's within the figures, yes, sir. >> thank you. now, following up, mr. harrington, we've heard about the fact that we were invited -- >> would the gentleman yield just to clarify this. what it sounds like, though, you're counting it as one. and not in terms of the dollar amounts. you couldn't be counting it in terms of the dollar amounts. >> no the 97% figure, mr. shays, is for contracting being done by the joint contracting command in iraq. it wouldn't include logcap. >> and it's for contract actions as the count? >> that's correct. >> contract what? [inaudible] >> you're taking each contract separately? >> sir, i was speaking -- >> and sir, i would also add --

if i could just add this. the dollars are about the same as well. so we did -- over 30,000 actions last year in iraq and afghanistan. >> if i can reclaim my time, i honor you in jcc-i/a. is logcap covered -- mr. harrington who does cover it. >> it's part of the army whole for contracting. the army as a whole exceeded 67% of its contract actions in dollars. >> is it counted as a competitive thing. yeah, it's not part of jcc-i/a. did you attend the briefing we were initially invited to and initially disinvited to. i'm not talking about the content just whether you were invited to it. the briefing on -- you were. okay. anyone else on the panel who attended it? >> no, sir >> no, sir. >> okay.

now, chairman thibault said the thrust of the analysis, he'd heard from the person who gave the briefing, who is unnamed, was for not competing iraq-based level services on logcap iv. do you want to warn me that we're on a false trail or -- you're not telling me that's wrong, are you? >> sir, what i can tell you right now, sir, that in holistic terms is being assessed by the army leadership. >> well, i want you to warn me. if i'm wrong, if that wasn't the thrust of the briefing, i don't want to be wasting my time and the commission's time. you want to warn me of that. are we wrong? >> that the thrust of the briefing was that it would not be competed? >> yes. >> sir, that was one of the topics discussed, yes. >> that's all. to go to the issue of conflicts of interest which is very

important for us on service contracts, mr. assad, let's talk about procurement support contractors and conflicts of interest. this is a big subject for my class at -- in government contracting at the university of baltimore law school. so i'm glad we're getting a chance to discuss it here. you implemented the key congressional provision on this. and i want to ask, was there -- why -- why was there concern by congress in the 2009 defense authorization when it passed the provision and the gao when it passed the provision, by the arms services committee when they looked at it about procurement committees like caci in regard to conflicts of interest. why were they worried about that? >> well, i think it goes beyond procurement support contracts >> was it the focus of the conflicts of interest -- >> no. the focus -- the focus much

broader. >> let me ask you doesn't use the phrase closely associated with inherently governmental acters. >> sure. >> and isn't a key part who is closely associated with inherently governmental support contractors like caci? >> yes. >> there are others. i'm sure there are others. are the concerns covered by the provision increased in the iraq and afghanistan situation where you have a culture of corruption, a culture which takes conflicts of interest for granted in procurement offices to put it mildly. and where the supervising acquisition officers are stretched to the limit or rapidly turned over. is it a more worrisome situation in theater? >> well, let me go on record. there is no culture of corruption within the joint contracting command. there is no culture of -- >> i did not say that. >> my question was iraq and afghanistan, meaning the local cultures.

the cases that are prosecuted, kickback cases and the local culture. i'm in the saying anything about the commands. you want to tell me there is no local culture of corruption in your afghanistan? >> when we find cases of corruption, we're going to pursue them. and we will take every action that we can against anyone that we find related with corruption. >> if i can reclaim my time because apparently i'm not going to get an answer. >> no, i'm making a point -- [talking simultaneously] >> in this particular case caci, in general do an outstanding job -- >> i didn't dispute that. that's not my question. this is not a trick question. i just filled out my annual financial disclosure form. lots of federal officials do so. a detailed disclosure form. it's a nuisance for me. in want -- i assume both the

civilian senior officials like i did, like all the commissioners did just filled out a financial disclosure form. i'm not trying to catch you out. is that right, mr. harrington? okay. the current rules do not require a detailed financial disclosure form like the standard federal disclosure form to be filled out by contractors like caci. am i right. i know they have to do their own thing. i'm asking about that particular detailed financial disclosure list. >> let me say that the commission on contracting integrity -- the panel on contracting integrity has recommended and, in fact, we are putting into play a requirement for all contractors it off identify personal conflicts of interest. >> i thank you. but could i ask you to specifically answer my question. not a general thing like certifications. do they have a requirement to make a detailed financial disclosure statement like the one i filled out, mr. harrington

filled out, you filled out -- a statement not a certification? is there such a requirement for caci now? >> in the past there was not. as we go forward, there will be. >> my time has expired. thank you. >> thank you, commissioner. commissioner henke, please. excuse me, commissioner zakheim, please >> just a very quick point. i think all members of the panel would agree if you issue a directive the contractors always salute smartly. this is not a contractor problem. this is a government problem. will anybody disagree with me on that? >> no. i agree, commissioner. and i can tell you that we are -- we are in process and i'll be happy to share with the commission on the details of panel integrity findings and what we're doing to address this very important issue. >> thank you. and we'll take you up on that. i appreciate it. >> i agree also, sir. >> commissioner henning's, please. >> thank you, mr. chairman. i'd like to take a case study,

if i could, on a particular recent contract. and before i do that, i'll just set believe up this way. it seems to me the crux of the matter here is that the army believes it has a fully sufficient vibrant way of overseeing services contracts. and that there would be not much opportunity to improve that. would that be fair? that you have a sufficient mechanism to oversee services contracts? >> sir, we believe our system is adequate. that we have in place now. however, i agree with you that we should take an opportunity to look at how other services might do. their services contracts and where we can take advantage of that or maybe do something a little bit different enhance -- we should always be a learning organization. >> right. >> and do things better. >> that's a fair point. let me just briefly go over the recent example of the anp, the afghan national police and get your reaction on that case study

of what happened. here it is, i think, in a nutshell. would you be hard-pressed to find three or four or five more important, more critical, more visible services contracts in the army, just a brief yes or a no. would the effort to train afghan national police -- it's a presidential priority. it's a national priority -- the sooner we stand up a sufficient force the sooner we are stand down? >> sir, critically important to the war-fighter and to our nation, i agree. >> you know with the general in afghanistan, mr. harrington, you and i and others traveled there in december among other places. but a brief question, who provides contracting support for general caldwell at cstc-a? >> sir, part of that -- i'll answer part of that and refer to mr. harrington. part of that is through joint contracting command iraq, afghanistan.

there's an office in kabul who used to report to me with now it's over 30 people. when i was there it was about 25. they provide some of the basic services and support. they did $1.2 billion last year. there's other services back in continental u.s., rock island and others that do some other services. >> the nut i want to get at -- we met with the rcc folks in afghanistan. i think they're fantastic and doing great work. i'm amazed you can put together an organization that can do a billion dollars in contracting fairly quickly like that. what i'm getting at is for the large contracts general caldwell goes stateside in iraq. he goes to your command in orlando for your contract. he goes to your command in i think it's new jersey. the rd research and command. he finds convenient contracting commands to cut task orders for him. the question on this afghan national police effort -- it was a state contract.

dod wanted to take it in house so that they would have the mission, the money and the contract. is that it in a nutshell? >> sir, as i understand, yes. >> right. and when we were there, people said -- we asked are you dissatisfied with the current contractor, the performance of the current contract, nobody said they were dissatisfied. so they were very satisfied with the incumbent, dyncorp. but for contract performance the customer generally was satisfied. so my question is, how does general caldwell decide to take this contract and bring it to a navy office in virginia, counter-narco terrorism program office and have them serve a program management function and wind up with an acquisition

strategy that has the army's space and missile defense command in alabama working a contract action for him? can you comment on that? >> sir, i'll take part of that and then i'll refer to mr. harrington to answer the specifics of the contract. going to other organizations. but at cstc-a under general caldwell we have a team that supports him. i just mentioned kabul. you've seen them extraordinary work, i agree. we assigned one of our acquisition colonel whose sits as a part of general caldwell's staff who helps him articulate the strategy. the acquisition strategy for the billions of dollars that he has to execute this year. and i think don't hold me to the numbers but i think it's somewhere around $8 billion. so rcc kabul about 1.2, $1.5 billion, i think, this year. others will be done by other organizations. so we have people inside his organization that are helping developing the acquisition strategy. ed?

>> with respect to the space and missile defense command, sir, that requirement came to the contracting officer there from counter-narco terrorism program office. and it was intent on those two officers to expedite because of the expanding requirements of the police and training. that was the rationale for how that ended up in smdc. >> this contract -- i've seen reports of it under a billion or billion-6. this is a contract under your 250 million and above. so the long and short of what happened was, shortly after we were there in december, the incumbent protested the action in december. and in march gao said, foul. they didn't say, well, it was close. it was a 51-49. it was a clear case of this thing is a foul. it's out of scope.

the navy office, the smdc office are set aside. so my question to you is this, if this -- this thing went through all the oversight mechanisms you have. it went through your peer review process. it went through your process, mr. harrington, my question is, what broke? on something this important, what broke? >> commissioner harrington, can i -- or harrington, henke, i want one clarification, though, mr. assad 'cause you and i had a discussion -- >> yeah, i was going to talk about it. >> and you didn't know anything about it. >> right. >> you went through the assumption it went through his trap line. somehow it didn't get to you. >> well, let me -- let me give you a little bit of the background. what happened was -- i actually received a call from mr. thibault who had asked me had i -- had i heard about this particular procurement yet? and the concerns that the commissioned. i told him i hadn't but that i would look into it. we, in fact, did have -- >> you heard about the contract action from us?

>> oh, sure, yeah. it was early on in the process. >> okay. >> it had not yet been decided exactly who was going to contract and what the army's plan was. i had my senior ses who does peer reviews intimately involved in it. and there was a legitimate question as to whether or not this was the appropriate mechanism to use. >> uh-huh. >> osd, frankly, did not necessarily concur with the army's view. >> were you concerned about scope? >> yeah, we were concerned about whether the scope and whether it should be full and open competition or did, in fact, this scope of work fit under the existing delivery contract. there was an honest disagreement amongst several very respected people as to whether or not this was the appropriate way to go. at the end of the day, the army felt that the position that they had taken was a reasoned one.

they had a reasonable justification for it. we didn't -- we did not concur necessarily. >> uh-huh. >> but at the end -- but the army was the executive heating and we deferred to them. it turned out that the gao -- when they, in fact, there was a protest the gao kind of saw it the way we thought it might go. so i don't want you to think that there was -- that there was of a, quote-unquote, that it was broken. the army felt a what it was doing and it had a -- people i very much respect thought they were doing the right thing. i can assure you that the process that we're now up presenting is full and open competition. >> but you made a judgment call that let the army proceed with it. >> well, we don't -- it's not a question of us allowing them to proceed. you know, we make a recommendation. we give them our view. but they're the executive agent.

they need to make the -- >> so it's not binding on the army? >> no. but i will tell you that what has come out -- >> could you have told the army not to proceed? do you have that authority? >> not really. but i will tell you where we are -- >> let me interrupt here just for clarification. and i think the world of your organization. in terms of trying to provide some order. in this whole process and some direction. you provide the regulation, the interpretation of the regulations. and in large dollar cases the professional advice founded on decades of history in this area to the services. and in this very important case, the advice and the regulations tipped on the side of full and open competition. and you have to turn to the army that says thanks, no thanks we've got a better case. and you're being very professional by saying it was an honest of opinion. i'm not disputing that.

but they basically saw no need to follow your fines. -- guidance. commissioner, do you want to -- >> yeah. sort of along the same lines. i'd like to know whether, you know, when there's a disagreement between osd and osd has the policy oversight, you're the ones who are meant to be politically sensitive. you, mr. assad, are terrific at that. i'd say that for the record. so my question is, the army is going down a route that you felt is going to get the department in trouble. did this issue go further up to dr. carter? did it go further up to mr. lynn? don't you think it should have? >> no, i don't think it's a question of getting them in trouble. i think it was -- you know, the general counsel weighed in. i think there were a lot of folks who looked at this and said the army's approach is reasonable. and there is support for it.

i will tell you what we have learned as a result. and we are learning in this peer-review process -- now we've done about 65 or 70 of these. in the four cases where the teams have not followed what the peer review organizations have recommended to them, they've, in fact, been protested and we've lost all four. so i think that where we're headed -- and we were going to discuss this at the procurement conference in another couple of weeks is to get the ses community together to basically say the peer recommendations are no longer recommendations. just go ahead and implement them because we do have a lot of very seasoned professionals looking at this stuff. and it turned out in this particular case the view was probably the right course of action. but it was a tough call. >> mr. assad, have you had four that have been over a billion dollars? where there's been a disagreement or are these all lower level? >> no. there have been four -- not a disagreement.

>> your office doesn't -- >> yeah. not a disagreement. it was we go through a very detailed peer-review process. >> right. >> and it was case where we found things that we recommended needed to be done, in fact, they weren't quite instituted the way we recommended it at the end of the day, those matters were protested and at the end of the day we lost. so it goes to show that this process is working. what we need to do is make it more determinative and more proscriptive. >> more binding? >> yes. >> thanks, bob. i really do respect your judgment tremendously and you've just proved it again. you had misgivings about this and you turned out to be right. so if that's the case, why can't dr. carter say right now when there is this kind of disagreement, it's going to go up to his level. and that way osd will have the final word.

my concern is that you seem to have been four for four. each time you let it go by, each time you've had misgivings and each time you were right and the protest was upheld. and that doesn't have to be a dod instruction or something that has to take forever. it can be done immediately. why can't that be done? i really respect your views. and i have tremendous respect for dr. carter. >> i think you can count on it. it will get done. the way we have done these things is to bring the entire community together of senior leaders. all the ses and general officers together and make sure we have a complete alignment if someone has a particular view that needs to be heard, we hear it. but pretty much in the middle of the may you'll see that policy matter come up. >> is it on this topic? because i have a question on this topic. and the only thing i will add and then you can finish up and take as long as you want, i was going to use this in my second round so you've saved me some time. so thank you. >> you're welcomed.

but under the strategy that was recommended in spite of your inputs, there was this contractor that's certainly renowned. there were three very large contractors that are great contractors, suppliers lockheed martin, northrop grumman and raytheon don't have a lot of training in police and there was one that did xe or black water that does have a history. by the time they would have sorted through this, technically there was one that could put it together. the others could have worked with subcontractors or blackwater themselves. now the sensitivity is there are a number including the incumbent that were excluded through this strategy. so you very rightfully said this is wrong. and it wasn't significant enough. go ahead.

>> well, i think -- excuse me, chairman thibault, you know, the fact is is that we're taking a very hard look at a number of these delivery auto type contracts where we have just a limited number of competitors. the answer is that, you know -- unless there's a very unique expertise, we need to open up the marketplace to as many contractors as possible. >> i agree. i agree. i agree. >> commissioner, i'm sure. -- i'm sure. >> mr. assad, i'm very interested you have done four peer reviews that have been differences of opinion, passed back and each case the oss peer reviews worked. when i meant when i said it broke, i meant there's the command in afghanistan that doesn't have their contract yet. that's all. that they don't have their requirement filled. so your team looked at it and passed it back to the army we don't think this is going to work. good luck guys so back to the army.

so then take me inside the army's analysis or views of this, mr. harrington or general phillips? you may not have been there yet. >> sir, it came down to an evaluation of what the requirement was against what was available for services on the contract. and the army felt that there was a nexus between the counter narco terrorism program offices focus on training afghan border patrol in a similar level of training requirements for the afghan national police. and in a sense the counter-narco terrorism kind of -- drug interparticular, those types of activities was found to be the primary reason shutting off funding going to the taliban. their primary force for funding. that was the nexus. >> because it was an existing contract, in other words, was speed sought by the army? >> yes, sir. there was a sense of urgency behind this whole requirement

because of the mandate to raise the amount of training, you know, increase the training requirement. >> and you must have evaluated as an acquisition strategy full and open or limited competition and discounted them because they would have taken too long? is that accurate? >> no, sir it's not. it went counter-narco terrorism contracting to the space missile defense contracting office can you do this for us as expeditiously as you could. >> so you don't look at limited option -- >> what the army came back and said, hey, we believe we're right in utilizing the delivery auto contract to go forward. we will do that in the near term. and we will conduct a full and open competition over the long term. so that was the -- that was the solution the army came back to the department with. >> okay.

right, sir, exactly. >> nothing further. thank you. >> thank you, commissioner. commissioner shays, please. >> thank you. i really like going last because i really appreciate the questions from my colleagues. i think there's tremendous irony in what we're doing here. the army has terrific people. and i just want to say to you, shay assad and to lieutenant general phillips and general harrington you get a 10 for cooperation with the commission and so then is on on. now, having said that about the people in the military, the bureaucracy of the army is scary. and what we're wrestling with is the fact that we could come and go and we're not sure that the change will take place. you could come and go. and we're not sure that the

change will be institutionalized. that's what's scary. and there are a few things -- and the other part is, given my respect for all of you, then i want to ask questions that may not sound as friendly. i think it's absurd to call logcap iii a competitive grant. logcap iii is a logistic contract augmentation program. we had one, two, we had three. logcap iii -- it turned out to be a 10-year program. we kept renewing it every year. when it was bid out, the contractor thought they would get hundreds of millions of dollars of business. they're getting $35 billion of business. do you think when we bid that out, if all the other contractors knew they were going to get $35 billion of business -- do you think it's possible that maybe it would have been a little more competitive? and i think the answer is yes. hugely. so the first thing i'm putting

on the table is, i don't buy that it is a competitive grant. i do buy that logcap iv can be because now people know how lucrative it can be. and now we have three so we can have the three compete with each other. what do you disagree with what i just said? mr. harrington? >> sir, i'd just comment that logcap iv was conceived in the 2006 time frame recognizing that logcap iii was growing regularly with the war effort. >> but isn't that just emphasize the bureaucracy? 2006, you said? >> yes, sir. >> and it's 2010 now? >> well, sir logcap iv was awarded in 2006. >> i know, but it was conceived way back. and it's taken so long. and the reason is, is the commanders on the field like what they got. but they don't to have worry about cost. they don't have a concept of opportunity cost. and you end up with the absurdity of our last hearing

where we have a contractor who is basically providing services, maintenance services, at 15 -- excuse me, 7 to 10 to 15% capacity utilization averaged 10% and frankly our government witnesses weren't all that troubled because the bureaucracy liked what they were doing. but hugely wasteful. how do we get these absurd costs when people thought it was only a few hundred million and now it's tens of billions -- how do we get people to think you're not going to make the kind of money you used to make?[ and part of the way we convince them, it seems to me, is with our contracting officers, the five-year talent that it takes to become a contract officer. and then the people on the ground -- the contracting officer representative -- when my colleague here rightfully

points out it takes two weeks to train them. and we know that's minimal training. but so maybe you could answer this second question that may seem a little unfriendly. åñ can someone tell us -- how can any of you tell us we're at 90% capacity for cors contracting officer representatives -- how do you arrive at that figure that we're at 90% to start with? >> we are actually count the number of contracting officer representatives that we think we need to have on the ground, dcma give us a weekly report of -- it's their professional opinion how many -- >> so we're at 90% capacity. >> we're about 90% staffing. 91% in iraq and 90% in afghanistan. >> let me go back to mr. zakheim's -- dov zakheim's question. he's a former comptroller of

dod. why should we not be at 100% since it only takes two weeks? and the reason is even if they aren't well trained, they're still our eyes and ears on the ground. they're still able -- and without eyes and ears on the ground, you've got contractors potentially run amuck because you don't have anybody watching them. so why shouldn't we be at 100%? why isn't that the easiest part of your job? and let me just give you time to think about -- given my concern about the bureaucracy, if we can't even do that, why should i feel comfortable that we're going to do all the other heavy lifting that you, number 10, in talent and capability and integrity are trying to do? >> sir, i'll take on a part of that and then refer to others. i think your opening statement is incredibly important. we have to institutionalize the way that we do things.

33% a year ago in cors unacceptable. 91% and 92% today iraq, afghanistan -- that's getting closer to the goal of 100%. if we don't institutionalize this within our processes, then we'll never get to the end state. and we've made tremendous progress over the last year, sir. but still quite a ways to go. for jcc-i/a, for the year that i was in command, sir, we did not issue a contract unless we had a contracting officer representative that was trained, had a certificate and was assigned to the contract. so i think we took some great opportunities internal to the army to focus on cors, to begin the work to institutionalize them. >> yeah, but with all due respect, general -- and i like the fact you're a three-star because that says the military is starting to get the importance of your work. it's nice you're not a kernel. -- colonel.

it's not you're not a one-star, or a two-star. it's a start. but it doesn't answer the question. why shouldn't we have 100% cors right away given its a two-week training period. and candidly we may say the cor is a flawed system but it's the only system we've got. 'cause they have other responsibilities. so it's not like you don't have people in theater that you couldn't assign to it. >> sir, one comment and then again i'll refer to my teammates on the panel. with dcma where the gap exist, i just want to assure you and the team that there aren't contractors operating over there that do not have some level of oversight. if that's not through a cor, then the contracting officer would take the appropriate action to make sure with their fiduciary responsibility to congress and the taxpayer that they are looking at those contracts.

to get to 100% obviously takes time. and it also takes education of war fighters. because at the end of the day, it's war fighters and sergeants and captains and lieutenants that are going to be the cors that are providing the oversight for both dcma and joint contracting command. >> can i try to have either mr. assad or mr. harrington respond to that to my question. were you done, general? >> yes. >> i think there are two issues here. this is a dynamic process. every day we're getting more contracts put into play. we have cors on the ground who get transferred, who move to other places so there's a sense that getting 100% -- i'm not sure we can get to. but your point, mr. commissioner, is absolutely right on target. the fact is that this work needs to be done by folks who are

trained and competent and we need to have enough of them. it's about leadership. and i mentioned general chiarelli before. his guidance -- there was a direct relationship between the increase in the number of cors and the direct involvement that he got into in terms of insisting that it happen. and so it's going to take that sustained leadership and now it is part of every operation argument to make sure they have trained cors going in. i suspect they are going to have a participation in cors. we're well over 90% -- not well over, 91, 92% in iraq and afghanistan right now. and i suspect that will get a little higher. and it will stay at that rate. >> sir, if i could just add one other comment. >> sure. >> quickly. on the 5th of december when it was assigned by the army, the army g3, i spoke -- within a week i spoke to two division

commanders who were asking questions of the jcc-i/a commander how we get cors trained. so my message on that is that we have got the attention of war fighters. that cors are important. we need to identify probably around 80 cors per brigade to provide the missing in combat so that we can get to that number. >> quick question, please. >> please. >> general, since we know some contractors are functioning as cors, what's the percentage? is it 80, 70? >> no, i think those 90% numbers are, in fact, government folks doing cors. the principal area where i'm aware of where we have folks doing contract oversight refuse what we call our task force-safe. and that's really electoral competence in overseeing electrical work being done in

iraq and afghanistan. we found that we just couldn't get enough trained folks within either dcma or at the corps of engineers to sufficient support that. so we have, in fact, contracted for an outside organization to provide us capable and competent master electricians to provide in the oversight. that where we have contractors doing oversight. >> i'll just conclude by saying, what we know the moment we joined this commission was we were looking at the billions of dollars of costs to contractors and was it being spent effectively. and the answer was no. and you all know that and you're trying to change that. but we're really looking at something else. and that's the issue of george washington's times, one contractor 10 military give or take. now one for one.

the contractors are an intrical part of our war effort. they are not being integrated. they are not part of the qdr and the qddr in the state yet. we're seeing where they thought they might be. until they are part of that in my judgment, everything we're doing is a hope and a prayer. not everything. a lot. thank you. >> thank you, mr. cochair. we're going to do a second round. smaller times allotted. i think i'll do better unless we get going here. [inaudible] >> thank you, thank you. i want to open with a statement again of appreciation for y'all to come up here for this dialogue. without this dialog we can't sharpen ours. i do want to say -- you know, i spent 35 years with the department of defense, three of which with the united states army. and i don't joke.

i say proudly that the best year of my life was spent -- professional life was spent as an 18-year-old pfc. i got promoted after that. so it wasn't the end of my three-year career. but it's something that i look back on with absolute respect for the people that i worked for in the united states military specifically the army. and it's real important to say it because i feel the same way about what now i can call those kids that are over in theater that are serving our country. it's with great pride that i say that. mr. assad, i want to make you an invitation. i do it a little tongue and cheek, since they didn't do it ahead of time and you've done some yeoman work, they promised us one. they initially promised us the model, you know, by the numbers people how to model work. and we're going back and saying that's great. we're interested in the model. but we want to know the outputs

and the decisions and who were and all that. -- who were involved in decisions and all that. there were no secrets on this commission ultimately. and i would love -- i say it a little tongue and cheek have your organization that's so critical as an advisory role, maybe we can do two for one and listen to the same people. i put that out there. >> i can assure you that we can have a discussion in that and what role we can play. but we'll look at it in any condition. >> well, thank you, mr. assad. and i know commissioner zakheim is in tune with this. but i'm feeling a bit like a historian as i'm talking, general harrington, you talked now -- and i think my numbers are right kind of unimportant if i'm off by a couple. you have 140 that you want to hire and 70 that have been targeted. and you've begun the hiring process. now, that's so critical. and you've said it's critical. and i want to go back to history because this isn't something that's on the cusp.

that's part why we're talking about it. maybe on the cusp for you. but in a long time ago in the early '90s, the dcaa where i was the deputy went from 7300 to in the mid-3,000s in the direction of bill reed whom i was his deputy. and it's interesting because the same things we're talking about today, we talked about back them. -- back then. there were people in the department of defense one of them by the name of jack gansler who said well, you know, you don't really need government department of defense auditors. why don't you look into hiring cpa firms. and we built a requirement that had, you know, i think -- can they be awarded -- dca does form 1s and multiple representation of contracting officers so we worked it out where they wouldn't have to do that. and lo and behold and the qualifications which they would have would be directly next to the training that the dcaa had.

zero firms bid on that. so we said thank you, we've gone through that exercise. those are the challenges that have been out there. lastly, i really respect the fact general phillips and that your predecessors and those behind realized you had a very significant job to do and you didn't have the staff to do it. and the balancing act then became we hired a contractor to get that work done. and we're going to talk a little bit about the firewalls and the controls and the things like that with the next panel. but without it, your risk would have been much greater. with it we're asking questions about are there proper firewalls -- you know, appropriate questions. so, you know, that's kind of like, excuse me, you're damned if you do and you're damned if you don't in this process. so i want to share. and last of all, i kind of made the analogy or whatever, mr. assad, you've laid out all the stepping stones. but you got to have the resources and the people to follow that.

and execute that. and several here have said, why did it take so long? and i guess we're at the point let's execute. and we can worry about why it took so long 'cause that's frustrating. so thank you. commissioner schinasi? >> thank you. i want to broaden the problem a little bit because i think if we don't define the problem appropriately we're not going to hit all the solutions. just by sharing some of the stories that we're hearing coming back particularly from afghanistan. the flip side of the continuity of a contractor work force is that the contractor work force often also knows what it is they can get away with not doing. and we are hearing increasing stories about contractors pushing parts of their jobs that they don't want to do onto the military. coming into theater, setting up pretty good accommodations for themselves.

and then pushing off what they don't want to do to the military. the problem here is that the military doesn't -- that they're working with doesn't understand the general parameters how do they manage the contract and certainly doesn't understand the specifics of any individual contract. so in want to put that on the table. even if we get cors, you know, hundreds of miles +égaway, you still going to have to deal with the actual militaryuiñ who is working side-by-side with the contractors. one specific example -- there was a remote forward operating base in afghanistan that didn't have any hot water. and it needed a part to fix this. and the contractor refused -- to go and get the part and the commander didn't realize that he could tell the contractor you have to go get the part. now, i'll ask you general phillips, would someone in the military say, no, i'm sorry. i'm not going to get that part? >> ma'am, the contractor needs

to get the part if they're responsible for it. and i would just share this with you. the year that i was over there, i'm sure the situations like you just described have happened.fae but we worked hard through our contracting officers and through our cors to hold our contractors accountable. and we owe nothing less to you and we owe nothing less to the american people. that's our fiduciary responsibility to make sure those contractors are delivering. and if they do not deliver we wrote a number of cure notices and other activities that were targeting contractors that may not be performing to make sure they were meeting the terms and conditions of the contract. every day we worked hard to make sure that they were held accountable. >> well, it's still going on. that's my only point. you know, it raises a question of at what point if we cannot manage the contractors should we not be using the contractors. so i'll just put that out on the table. but i'd like to just go through a list of, again, to try to help

you make your case as to why more resources are needed here. you know, a dollar wasted is a dollar that's not available to meet war-fighter needs. so are we -- have we seen waste with undefinitized contracts and i'll go through each of you, mr. assad? and if you don't like me -- well, i'll let you -- >> well, no. i think general phillips will second this but i'm not aware frankly if there was anybody who was using undefinitized contracts that it was he. i think in general -- now, i'm talking about doing contracting by the joint contracting command. >> and i'd like to talk about service contracting. >> use of contract -- we manage very, very closely the use of undefinitized contracts. and, in fact, have expanded to

include all instruments that are not -- don't have the specific terms and price set. we look at everything. not just what traditionally the defars would call an undefinitized contract not just our work but all our work. and there's been a significant improvement in terms of the use of undefinitized work instruments but. but frankly if we can avoid them across-the-board whenever we can we want to do that and that's the policy of the department. >> i think you've made my point that there is waste often in undefinitized letter contracts. >> there's no doubt that it is not a tool that we want to use. >> so having a work force not just an acquisition work force but a requirements community work force that is smart enough not to have to do that puts news better shape? >> absolutely. >> how about extensive accounting task order modifications without competition? we've also seen those.

is that something that we could let me turn the question around if you don't want to talk about waste. is that something we could recover value from? >> well, the issue that comes up -- once you've got a contractor performing the work, it's very difficult -- while he's in the middle of actually doing a task to try to halt him and complete the balance of it. that's a challenge. so, you know, when we can, in fact, separately identify work under a multiple order definitized contract we want to compete. >> and i'm just going to let you, general phillips, and you mr. harrington, give me a yes or no answer if you would. >> ma'am, i completely agree with mr. assad. even task orders that were under installation and security services, twist contracts, theater-wide installation security services we would have i believe as i recall up to five contractors that were on those task orders. we would compete them for various fobs throughout iraq and doing the same in afghanistan today.

so competition inside a task order is very important. i don't recall many ucas ...

>> my time is up so going to ask you to be short as well. i have read through a number of the peer reviews, and i think it's pretty clear there are some service contracts that are being done in iraq and afghanistan that look pretty good and that you have identified some best practices. do you have any visibility into the peer review is that the servicers are doing? and what is your -- what's your assessment of whether or not the services, the military departments are doing as good a job at your office is because we have not yet started our preview of the peer reviews. and so in general sense, we have let the departments to the services, but i can tell you as

changes coming about with regard to peer-reviewed findings over a billion dollars we will set into place a quarterly review of the reduce, just we get a sample of what's going on. >> i would hope you would have some kind of hammer a associate with that too at the the, shivered from the commissioners before. persuasion is nice and it's good if people want to listen, but that's the tack we have taken and here we are agers in and only getting started on solving some of these problems. thing to. >> can offer just one comment? >> lee's. >> we sought help in every opportunity we could on some of our more challenges contracts and other used the theater wide secure his installation in afghanistan. we did a peer review. initially we were sure we wanted to do that. we did a peer review internal to jcc-i/a, taking the contract from afghanistan with my staff. we used mr. harrington, used isn't the right word, we had his talent look at it as well. and i believe we used some of

mr. assad talent to look at that contract where we got in idiq in place that was so good, in my view, that it was all protest that we had against the contract. so i'm a big believer in the reviews and using the review process where it has great advantages. >> thank you, general. thank you, commissioner. i want to put on the record here before we ask commissioner zakheim to come up her, that general harrington, you were asked how many contractors are there and i guess pun intended, you were spot on with afghanistan with 107,000. but there are, according to our, in addition to the 107, there are 100 in iraq. to the total number, i think it's important for the record, those parts of theater there are, based on the system you have, which is the best system out there, there are 207,000, approximately, contractors that are supporting the military. >> yes, sir.

>> just for the record. >> we counted 95,461 contractors in iraq, and 107,292 in afghanistan. >> our version is pretty much the version, give or take. commission, please. >> thank you. mr. assad, i just want to have you repeat for the record, you are committed by mid-may as i heard you say this, to ensure a higher level always the review of contracts over a billion dollars? >> yes. what -- >> basically to change the system and assure what happened with those for contracts, to the best of your goalie, will not happen again. >> yes. >> there's been a lot of talk about resources, i was involved a little bit and resource allocation not all that long ago. mr. assad, if you were approached by the army to support them in their quest for additional resources to fund more billets to the acquisition of requirements committee

workforce, would you support that? >> yes. >> have you ever been approached for that during the budget process? >> yes, during the last round. >> okay. and with these billets funded in the baseline budget or in the supplemental. >> i think they were funded in the baseline, a 52 funded. >> i kept hearing from the army that they need more and more resources. have that approach you for even more? >> no. >> they never did, okay. what normally happens, i don't want to give a comptroller one-to-one course, course, but i think general phillips and mr. assad come to both been on ground enough to know if you don't have what you want to go to osd that you have a powerful advocate in mr. assad and you say look, we need more billets. and we need more money, help us. why didn't you do that?

>> sir, part of the reason is, by the way, we have an ongoing dialogue with mr. us on an dr. carter, and they give us tremendous support. so that, having in up front statement. we have within the base budget as i described earlier the funding in place and across the pond through 2015 for the -- >> i understand, joe, but you have been asked by some of my call is a. why you didn't accelerate it. so my question is, you've got about i think roughly 700 that you added on. why didn't you, the out years are out years. they are blue sky and we know that. why didn't you ask for more money, for more billets in this fiscal year? >> sir, we will be -- part of it is -- >> not future now. why didn't you ask? >> part of it is in funding and the current budget we have. will be glad to go talk to mr. assad and dr. carter. as result of this session we will go back and have that

dialogue. >> fair enough. >> we will ask. >> can you give me an explanation why you didn't ask or in a fiscal 11 budget speakers sir, we have. and the present budget funding their -- >> but not enough. why didn't you ask for more? >> serve -- >> why did you go to bob hill and asked for more? anytime a four-star wanted something that i would get phone calls. why didn't that happen? >> sir, i would answer that in this would. the army is like the any for 1185 contracting -- acquisition positions of which the majority of those are contracting. as we work our concept plans, as mr. harrington just described, we will come forward to osd and to congress and ask for the funding. >> i would just take for the record that i find that not entirely a satisfactory answer, sir, because to say as you will come as we will, you can do it, it's been done, it's done every year. if you really need these people,

we're not talking about billions of dollars to fund these billets, you could deal this year and put it in your current palm, every single one of those outstanding whatever does thousand, that's just the point i want to make. let me ask you, mr. assad, the qdr. is there a specific chapter in the qdr about service contracting? >> no, there hasn't. >> was there a page, full page in the qdr? >> not to my knowledge. >> how much was in the qdr about service contracts? >> i think there were about six or seven references. >> there were about eight lines actually, maybe nine lives. my question is, the qdr lays out priorities. is supposed to drive the budgetary resources. this is an important issue, the secretary of defense has talked about it, the secretary of state has talked about it. why didn't the quadrennial defense review which lays out the future for the department of for the next five years in vote

wasn't eight lines -- and oh, public, those, those lies were mostly descriptive. there were no instructions at all. what happened? under you and dr. carter push for something more. >> i think in general it's just the nature of the recognition of what service contracting is all about. it goes much broader than the qdr. the reality of life is service contracting, or contracting for services in general, we now spend almost 50% if not more than 50% over budget to do with service contracting. and there's no doubt, you know, mr. ervin brought up the idea of having a centralized view of the acquisition services, the air force has, perhaps the navy and army need to do that. we need to have a more integrated review. it's just a recognition, mr. commissioner, that the fact

is that we have just got a lot of work to do in this area, and it's the recognition that this integrated workforce as you mentioned, there's no doubt as we go forward, contractors will be on the battlefield. >> well, if that's the case, and that's not exactly news, but let me just state for the record, i am absolutely flabbergasted that something as important as this, and you just laid it all out, and i totally agree with you, mr. assad, something as important as this could not command a single instruction, a single directive, a single objective, a single gold even in the qdr. will the gentleman yield? >> absolutely. >> sometimes i think in order to be able to say what we need is a we have to speak in tongues. what i think i heard you say was that you belief there should be major emphasis in the qdr of our contracting, and it is not in

their come is that correct? >> no, that's not correct. what i believe is that there needs to be a more integrated recognition of the requirement for services, but i'm not responsible for developing. >> but this is your baby, isn't? >> sir, this is my responsibility. >> your answer concerns me more. i would rather you be fighting the battle and losing that not even fighting the battle adult. >> is not a question of fighting the battle. >> why is that? >> i think we have made, if we look at how the department was three years ago and what we're doing today is remarkably different that it may not be sufficient, it's remarkably different. >> half of our dollars, half of our personnel is being ignored by basically the quadrennial defense review. and it's a five year plan, and it's not in the five year plan. so how should i feel

comfortable, or i mean, and frankly, this has been, you know, mr. grants point -- grant green's point to us as well, time and again if it's not there, how can we think the military is taking it seriously, how can we think that we're going to see the institutionalization that you want and it's not there. and then i'm just left with, i would think would be jumping up and down to make sure it was. and the outrage, i mean, that's kind of where, i'm sorry to -- >> iphone allow myself with those comments. >> and, you know, very well, mr. assad can have the qdr works. it basically is work the same way under different guises within the defense planning guidance which i read where five years ago or whatever, basically every osd office has input. and raises issues, and your undersecretary, like all the under secretaries, says the

defense advisory working group, d.a.w.g., and raises major issues. so what co-chairman shays has just said is essentially, you have the opportunity to service those issues and for whatever reason, did not, and that's what's troubling him and i think that's what's troubling me. >> let me just add to that, since i brought this up sometime ago. after we heard the frustrations from some on the joint staff about recommendations that they have put forward to be included in the qdr with regard to contractors, and whether it's the qdr or any planning document, we can talk about active reserve components or civilians and our contractors as a single force. but if we don't acknowledge in the planning documents and we're talking today about qdr, if we don't acknowledge in those

planning documents that we are going to go to war like this, whether it's one-to-one or .7 to one or whatever, we're going to go to war with a lot of contractors. and unless we plan for it, and in next up is are not going to mean squat. >> on that note, commissioner ervin, please. >> thank you, mr. chairman. again, it seems to me that we're really talking about the theme of urgency. there's no question but that steps have been taken by each of you, and others, to move in the right direction. it seems to me with regard to service contracts, but i still am worried that the issue hasn't been taken up with the urgency, that the importance of it requires. so one specific example of that, and i guess this question should be addressed to, mr. harrington, if not mr. assad. but our understanding is the army regulation on service contracts is still in draft form but it's been held up in the

army headquarters publication office for nine months, is that write? >> close to that, yes or. >> why is that? why has it taken so long to get this regulation out? >> my only understanding is it's just editorial aspects of it that need to be completed for publishing army wide. >> do you periodically check on this? had anything to move the process forward? >> sir, we very often check on it. to determine what corrective actions may be required to try to speed it along. >> to you does this suggest a lack of urgency that it is still waiting to be published all these many months later? >> from my perspective it goes to an immense amount of work, not the sense of urgency. there's five times amount of workload on a per transaction basis and that's what is staggering to the members across the army never. >> do you agree with that explanation? >> i do not agree that there is

a sense of urgency. there's a tremendous sense of emergency as it relates make a recommendation that we have to have an integrated review. >> but on this issue though of this regulation, mr. harrington attributes that to a workload. do you regard that as a workload issue or lack of sense of urgency? this issue of this regulation. >> i can't address that because i'm not aware of what any of the particulars are so i don't know. >> let me talk about another issue, and i understood you in response to either mr. zakheim or mr. shays, mr. assad, to say in response to my having great the issue early on that you believe, speaking for yourself, that the army needs to move toward a more centralized model of service contract management oversight, is that right? >> yes. i think the process the air force uses is a commendable one. >> i'm very pleased to do that. i think that was a process along. i get the sense, strong sense, black and white, from your

statement, general, that you don't have that you. you as i said earlier out the value decentralized contract management. are using those terms interchangeably? >> sir, that's my view from my perspective of having commanded from in contracting from a major when its chief of joint contracting, joint task force -- bravo all the way through jcc-i/a and every ranking between. i have seen decentralization being powerful at various levels. the more complex you get in terms of a services contract, then i think you need to move toward more centralization. doesn't need to be a peos services that's reflected within air force? i don't know. >> let me use that as a predicate and to loop back to the discussion that we had a little harder. did i understand you correctly,

mr. assad, i thought i heard you say that the first time you heard about problems with the central contract was with us, from the commission? >> no. on my staff had talked about about when mike mike called me, chairman thibault called me about it, i knew it was coming up for review. i just hadn't seen it in detail, mica getting more detail than i don't at that point. so there's a process. >> but just so i'm clear to the chairman of the extra commission on wartime contracting, knew about this issue sooner than you personally did. >> that's correct. >> is that troubling to? >> no because the fact of the matter is that, you know, we have got hundreds of use that i conduct on a quarterly basis, and this was just one of the reviews that had been scheduled that i would have gotten to it. >> but it's been established, and surely you wouldn't disagree, that the training of

the afghan security forces are critical to the war effort there. >> no doubt that my principle deputy was intimately involved in it and was looking at it long before i saw it myself. >> but if he is my principle deputy. >> but you, learned about it from us, from the commission? >> no, dick briefed me on something coming up, some details that mica talk to me about i heard. >> let me ask a question back to the logcap iii, logcap iv transition. also i want to clarify something. mr. harrington, mr. tiefer asked you what the thrust of the briefing was. by that he meant clearly what was the sense of the recommendation that was being made? and was the sense of the recommendation being made that there wouldn't be a transition? and in response to my recollection is you said that

was discussed. it's a little different from asking the question of what the thrust of the breaching of was. what was the sense you got as to what the recommendation ultimately will be? >> i don't know what the recommendation all to many will be. what would on enemy was essentially an analysis of the alternatives presented. with respect to business cases can both operational requirement. >> let me, can i help? just for yes or no. because it was explained to me that there was a recommendation that, and they want to alternatives, you're absolutely correct, but there was a recommendation what make emotions that ought to go forward for approval is to cancel the competition and go with a continuation of the logcap iii. that's what i was told. was in the slides and in the presentation that had been practiced before this high level

briefing here i mean, did they change the presentation? >> at that point going to be brought forward to the secretary of the army and chief of staff. >> okay. the point is, is there was a recommendation to discontinue the competition, but the points that been made over and over that i think is also valid is that, hopefully, more experts, wiser eyes would task on to ask the kinds of questions are being asked and the results will be what the results are. >> i wanted a new, mr. harrington. are you agreeing with a? are you guessing the recommendation was made not to compete? not to transition. >> that was in a meeting. that's what was discussed going for to chief of staff and secretary but it was not a decision. >> i understand it. the recommendation was made that i understood earlier from you that you said that issue was discussed. are you now agree with the chairman that he recommendation was made at that meeting and not to transition? >> that was, the recommendation

was discussed for amc to comport with that recommendation. that's all. >> and presumably the country was discussed at the point is in the briefing was a recommendation, was the recommendation to not be a transition. both sides were discussed, surely, right? but was a recommendation made in the briefing, not to transition? >> that was the position that the reconciliation was amc decide to bring forward. >> it was army materiel command subject to approval by the staff specs of the next up was to go to the army leadership. >> final question on this. what is your expectation on to what the final decision with regard to transition will be? >> i don't know right now. that's a metaphor the army leadership to decide. >> you have any expectation whatsoever? >> right now i do not. >> mr. assad, do you have any expectations because i don't but i hope we can fall on the side of competition, we should. >> thank you. >> actually, could i jump in

here for 22nd? >> please. >> mr. harrington, you're not going in there with a preconceived sense that you would prefer competition? mr. assad made barry gordy does and i'm totally into the with them. but you sound like you're totally neutral on this. is that really the case? >> sir, that's enough for the army leadership to decide. we always decide on pursuing competition everywhere we can. but the factors regarding this decision are still being assessed in the army leadership has got to decide upon that. >> presumably, you're part of the army leadership i would have thought. you are senior enough. aren't you going into this debate with at least an initial bias towards competition? are you being so value-neutral that it may be not? that you're not initially biased. i got the impression from transixty prefers competition and has to be shown otherwise why there should not be. and i think he is absolutely right. are you prepared to say the

same? >> i think is absolutely right. that's a part of the analysis that is being presented. >> thank you. commissioner green, please. >> thank you. at the risk of being a dead horse here, i come from the operational side of the horse top of the army. and so i understand, and i appreciate how force structure decisions are made and how personnel are assigned. but i also from a past life understands the importance of support. i'm not convinced why, what i've heard today, that the culture will change. i'm not convinced that we will, in fact, institutionalize these

things we have talked about so that they continue well beyond your 10 years, and certainly my 10 years. sure, we've, you know, we've bumped up the force structure. we will see some additional spaces. we may see some additional faces. five years from now will both be filled? will that be a different priority? will change regulation, will change policies, we will even change laws. but will it really continue? as i said are there, we are going to go to war with a lot of contractors, and we're going to need a lot of folks to oversee them to take care of them. either that or we'll go to war in a much more austere way then we are going currently.

i know you guys understand it, because you're in this business. you're in the business to provide support. contracting, acquisition. but how do we get the warfighter to appreciate it, long-term? and how do we get the leaders to say, i want ed harrington to have 10 bodies tomorrow? you folks may not be old enough, i certainly am, to remember the very early early discussions of goldwater-nichols. and it was a tough slog, but i think it's fair to say that, to a large degree, it has worked. what i would like you to think about, you don't have to answer it, but what i would like you to think about, do we need a

goldwater-nichols for the contracting acquisition business? if you have comments right now, feel free. if you don't, we will ask you for it later. >> sir, a couple of comments. i can answer your question. i don't know if we need a goldwater-nichols for contract that i think the gansler report and looking out of iraq and in particular kuwait in terms of what occurred with on a contracting was an eye-opening experience for is that it was a significant emotional event. we can never go back to those days. so it's up to ed harrington and bill phillips with the support of shape a sod and many others in congress to make sure that we never go back to those days. if we don't institutionalize this within our army we have missed an opportunity. for my three years or whatever my tenure is here, i will work hard on that and i will make sure that it doesn't fall off the gears of our army leadership. and i would also like to say that we're getting tremendous support from the army

leadership. general carelli as mr. assad has mentioned a couple times, general casey, secretary of gq, was asked me and ed harrington and others to make sure we go around and we talk on track and. another point, general casey asked me to go and talk to the division commanders and assistant division commanders in north carolina about three weeks after i came back from iraq. i did that. we now have division commanders talking about contracting. i don't think we would have had that four or five years ago. so, your point is well taken. we cannot miss this opportunity to make sure we push this forward, and we continue to fix contracting and never go backwards. i will work hard on that during my tenure, sir. >> i'm not worried about general casey or secretary mchugh or any of the other folks sitting there today. what i'm worried about is five years on now, seven years from now, 10 years from now when you have a new cast of characters and they say, harrington, or

your successor, you're going to lose 50 spaces because i'm going to stand up a new stryker brigade. that's what i'm worried about, and that's simplistic, what a concept. and so thank you very much. >> thank you, commissioner. commissioner tiefer, please. >> than one. mr. harrington, and i want to preface this by saying, it's our job here to ask hard questions that you have a reputation as a straight shooter. you were a stranger in all of my expenses with you in the briefings and i believe you're but a straight shooter here today. so the fact i ask hard questions doesn't change that in the slightest. as to your procurement management review, which look out army contracting programs, i would put it as where the contractors may be getting away with too much. i want to take a particular example, which is a huge $5.5 billion in? , translators.

specifically, is it your thought, would you agree the contractor that we held a hearing on the gls, for lack of a pmr on this, got away without a tough cure notice? that they should've gotten a notice saying, as i explained, cure to my universal baltimorbaltimore student of gls, you screwed up, now fix it up or if you are out. might the millions if not hundreds of millions of dollars of gls waste sharply? >> server, our procurement management review process has been built over the last two years. we have defended the necessary resources right now, but we are going after more resources to increase the number of procurement management reviews we conduct on a yearly basis. >> i'm not criticizing. i'm just asking.

would have saved millions of dollars? >> very likely, sir, yes. >> now return to our favorite question, although it's not our favorite aspect, on the business case analysis and our initial invitation to redo it. general pillsbury, when he told us two weeks ago in public that we were invited to review it, and it turned out to mean a 10 the review, said he -- that would be subject to a system secretary on you. and i know you have still been involved in it. obvious the a higher official that general pillsbury have to be involved in radically changing his view. of whether we should be invited. i assume that's assistant secretary on the. do you disagree? >> sir, i don't know that. >> he is my boss and i've no knowledge of that. >> okay. of no knowledge of anyone higher

than in getting involved, do you mr. harrington? >> no, i do not. >> the business states announces you discuss, we had very full talks with commissioner schinasi and i were in the theater talking to the generals and officials about this. am i correct that the type of assumptions and has to work on necessarily are what the savings percentage would be if there's a competition and what the skill of contracting will be on this contract that would be competed but otherwise we'll just go sole source to kbr? i will say that again. percentage of savings, scale of contracting. >> sir, i have to say at this point is and what the army calls can what we call procurement sensitive information. that's the reason this is going forth with the army leadership in unable to comment on some of the specifics because it is procurement sensitive information right now. >> we haven't been disinvited

because its procurement sensitive information, have we? shirley general pillsbury -- ever my. it was general pillsbury's decision. >> past performance of the contractors, or the contractor, was that a heavy consideration in the presentation? and any corrective action plans and things like that? >> sir, i do not recall that it was. >> okay. maybe for the record, can you answer that as best you can when you go back? >> yes, sir. i will. >> thanks. >> mr. chairman, do know what i was going. i was going to ask mr. harrington about past performance, but not on that, where -- what i was going to ask what you know there have been as far as what the past performance is being basically report in the appropriate database by army contracting command she's, the general accounting office, government accounting office and the ig of defense department have had reports on the inadequacy of the placement of the number of past performance

reports and their lack of the narrative that should be in there. and very crucial is that these are not only going to be the end of a contractor but annually in a because otherwise, we are not finding these when we look for them. especially for kbr, for which you would think there would be seven or eight annual report in the database. we are still looking for any, any. now, would you like to be doing annual reviews of whether the contracting officers are making these past performance reports? is that something you would aspire to if you had this position, if you have sufficient manpower? >> yes, sir. >> what is the value we are losing by not having those annual past performance review, both in terms of discipline for the current contractors like kbr and in terms of informing future buys like logcap iv, which kbr not despite its electrocutions?

>> you just described we don't have the relevant diagnostic information in some cases to be able to evaluate potential offers on future procurement. we want to determine whether not their performance first of all was well that and it was an appropriate level performance that would make them it responsible. so agree with everything you say. we understand that. we have work went on to improve it. resources that we need will help enable us to improve that over time. >> in terms of chairman thibault's question, you would remember if there were a mysterious appearance of years and years of kbr past performance reports at this briefing, wouldn't you? >> yes, sir. i would. >> okay. one more question? >> please, one more question. >> mr. phillips, general, excuse me, general phillips, this should be an issue one because when i was in iraq, you put four

hours nonstop into educating me about the successful innovations there. one thing that hasn't been done is that logcap and most big army service contracts in the theater 10 to compete for one base year, sometimes too, but basically one, and did the rest are option years. and our experts in talking to contracting officers is they just reflexively okay the option years, meaning there will be competition unless the contractor has screwed up horrendously. we're not in our ninth rubberstamp option here for kbr. will you, in your post, increase the competition levels for the option years, would you support us in the recommendation of considering option nine we know more serious than the current rubberstamping? >> sir, i would like to take a deeper look at the, but what i can promise you that we will do is we will work hard on competition across the board.

many of the idiq contracts the we put in place for jcc-i/a, i'm not the mayor with, but were based upon the first year as well as the option years being tossed in that execution pics even though you execute the option for the contract, the basis of that is through competition, and depend on how the contractor performed during that first period gives the government the right to either execute the option or to not and to see competition for the next follow long. >> can you name any big contract do not read it that you didn't take option year on? >> sir, chemical in at this point. the theater wide installation security services is a form of an idq that we get where i believe we had five contractors that competed with a base in option years on that, as well as every time that we went to execute an option, that option

was competed. so there's a various opportunities i think for us to look at the way we orchestrate idiq contracts to implement competition within. >> thank you, commissioner. commissioner henke, please. >> thank you, mr. chairman. mr. harrington, general phillips, we had a discussion earlier about whether its a sense of urgency, or it is the sheer workload. i take your point, mr. harrington, i heard you loud and clear sometimes it's just an immense amount of workload you're trying to put across your staff. i've been there. we've been there in different positions in the executive branch will you realize i don't have enough resources to get my day-to-day activity done, much less new innovative ahead of the problem. can you, for the benefit of our understanding, just elaborate on a couple of points in your joint testimony. sir, mr. harrington, i believe you are the army's senior procurement executive?

>> doctor o'neill is in a position at this moment, yes. >> you are his functional -- >> im. >> you and the army have delegated in terms of that acquisition authority, that flows out to your different command, army corps of engineers, forces command them to what are known as heads of contracting activities, or hcas? >> yes, sir. >> how many hcas you have in your control? >> we have 17. >> you refer to something in our prehearing briefing that are known as buying commands, buying activities speaker is yes, sir. >> how many do have and what are they? >> we have three major ones, sir. tank on, aviation and missile command, and communication electronics command. we've got the research developer and engineering command also that is a by for our anti-services and some other slightly smaller activities.

but aecom and see, our largest will go buying commands. spirit but don't have something like 200 buying offices or buying activities? >> yes, sir. we have 272 sites that do army contracting for us. worldwide. >> and you have, those are all a sign to some the hcas is that correct? >> yes, sir. >> you have 272 places doing buying for the army, different thresholds, services and hardware. and you perform from a headquarters, from a pulse oversight stable, you perform performance management reviews? >> procurement management reviews. >> it's basically your staff, senior staff, expertise go to a place of command inspection? >> yes, sir. it is focused into areas. it is an inspection, and evaluation of the health of the contracting activity and how it

performs its functions. it's an assessment by us and the resources they need, policies, processes, tools they need. it's also an evaluation of do they have good best practices and can we take those best practices and proliferated across the rest of the community to include others from having to have innovative ideas that are working. >> do you certify them to continue to operate or what the nature of the assessments they? sir, we review the findings. we do a risk rating of those contracting activities that we provide our report today that they provide -- is a corrective actions by. they provide a part corrective action plan back to his. >> you're able to do how many reviews as you? >> right now we target 28. there are principled resistance responsible for contracting, that work ahead of contracting activity. dark 27 of those.

we target another one just on an ad hoc random basis. and again just assess their health. >> you're able to get to all of the parcs, at least 20 years because we are not, sir. we are able to do 14 at the most. >> oh -- >> we target. let me correct myself. we want to do 28 because we feel that's an important sampling of each heart on a yearly basis. right now we have the resources to do 14. >> you would like to do 28 of the 270, is that he compares a? >> these 28 parcs have numbers of those, so we would go to the park office at different times. we go out to a contracting site in one or 272 and actually look at the contracting files can look at the internal controls to

look at their training, their qualifications, their certifications, things like that. >> the point is, what are taking what is you would like to do 28 of them. you're able to do about 14? >> yes, sir. >> obviously that is risk that you are accepting, the army is accepting in its systems. we don't want to accept the right now as we build our resources we have to accept it. >> i understand. your testimony, mentions the army, using section a52 has hired 700 people and about five other of them are contracting officers. your office hired any of those? >> sir, we have not in my office, those are entry-level contracting personnel. we require senior level. >> it wouldn't be appropriate? >> right spirit which shouldn't be surprised? >> yes, sir. we have been hiring but the available pool for a senior

contracting experts is be mentally competitive pool because many of our other, both army, department of defense and federal contracting activity are pursuing the same level of mid-and upper level expertise. >> thank you very much. >> quick question, mr. harrington. you said you are not resourced enough to do 28 of these reviews that how many people would it take to be able to do 28? our document 5000 more people? >> no, sir. we're talking about 26 2/28 more. >> so you can't find toy six to 28 people? >> right now we're using people in the field. you are exactly right. we can't find them. we have a tough time competing for the mid-and senior level. at 1.12 years ago, we had 11 of them in my office. i have been able to hire one of those to come back. we have spoken with seven others and they, frankly, refuse to come back. they just don't want to.

>> thank you, commissioner. my coach or. >> thank you, mr. chairman, and my colleagues. and again, thank you to our three witnesses. i am struck by the fact, mr. assad, u.n. the private sector able to support your family and a lot different way than you're able to support them now. head of marine procurement and the job you're doing right now. you do this and we thank you. general, you have made, general phillips, you have made a career of the military. you continue to proceed in a very important way. mr. harrington, you were in the military and rather than going in the private sector and being able to support her family in a much more significant way, you come back here. so we are incredibly grateful for that service. and i mentioned that because i don't want this chart, which i wish we'd done differently, it's so small. mr. assad, you basically have

this job you have right now from 2007, and mr. harrington, 2009. but my understand was, general, you were involved in procurement before, but not necessary in a position to have the impact you have now and the same for you, general phillips, your impact out is much greater. so we are starting to see things happen that we didn't see earlier. and what did happen in '02 doesn't rests on your shoulders. but it is still part of the record that i want to establish. in the national sense authorization act of '02, congress had established service contract management structure and increased competition to and are reading is there is no structure, certainly not like the air force. you know, you have for people, mr. harrington, and you don't have the 20 plus the army has an have a much more significant workload. in '03 tationadefens authorization act said

performance goal for multiple award service contracts, and we don't see any implementation of any metrics, regulations or metrics on that. so we're kind of thing congress early on saying do this, and not seeing it happen. in '04, the national defense authorization act as data a set of excellence, it is going back to the request in '02 that was made. and we don't see that establish. in '06, and management structure reforms for services, and we see partial implementation, but not a yearly review. in '08, it said provide congress provide annual inventory review of these contracts. and we are seeing this happen, but we are seeing you gather the data but we're not sure the data is being used. and, finally, in 2010 it said the board to conduct independent review of improvements to service contracting, and we see

that underway. so we know that what happened way back, not on your shoulders, but would you agree with basically, you know, would you take issue with anything that i have just put on the record? sorely not about my complement about you, but i'm talking about -- >> transit i wouldn't take issue except that we do have policies and processes in place to address service contracts. and absolutely, we have started maybe five months ago to take a look at how can we manage larger service commodities in a more competent fashion. so yes, we are looking at the air force, the model. were looking to learn about what the pluses of that have been and what the experience they have and haven't. >> how long do you think that would take speakers it will take us another year at least. with a group of people we have, to be able, but we do illegal acquisition services strategy panels for services contract

between firefighters and a billion dollars. we have done about 43 of them over the last few years. i conduct those. they are a very rigorous of you. we require that. we require them to report to us. we have those processes in place. it really comes down to having enough senior level skill folks to be able to make sure we reliably do that on a regular basis. >> i get the sense that some of those experienced people are in the private sector and not doing what you have done. candidly. let me conclude then by this comment. i guess when i say there's no urgency, we are really asking you to sprint. maybe it's not humanly possible to sprint all the time. but in a way, that's what we are asking, a cousin -- because we are transitioning in iraq, we are moving forward in afghanistan, and we don't know

where that takes us. so i don't see the sense of urgency, and i don't know how we do it. and i don't see the integration of contracting yet into the military. and, therefore, i don't see the institutionalization of it. askar said we're all on the same page you are and we are. i agree with that. so we've got to find a way to see the institutionalization before we are no longer here a year from now, and gentlemen, frankly, you all will be moving on. and i am left with the conclusion that really, with grant green's comment, and that is, that if we don't see it in the qdr as an enthusiastic part, we haven't yet seen it. that's kind of where i am at. >> thank you.

>> that ago. i can even push the buttons right. this is the opportune i would like to give each of you a couple of minutes, if you have something you'd want to say to sort of wrap this panel. no, no. and then we can mov move on to r next panel. >> thank you, mr. chairman. i very much appreciate the constructive criticism that we have received from your commission, as we move forward. there's a lot of work to do here. i do want, though, to rehab the size and particularly sensitive to the concerns about sense of urgency. there is a great sense of urgency with regard to this. we now have inside into, talked about in the tone of services. we now know how we're spinning our services money in a very, very detailed way by command, such that we can take action to make significant change so that

we can save taxpayers money. as i put afford to our leadership, if we figure out a way to save three to 4% in the world of services, we can buy a multi-year's worth of, you know, him wraps every year. we can buy ddgs every year at no cost to the taxpayer. so that mandate that you pressed upon us in terms of becoming more efficient and effective is absolutely taken with the utmost series. i can assure you that i look forward to reporting back to thithecommission on the progrest we're making. >> thank you, mr. saw. general phillips? >> sir, thank you and thanks to the distinguished members of the panel. just a couple of comments that i would like to go on record that lieutenant colonel and colonel bill phillips work for colonel and brigadier general ed harrington many years ago. so we have been in this business together for many, many years. and he has been so eloquent in

answering the questions, but i am now his boss and i'm responsible for those actions associated with getting him more resources so that he can execute the mission that we have described here. so i can promise you that we will work hard on that, and we haven't pushed back on any of the concept plans that mr. harrington has pulled for that as a matter of fact, we are pushing afford it and to change that image in my opening statement to over 2000, then we'll push that over 2000 ask for army and osd and congressional support in doing so. you have my promise on that. sir, i would just echo what mr. assad just said. there is a sense of urgency. and i would also, i would argue that we are in integrating contracting inside our war fighting to did that and i hear division commanders talk about contracting in a way that they never have before. and all that is positive. but you are right come if we don't get it inside our rules and institutionalize it, and get

it inside our thought processes, and in qdr and other documents, they will have missed an opportunity. so sir, your point is well taken. for that peace. we are getting, back to your, dr. zakheim, we're getting an tremendous support from army leadership on our funding. as much as we might have that dialogue here, general casey, secretary mchugh and the entire army leadership has supported us, to include, i can go into detail, the palm process that we have now to 2017 contracting workforce is a key discussion topic, and i expected to be fully funded with our armies, so there is some good news there as well. i have seen many of you in iraq, and visit us. so i want to thank you for what you have done to help our contracting mission, and to also support our contracting warriors that it has been an honor for me to be here with mr. assad, or could generally tired harrington

and see all of you, not in iraq, but here in washington, d.c.. thank you for your service to our contracting warfighters. >> thank you, general. general harrington. >> thank you, and there's not much more i can add to what general phillips and mr. assad said other than the peer review osd performs is, in my view, a model of where we need to go in the future. to the institutional position of this is a very ballot point, but if you take a look at what we have done so far, we have army organizations that are called tables of organization and equipment. that is the operational force in the army in terms of how it structures itself. we have contracting units embedded with our war fighting capabilities. we have a joint that lays out the doctrine of the operational contracting function we perform. we have challenges of getting regulations, but those regulations are going to be in place and they're going to govern us. with the resource support we

get, and i into a very good support for the resources, we're only going to continue to improve our ability to oversee what our contracting function does, and and to ensure the broadest spectrum of requirements generate becomes more and more. when you say the army field commanders out there have reduced seal our transition to two weeks to two hours -- two days to two hours, excuse me, that's a tremendous emphasis on the army, by the army chain of command. general casey spoke at our contracting stand down day. general carelli has been great on a contract close out. i think it is indicative of the sector and the undersecretary and the chiefs commitment that the actress said that as a we want to address the analysis of alternatives in this business case that represents, do we compete or do we not come and just exactly why do we will be the function. so those types of functions exactly. that senior leadership oversight

of senior leadership spotlight on this is just essential. we've got that effort started, momentum has begun, and now our obligation, my obligation to my boss, general phillips, is to continue to do my roll with our contracting workforce. >> thank you very much. i personally very much appreciate your involvement. i have spent time with you in afghanistan. i think what you're doing is extremely constructive and very helpful to us. so we look forward to it. that's what we're here for. >> thank you, gentlemen. much appreciated. will move on now to our second panel, at about 25 to one in terms of time, about 1:00. thank you, gentlemen. >> thank you. [inaudible conversations] [inaudible conversations]

stay yesterday, sander levin who heads up the house ways and means committee had it that you added tax was not on his committee's agenda. his remarks are next on c-span2

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