>> also today, a hearing on congressional authority over executive branch regulations. members of the house subcommittee will examine a proposal called the raines act that would require an up or down vote by congress on new federal agency rules before they can be enforced. live coverage begins at 4 p.m. eastern here on c-span2. >> tuesday president obama dhifers the state of the union address to a joint session of congress. c-span's live coverage begins at 8 p.m. eastern with our preview program, followed by the president's speech at 9. then the republican response from house budget committee chairman paul ryan of wisconsin. plus your phone calls and reaction live on c-span, c-span radio and online at c-span.org. you can also watch the

president's address on c-span2 followed by reaction from members of congress from statuary hall. >> now, housing and urban development secretary shaun donovan. he talks about how the recently-enacted tax cut package will benefit cities and also comments on a house republican proposal to cut funding for community development block grants. secretary donovan spoke recently at the u.s. conference of mayors' annual winter meeting in washington. this event is about 45 minutes.w >> thank you. it's a real pleasure to be here with all of you and introduce the secretary. twi of before i do, i just want to mention a couple of things. first of all, thank you, president and tom corcoran, for leading the effort on protecting

cdbg funding which we know is so important to us as mayors. i was so pleased this morning,- we all had the opportunity to hear the president speak.i wa his steadfast support for cdbg funding has been so critical in the past few years and,his obviously, the secretary's. c but it's really going to be up to us as mayors, as i mentioned yesterday, to take the lead onit telling the story of how important cdbg funding is and how critical it is. and it reaches across the aisle. this is a bipartisan program, it benefits republicans and democrats on the ground, and a b it's a real engine for economics recovery which is very important at this time, and it also really touches the most vulnerable in our cities and communities.d it so we're going to be engaging members of congress, governors, senators over the next several weeks.ess, i'm going to be asking for your help in an effort to tell that story as we go into the next

budget round. and i also want to mention, very pleased in working with the secretary's staff, they've offered technical assistance for mayors as we talk about that story. so we'll be working with the secretary and others. but we must take the lead onnd this. i'm really pleased to introduce shaun donovan, secretary of u.s. department of housing and urban development, this afternoon. since becoming the head of theua nation's housing department, secretary donovan has attended several conference of mayors' events including our seattlehas leadership meeting and most recently the press conference la releasing the 2010 hunger and homelessness survey.elea under his leadership we have seen the strengthening of many housing and community developmentse programs including the community development block grant program, the home program, and the homelessness programs. we look forward to continuing

our work with secretary donovan to build further on these efforts. please welcome secretary of hud, shaun donovan. [applause] >> thank you. it's so great to be with you. thank you so much for all the just fantastic work that you're doing.. it's been great to get to knowoa you and to work with you so closely and for your leadership, taking on this role that you have. it's always been important, but assh we've discussed, it's going to be particularly important in the years ahead of us, so thank you.nt president kautz, elizabeth, it is wonderful to be with you. thank you for your leadership. as the president called you the lady in the red dress today, ane it's been such a wonderful, wonderful partnership that we've formed over these, this past year to work so closely with you. hav and i just want to say

personally on behalf of myself, behalf of the president, thank you for your leadership. it really has been remarkable. thank you. [applause] it is such a great honor to be back with all of you. in fact, it's almost two years to the day that i came in the midst of the transition about to have the inauguration, literally the day before, to join you at the national building museum. t and one of the thingshe that iyo saidu there is i had been workf for one of the nation's great mayors for the past five years, for mayor bloomberg in new york city, and i was looking forwards to taking on my new role workin for all the great mayors across this country.r and it is such a pleasure to join and to echo e the president's words earlier todays the men and women across this country who lead our nation's cities, who understand the

importance of putting aside our differences to solve real problems on the ground that make a difference in people's lives. he quoted a number of mayors. i often like to quote laguardia, a great mayor of my city, who said there's no republican or democratic way to take out the trash.here maybe he should have said clean up the snow given the recentthe experiences in new york city. but i will tell you my commitment to what you do in local government stands true. in fact, i'm wearing today my cuff links that are or new york city hand hole coffers -- manhole covers from the sewer system in new york city that remind me ha what i do every dae is to serve all of you, to workt with you to help you deliver the desperately-needed services and to make your cities work eachspr and every day. so wonderful to be with you. and i want to talk today about

the partnerships and tools thate we've been developing to make sure that you can do exactly that. but let me say a few words before i start on that about where we are in this moment in i the economy. the president said this morning that we have seen a difficult two years. we've seen it around the s country, but again, you are the closest. you are the people, as he said, that your constituents will find. not me, not governors, not theor president himself, but you. you're the ones that they will find. and what we have experienced these last two years has been t nothing short of the consequences of the greatest financial meltdown that thisence country has experienced since the great depression.ha just twot years ago, and i thine we too often forget how far we've come, 753,000 jobs were 7

lost each month in the first quarter that the president came into office. 22 straighting months of job declines,30 straight months of home price declines. and so we took the dramatic and urgently-needed steps that we a needed to at that time to keep families in their homes, to keep our housing market afloat and ti provide the critical assistance that you all needed through the recovery act. to date, nearly four million american families have had their mortgages modified to be able to stay in their homes, more than m twice as many foreclosures as we've seen in that time. we have stopped the slide in home prices x most importantn of -- and most important of all, we've stopped the slide in jobmr losses. in fact, every single month of of last year we saw i privateof

sector job growth. in total, over a million jobs in 2010. but i also don't need to tell you that we still have a ways to go on this recovery just as the president said this morning. t we need to accelerate that job recovery. is our job number one. that's why this bipartisan taxat package that was signed into lan just a few weeks ago is sod in critically important. 159 million americans will get a tax cut worth a thousand dollarx to the typical family making $50,000 a year.amil twelve million families will benefit from a $1,000 child taxn credit. eight million students and their families will receive -- will benefit from a yearly $2500 tuition tax credit to make college more affordable.ax and six and a half million

families, which include 15 million children, will benefit from an expanded earned incomene tax credit.fipand now, the council of economic advisers estimates that just the full year extension of emergency unemployment benefits will create 600,000 jobs this year. in what -- anyone expected with a relatively weak hand to play andd an enormous amount of wit pressure, we were able too deliver a package that was focused on high impact job-creating tax cuts that will have real repercussions for ourd national economy broadly, but also particularly for our housing market and our construction industry which is traditionally -- which has traditionally been such important pieces of our economic recoveries. because of this package, businesses in your communities

now have new tax incentives to buy equipment and make theur investments in research and now development that help them hire and grow. the expensioning provisions -- expensing provisions alone coulo generatene $50 billion in additional investment in the u.s. in 2011 helping ourad construction industry buy the new equipment it needs to create good-paying jobs in your communities. the package also extends a tax credit of up to $2,000 for builders of residential homes that are more energy efficient, and it extends the gulf opportunity zone tax credits which will insure that more than 6,000 affordable housing unitsts are able to be completed and support some 13,000 construction-related jobs in communities still recovering from hurricanes katrina and rita.veri and, most importantly, these responsible temporary measures will not add to the long-term

deficit at all.st because of them, independent experts now expect another one and a half million jobs more will be created in 2011. lifting our economy and our communities alike. and i'll never forget, on the day that the tax cut passed, i was walking through the white house and ran into gene sperling just leaving the ceremony to celebrate the passage. he said, you know, there aren't many days when you can say you got something done that day that will raise the growth of the entire american economy by a full percentage point next year. think about that. rai a million and a half jobs.fu independent economists across the political spectrum are expecting next year because -- this year because of that tax cut package.expe so a remarkably important forcas all of us in the work that we're doing to create jobs in ouror communities. of course, you have been hard ao

work helping our economy and our communities recover throughout these entire two years. and many of the tools that you've been using were provided through the recovery act.ools and i want to particularly thank all of you for the remarkable, remarkable work you've done in getting that recovery act funding to work in your communities.y indeed, one of the reasons that we provided almost three of-quarters of our $13.6 billion in hud recovery funds directly l to localities is because we believe you best understood the needs of your communities, andro you knew how to insure that these dollars quickly got to the people and the neighborhoods that needed them most.hese and you have delivered beyondd h even our high expectations. with your leadership, think about this, hud's recovery programs have already completed

renovation -- not started, not underway -- but completed renovation of 358,000 homes around this country. 358,000 homes.000 give yourselves a round of applause for that work. [applause] and these homes, the renovations, the additional homes that you've helped to build are to green standards and with energy efficiency improvements that save money for residents, save money for owners and save money for the taxpayers because hay typically pay -- they typically pay back our investment whether it's in public housing or in other affordable housing, they payer back our original investment, typically, in 3-5 years through lower utility costs. with funds from the rapid rehousing prevention and homeless prevention, you have helped us prevent or end homelessness for more thanam,

three-quarters of a million people, 750,000 people are housed today that might otherwise be homelessed that ite not been for the homelessr prevention and rapid rehousing program. a and what's more as you reported last year, hprp is, as you said in your report, fundamentally changing the way communities respond to homelessness. mayor villaraigosa and i had a chance to do the release this year of the hunger and homelessness report, and that progress is not only occurring in central cities, but also in suburban and rural places which is so critical because we've seen an increase of family homelessness in suburban and s rural areas of over 30% in recent years. most important of all, our r recovery act programs have been creating hundreds of thousands of jobs. in fact, in the third quarter of last year alone when most people

thought the effect of the recovery act would be declining, just in the third quarter you created 27,000 jobs with hud programs from the recovery act. none of this would have been possible without your leadership, and i want to thi congratulate each and every one of you on obligating 100% of our recovery act funds a full month ahead of schedule, a full month ahead of schedule. putting that money to work creating jobs more quickly thany anyone had expected. you also met beyond our recovery act funds for our neighborhood stabilization program. $4 billion critical to helping renovate foreclosed and vacant s homes in your communities. despite a very tight deadline, 99% of that money was put to work on time and met the 18-month deadline that was set by congress.

mercedes marquez is here, our wonderful assistant secretary for community planning and development, and i know she w joins me with her team in thanking you for the remarkablev work that you've done on neighborhood stabilization asm well. we know that it's become anegan essential tool in your tool box helping you to rebuild not only homes, but entire communitiesebi that have been devastated by this crisis. that's why we worked so closelys with congress to provide an additional billion dollars of neighborhood stabilization funding in the dodd-frank wall street reform bill, and that built on an additional two billion that was in the recovery act through what we call nsp2. but we know that the extraordinary challenges that rc your communities are facing using these funds from staff shortages during a time ofhese enormous budget cutbacks to having to establish individual relationships with financial institutions to having to

negotiate the best price on homes one house at a time.he that's why it wasn't just enougm to provide you $7 billion in i neighborhood stabilization funding, it's why we went out with private sector partners and nonprofit partners and created the first look partnership to sc give you and your granteesthe exclusive access to foreclosedgi homes in your communities for two weeks before anyone else to could bid on them. and to allow you to getweek discounted prices that would help you to stretch those dollars even further. wou because of this, in total we expect neighborhood stabilization to be able towe reach more than 100,000 homes around this country.e that's if you look at areas that we've targeted, it's a huge impact. ar we estimate that about 20% ofte all the foreclosures in the neighborhoods targeted by of neighborhood stabilization can

be purchased or renovated withge the funding that we've providede and because we've been able to set up this first look partnership, 188 communities around the country have been able to save over $26 million, an average discount of about 13% over the market price of those properties coming to foreclosure. so this has been a tremendous partnership.pr with nsp2 projects continuing to with neighborhood stabilization 3 or nsp3 dollarse hitting the ground in march andn with the fragile but growing stability that we have in the housing market we expect a big jump in the impact the first look has and in the number of homes that you can acquire in 2011.numb of course, at the same time that these tools are helping to repair our economy we face an

uncertain budget situation for the foreseeable future, and i heard your, your sighs, your chuckles this morning when the president talked about this. and we need to work together to be closer partners than we've even become over the past two years as we face the difficulthe budget ahead of us. two i mentioned earlier that you've done a remarkable job with our recovery funds. you're creating jobs and homesev and opportunities in your communities, and can one of the things that has been most important is the cdbg funding that was provided during the recovery act. [applause] in fact, 900 mayors -- 300 mayors around this country, 300 mayors conference members have already drawn down and spentne every single dollar that they r had in cdbg funds that weret

received through the recovery act. and dozens more of you are about to reach that threshold. and i want to say very personally having led thewant housing department in new yorkey city, i know how critical the cdbg and home fund are to you and the work that you do on thea ground. and and i know that this has been ad primary focus. you heard the president talk about it this morning. i also want you to know that i was the largest user of the home program in the country in new york city and that we will be reaching a remarkable milestone in the history of the home program. its 20th anniversary, and we will reach right about that time it having built or renovated its millionth home in this country, a remarkable record of achievement for the home program. c in fact, when you take my

experience and mercedes marquez's experience, we have the first and the third largest cdbg programs in the country. and so we know, you don't have to tell us, the importance thaty cdbg has to you and your u communities.s how those dollars can leverage t the critical resources you need to build economic infrastructure and to help your communities thrive. still, while president obama hasn't even released his 2012 budget proposal, some are suggesting that we cut $100 billion this year in 2011 from domestic programs. now, let me be clear, this administration is serious about reining in our budget deficits, and you'll see that in the president's budget.de he told you sofi this morning. there will be tough decisionsin

that need to be made.u th but we are absolutely committed to making the strategic investments we need to insure the economic future of this country. to and cdbg is one of those critical investments. it is a -- [applause] critical catalyst -- [applause] it is a critical catalyst fora r economic growth, helping you everywhere across this country bring retail businesses to your communities, forge innovative partnerships around child care and to rebuild your economies in so many different ways. in fact, our data from be the i recovery act shows that cdbg has created the most jobs per dollar of any program that was funded at hud in the recovery act.s in fact, at about twice the average.ud [applause] about twice the average of our

programs and ore programs -- and overall.grams so let me be perfectly clear, when it comes to cdbg funding, i hear you, and president obama hears you loud and clear, and we need your help to get us the data, the jobs day that that -- data that i just talked about, to get us the stories to get out the real story of cdbg and how it creates jobs in your communities. that will be critical to winning the battle to insure that cdbg y remains oua proud and strong investment in every communityth around this country. now, you've rightly focused on how important cdbg is, but i also want to say it isn't the hw only area where you need to make your voices heard. hud programs provide decent, are safe housing to four and a half million people, more than half

of whom are elderly and disabled. these are programs in which just funding the same number of people each year costs more j money. as n rental costs and utilities and operating costs rise, just to serve those same four and aco half million people and because they make up such a large share of hud's budget, that is as growing cost that is critical to meet. so insuring we continue to support those residents will be a priority, and that's why -- and it will be a priority for congress as well -- that's why you and i have a big case to make on other innovative initiatives that we have put in place together to follow the innovative things that you've been doing in your communities.r and to support the work you're already doing to prepare yourour communities and your economists for the future.y do the first of these is on sustainability in green jobs.f

i don't have the to tell -- i don't have to tell this audience how important this is to our economy.dien green construction spending already supports more than twono million jobs and generates more than 100 billion in gdp and wages. and over the next four years it will support nearly eight million jobs and generate morerh than a half a trillion dollars in economic activity.llio on tuesday i joined mayors tomrl barrett of milwaukee, gene kwan of oakland to promote green cities and green jobs during tho white house emerald cities conference. and what i heard was crystal clear. sustainability isn't just about green roofs and energy-efficient buildings, it's also about where those buildings are located with respect to transportation and the rest of how we build our communities. in short, america must find a way to connect housing to jobs. today, think about this, for

every dollar the average american family earns they now spend 52 cents on housing and transportation combined. ear they have become americanport families' two biggest expenses by far. that's why this past october i was announcing $140 million in hud funding to support sustainable housing initiatives. demand for our two new sustainable communities grant programs was remarkable, exceeded our wildest expectations.ty g 78 million americans live in the 45 regions that won those competitions, that competition, but still we were only able to fundoe a quarter of the applications that we received. for our community challenge grant program which we administered jointly with thety department of transportation, the funds awarded by hud and d.o.t. will leverage over 50ant

million in additional state, local and private funding. these grants represent the most significant federal investment and planning in generations. planning our communities smarter means parents will spend less time driving and more time withs their children. more families will live in safeh stable communities near goodldre schools and jobs.n rg more kids in your communities will be healthy and fit, and more businesses will have access tos the capital and the talent that they need to grow and prosper be. indeed, one of the things that is so critical about these investments is that regions who embrace sustainable communities will have a built-in competitivs edge in attracting jobs and private investment.g of course, the grants we provided weren't just aboutnts central cities. than half of applicantsre came from small towns and rural regions, and winners including rural counties in the central florida, appalachian communities in western north carolina andlet native american tres in the

washington state and south dakota. and this commitment extends to rural america with the $25ra million rural innovation fund which supports larger-scale innovative approaches to addressing unique rural issues including community poverty and concentrated housing distress and bolstering our capacity to change the game in rural america. one of the things that's so important is that we don't take the old federal one size fits all approach. you know better than anyone than the needs in your communities vary dramatically, and it's so important as we think about theo threats that we may have to this sustainable community's agendais going forward is that this is not about the federal government telling you or creating an unfunded mandate for you. this is about us supporting thea vision you have for yourco

community; rural, urban oran, suburban. this is a critical tool, and i was so pleased this morning as i spent time with many of you at y the white house to hear how excited you are from macon, georgia, to salt lake city,ge utah, and so many other places u so excited about this sustainable communities agenda. it is long past time that the federal government understood that we need to speak with one voice on housing and transportation policy, and finally we're beginning to. help us continue that momentumnd that we've built.ng t ..another area where we have to make our case is transforming our public housing. i talked with many of you earlier this morning about the enormous challenges you feel in creating mixed use, mixed income communities and in being innovative with public housing. despite the enormous desire and rulesin your communities, our

>> our rules a half century old prevent you from doing what you need to do in your communities. it stops anyone but the federal government from being able to finance the improvements that you need in public housing. but these rules haven't just stood in the way of building better housing. my own experience in new york, trying to bring grocery stores in public housing, trying to bring schools and the services, was like banging my head against a wall far too often. because of the barriers that we put in place. and so our transforming rental assistance proposal would change that by providing you the power and the tools to bring in private financing, to bring in home and cdbg, and tax credit, and to create the kind of

vitality and market discipline that we've seen elsewhere in the affordable housing sector. you know this isn't just theory, because you've seen it. i talked to mary fox from charlotte this morning who lived in a hope 6 redevelopment. you've seen the remarkable transformation that hope 6 has been able to provide in so many communities around the country. but let's be honest, we're not going to transform public housing with a half dozen grants a year. we have to change the system more broadly. otherwise with the status quo, we're going to keep losing public housing. 10,000 units of public housing each other. in fact, during the time that i'm talking to you another, we'll lose another unit of public housing. because there's a need for $20-$30,000 in capital in housing around this country. we think the transforming rental

assistance alone would bring over $25 billion of private capital into public housing. most importantly of all, it would create 300,000 construction jobs around this country. renovating, public housing, building the communities that you know your cities need. and i want to say that this is one the most important bipartisan issues that we could have. hud secretary jack kemp who created hope 6, senator bond who championed it for decades knew that. we have legislation that was produced by keith ellison from of minnesota that would bring that to public housing. we need your support. we know the results it can have on the ground. make your voices heard. lastly let me say there's no

greater opportunity for bipartisan and getting real results than on the issue of homelessness. when i was housing commissioner in new york city, mayor bloomberg and i worked with a republican governor. now i often like to joke that i know bipartisan, in fact, i worked for all three parties, that was just under one mayor in new york. [laughter] >> we worked closely with george potoky. to support 9,000 units of housing for the homeless. how was it we were able to get in difficult budget times $1 billion investment? it was because mayor bloomberg as a businessman, george as -- george pataki as a fiscal man,

they knew it was not only the right thing to do as taxpayer, it was the houses that supportive housing provided. but the real cost was the resolving doors of emergency rooms, shelters, jails that would result if we didn't do anything. we've learned that it's actually more expensive to put a band-aid on homelessness, than it is to solve it. the bush administration realized that as well. key members of congress like senator jack reed, and judy bigger who just took over, the housing support model has reduced chronic homelessness that people on our streets that we thought would always be homeless by 1/3. in just five years, 1/3

reduction. in fact, that progress, your work at the local level, opened the door to a federal plan that president obama announced last year that will finish the job of ending homelessness. it's the culmination of a decade of work, and it commits the federal government working with you to ending chronic and veterans homelessness in five years, and family and childrens homelessness in a decade. let's be clear, this fight wasn't started in washington. it was started by you and your partners in communities around the country. you were the ones that said and showed that we could end homelessness. you set out to improve it. with this plan we are not only going to take on the fight, the federal government supporting your work, we are going to win this fight. [applause] >> next wednesday i'll be

joining thousands of volunteers in four city and counties to conduct the national count of homeless persons and families. this is to have the clearest possible understanding of homelessness, and measure our progress towards. find out how to volunteer at hud.gov/homelesscount. we are urging every community to participate because good data is essential to measuring what works and what we need to do better. you heard the president this morning say the key guiding principals in the budget fights that we have ahead of us, we need to demonstrate what works and stop doing what wasn't. we need the data in cdbg and homelessness to show what works. we're urging every one of you to join the counts. i personally will be on the streets in washington. i will urge all of you to get your communities out to help us.

some wonder whether we can make progress in a country this divided. but whether the issue is tax cuts and programs like cdbg that create jobs, putting people to work rebuilding our public housing, proven strategies that prevent and end homelessness, or new tools to help communities that share problems finally start sharing solutions. i'm confident that we can not only make progress, but history. ensuring that we do starts with the men and women on the front lines of our communities. it starts with the leaders here today in this room. it starts with you. thank you for the opportunity to be your partner in that fight. thank you for everything that you do across the nation every day. i look forward to continuing our work together in the months and years to come. thank you. [applause] [applause] >> mr. secretary, we thank you

for being here. and one the things that the mayors would like probably if you could take one or two questions. but there's a very pressing question on the minds of all of the mayors. if you could address that. then we'll go to the floor for a question. because we have other members who are going to be speaking. but the document that i hold here, and it's going to be upthere, the republican study committee issued their spending reduction act. can you tell us what is the process? and what does this mean? because we see reductions in the community development block grant which say it's an elimination. so could you talk to us about that please, mr. secretary? it is right up there now. i mean this is the outs yesterday. and everybody has gotten a copy and everybody has upgraded

concern. >> elizabeth, thank you. and i'm glad that you raised it. because we're going to -- we've been talking a lot about what the presidents budget proposal will look like for 2012. the president spoke to you about it this morning. you have made your voices heard. i want to thank you, mayor warren, congressman frank, so many of you that stood up just yesterday to say cdbg is a critical resource. your voices are being heard. continue to make sure they are being heard. it's not only a question about 2012, but immediate about the 2011 budget. because of the short term continuing resolution that we got in december that ends in march, we're going to have a debate even about whether cdbg continues to be funded for the remaining six months of the fiscal year, this year, in 2011. so this is going to be a critical discussion. what this document does,

frankly, i will say honestly doesn't surprise me. as i said, i was running the largest cdbg program in the country in new york city when it was proposed during the last administration that cdbg be eliminated completely. after that there were proposed cuts of up to 2/3 of the budget. so this is a real, immediate question that we all need to work on. and again, the process here is that the current year's budget needs to be passed in march. and it maybe a continuing resolution. it could be something that cuts substantially. and you've heard as i said in my remarks, a proposal of $100 billion this year in discretionary spending. not in 12, but in '11. that's what we need to make sure

of. as we're looking at 2012, we are also focused on protecting cdbg this year. and not only cdbg, but the other critical resources that we've provided. >> mr. secretary, can you take one question? i know your time is limited. we appreciate you being here. >> i can take one question. i see the folks that are waiting. >> yes, mr. secretary, my name is jimmy, beverly hills mayor. you would think beverly hills would have the problem, we are rich. but we have the same problem. we have developed something that may want to be a challenge before the rest of the cities is small city initiatives. small city goes way beyond sustainability. we've been able to create ten initiatives and now up to 175 which has helped us to be a small government.

now we have water solving problems and home solving problems and all of that. i think i want to challenge you to create, move up from sustainability to small cities and small communities. because it would really pay the government smart and pay back in the large term. the paradigm has changed to small cities. >> thank you. i want to go back to something and just maybe amplify it a bit that i said earlier. one of the sort of misperceptions, i think, about a lot of the work that we are doing on sustainability, on linking housing to transportation but in so many other ways trying to make our communities more sustainable is that this is a big city issue. this is an issue that, you know, the new yorks and chicagos, and l.a.s are dealing with. that's what has been so interesting as i've traveled around the country with the president and the vice president

with ray lahood and lisa jackson, there's incredible support for this agenda of sustainability in every community. urban, rural, suburban, every geography. we needs to make here it's heard. what's heard is we are supporting your vision because, you know, we learned with urban renewal with many of the historical program that hud and other agencies created, you can't have a one side fits all policy, you can't think of your communities as having the same needs. so what was so different about this process that we put in place for sustainable communities, we're asking you to tell us what your communities should look like. what's your vision? if it's a small cities vision, we want to fund that? if it's focused on art space community development which we've seen in many communities is the best way to generate

economic activity. we want to fund that. we want your ideas. we are here not to dictate what the communities should look like, but as a real partner. i think that's something mayor becker and i in the salt lake were having this discussion at the white house. we need to get it out. there's many in congress who think of federal planning support as modeled on the urban renewal approach. this is a very different approach that's based on your vision, whether it's a small city's approach obvious anything -- or anything else. we need to make sure the newest members of congress who aren't familiar, they hear and understand that it's reaching every community and it's about your vision, not federal government dictating it. it's a partnership approach. it's so important. thank you all so much. i look forward to seeing you very soon. >> to be working with you. [applause]

[applause] >> coming up, more from the u.s. conference with remarks by the head of the justice department program involving community policing services. after that, live coverage of the commission on wartime contracting as the panel looks into allegation of waste and fraud on u.s. projects in afghanistan. and later a live house subcommittee hearing examining a measure that would require congressional approval on major executive branch regulations. congress returns to capital hill this week. in the house, remembers --

>> do you solemnly swear to support and defend the constitution of the -- >> the senate returns to work this week. including the new class of freshman senators. learn more about them online with c-span's congressional chronicle, track the daily timeline, read transcripts of every session, and find an archive of every member at c-span.org/congress. >> now more from the u.s. conference of mayors annual meeting. another speaker was the director

of the justice departments community policing program. he talks about how this year's budget will affect funding for local police services. he's introduced by houston mayor mr. parker. this is about 15 minutes. [applause] [applause] >> i know it's been a long program. i appreciate everyone's patient out there. but i also know how important it is to all of us to receive the c.o.p.s. grant funding, and how that program has been able to make our cities safer. it's my pleasure to introduce to you now a very good friend of our cities, the director of the office of community oriented policing services at the justice

department, barney melekian. i won't spend much time talking about that. but i will tell you the conference of mayors is committed to see the c.o.p.s. program adequately funded to be able to take advantage of the vital help that it provides. director melekian was the police chief for the city of pasadena for more than 13 years before assuming leadership of the c.o.p.s. office one year ago, and served with distinction in the santa monica police department in 23 years. he's also served as the acting fire chief and interim city manager for the city of pasadena. i met the director shortly after taking office last year to discuss with him the fact that the city of houston was skipped over in the first round of c.o.p.s. funding. we had a really great meeting. we just introduced ourselves and he asked me how things were going. i said, well, i've had some challenges. first thing i had to do was get

rid of my police chief. i said did you know my police chief? he said, yes, friend of mine. very good friend of mine. but we went on to have a good productive conversation. i'm pleased to say the city of houston did receive c.o.p.s. funding in the second round. i know that we all appreciate director melekian's professionalism, but more importantly his practical experience as a former police chief and genuine concern for all of the cities. please call director barney melekian. [applause] [applause] >> thank you, mayor parker for that kind introduction. it's been a pleasure to watch your leadership of the city and of the department and to watch the changes that are occurring there. certainly i'd also like to thank

president coats for her leadership and opportunity to be here today. you heard two significant speakers talk about national and international trade and the importance of that. and the importance of housing and this impact on america's cities. joel kotkin in his book "the city" said to be viable, the city needed to be three things. it needed to be sacred, safe, and busy. by that, he meant not sacred in the religious sense, but in the sense that it conjured up a sense of place, a sense of belonging, a desire to commit. it needed to be safe in the sense that it's citizens were free to go about their daily lives not only physically safe, but safe really from even the necessity it think about whether or not their safety might be at risk, and lastly, the city needed to be busy.

needed to be economically viable. it needed to serve as an engine for the people who lived there and for the region who surrounded it. one the things that i've come to appreciate in my time in the c.o.p.s. office, my time as police chief, and my time as city manager is that the fact that law enforcement touching each of these aspects of city. that, in fact, law enforcement and your policing services which consume a significant part of every city's general fund budget needs to be more greatly involved in urban planning, in issues of housing, in issues of economic viability, and we at the c.o.p.s. office are committed to making that happen. the notion of community policing sometimes engenders a discussion about what is it, and what does it mean? i would suggest that it's nothing more than the act of your police department building

relationships with the people that they serve and ensuring that we can solve their problems. and to that end, the c.o.p.s. office remains committed to that. from the time of it's inception, the office was intended to advance public safety through community policing. it is -- most of you i suspect are very well aware of the hiring grant. most of you, i suspect, at one time or another have been the recipient of those. and in the '90s when this program started and we were able to fund 90 to 95% of the cities that applied, that was one -- that was sort of one reality. but the reality today is that inspite of over $1 billion being infused into the 2009 budget as part of the recovery act, an additional $298 million in hiring funds in 2010, the demand because of the economic impact that has landed on america's

cities, we funded 14% of the agencies that applied in 2009, and 8% of the agencies that applied in 2010. the reality going forward that the office and partnership with you needs to help redefine what it is that the office will do and how the office had serve your cities. the fact of the matter is that as we go forward and the chiefs and sheriffs of this country who have walked in and told me stories about what is going on in their cities, cities with high violent crime rates still laying off 40 to 50% of their sworn employees. cities merging resources or personnel in an effort to control costs. the list goes on and on. and the reality is that the

federal government in it's entirety, or the c.o.p.s. office in particular, is not going to be able to fix that. what we can do, what we are committed to do, what i wanted to talk to you briefly today is to approach the issue of where policing is going to go and how we can support that and support your efforts to gain greater cost efficiencies in your cities and with your police departments. i believe -- and i've been in this business for a long time. and professionals who have studied this business for a long time believe that over the next several years, the delivery of policing services in this country is going to fundamentally change. in ways that are not fully, clearly defined yet. but i believe, for example, that there are areas and i want to address a few of them, that may provide opportunities and may provide things for you and the police chiefs and sheriffs that work with you to consider.

there's no question that the sharing of regional resources is going to become the norm as we go forward. that may -- that does not necessarily mean a merger of agencies. but certainly a sharing of commonly held, administrative needs. for example, internal affairs, or other administrative actions, detective sections could very easily be blended to share resources. the issue or the delivery of nonemergency patrol calls for service. greater use of technology to get information from citizens in a way that does not necessarily demand that one or two highly played professionals respond at random intervals to the city's request for service. the issue of scheduling appoints, the issue of making greater use of civilian

employees, and the issue of greater involvement of citizen volunteers. i spent some time earlier this year talking with members of the denver, colorado police department about what they have done in terms of expanding their base of volunteers, including using those volunteers in a number of nontechnical issues. i'm sorry. in a number of sort of technical areas of expertise that they bring with them from the private sector. the challenge really of policing and what it means as it gets redefined, very often the true of falsity of the constitution, the truth of viability of each of your individual governments is often determined by the actions of your police department. and how they interact with citizens. very often, they are the only arm outside of snow removal, perhaps, they are the only arm

of city government that many citizens ever see. very often they are the ambassadors of your city in a way that you may not fully appreciate. at the c.o.p.s. office we are committed to this idea that part of our responsibility besides the availability of hiring grants, is the issue of training and technical assistance. that we provide to law enforcement agencies across the country. as we go forward into 2011, we are going to make some significant changes in terms of the grant process and about how that's going to work. there will be a much more comprehensive application, there will be an emphasis on regional or multiagency partnerships. we like every other federal agency in the new environment, it is not enough to say that c.o.p.s. office funded the x

number of departments, or the c.o.p.s. office made available to hire the x numbers of officers. the reality is we have to be able to point where what did the officers accomplish. it's not enough to say since january 1, 2009, over three million publications have been distributed. what savings did city realize, what value for the publications came from the agencies. part of our application process beginning this year will be to measure community policing at the beginning of the grant, and at the end of the grant. and begin to collect data to say that community policing, solving the problem, is doing what we want it to do, advance public safety. there will be a greater emphasis on the ability of departments to hire civilian employees. where those civilian employees

can be shown are freeing up an officer to go out and work control and detectives and encourage in -- engage in enforcement activities. as we measure what it is more than anything else, we will be asking your chiefs and your sheriffs and your cities to articulate what problem would you like us to solve? we are not going to be able to address the long-term sort of economic fishers that are occurring. the recovery asset that you've heard i'm confident is going to do that in the next several years. in the mean time what we will be asking the people who fill the application out is to say describe to us what it is that the officers that you are going to hire are going to do --. >> we'll leave the program at this point on the commission on wartime contracting is holding

hearing examining on how u.s. dollars are being spent in afghanistan and the extent that contractors are being supervised. this is just getting underway. live coverage here on c-span2. >> the other commissions at robert henke, clark green, and charles tiefer to my right. problems in afghan construction, for most americans, this is a matter is a quite literally out of sight, out of mind. but it's a huge issue involving almost $20 billion taxpayer dollars in just the past three years. just as critically con -- construction contracts, the future of afghanistan and america's image in the rest of the world. untimely, unsafe for poor

construction has impact. too often they are felt by american soldiers, marines, and airman that find themselves cramped in protective quarters. the afghan people have also been ill served at time by some of the u.s. funded construction projects in their country. these issues go beyond delays and cost overruns and are unacceptable. we'll be probing them today. the construction that we're talking about including power facilities, schools, hospitals, clinics, prisons, and facilities for the afghani national army and police. construction is taken to support our troops and coalition partners. these projects include barracks, headquarters, airfields, and dining facilities, literally all that is needed to sustain or forces in theater. most of the construction is sponsored and directed by the

department of state, the u.s. agency for international development, and the department of defense. the d.o.d. effort largely flows through the u.s. army corps of engineers and the air force center for engineering and the environment or what's referred to as afsi. the construction is mainly performed by contractor or for usaid, implementing partners that work under grants as well l as under contract. we're looking at construction because the mandate from congress required that we determine contractor support for reconstruction and stabilization. we are looking at construction and doing so in the public setting because there are definitely problems and there have been recurring problems that needs to be addressed. now there are lots of talented and dedicated people working on

these construction projects in afghanistan. they do much good work. that needs to be said. but there are also many problems, problems that occur over and over, year after year involving both government and contractor personnel. and when you have recurring problems of the same type, that's nature's way of telling you that your structure system or staff need reengineering. the commission on wartime contracting has taken a careful look at construction efforts in afghanistan. we've concentrated on many of the larger projects such as the $300 million kabul power plant that maybe too complicated and costly for afghans to run once american involvement declines, but numerous smaller projects that add up to billions of dollars and also need attention. the main reason for paying attention to construction project is the large potential for waste. waste can result from projects that are poorly planned, over seen, and built.

waste can spring from abuse and corruption, and waste can occur when projects are cultural insensitive, unneeded, or unsustainable. the government of the united states has been guilty of causing or tolerating all of these forms of voice at given times. one the challenges in diagnosissing waste and proposing reforms, it's not always clear where the money goes. the audit released many october for the inspector general found that the state and usaid were not able to readily report how much money they spend on contracts for reconstruction in afghanistan. it's hard to follow the dollars if there isn't that kind of accounting, the sigar said that nearly $18 billion was obligated for the three agencies for work

by nearlyly -- by by -- from fil years 2007 through 2009. if federal agencies can't readily account for their spending, that raises questions about contract management and critical contract oversight. we look forward to hearing more of these issues when general fields, the sigar inspector general testified today. we'll develop many questions on it's own that we'll explore. we've walked the ground as a commission and as members of the commission and as staff to observe projects throughout afghanistan. we've talked to federal employees and contractor representatives. after an effort that started last spring and included two trips to afghanistan to look specifically at construction, what have we found? in large part, disappointment. well, we did see some very well run projects that were many more examples, too many examples of

projects that were not going so well. too many projects came in over budget and rehind schedule. the amount of waste quickly rises to staggering proportions. of course, trying to build clinics, schools, and other projects in a war zone complicated the daunting managing challenge. in addition, timing is critical. the military describes a contingency mission in simple terms. secure, hold, and build. if the build phrase is launched before the secure phase is complete, you invite failure. you give the taliban or other enemies a chance to sabotage projects and intimidate or kill the construction workers. that increases cost and delays and simply unfair to contractor employees. meanwhile border politics that can block and delay shipments to landlocked afghanistan makes matters worse.

the wartime setting makes challenges worse, even behind the wire projects. an example from my own experience fits in here. i was talking to the contractor officer representative who was over seeing construction on a bar rack -- barracks on a base in afghanistan. he was an engineer. he told me his engineer was blowing things up, not building them. he was trying to do it his duty, but he was no more qualified to oversee than we are up here. this was weakness in oversight, one that invites waste and can cause deaths as american soldiers were executed in faulty wiring in base services. other are planning and contracts and management. they are recurring, avoidable, and of unacceptable.

the commission is devoting attention to construction issues both to improve outcomes and identify lessons that can help. we've assembled three panels of expert witnesses to help us probe issues involving contract construction and grants. panel one is one witness panel. the witness is major general arnold fields, united states marine corps retired who was appointed special inspector general for afghanistan reconstruction or sigar in june of 2008. general fields will be leaving government service shortly after a career spanning 40 years. i thank you for the long span of dedicated service to our country, and i thank you for taking the time to participate in our hearing. panel two comprises federal officials with responsibilities for construction, contract management, and oversight. they are major general jeffrey

dorco, william jay mcglen, principal deputy, international narcotics and law enforcement affairs u.s. department of state, colonel wilfred cast cas. times i forget the name of the person that i'm talking to. we respect and appreciate all of you on the panel. panel three is construction contractors with projects in afghanistan, a critical part of

this hearing. michael mccalve, president and environmental division. charles musenar, president of amac, earth and environmental inc., william van dyke, and larry d. walker president. also appearing with this panel is bruce mccaryn, regional director for project services. they are the implementing project for the school project. i would note it has made him available to provide information without status privileges and the immunities enjoyed by the u.n. as a u.n. official. we appreciate all of the

witnesses that i've named. before we would start, commissions like ours are committed to solving the problems, and focus on short comings and failures than on successes. both sides of the coin, are those important. our mandate from congress instructs us to identify lessons learned in iraq and afghanistan to help point the way to better outcomes now and in the future. we'll be calling out good efforts, best practices, and notable successes by both government and contractors in july. that's only appropriate. we don't intend to shortche anyone or exempt anyone where criticism can help pave the way forward. we've asked witnesses to offer brief oral summaries. the full text of their written statements will be entered into the hearing record and posted on the commission's web site.

we asked witnesses to submit within 15 days, responses and any additional information they may offer to provide. now if the witness for our first panel, general fields, will rise and raise his right hand, i will swear you in. general fields do you solemnly swear and airplane the testimony that you will give in the hearing is the truth, the whole truth, and nothing but the truth? >> i do, sir. >> thank you, sir. please be seated. thank you, general fields. let the record show the witness answered in affirmative. general fields, please begin. >> thank you very much, co-chairman thibault, distinguished members of the commission, i'm pleased to be here to discuss sigar's work, to assess results of construction work and facilitators carried out in afghanistan. as the commission, i'm confident

knows over $56 billion since 2002 has been invested in afghanistan or appropriated therefore in the reconstruction of the country, in the interest of afghanistan and the people of the united states. about $29 billion of this fund or these appropriations has been made available for the afghan security forces with the intent to build the force to a level of capability, to defeat insurgents, and to provide security for the nation of afghanistan. there's also a train equipped and basing component to this funding. this reconstruction element of afghanistan in terms of the afghanistan security forces is largely under the management and supervision of the combined

security training command of afghanistan. he serves us the auspices of the commander u.s. forces afghanistan. facilitators is a critical component, are a critical component of the reconstruction of the afghanistan security forces are the building of the afghanistan security forces. since 2005,$11.4 billion has been made available or is in intended for the security forces infrastructure. much of this money has come by way of appropriations since 2005 through 2010, and will also include appropriations yet to be approved for 2012. $7 billion of this money is

appropriated or will have been appropriated between 2010 and 2012. we have constructed 34 overall audits in sigar. of which, ten of these audits have been focused on addressing infrastructure projects. they have essentially covered garrisons for afghanistan national army, compound forest afghanistan national police, and the reconstruction efforts under the auspices of the commanders energy response program. designed primarily to provide immediate assistance to the population of afghanistan. we have over 90 investigations under way involving infrastructure. they can be categorized in areas of bribery, country fraud, faulty construction, and

substandard material. our work in general has identified numerous problems. and we have reflected these problems in the 34 audits that we have conducted and certainly in the 10 that focus primarily on infrastructure and the afghanistan national security forces. so there is insufficient planning, inadequate contract management, and lack of faulty assurance. in general. but certainly lack of quality assurance and oversight in the areas where the threat to security is greatest. in reference to the afghanistan national army facilities construction, our audits have raised serious issues overall. but many of these issues were raised last year and prompted us to conduct a contract audit or a more focused audit on the

reconstruction areas involving the afghanistan national security forces to determine whether or not plans were sufficiently in place to address the long term future of the build up of the afghanistan security forces with emphasis on the infrastructure that underpins the force. and the other issue of maintenance, whether or not there are -- there is sufficient capability put in place even by the u.s. or the international community or by the afghans to ensure that the united states investment in infrastructure, relating to the security forces is not wasted. we discovered that there is not a long term construction plan for the afghanistan security forces. we feel that the lack of this plan could result in buildings that are inadequate in order to meet the long term or short term

needs of the security forces. we conclude that the $11.4 billion is at risk if these matters are not promptly addressed. we feel there is still some time to address the issues in as much as the $11.4 billion that i earlier referenced has not been spent. some of it needs to be appropriated. therefore, it's time to address the planning, maintenance, and sustainability issues that we need to address to ensure the american taxpayer dollar is not wasted. some $800 million has already been provided for the u.s. by the u.s. for maintenance of the completed facilities in afghanistan. and this $800 million covers a period of five years. cstc-a has informed us, it might be year 2025 before the

international community, including the united states will be able to disengage from providing this maintenance and such maintenance being taken over by the afghans. we are issuing a report this year on our assessment and audit of 69 projects. those projects represent $58 million of taxpayer money obligated between 2008 and 2010. the 69 projects that we audited represent 91% of the $58 million. they include matters relating to roads, dams, canals, and bridges. we found that 27 of these 69 projects valued at $49 million are at risk of failing. we recommended to u.s. forces

afghanistan to improve cerp oversight, promote sustainment, establish better planning cry -- criteria and assess whether the projects have met or are meeting the intended purpose. in closing, our work, mr. chairman and commissioners, point to three principal areas of concern. the first is lack of a comprehensive plan for building infrastructure in support of the afghanistan security forces. secondly, numerous delays have come about which may not keep pace with the intended goals for building the force. in other words, delays will negatively impact the intended goals and maybe preclude the united states from contributing

fully it's share to establishing the force as designed by the expected time frame. the apparent inability of the afghan government to sustain these facilities is another of the major concerns. i have generally summarized in broad terms some ma yo -- major issues that need to be addressed in order for the taxpayers dollar not to be wasted in afghanistan. i look forward to further questions and comments as appropriate on these matters. thank you very much. >> thank you, general fields. the process we're going to use is each commission is going to have a limited period of time to engage in a dialogue. before i start, i'd like to thank you, again, for your service. and i -- in fact, i'd like to

lead in with a question. you know, you were asked to stand up a robust organization from scratch. you know, there was nothing in place. can you talk about what that first year -- and that was summer of two years ago, two and a half. can you talk a little bit about what the first year was like in terms of trying to bring in staff and build momentum? >> thank you very much, mr. chairman. i'm delighted to talk about that. because that have been one of my and sigar's greatest challengings, -- challenges to construct the organization from scratch with only legislation at the time that i was appointed to this position, no funding by which to build the organization rapidly as i believed the congress and the people of the united states intended and expected. so there was no funding for

sigar until basically october of 2008. when i took this position and had my dialogue with the senior leadership within the government, the implementers, along with the department, i determined along with my colleagues, the few that i had at the time, we needed about $23.2 billion in order to build the organization rapidly and to declare it ready within one year. which meant to me by one october of fiscal year 2009. that money did not come rapidly at all. even though by the end of the fiscal year 2009, i did have the funding that i recently requested, but it did not arrive in time for me to impact the organization to the extent that i wanted. so our numbers were few. and unfortunately, our products were few at that point in time. i really expected a -- with my

interpretation of the legislation that there would have been more support without compensation if you will by the various agencies mentioned in the legislation. but i later found that in large measure for me to have been supported or the organization sigar to have been supported by these agencies, there was a fee in general required. had i not had to do that, i feel that we would have gotten the organization off to a much quicker start. >> let me explore that a little bit. you said there was a fee. i'll talk about this commission because we had a good experience. and so i'd like you to clarify what you were set with. we received support from numerous organizations within the department of defense and the department of state. it is never timely enough, and it was timely, and it was funded by those organization.

we funded the travel, you know, and the facilities and computers and things like that. and so from a staffing viewpoint, we were augmented by individuals that, you know, we never put in a senior management position, but they certainly were strong management individuals that an analyst that supported us. and so probably within three or four months we had that in place. and you are saying that you had to pay for -- from these agencies that were identified in the legislation on a reimbursable basis? >> that is generally correct, sir. and what would have much more of an advantage to sigar if i could have received that help without reimbursement to those respective agencies. that would have heavenned the organization to move more quickly through this period

where funds and support of the organization were minimum at best. >> okay. have you mentioned and were keen on the, you know, the opportunities for reimbursement of funds or for preventing the waste of funds is in the waste and abuse part of fraud, waste, and abuse. when you have you have 90 active investigations, and you couldn't stand up the first year, you've really started up a significant number. and you outline that they cover a wide variety of areas. i want to -- i have to ask you, i'll make a statement, investigations often take a life of their own. and they take a long time because of due process. do you have the staff to execute those? and are any of those languaging because of the limitation or

resources? >> at this time, sir, given the fact that we were basically fully funded for fiscal year 2010, and for that amount of money that i was unable to expand during fiscal year 2009 because it came late in the year, i was able to roll some of the money over into the subsequent fiscal year. i have been funded for no less than the past year, year and a half. i feel that while our staff is -- continues to grow both on the audit side as well as the investigation side, i do have sufficient forces right now to accomplish the basic mission. however, we are growing this organization to 132 during this fiscal year and we hope to enter fiscal year 2012 at a staff -- with the staff of 180 full time

employees and if the congress so approves, our budget for 2012 will be 44.4 million. >> so you are saying that -- i'm hearing you say that while you were challenged with the piece, we're using -- starting an organization absolutely candid from strap, that it makes a period of time, and i will appreciate that. >> yes, sir. >> that in the present mode, you are being supported in terms of the resource needs that you have. going back to these 90 investigations, when might we start to see -- realizing there's due process, public disclosure? there's a lot of alleged wrongdoing. and typically out of that at a point where an organization accepted it for investigation,

there's a basis for risk that they, in fact, has been wrongdoing. when might we start seeing outcomes of those investigations in terms of indictments or plea bargains or those kinds of things that occur? : >> i would say that they are modest results right now, about six million in terms of money that we could directly associate

with an investigation of which we have been a part. but we do feel, though, that some of the investigation that we have underway right now are about to reach maturity, and i feel that the investment that we have thus far made in the investigators that we have been able to hire will reap the intended benefit, sir. >> i'm, again, hearing you say that in the near term we should expect to start seeing the outcomes of an aggressive investigative effort. >> i would like to say that, sir. and let me seize a moment, mr. chairman, to acknowledge the deputy inspector general for sigar that i was privileged to hire back in november of this year who has come to us with 20 years of experience in the fbi and about 15 years of experience directly relating to ig work

associated with the department of energy, essentially all of which in a senior leadership position. he came from department of energy to sigar to bring that talent and experience to bear ponzi forward, and i -- upon si far, and i want the chairman and commissioners to know that it's certainly already having an impact on the organization. so that also contributes to my optimism, sir, that these matters will be taken care of. >> thank you, general. my time has expired. commissioner ervin, please. >> thank you, mr. chairman. like the chairman, general, i want to start by commending you for your 34 years of service to the nation and the military and for your years of service as the first inspector general of sigar. having been an inspector general twice and one of those times having been an inspector general at a new organization, starting one from scratch like you, the department of homeland security, i'm particularly aware of and sensitive to and sympathetic to the challenges you faced in your

job. building on that line of inquestion si regarding what happened at the beginning, i want you to expand on that a little bit. begin the legislation creating sigar -- given the legislation creating sigar and the urgency of the war effort and the length of time that passed from the inception of the war in 2001 to the creation of sigar and the amount of money as you noted in your testimony that we have been spending in afghanistan, why do you think you got so little support at the inception to do your job? >> well, sir, i think there are many reasons why the support was not there. and i will only speculate that what i'm about to say was the real reason or were the real reasons for the lack of support. first off, there are mixed emotions within the federal community even among the inspectors general themselves about the efficacy of the

concept of a special inspector general. i think that as a concept, if you will, contributed adversely to the more rapid standup of sigar or the level of support that might otherwise have been given to the organization. the other is we waited too long to address or to focus on oversight for reconstruction in afghanistan. it would have been much better had sigar the advantage that my counterpart had having been stood up early in the process and bringing, as i understand it, into si gear the inspector general for iraq reconstruction funds at the onset. and what i'm led to believe were no funds at that time. that was a considerable

advantage. plus, there was a nucleus from the provisional authority that existed before we stood up an embassy in iraq. and so that nucleus of oversight agency also was good enough upon which to begin to build a longstanding and much more robust inspector general organization. so i think all of those matters came to bear on this. the, i want to also quickly say, commissioner, that while on the one side the ig community, some of them, may not wish to have supported a special inspector general, but i think that idea is borne out of the fact that we do already have existing inspectors general within the department of state, department of defense and usaid whose job it is to oversee some of the very measures that sigar is

overseeing. but the one thing that sigar's legislation brought to bear upon the oversight community is the ability to look across agencies. >> let me build -- thank you for that answer, and let me build on it by asking your opinion as to the notion of figuring that we're going to have contingencies in the future. i think that's likely to speculate on. wouldn't it make sense for there to be a standing inspector general for reconstruction not tied to any specific contingency, but a standing inspector general that would be available the next time the united states government has a contingency with the necessary resources in terms of money, in terms of staff, in terms of experience and expertise so that the next time we have such a contingency, the inspector general can hit the ground running? what's your view of that? >> yes, sir. i have discussed this issue with my distinguished counterpart, mr. stuart boeing, and it has

some value because it would preclude having to stand up a sigir or another sigar or in the case of the troubled asset recovery program and so forth. but the other part of it is whether or not the american people -- not a e question for me to answer, this is a policy question -- but are the american people willing to put in place such an entity which suggests that we will have future emergencies of the magnitude of iraq and afghanistan to which the american people will be inclined, if not expected to provide tax money in support of these efforts. so that is the downside of this organization. but i would say, sir, in the general there is value to having a body or an entity like this in place. >> absent that, that's not going

to happen anytime soon, but absent that for the foreseeable future, do you have any advice for your successor about how we can make things better with regard to afghan reconstruction and the management, ongoing of sigar? >> yes, sir, i do have advice in that regard. first off, i want to reiterate that mr. richardson, the deputy inspector general currently of sigar, comes well equipped to deal with matters in be reference to the inspector general community, so that's very much an advantage to him. also the work that we have done, those 34 orders to which i earlier referred, the six formal inspections that we have conducted, the over 100 recommendations that we have made, i think he will benefit from those by following up with the appropriate entities, the

implementers with it the department of state -- be it the department of state, defense or usaid and certainly with the congress to insure these matters are appropriately addressed. i think if they are, i think he will have a much smoother ride than i have had in this capacity, sir. >> thank you. just a couple of other questions for me. i just wanted you to talk generally about the sweep of development since you took this job now that you're leaving. do you think the things that we're focused on today in this hearing, the importance of cost controls and sustained ability in host nation buy-in and support for projects and taking past performance into consideration as a key foundation of accountability, are these things, generally speaking -- and feel free to give some examples -- are these things getting better in afghanistan, or are we basically where we were at the inception of sigar in this regard? >> sir, i'm not confident that there is evidence that we are getting better of it at the implementation level, at the bottom line.

i would say at the tactical level which is really where the work is being accomplished. however, given the president's or this administration's focus on the new strategy in this addressing afghanistan which emphasizes certain elements to include reconstruction elements such as shoring up agriculture in afghanistan but also focusing more on involving the afghans in the reconstruction of their own country which, also, has a focus on contract elements to it, i think these are all good matters, sir, that will ultimately help to improve reconstruction in afghanistan. my most significant recommendation, however, would be that while we were inclined to do something very quickly following the 9/11 matters, and

i have used this phrase before and i don't mean it condescendingly to folks who are a lot smarter than i am in addressing these issues, but i believe back in 2002 when we commenced our effort in this afghanistan, we began to kind of throw stuff up on the wall hoping that much of it would stick in order to, perhaps, build upon and arrive at largely where we currently are in reference to reconstruction in this afghanistan. i would say we should do a better job on the front end, take that extra moment to plan better. consider the environment, consider resources, consider limitations. >> thank you very much, general. my time's expired. >> thank you, commissioner. commissioner green, please. >> thank you. general fields, as someone who also spent a considerable time in government both in uniform and as a civilian, let me echo the appreciation that others

have expressed for your four decades of service, 34 as a marine. i guess you're still a marine, aren't yousome. >> once a marine, always a marine, sir. >> but i think we all appreciate that service very much. i also want to thank you for your very frank and informative opening statement, some of which you orally presented and other that will be entered in the record. you have raised many issues that are of concern to this commission. projects, even though we've been in country for we can argue the time frame, nine years or whatever, projects that are duplicative, not always culturally sensitive. i even understand we're still

trying to figure out in some cases how to build latrines. projects that aren't needed or wanted by the local governments, and certainly, projects that are not sustainable. and you highlight several times in your testimony the issue of support about and sustainability. with that in mind, what is your sense of the degree to which the afghan government, either the national government or local provincial governments, are consulted on projects both before we undertake them and during the implementation of the project? >> thank you very much, sir. i appreciate your complements regarding my service, sir, and i wish to thank you, sir, for your

service, and i wish to thank this commission for what you've done to make reconstruction during wartime a better place, so to speak. sir, sustainability is one of the critical issues involving reconstruction in afghanistan. i've made my first trip to afghanistan in this capacity the third week of september of 2008. and the very thing that i was first hit with, about right here, coming from the afghans at all leadership levels from administer traitors in kabul to the provincial governors to the people that i might otherwise are met in my visits to over 15 of the provincial reconstruction teams representing about 17 provinces out there. we have not done a good job. of including the afghans in the reconstruction of their country. they have brought this to my

anticipation every time -- attention every time i have had the privilege to visit afghanistan. it's a reoccurring story, and it's the same l kind of feedback -- same kind of feedback i get at all levels suggesting there must be some script which i'm confident is not the case, but i get this everywhere i go. so it is a serious problem. i do not believe, sir, that we have done a very good job at all of including the afghans in consulting the afghans before, during, nor after their, these projects have been instituted. now, let me add a bit of perspective to this. earlier i said that we have done a poor job early on of planning, and this is certainly the case, and it's still the case given the audits that we have conducted. however, i have seen evidence, sir, of improvement in this regard.

i am acquainted with what the corpses of engineers, for example, as an organization is doing to include the afghans in the reconstruction efforts for which they are responsible, for which the corps of engineers is responsible. they are including in their contracting more emphasis on not just the involvement of the afghans, but also the sustainment of the projects that are being put in place. >> thank you very much. as chairman thibault mentioned in his opening statement, there's a lot of good work that is being done in afghanistan as well as iraq, for that matter. and i certainly don't call into question the dedication or the focus of those good people be there government folks in uniform or civilian or

contractors that are working in afghanistan, nor do i call into question those who will serve there in the future. but i'm concerned in the current budget climate that we are facing in this country, how confident are you that the resources will be there for the u.s. and the international community for that matter to continue to provide this kind of support? how will we sustain these programs? and if i can use, very briefly, iraq as an example, once the troops are gone, the focus is off. and at some point troops will

leave afghanistan. and whether you accept the fact that let's use o&m operations and maintenance funding is good through 2014 as one of our other witnesses has indicated, 2015 as you, general fields, have indicated in your testimony or 2025 that cystic ca has layed out there, how confident are you that this country will have the will to continue to provide the kind of support that will be needed to put people in country whether they be contractors or government people to provide the necessary oversight and contract support that will be needed? >> thank you, sir. first, let me address your question from the standpoint of the inspector general for

afghanistan reconstruction. then i would like to address it from the standpoint of a citizen and taxpayer of the united states of america. first, i wish to applaud the government of the united states and the american taxpayer for thus far having been willing to invest this level of funding for reconstruction in afghanistan. i reiterate, over $56 billion and if current appropriation requests are answered by congress, this figure could reach very quickly as much as $71 billion. so there has not been a paucity of contribution by the american taxpayer thus far in this conflict with all of the debate that underpins reconstruction in afghanistan. in -- so that's good news. but there's an expectation, and i've often offered this in the context of of my leadership of sigar. that while we are providing

oversight of funding for afghanistan, we are also providing and somewhat assuring that there will be the confidence among the american people to further this tremendous investment to its ultimate objective. to maintain that level of confidence, the american taxpayer has to be assured that the funds that are being made available or have been available are being used for the purposes for which the congress appropriated them. and there is doubt in my mind, doubt in the minds of my auditors and my investigators that this is, in fact, the case. and so i am concerned from the standpoint of sigar that we are not taking full advantage of this opportunity in afghanistan. as an american taxpayer, while i

have always been willing to pay my taxes commensurate with the needs of the united states of america, i will continue to do that. and i having been in this capacity, i understand what we're up against, and i have probably better, a better appreciation for this in the dynamics that underpin it than the person in middle america. and so it's that person in middle america that we have to convince that this effort is worthwhile and must continue to be supported by the american taxpayer. that is a part of my job as sigar is a part of, i think, the federal government. but i think that the american people right now from my senses are becoming a bit wary with this investment in afghanistan. >> thank you, sir. my time is up. >> thank you, commissioner. commissioner tiefer, please. >> thank you, mr. chairman.

i want to start by a tribute about this hearing to the chairman, to you, mr. thibault. this hearing, more than the usual hearing, this hearing would not and could not have occurred without him because he has led multiple inspection trips into afghanistan. not just to the capital, but out lord knows where, all around where the construction sites are to bring back the information that we needed for this hearing. and so the value of what he has brought back from those trips is not just what he will say and do in this hearing, but what we all are sharing and doing in this hearing. i could not do what he does, but i can build on it anyway. mr. fields, i'm going to go from the macro picture of some of the previous questions to one of

your best audits. it's mentioned in your prepared testimony, it's the one about the kabul, the kabul power plant. what's been nicknamed out there the white elephant of kabul. and to take half of the title it says that sustainability, sustainability remains a key challenge. now, i'm going to ask you about that in connection not only with the kabul power plant, but with -- which was a diesel-generating power plant -- but with the decision to do another diesel-generator power plant in kandahar city as part of the kandahar power initiative. what is the long-term sustainability power, excuse me, sustainability problem of these diesel power plants, and what kind of burdens or irritations, call them what you will, does it put on the karzai government?

what's the basis on which you said, and i think you said rightly, sustainability for this kind of a plant is a big challenge? >> thank you, sir. first, i just must reiterate that the issue of sustainability we have found to occur largely throughout the overall reconstruction effort. but especially in infrastructure which would include buildings, roads -- >> excuse me, general, is your microphone on? >> yes, it is. >> okay. maybe you could sneak up a little. >> i can certainly do that, sir. >> thank you. >> let me just reiterate what i just said, that the sustainability is an issue that permeates the whole of the reconstruction effort, but especially in infrastructure; buildings, roads, bridges, dams and matters like that. specifically in reference to the energy sector, we, we are

inclined to show, shore this element up because it is one of the four top issues that are brought to my attention by everybody from president karzai to the children that i have met in afghanistan, that they want electricity, they want agriculture, they want education, and they want roads. those are the four top reconstruction issues for afghanistan. so we rightfully have addressed the issue of providing energy or helping the afghans to improve their energy situation. the kabul power plant and the use of generators fueled by diesel or various and sundry other variations thereof, that's an issue for many reasons, but let me just address two of them. one, diesel is hard to find and to resource these generators. i've been to the kabul power

plant. it's an amazing plant. i presume that some of the commissioners may have been there as well. i'm impressed by the layout of it. giant generators and so forth. so from that standpoint, it is impressive. but that only goes so far. because once the contracts end that currently provide maintenance, to whom will the afghans turn for that support? secondly, there is an issue of the capability of the afghan government to fund the fuel, the very fuel that is necessary to support these generators. so we have discovered as a result of our audit work and we also have an ongoing investigation associated with this kabul power plant that these two deficiencies put this incredible investment, over $300 million in kabul power plant alone, at considerable risk.

>> let me follow up -- that's very beneficial, and i, as i understand the kind of figures about the diesel versus other matters, it's costing 22 cents a kilowatt hour for diesel fuel in kabul power plant, and so it's not being used mainly for the welcome trick power of kabul -- electric power of kabul because they have six cent transmission from uzbekistan. i won't ask you what that investigation is that you're doing, but i'm sorely tempted to ask. i won't, but i'm tempted. a second question is the delays. the other part of your audit about the kabul power plant was that, the title was contract delays led to cost overruns for the kabul power plant, delays. now, that was a blackened beach

construction project. they supervised it anyway even if subcontractors did the actual work. and the new diesel power plant for the industrial park in kandahar is, again, this time sole sourced as a blackened beach plant. what is -- do they have problems working with aid to meet their deadlines? is this delay problem that you singled out -- and i think rightly so for the power plant -- is this likely to be another problem with aid and their sole source contractor, blackened beach? >> sir, we are aware of this most recent sole source at the tune of something like $280 million or a figure -- >> that's right. >> yes, sir. pretty close there. this is being examined. we, i don't have the details that you're asking for at this time, sir, but i'm confident as a result of what we are doing

looking into the sole source initiative as well as we continue the audits of other similar kinds of investments by way of usaid, some of your questions i'm confident, sir, will be answered. but we do, as i mentioned in my earlier statement, acknowledge that these are delays in and as a result of poor planning, inadequate expertise, substandard materials and so forth, all come to jeopardize finishing these projects on time and within appropriate budget. >> i'm not going to take much time because i'm coming to the end of it, but i want to confirm because i think this is a dramatic sign of sad substantive action but dramatic auditing action, you're going to have an investigation for the kabul power plant, and you're looking into the kandahar sole source

power initiative, am i right on that? >> that is correct, sir. >> thank you, sir. >> thank you, commissioner. commissioner henke, please. >> general fields, good morning. thank you for your dedicated service both in and out of of uniform. sir, i've got a couple of things i want to highlight from your testimony which i think is really remarkable, and i thank you for being so clear in your written and spoken word. the last paragraph of your testimony says -- and you mentioned this in your opening -- you have three major concerns. number one, there's no comprehensive plan. number two, your words, the projects are seriously behind schedule making it doubtful that the construction efforts will keep pace with recruitment and training, so we may be building forces faster than we can put them in barracks, simply. and number three, the sustainment issue. we're building something so large the afghan government won't be able to pay for it. their entire revenue this year

is on the order of a billion dollars, and we're spending billions to build something that will cost billions to sustain. the bottom line of your statement, i think, is really remarkable, and i want to make sure it does not go unnoticed. these issues, your testimony, these issues place the entire u.s. investment, the entire u.s. investment of $11.4 billion in ansf facilities, construction at risk so every bit of it is as rating -- risk. is that correct, sir? >> that is correct, sir. and i wish to amplify further what i have previously said. the entire 11.4 is at risk for many reasons, the three principle reasons that you pointed out. i would wish to hone in on the lack of a plan as a part of that. because if there is no plan that

we are pursuing, in other words, we are going somewhere, but we don't know where we're going -- >> right. >> -- and then we will not know when we have arrived. and part and parcel to that, of course, is a maintenance plan. so if this maintenance plan isn't a part of the reconstruction effort, what level of assurance does the american taxpayer have that these facilities into which we are spending millions of dollars needless to say will be maintained? that is where the principle problem lies, for sure. >> i also want to take it to a different point that setting the dollars aside, building amsf forces is important why? because it's the way we can hand off security to the afghan government and and leave, is that your judgment, sir? >> sir, that's a policy issue, but, yes, sir, my understanding of it is that the, we are investing most of the reconstruction funding in the

establishment of a substantial and strong afghanistan security force, police and army in order to be able to hand off what we are currently providing by way of our own forces in afghanistan. >> right. so building amsf is the single most important reason to bringing u.s. forces home, and can the single most important -- and the single most important challenge, it seems, to building facilities is a consistent theme in your testimony just to quote a couple of parts, if i may. security issues prevented the corpses of engineers from regularly visit ago site to provide quality control. another quote, different audit you did, u.s. army corps attributed the lack of project oversight in part to security concerns. another quote, this time related to cerp money and prts, i believe, and a road project: security has also been a factor

in conducting the necessary oversight. so it seems to me, sir, that the number one reason, the overarching reason why it's tough in afghanistan is because of the security situation, is that accurate? >> it is certainly a major contributing factor, sir. um, while security is important, i would also, again, reiterate that the lack of a sustainment component to each of the reconstruction initiatives is contributing as well. but, yes, sir, there are cases where there are projects that are underway, they are being overseen by hired afghans who in some cases according to some of our audit work may not have the necessary skills to provide the kind of oversight necessary. >> right. >> and be -- feedback to implementing the agency. so those are certainly significant issues, sir. >> is it accurate to say, general, that the key of the

problem is security and that we're trying to build things in a place where the enemy is trying to blow them up and to kill us while we're doing it? is that the basic reason? >> that, i would say, sir, is the basic reason. but i want to also say, and i understand that i have been privileged to serve in the capacity of inspector general, and so i, when i make a request for something, folks tend to abide by it. and probably sometimes including taking certain risks that they might otherwise not have taken. but i want to say that there is only one occasion, maybe at best two occasions involving the same province to which i have not been permitted to go at the time that i was in afghanistan, and that province is kanduz. it was turned down because of security. i never argue with embassy or u.s. forces, afghanistan in that

regard. >> uh-huh. so you as the inspector general have been told it's too hot to go there, is that it? >> only in that particular case. but i've gone to other hot places, if you will. >> uh-huh. >> i've been all over helmand province, for example, probably the most hot province of the 34 provinces of afghanistan. but i've also been up to pa jack key dam and physically examined that situation up there in the midst of a highly-insecure environment. so what i'm suggesting, commissioner, sir, is that this is war, and sometimes we have to push the envelope in order to insure that the oversight is being provided so that the american taxpayer dollar is not wasted. and i'm not

. >> 78 are in progress, and 673 haven't been started.

so 76% of the projects in the current plan as it is, and you have your concerns with the plan, 76% of those projects haven't been started. what do you take from that? >> sir, that information i just want to reiterate is accurate based on our recent audit of infrastructure relating to the security forces and the extent to which a plan is or is not in place in support thereof. that audit will be published by the end of this month, of january. and that's a problem. we, it appears almost impossible, and nothing is really impossible if we bring resources to bear upon things appropriately, but it appears questionable no less that we in a relatively short period of time, in about two years or less, will have built the magnitude of infrastructure, 884

facilities, with only 133 of those facilities in place as we speak. >> tw okay. thank you, sir. i'm out of time. >> thank you, commissioner. commissioner schinasi, please. >> thank you, mr. chairman. and i'd like to start by saying thank you, general fields, for the work of your agency because you've brought to light many, many be issues that until we get them fixed will continue to waste taxpayer dollars and also challenge the success of the mission in afghanistan overall. i'd like to talk a little bit about the commander's emergency response projects, the cerp program as it's known. you spend some time in your testimony in the overall work that the agency has done on cerp, but i would like to turn particularly to a review that you completed last march on the province, the toaj bridge, and

the title of this report is construction is near complete. i would think that's the glass half full argument, 80% complete. if you don't have a complete bridge, it's not going to do you much good getting across it. the reason i thought that screw was interesting is because -- view was interesting is because it brings up so many issues we see on the requirement side. the afghan ministry was not involved in setting up the requirements for this project, but even more telling, i think, what you found was that the provincial reconstruction team, the prt team there, the lead didn't support this project, and it went forward anyway. problems in execution, poor quality, don't know if concrete's going to hold up, test procedures weren't sufficient to tell us whroornt we actually would have a bridge by the time we got finished. and, again, the issue of sustainability that my colleagues have raised were not sure -- we're not sure that the bridge will be sustainable. so i guess my first question

having finished this audit in march 2010, i just wonder if that bridge has been completed, if you know the status of that project. >> um, i'm not sure of the status of the project. i will tell you that our involvement with the toaj bridge in farah province began really with an inspection, short of the specifications of a bona fide audit. but we took interest in it because it was a cerp project, for one, value of which, i think, was at or about a million dollars or slightly -- >> little bit more than that. >> slightly more than a million dollars. we turned it into a contract audit. and so those results that you are reviewing as a part of our march report were associated with the fact that we, ultimately, conducted a contract audit of the tojg bring. i'm not sure of the current

status, but i will certainly be willing to find out and let you know. >> the recommendations that you made sound very familiar or; establish accountability, insure necessary quality control, you know, address deficiencies in the documentation. i mean, it continues to amaze me that audit after audit after audit you continue to find the same problems no matter what the size of the project or the location in afghanistan. but i'd like to turn to your statement. one of the things that i think was interesting to me is the fact that the u.s. forces afghanistan disagreed with your findings that large-scale projects in the cerp program pose any management risks. were you surprised? most of the, most of the audits that i've read of yours have the agency agreeing with your recommendations, and in most cases agreeing to take the actions that are necessary to fix, fix the problems that you've uncovered. yet in this case it seemed that

the military was disagreeing with your contention that there are risks in large-scale management programs. >> we will still stick to our story that they are at risk for a number of reasons. one of the reasons is that because it's a cerp project and the cost in many cases tend to be high, but the oversight of the project oftentimeses -- particularly when it's one that costs quite a bit of money, let's say over $500,000, the supervision of the project is normally handed off to, handed off by an outgoing prt, for example, and handed to the incoming prt, and that handoff we have discovered precipitates lack of continuity of effort.

oftentimes the incoming prt commander doesn't see the value in the initiative that his predecessor may have seen, and in some cases have turned off projects or have not necessarily provided the level of supervision that would be necessary for the project to reach its full maturity commensurate with the investment. so we'll stick by our guns in our, in terms of our assessment of such projects. we did note many our cerp -- in our cerp audit, our initial cerp audit that of all cerp money, 67 % of the money was being spent on 3% of the projects. that 3% of the projects represented projects $500,000 or more. and we did not feel and still do not feel that such initiatives are commensurate with the

congress' intent of the use of such funds. >> let me ask you on our second panel we're going to have representatives of the army building agency, the air force building agency, state department building agency, the usaid building agency. is there any reason to have yet another group of individuals who are not schooled in building techniques to even have projects of this size in afghanistan? >> is there a need for cerp -- is there a need for cerp to be doing construction projects? >> well, as a former active-duty military officer and privileged to have been a combat veteran and so forth, i feel -- i don't want to get in between the commanders' perspective on the ground. i still value that. and even in my capacity as inspector general i must take in consideration the needs of the operational commander. but at the same time i must take

in consideration the extent to which there is the capability within the realm of the commander who might implement or put in place a cerp project for the benefit of a near-term, tactical gain, if you will, that there still needs to be that level of oversight so that the american taxpayer dollar is not wasted. and, therefore, there should be limitations on the extent to which this money can be used for projects that might otherwise be implemented by a more longstanding and resourced organization such as usaid. >> i think that when the cerp program was with originally put in place, it was envisioned that it would be used for projects of about $10,000 with limit, maybe, at $900,000 -- $100,000. and you note in your statement that the 2011 national defense authorization act has put some limits on cerp funding, but they limit individual projects to a

maximum of $20 million. that seems to me to be a far cry from the $100,000 limit that you're referring to with the commanders' needs from an operational imperative. would you see is that limit sufficient, or would you look for even lower limits given the kind of risks that you've talked about in managing these large projects? >> well, first off, i'm very pleased to see that the authorization act of 2011 has taken into consideration some of the issues that we have brought to the attention of the congress by way of our audit work. i acknowledge the fact that while we reported in previous cerp audits the concern about projects that exceed $500,000 but certainly acknowledge that the sec take of -- secretary of defense and the congress now

must do certain things, the congress to oversee the extend to which these projects are being put in place at various amounts of money. $5 million, the secretary of defense must, you know, notify the congress if that's underway, and there's a $20 million maximum for any individual cerp project. so if all those things are, i would say, good, and i'm confident they've gone through appropriate examination by our civilian and military leaders. and it probably suggests the maturing of the reconstruction effort in afghanistan. and so i will not, for the moment and not ever, actually, debate the every cat si of those -- efficacy of those decisions. >> thank you. my time is up. >> thank you, commissioner. what we're going to do here is if anyone has a final question, we'll follow the order. and then say thank you. one of the things that i think

that's important, general, is to reinforce your statement -- and several up here have done this about the criticality of who's going to pay for the sustainment. and commissioner henke brought out that the revenue available, a billion dollars or so, so, obviously, the government of afghanistan is not. and so then you get into the question of everyone tosses out or discusses because it's been mentioned as a, as a highest-level priority by the president that maybe 2014 is an end year. and i carry a slide around with me that is a 10, november, of last year from you say cstc-a, but now i'm told to call it the national training mission. it's the same organization. and this slide shows sustainment

pushing for 2015 and 2016, $5 billion a year. total cost that they've put into their pipeline of $5.7, 5.7. and the slide also says which talks to the cost impact that i don't think people understand is that it says and i'm going to quote this, 2003 to 2009 it was six years for their mission, $20.5 billion to build and sustain the 200,000 soldier and police force, afghan force. and then it says 2010 and 2011, and an interest withing choice of words, it says two years and $20.8 to sustain. so it was 20.5 for '03-'09, and now in the current year and just completed year, two years and $20.8 to sustain, and then it says and regenerate. the 200,000 work force. which, you know, when we

inquired about it, and this was presented, that that loosely said or probably fairly accurately said as you had to go find some of the people and retrain them and all that. so all of that money to build and construct and to train. and they say to build and sustain and also to build and sustain an additional 105,000. so my point is, is this is just a training mission. and it, you know, to look at the chart for '15 and '16, 2015, 5.be 7 and 5.7 for the total of which which the significant majority is sustainment, it begs the question, are we really aware of just what we're committing to by building that force? and i offer that and the last -- and i'm just sharing that. and the last thing that i wanted to ask is you said you had 100

recommendations. what kind of pushback have you had by agencies that say, well, that's great, but -- or what have you found by agencies either pushback directly or pushback that is in the tomorrow of they haven't done anything with it? >> yes, sir. first, i will say that in general the agencies have been receptive to our recommendations. i would say that about 90% of our recommendations have been accepted by the respective agency or agencies. but the extent to which everything that we have offered as a remedy for certain problems may not have been put in place yet. but i'm not prepared to say that they will not be put in place at any point in time. i'm inclined to say that they will be put in place at some point in time. for example, we've recommended that we need a centralized

database for contracting in afghanistan. or contracting overall. but specifically, when it relates to contingency operations such as those of which afghanistan is characteristic. to my knowledge, no such system has thus far been put in place. >> thank you. that's, to my knowledge, no such system has been put in place also. commissioner green? commissioner, you're fine? i'm sorry, commissioner ervin? >> i just had one -- i don't know if it's quick or not, general, but i don't have much time. i want to take advantage of your being here to ask a series of overarching policy questions. that's what i did in the first round, and i want to do that to some degree here. in your judgment, has the united states government -- and by that, of course, i mean specifically dod and state aid, that's our charter here -- have we become overly reliant on contractors? i think everybody would

acknowledge there's a role for them to play, but have we defaulted to them all too often? what's your judgment about that? is there organic policy that ought to be grown in government so we're not dependent on contractors as we are and will be in the future if action isn't taken now? >> well, first, i must agree that we are very dependent upon contracting. >> and, sir, could you just, again, speak a little bit more -- >> thank you. let me say again that i believe that we are, we have become very dependent upon contractors. and i'm not suggesting that that is all bad. we have to examine, you know, the risk, if you will, or the capacity, what capacity exists within the federal structure and what capacity must we tap into in order to bring about a certain capability or end that we are, that we're looking for. so i'm -- we're going to be involved with contractors, i think, for the duration.

so i won't argue that we have too many contractors or too little. i believe that the jury is still out in that regard. what i will argue, though, is that we don't have enough trained folks within the federal establishment to provide the oversight of the very contractors that we are bringing aboard. and something that has come to my mind here recently is it should be axiomatic that a part of the training regiment of our leaders both on the civil side and in the hill tear ranks -- military ranks should be contract training. and that's something that i never had, really, as an officer. and i have had contractors under my charge, but of course i've had trained contractor expertise to assist me in that regard. but i think we need more depth and breadth of contract training as a basic element of the

curriculum that's provided to our officers and our staff ncos. >> and let me ask just one other question that's a logical follow up to that. do you have any particular concern about private security contractors? >> the -- first off, i have benefited from private security contractors as a part of the many visits i've made to afghanistan. they've all served me well, so i have not an issue in that regard. but if there, if i were to suggest an issue, it would only be that we need to insure that the private security contractors work within the confines of the contract under which they are hired and that they work and serve in a manner that respects the sovereignty of the nation in which they are providing such support. >> thank you, general. >> thanks, commissioner.

commissioner tiefer, please. you're okay, right? >> i, i only wish to join my voices with those of my fellow commissioners in expressing gratitude to you for your service. before you became sigar, the public knew the scandals of wartime contracting in iraq but not afghanistan. afghanistan was a small blip on the screen as to that issue. you have been a leading national educator about this. i know young people like the students i teach government contracting law to at the university of baltimore law school, they read in the news a short version of your reports, and they learn real-life lessons that in the classroom are impossible to teach, and i

commend you for how you have brought to light the persistence in afghanistan of contracting waste, fraud and abuse. thank you. >> thank you very much, mr. tiefer. i'm pleased that this work and maybe my contribution to it is having an impact across the board in afghanistan, but there is an impact, sir, over which you have significant influence to build up and raise up younger folks who might take these positions and bring intellect to bear upon improving how it is we do this work. you know, commissioner and commissioners, when i look at this picture over here, this is a bridge in the province of kundar. it's not one that i've personally visited. i have been in the province of

kunar, and i have crossed this very river that this bridge is supposed to span. and, no, that is not the way the bridge is supposed to look. it is crumbling. it was, basically, handed off from the standpoint of its warranty during august of -- july, rather, of 2010. poorly built. this is an example of poorly-built trues in afghanistan -- structures in afghanistan. as i understand it, it's still under investigation by my investigators and perhaps my auditors as well. poor construction, likely substitute, inferior material used in the bridge. so we need to correct these matters for the benefit of the american taxpayer and certainly for the people of afghanistan. >> you good, charles?

>> oh, yeah. >> thank you, commissioner. and, you know, i've been sitting there thinking, general fields, the whole time don't forget to ask him about that bridge, so thank you so much for bringing that out because i'm sitting there now saying how would i like to be someone traveling and what kind of transportation -- maybe you could do it by holding on to the guardrail as you're traveling up. commissioner henke, sir. >> general fields, just a couple of brief questions, if i might. does afghanistan have now an effective rule of law system? ..

>> that figure is about $16 billion divided between governance and development. so we're spending a lot of money to show up the government of afghanistan that also involves facilities and so forth. but, no, sir, we are not there yet. >> sir, you made a number of trips to afghanistan i'm sure. how many times have you had the chance to travel? >> thank you, sir. in a previous life i severalled times to afghanistan before i took this position, but in this capacity, i've been. afghanistan eight times, sir. >> when you are there, there are times when you are behind the wire and outside the wire. >> yes, sir. >> when you are on the base or off the base. >> yes, sir. >> i'm sure you stayed at camp baggers, and various operation bases. sir, is that correct? >> i have stayed in kabul, and overnight several other places in afghanistan. >> is there a clear distinction

between being behind the wire and outside the wire in terms of your security? >> if your question, sir, is related to the presynodal if you will and the concern about security, once one leaves the base, for example, yes, sir, there's a considerable difference being between inside the compound, and exiting the gate no matter under what circumstances. >> it seems to me, when you are going out the wire, you are going into a place where there is no effective rule of law. inside the base, you are not safe, but you are safer. there's an effective rule of law, you are an american u.s. -- american citizen on a u.s. base. as the issue as it relates to afghanistan sovereignty, and president karzai's decree to restrict or constrain private

contractors. does it support or undermine the legacy of the afghan government? >> sir, i would say that the answer to that question is often times in the eye of the beholder. but i feel that it is as much as we are spending $29 billion on shoring up the afghanistan national army, and afghanistan national police, one might conclude that this investment should already have yielded some level of capability within the security structure of afghanistan to provide some of this security that we are seeking through other means. such as, you know, the contract community. and in terms of the, you know, the sovereignty of the government, i know these matters

involving president karzai's intent to eliminate private -- the pses in afghanistan, they are still on a debate. and i want to comment only to the extent to say that, yes, we do need to have a secure environment within which to conduct this reconstruction. to the extent to which the afghan government and other resources in afghanistan, afghanistan can provide this support, i think we should tap into the extent that the capability exists. >> so relying more on afghan forces would support -- would have the added benefits of supporting the legitimacy of the afghan government. >> my answer, sir, would be more in the context of building capacity. as long as we are providing a capacity, external to afghanistan in the support of the reconstruction effort, we are doing very little to build

that very capacity in afghanistan. so i think we should begin to lean more on the afghans for matters like this. this is also a part of the president's strategy, include the afghans to the maximum extent possible. the afghans would wish to take over the whole of the security element. and my visit to one providence, panshir, they say let me handle security for my area. i can do it. he's a mujahideen. i think we should give some consideration. >> thank you. >> i think anyone who has spent any time looking at acquisition process recognizes pretty quickly to those who have responsibility for mission success don't see the value of solid acquisition process in that mission's success.

and so i'm of the opinion that if we can just get across the idea that money wasted is really an opportunity lost to get mission success that we need see some turn around in the way the agencies and the u.s. government as a whole treats the whole issue of contracting. i guess my question to you with your marine corps officer hat on in the fast -- past, and now the staff trying to figure out whether the u.s. government is getting the intended outcomes. have you seen a change in the field in the time that you have been in the position either by military commanders or the civilian program officials that there really is the understanding that money wasted is really a lost opportunity for mission success? and if not, would you have any advise as to how to really drive home that lesson? >> in an answer to the part of

your question, dealing with whether or not the attitude, if you will, by senior leaders is changing or has changed regarding the best benefit that might be reaped from the investment, i would say that in the two year, two and a half years basically that i've been in this capacity, i am beginning to see some change in that regard. but i tend to address matters like this in three dimensions. the first being at the strategic level, then the operational level, then the tactical level. and it's really at the tactical level where the matters begin to take root and have the affect on the people of afghanistan and the mission that we have -- that we have undertaken. i would say at the strategic level, this is the change in attitude. i think the strategy that we executing is an example of that. and i believe that the mechanisms that have been put in

place, both by the u.s. ambassador to afghanistan, as well as general petraeus suggest that attention is being turned to these very issues. so these strategic mechanisms that are in place, policies and so forth, directing and guiding the contracts and the effort, i think are all leading towards that end. >> what will it take to get through the strategic level through the operation and tactical level to where you say it hits? >> exactly. first it will take some time for these matters to trickle down to the execution level. but i think increased training, increased leadership, stronger leadership at all levels, and i feel though that we have enough policies in place. we need tone sure that the policies that are in place are, in fact, implemented by those responsible. >> how about some constrains on

the resource side? >> well, i think that if we don't do a better job of cleaning up our act when it comes to oversight in afghanistan, making better use of the resources that the congress has very generously provided and the american people, of course, confidence will be lost. and that will be a disadvantage, commissioner, to the outcome of this tremendous effort. >> thank you, general fields. >> well, general fields. i want to thank you for leading off our panel. i want to wish you the very best. i hear february 4th is your last day. so, you know, it was terrific that you were willing to come up in here that environment and be so candid when obviously you have a lot of work ahead in the next short period in the couple of weeks. and it was good to hear that you have so much confidence in your leadership that you've build there going forward.

so thank you, and for all of us, when you walk out of this door for the job that you've done, this marine in front of us should hold his high head. thank you, sir. >> thank you, chairman, thank you, commissioners, thank you for everything that you have done to help me in this path. this is my second privileged opportunity to testify for this commission. i have enjoyed this and learned from it as i have the one in the past. thank you for your effort. and i think you have certainly made a difference. that's my assessment of what you've done, mr. chairman and members of the commission. >> we're going to take about a five minute break while we swap out panels. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> so about a five minute break in our coverage of the commission on wartime contracting. as they're holding hearings examining on how u.s. tax dollars being sent in afghanistan and being supervised. five minute break. we'll return to coverage after this.

>> c-span's local convent -- content vehicles are traveling. we take you to cobo arena in detroit. while there we caught up with michigan governor rick snyder. >> the rebuilding of michigan, the reinvention, are the companies here and the universities here? not the fact that government is here. it's companies, innovators, entrepreneurs that are going to create the more and better jobs of our future. our role as government is to be a supporting player in that. and create the best environment to make that happen. we're committed to that. we are going to make that happen with tax reform, regulatory reform, and having the very best economic development people in the world to create that environment for success. so i'm excited by the opportunity that we have in front of us. >> they have nice charging station technology they want us

to start helping us with. the governor wanted to see what you have. >> this is our charging station. it charges two cars, concrete base. this is a standard right here. these are card access cards. touch screen, monitor, remotely by cable. it's designed from the building owner stand point. all of the energy is in the building. >> i think we've made o lot of progress. i'm excited about the future of the auto industry. now that the bailouts are over, companies especially like ford, they have taken their break even points to apply it where they can be profitable again and look towards the future. in terms of the auto industry, we've moved from negative to positive, moved from looking in the rearview mirror and looking forward. our role is to support the companies succeeding. that's how we are going to create more and better jobs. we're going to get this done.

>> what's been the impact on detroit and the state of michigan? >> well, we've gone through at least ten years of a very difficult time. we're picking ourselves up. what got me elected was people being positive in michigan. they say there's a bright future. let's build a new michigan. it's time to reinvent our state. >> segue races here. [laughter] >> they have board heads and electric racetracks. >> what kind of cars is your family in right now? are you looking to buy anything? >> ford and gm in the family right now. that's done great. for our campaign we had a gmc hybrid that we drove 80,000 miles on campaigning. that's our main campaign vehicle. >> proximity switch so that you get your fingers quick. very innovative and different.

>> thank you. thank you very much. i appreciate that. >> we should really have a -- [laughter] [inaudible conversations] [inaudible conversations] >> governor, what's your take on the government bailouts of gm and chrysler? i said in this case it was appropriate because you were talking about the entire auto industry. it wasn't about bailing out -- >> return now to the live coverage on wartime contracting. two panels, one with federal officials on the overnight of construction and contract management, and a group of

construction managers to discuss their project in afghanistan. this is live on c-span2. >> follow the order that we have. general dorko, sir, can you provide your opening comments? >> thanks a lot. distinguished members, commission, i'm major general jeff dorko, commanding operation of the corps career. it does take up about half of the space on the business card. i appreciate the opportunity to discuss our construction program in afghanistan, the associated challenges. and thank you for the critically important work that you all do. our meetings here in washington, your visits to our teammates on the ground in afghanistan, help us improve and execute the mission better. mission accomplishment sits at the top of the list of priorities. as you know the mission in afghanistan is design, ward, and execution the construction projects with responsibilities. since 2001, the corps of engineers has managed over 850 construction projects at a value

over $6 million in afghanistan. the workload in afghanistan has ramped up substantially in the last few years due to the surge in u.s. forces and increased effort to build the afghan national security forces. we have increased staffing in afghanistan from around 250 military and civilian personnel in early 2008, to over 800 today. we activated the second district in the south in kandahar in august of 2009, and established the transatlantic division headquarters in october 2009 to provide focus, command, and control in centcom at aor. we have matured our processes, not just to winchester, but reaching back to 41 districts and 37,000 people back here in the u.s. challenges remain. i know we're here to talk about that. security, corruption, providing adequate contract and oversight,

managing the expanding workload, sustainability of selection and sight selection. i think we have learned from the involving environment and learned from our mistake. through every audit, inspection, product review, and those of us in the u.s. and after action reviews i think we get better and mitigate against the challenges. our the heels of the 2009 after action review, i see one specific initiative by the commander of ijc has being particularly critical and seminole for our moving forward. the issue issue -- issuance thas issued in october 2010. the construction effort and 16 best practice comparatives are in the just doctoral underpinning, but real drivers for action that have come out of on the ground truths. these principals and guidelines move us from an era of construction where effort was --

construction effort was simply trying to deconflict itself from operation to a situation where construction is better synchronize the and integrated. these guidelines put us in a position to undertake projects that we can accomplish. in the realm of challenges, securities as pointed out earlier, remains number one challenge. it can be the root cause of other things that impact our ability to execute. the hiring of local, national, quality assurance representatives, using remote sensitive methods and every other means of our disposal for feedback on construction progress are helping to reduce the security impact on project completion. corruption is another challenge. we are getting on that by emphasizing the contract administration, minimizing the brokering of contracts, and coordinate with task force 2010 and centcom contracting command, and we educate our contractors

in adopting best practices and we've implemented, for example, a tracking system that positions progress payments on prime contractors verifying they have paid their subcontractors. timely, quality oversight closely linked to security is critical. and it's tried to having the necessary personnel on the ground commanding the workload. it's a big task. it's tough. but we have a large pool of expertise to draw on back here in the united states, the 37,000 corps of engineers and employees that volunteer to go forward. we maximize the use of reach back, and hired professionalled hired from here in the united states, and most significantly, this is a joint effort. it's all three services bringing together their unique capabilities and business models seemlessly, where i think the whole ends up being greater than the sum of the parts. sight selection and preparation have been an issue. the icj guidelines have solved that, like sight draining,

technology, and geological oversight, all of the things that need to be done to make sure the project gets off on the right foot. suitability, sustainability, we are using designs more suited to afghan forces. more easily constructed that cost less and easier to maintain. we have contracts in place to provide operation and maintenance for the facilities both in the north and south. we've faced a lot of other challenges. we have come a long way in the last year in dealing with them. i welcome this opportunity to talk to you so that we can all get better what we are doing in theater. we welcome your recommendations and the recommendations of everyone that we deal with in delivering on our promise to get these prompts in on time to the time to the highest possible quality. i look forward to your question. >> thank you. mr. mcglynn please. >> thank you for the opportunity to appear before you today. for my organization, this area

is the fifth engagement before this commission since 2008. the department of state in my bureau appreciate the strong working relationship and productive exchanges we have had. they have improved program, and will ensure better practices. the bureau of international narcotics and law enforcement affairs is responsible for supporting rule of law and criminal justice programs throughout the world. in afghanistan, our programs are important to defeating the insurgency, and creating stability. the key area for today's hearing is renovation contracts for corrections and police training. both program areas are crucial for the effective operation of civilian justice program. we have significant endeavors in both areas. these are based on close coordination with the government, and they are aimed at building a stronger afghanistan capacity and one which is eventually self-sustaining. i understand from commission

staff the focus of your interest with us is the prison, and the central training center for police training both in or near kabul. the prison facility has almost 30% of the afghanistan's entire prison population, including the most dangerous criminals and insurgents. conditions in the past were overcrowded and inhumane. prisoners controlled key portions of the prison until 2008. when the government of afghanistan, supported by the united states retook control. to make it a more secure, effective facility, inl developed a renovation project with afghanistan in 2009. as part of the u.s. policy to utilize afghan companies whenever possible and appropriate, the competitive process with afghan firms were constructed. two of them, in basra, won the

competition. the project included renovation of the kitchen, staff barracks, prison industries, and block sales. in the course of the renovation, problems were identified as a result of inl and state department office of inspector general oversight mechanisms. inl staff reported serious problems with the quality and pace of the work. oig indicated potential allegations of fraud. my bureau terminated the services of the contracting office representative in may 2010. the departments office of the procurement executives suspended the two firms in august and stopped work ordered that were issued for the two firms in november 2010. an afghan firm is assessing the progress of pul-e-charkhi.

turning to the central training center for police, that has been an important part of the overall police training program in afghanistan, which has been a priority since 2002. inl has implemented the program with the department of defense and at the direction of the u.s. department of defense and close cooperation with the ministry of interior. it's one of seven sights where inl police train afghan police in basic civilian police skills. like many renovation projects in afghanistan, this project has encountered some challenges since initiated in june 2009. in december, for example, a building that was to be raised was declared an historic building or otherwise estimated by the government of afghanistan as inappropriate for being raised. in december 2010, one the two

projects may have defaulted. project completion has been delayed. let me say a few words about inl before concludes. we have several operations to provide oversight for operations such as these in all parts of the world. we have an integrated management contract oversight process. and in this case, for the ctc project, this includes a contracting officers representative supported by 28 experts in washington. they work closely with eight in country contracting offices representatives in afghanistan, and 38 program officers in washington and afghanistan. our motto for the pul-e-charkhi project is different based on the individual contract with an individual firm. with that, commissioners, let me just say that we, and you, know

that afghanistan is a dangerous place to work. we are committed to achieving our objectives and ensuring that u.s. resources are carefully and effectively deployed to meet those goals. thank you. >> thank you, mr. mcglynn. colonel cassidy, please. >> good morning. members of the commission. thank you for the opportunity to appear before you. the role of the air force center of engineering has equaled from the center of environmental excellence to providing engineering and environmental services enabling sustainable air force and joint installations globally. december of 2003, the chairman of the joint chief of staff to the chief of staff in the air force ask afcee to provide -- in december of 2003 afcee was asked to support in iraq. in 2006 they supported afghanistan. to date they have been awarded $6 million required for central

command in which approximately 1 billion is in afghanistan. we bent to accomplish critical work. afcee plans, executes, and delivers construction service to the following customers in the areas, u.s. central command, army central, army command afghanistan. afcee utilizeed idiq contracts, vehicles, and then completes the views for construction and services. the idiq subcontractors to local national and third companies and individuals. afcee uses criteria to design the contract tailored to the type of contract firm fix price, or cost price plus fixed fee. the afcee project management

model embodied the teamwork, levering our government, civilian, and primarily personnel to execute the functions. the afcee model utilizing contractors and situations that are not inherit governmental. leveraging contractor expertise. for utilizing the combination of expaid -- expatriots and local nationals. this provides local nationals where security that only locals can pass safely. this provides accessibility to include daily quality assurance and oversight. while the military, civilian, and contract employees provides the construction oversight, the san antonio team provides technical contracting and administrative support along with continuity of the construction program. our current contract of performance in afghanistan has maintained reasonable schedule

and controls considering the contingency environment and modifications we've had to process due to changing requirements and sight conditions. today none of the orders have been terminated for default. we strive to continue our ability to provide quality and timely construction for the war fighter. we welcome recommendations to reform our mission better. we understand the committee is interested in several areas, and i look forward to answering your question. >> thank you colonel mr. -- >> yes. my name is jay alexander tier at usaid. first i want to compliment you on the critical work of this commission. i began working in afghanistan in 1993. during the time when our country was ignoring the plight of

afghanistan to our mutual parallel. i've spent many of the last 18 years working on that country, and written and testified extensively about the effort that the united states has undertaken in afghanistan since 2001. our mission in afghanistan has been and remains central, and our civilian assistant efforts are essential to their success. at the same time, i have repeatedly raised concerns about the corrosive effects. i have long argued that the insurgency is strengthened by corruption, lack of accountability and weak governance. one the reasons that i took the job five months ago to improve the performance and accountability. we owe it to both the american and afghan people to do so. this has been a dramatic year

for progress at usaid under dr. shaw's leadership. applying for capacity and leadership at a global level. in the short time that i have been at the agency thus far, we have initiated aggressive reforms in afghanistan, aimed at the very heart of what this commission was mandated to address. accountability is among usaid's highest priorities. let me give you a few examples. usaid has developed th accountability assistance for afghanistan, or a cubed as we like to call it to help protect from waste, fraud, or diverted from their development purpose. usaid is enhancing the safeguards in the following ways, we are utilizing award mechanisms, limiting layers of

subcontracting, and increasing bidding -- sorry competition and building in award process. we are envetting all companies working on projects, enhancing project controls, performing additional project oversight in the high risk area using multiple monitoring techniques and utilizing the full arsenal of auditing mechanisms. one the biggest problems, frankly, has been usaid's capacity to fulfill the oversight obligation in the fullest. we are increasing our own capacity to undertake proper oversight and accountability. we have increased the staffing to 305 americans on the ground, and 170 afghans with 60% of our staff outside of kabul. despite high personal risks, staff with backgrounds in law, financial management, auditing, and contracting are serving throughout the country in prts, district support, and

regional platforms. they are getting out more frequently to evaluate the performance of the programs that they oversee. we have ordered a doubling in size this year, which has tripled since 2007. to advance u.s. national security only i i haves, usaid s helping to strengthen afghan capacity to design, maintain roads, and design and construction clinics, hospitals, and schools. i cannot over emphasize the challenges involved in under taking these efforts as the afghans, the u.s., and other international partners combat a vicious insurgency, and terrorists threat. security concerns on construction projects are paramount. in 2010, attacks on civilian efforts rose sevenfold. managing the safety of u.s. international and afghan personnel, as well as their associated costs is a central undertaking for us.

geography, and terrain present challenges to undertake construction efforts. i want to take a moment to acknowledge the immense pleasures, political, security, family that are staff and partners serve under every day. i have personally lost friends and colleagues every year of this long campaign. there's no question that we as a nation and the agencies represented here before you can and must do better. it is also important not to lose sight of the positive impact these programs are already making. our investment in schools, clinics, roads, and electricity have dramatically expanded access for millions of ordinary afghans to education, health care, and the economy. in conclusion, i want to say that nothing that we do in afghanistan is easy. and the challenges that we face in construction have reflected

that. but we and personally, i, am committed to making -- to asking better of ourselves. and we have already begun making the critical changes needed to improve our efforts and enhance our prospects for success. thank you. >> thank you, gentleman. we'll have a round of questions now and proceed accordingly. this is kind of in a -- the onset of a bit of a softball or educational situation without trying to criticize it. i'm trying to understand or let you explain, general dorko, and colonel cassidy, you know, you have a very large organic organization in afghanistan. where you do some contracting back here, and the larger programs and alike, you do it a lot of it over there. the air force does most of it out of texas. you have a very robust quality

assurance organization in country, in afghanistan, and you use organizations such as jvsr to do your quality assurance to be sure that contractors are doing adequate quality assurance. you know, the difference, and i guess i'll start with you, colonel cassidy, because you are the proverbial new kid on the block in the sense that the corps has been doing this a long time. you have filled the breech that was critically needed. the air force certainly has stepped in. you've taken a little different approach. can you talk about what led to that and why you are taking that approach of using companies to provide adequate oversight? >> sir, we're using the same methods in iraq and afghanistan that we used that afcee uses here stateside or any place else around the world. we have a limited number of

military engineers or even civil servants. the bar allows us to hire out the title too. which is day to day quality assurance for the contracts. so we've chosen to do that. we have about 100 title ii contract employees in afghanistan at this point augments our team. they do the quality assurance, making sure the construction contractor is comply with the quality control that they are supposed to do. and then we have corpses assigned, contracting officer representatives who will make sight visits and resolve any differences that arise between the title ii and construction contractor. we've done it to minimize our footprint in the country, and by using our large idiqs, our contracts, we go to a group of prime contractors, there's 40 -- over 40 on the list. we've had nine working in

afghanistan at this point. and we feel we have been fairly successful with that. we've had our challenges with some projects. we are moving forward and it's just a different model than what the corps uses. >> okay. general dorko, that -- you use the model where you do most of it, or a good portion of it organically, is that simply because it's tried-and-true corps model or some other aspect? >> yeah, the corps of engineers is unique. we have two business models, as colonel cassidy pointed out. our business model meets our requirement as d.o.d. construction agents, naval facilities engineering command being the other one, to do the work in the u.s. then the additional in the water resources business, the civil works infrastructure, and waterways, hydropower, and all of the other business lines that are on the water infrastructure side in the u.s. that makes up the whole of the

corps of engineers. we're able to draw on all of that. that's the 37,000 people that i talked about that we draw on through reachback and deploy nearly 1,000 of those people forward into theater. so it's a different business model for the different mission that is we have. they compliment each other. we are not in competition. i think the integration between the organizations is seamless. >> thank you. you are not in competition, but many of the projects and many of the companies, in fact, that you work with, are similar look and the same companies. i know you know this pictorial up here is camp phoenix. i want to talk to camp phoenix, because we talked -- the statements are clear about expectations. and sometimes the outcomes don't end up with the same situation. and we had the opportunity to be briefed by your soon your officer from air force center of

excellence. and this was to us if you look on the -- my right, your left, there's a picture of barracks that the big picture of barracks that have been boarded up. some are in shell, and some are boarded up, that were not completed. if you look over, you'll look at the quarters that people call pimp quarters. it's where the military has put the people in and out while they are trying to scramble. because the barracks aren't done. it kind of reads like a comedy. in fact, when we were briefed your onsight officer said it doesn't represent. he was very candid. he said this does not represent the work that afcee does, unfortunately, it was our work on our watch. you have the company, names unimportant, but second tier called n corp. that wasn't paying off of their subs.

encorp and the owner and company fled the country in $2 million fees owed to third tier because the construction wasn't working, they didn't know what they were doing, they took the $2 million and left town. in order to get the payment then, the third tier subcontractor that worked for n corp. removed 275 of the generators, these are your words, not mine, for ransom so they would get paid. you need generators to do the job and get the work done. they are highballing the generators out of one the camps that part of the kabul cluster. we're not talking about an isolated area. and then when we asked the question in the model, all right. you've got -- why didn't you know about all of the problems. the person was there and i

thought we'd find out the contractor wasn't doing a good job. in your model, he was doing a good job. but his contract was not sufficiently funded and he had been told by his afcee customer to work in two other higher risk, even though you see the pictures, projects, and he had done no quality assurance because his contract was sort of a zero sum and he could only do it in other locations. there was no quality overnight. the net effect, that's the concern, you know, it's incredible. it's kind of worse than a comedy of errors, it's a case where they are not paying lower subcontractors, once the pressure is on, the contractor takes his money and leaves, there's discussions about the guy game in and was bragging about his offsite villas, that's the $2 million. with all of that as a lead in, i

know the model works. but the real question, colonel cassidy is, you said you have some problems, that's a big problem. what happened, sir? >> sir, i think camp phoenix is probably our worse case. one of our first projects in afghanistan. our focus was purely in iraq at that point. we were still focused on building up the surge in afghanistan. afcee did not move enough resources to afghanistan to watch the project. that was -- that was a lot of the problem. one the things we did take, we took our lessons learned from iraq to afghanistan. what we found, it's different lessons in afghanistan. different skills for the people, different abilities, we had a lot more trouble in afghanistan with the inadequate materials coming in. they were stamped that they met standard, but wouldn't meet standard. it was the perfect storm, everything coming together that caused a lot of the problems

there. i think we've addressed a lot of them. a lot of the issues that we've had, and a lot of the cost growth that we are seeing at camp phoenix is also customer changes and changes that went forward. we knew -- we know we have problems at phoenix. we are working to fix those. >> i appreciate that. because this sort of like the -- you know, i see this picture of the building next to it. i don't know if you've been there. there's a building next to it that's been inhabited, project safe had come in there and written up pages and pages. here i just walked in the room. some of the people live in there. sometimes when you put the plugs in, if you don't have the right extensions, there was like a sparkling. it was written up there shouldn't be people in there. i said how come there are soldiers here now? they said because there's no other place to stay. there's a significant risk. the one thing that i will say about the air force in there,

your briefings are exceptional. you know, it takes -- you didn't try to pull any punches about the problem. we picked this randomly. you know, and so any kind of a commission that starts making the rounds on randomly picked and this is the only one i'm going to bring in on afcee projects and start running into issues like this, the words that the structures there sometimes pails against the actual experience. and that's our concern in construction is just exactly that, colonel, that you take your lessons learned and i comment you for frankly in your people in the theater acknowledging the issues. but it's just goes without saying there are challenges that need addressed right now so the soldiers don't have to live in facilities like that. >> yes, sir, we've also had the contractors and forced them to bring in increase the electrical, mechanical engineers to do the oversight and to do the construction. >> all right. thank you. my time is up.

commissioner ervin, please. >> thank you, mr. chairman. i want to start with you mr. thier, in your written statement and oral statement, you talked about accountability. i'm glad you stressed that. i think that's a keyword. i think accountability drives performance. the lack of accountability results in poor reference, maximum accountability results in good performance. i'm trying to square your statement with what i think, at least, is the most important piece of paper in this 400 plus hearing booklet that our very able staff put together for us. there's a january 10, 2011 article from ap, and it's titled usaid awards firm with checkered record. $226 billion no bid afghan

electric deal. the united states government is counting on the american contractor with the cost overruns and misdeadlined to handle the critical component of general david petraeus to stabilize afghanistan and quickly deliver more to the power start region. basically it says aid awarded to blacken beach the $226 million contract for kandahar, the birthplace of the taliban, really the heat of the fight right now in the southern providences against the backdrop of aid having complained about black and veatch performance, a contract that ballooned in price from $100 million, to $300 million. it wasn't just a cost, it was a timing issue. the other interesting pieces of paper in our hearing book is the november 29, 2010 justification

document that essentially requested up the channels at aid, approval for this no-bid contract. it uses two interests phrases. it says that for various reasons that we'll get into, i'm going to ask you a question about this, of course, i'll give you an opportunity to respond. first it says, uniquely positioned to undertake this kandahar project, and then it uses the phrase, uniquely qualified. if you really read the rest of the memo, it seems to me that what they really intended to say was uniquely positioned. because they later explained what uniquely qualified means to simply be that black & veatch was already on the ground. they had existing staff. there wasn't an alternative to them. that's just -- further my understanding is the bulk of the work there was subcontracted out by black & veatch. we don't know what the percentage is, tell us if you know. against the backdrop, how can

the american people take your claim that aid is taking accountability seriously if a no-bid contract is awarded to a contractor with the record of poor performance that aid quite rightfully called the contractor out for. >> thank you, mr. ere syringe. let me take you back into, i think, the decision making process over the last year as far as the contract for kandahar power is concerned that you are referring to first. then we can go to issues about black & veatch performance. the decision that was made to provide many electricity this summer to kandahar was a decision that was discussed at the highest levels of our government as something that the new commander of our forces in afghanistan felt was absolute paramount importance. it was a top agenda item for our military in their engagement. this year we have the operation

to try to turn the home of the taliban away from the insurgency. this was put out as among the highest priorities. within that priority, the idea of generating additional power to the citizens of kandahar in a visible fashion was made a top priority. within the overnight priority, the specific priority was placed on delivering more electricity to kandahar. so a decision was made that the competitively awarded joint venture agreement between louis berger and black and veatch would be used. it was an agreement already in place. black & veaatch was already in

kandahar. we moved forward to contract that work under the existing agreement. and that was made, that decision was made because that agreement was in place. at the same time, usaid is working on replacing that single iqc that had been awarded to black & veatch and louis berger four years ago with multiple iqcs held by multiple awardees. in other words, the single iqc that was put in place for power and roads was going to be broken down into multiple agreements. one for energy, one for roads, and one for vertical structures. the reason that i emphasis that, the agency takes very seriously it does not believe for accountability purposes for competitiveness purposes, that it makes sense to rely on a single award iq. >> sure. let me stop you there to probe.

when did the process start providing the alternate contracting vehicles going forward? when did this process start? >> i'd have to get back to you on the exact date. i'm not sure when it began. there was a commitment at the beginning of 2010 to initiate those procurements to preplace the existing iqc with the multiple iqc. >> the initial kandahar contracts in 2006. >> 2006 or 2007. >> all right. it wasn't until 2010 and last year that we began putting in place ultimate mechanisms. >> as far as i know, yes. four years of >> now on the symbion issue, do you know what percentage was contracted out? >> let me explain. then we can talk about. >> all right. be as brief as you can. >> sorry -- it's -- the reason that i'm telling the story. i think it's important to understand what happened next. we were going to go with the

existing competitively awarded agreement, however, in august when this was lined up, it came to our attention for the first time that louis berger was in discussion with the justice department. i'm sure this is something that we're going to return to. so i won't burn up a lot of time talking about that agreement here. but it became the decision of usaid that while these negotiations were ongoing with the justice department in a settlement agreement, it was neither appropriate to use that joint venture agreement to move forward on this work, nor was it safe to do so because we did not know what was going to happen and the outcome of that negotiating process. and we were worried that the entire effort would be imperilled, so the decision that we made to award a sole source contract was taking it out of

the joint venture and giving it to the company that was going to conduct under the joint venture. it was awarded as the source instead of going back in august and recompeting the entire venture. we felt that would take too long in order to achieve the affects that we felt were imperative at the time. >> thank you. i've been given just a little additional time. let me probe further. i understand the urgency that's clear. what puzzles me black & veatch itself was a subject of cost over run. even in the circumstances would result in a more timely completion of the project if the record shows clearly that black & veatch did not perform in a timely fashion with regard to the kandahar plan. >> the sigar can a report as has already been referenced in the

hearing on black & veatch performance in tear kill. it was when it was found that the project was being delayed, the kabul power plant project that you referred to, when that was being delayed, there was a very serious effort at remediation, including replacement of leadership, a lot of additional oversight, and even according to the sigar audit, black & veatch then dramatically turned around it's performance on that project in the second year. we felt confident clearly they had severe problems in the initial part. that is well documented here. we felt that due to a change in leadership of the of the -- ovee management of the subcontractor, as well as black & veatch itself that black & veatch performance

had improved dramatically. it was our assessment that our performance and subsequent work in kandahar made it so that not only would they complete this work on time and for the budget, but they would do so effectively. otherwise, we wouldn't have gone forward. >> final question. as you say, i'm sure that others will pick up the string here. final question, when just give me a notional sense of what that turn around on performance in black & veatch's part happened. >> i would have to refer back to the record. it was before my time. it's my understanding -- i think that it was essentially in the beginning of 2009 that substantial remediation efforts were undertaken to get the kabul power plant project back on track to improve the monitoring, oversight, and delivery of the program. >> this "ap" article says in january of 2009, we don't have the source documents, at least

according to the article, could be right, could be wrong, according to the article in january 2009, michael yates, the top usaid official in afghanistan wrote a letter to black & veatch with the company's progress in the plan. in this letter, yates scolded the company to kept inform of the construction delays. it doesn't say when, sometimes after january 2009, it talked about many important deadlines missed. usaid has lost confidence, lost confidence in the ability of black and veatch and louis berger to complete. i think the timing is important, it's of possible over the course of the hearing what time frame are talking about when you think the performance increased so substantially what it justified the sole source award. >> thank you, mr. chairman.

i'll add to that, if i might, commissioner that we would like you to provide -- and our staff will work with your staff -- clarifications to those questions for the record. i doubt seriously we'll have the time to totally pursue it here. i think that everything that the commissioner raises is absolutely on spot. commissioner green -- commissioner henke has something related. >> quick follow up if i may. you said in your statement quote a decision was made to use the joint venture. who made the decision on that point? and the second thing you said was in the past, it became the decision to not use the joint venture, and to use black & veatch. who made that decision? >> on the first question, when you say the decision was made -- >> no, you said the decision was made. >> no, i'm asking you the quote. the