mr. dicks pointed out more difficult, but we're also putting a lot of jobs at risk. and i want to just talk about another area that never gets talked about and it's probably -- it's an easy place to cut because not a lot of people raise their voices on it. but that is our food assistance programs all around the world. you talked about national security, mr. rogers. i will tell you i think helping to combat extreme poverty and hunger around the world, which we have been doing, actually enhances our security. probably more than a lot of the programs that we have that send all kind of military assistance overseas to governments that don't respect democracy but somehow we consider them our allies. but under this bill, development assistance for programs like feed the future would be cut 40.5%. global health and child survival programs cut 12%. the food for peace program cut over 40%.

the mcgovern/dole international food for education program which feeds hungry kids in school settings is cut by 52.3%. and let me tell you what happens when you cut these programs. one of two things happen. either china is going to step up to the plate and start providing food assistance to try to enhance their standing in that part of the world or nothing will happen and people will literally go without food. literally go without food. you know, when we talk about national security, i think these programs, to me, are more important than a lot of the things that get approved around here. mr. rogers, you talk about shared sacrifice. it seems the only people sacrificing in this are middle income families and poor families. couple months ago we passed a bill that extended tax cuts for millionaires. donald trump gets to keep his tax cut. but we end up cutting pell grants and we cut headstart

here. we talk about shared sacrifice, ms. slaughter talked about the oil companies, their subsidies are still in place. i think the way the bill is written it may make it impossible for us to go after these under the rules we're abiding by. programs like some of these farm subsidy programs, we have a debate on whether we should be funding corn ethanol. i think it's one of the biggest boondoggles in the world. we can't get at it the way the bill is written. you know, i think this makes it more -- i think if in fact this were to become law it would make the recovery that much more difficult, it would cost us a lot of jobs at a time we should be protecting and trying to create more jobs. and i think it nwould not enhane our security by decrease it. and i would just say, finally, you know, i hope -- i mean, i don't think i'll get the opportunity here. but i hope at some point in a

bipartisan way that we will agree that if we're going to go fight wars we're going to pay for them. when george bush first went to war against saddam hussein, when they invaded kuwait, he went around and got other countries to pitch in. paid for the war. we paid for world war -- we had a war tax during world war ii. we're asked to do nothing. you know, i say this as a critic of the wars in iraq and afghanistan. i don't like them. i want them to end. but if you're going to do them, you ought to pay for them. and i think that's a better way to control our deficit and start paying down other debt. thank you. >> thank you. mr. woodall. >> thank you, mr. chairman. and i appreciate you gentlemen being here today and i appreciate the hard work you've been doing, mr. chairman, to take all the orders that you've been taking and try to do things as fair as you could. i did notice that as

mr. mcgovern went through his list of things that he thought might have been cut too much there were only three things on his list that he didn't think got cut enough and he didn't think he could have gotten to this bill anyway. you didn't leave anything on the table and i'm grateful to you for that. that's the marching orders we got. >> we went into this with the idea that there should be shared sacrifice. we knew if we were to solve the problem of the deficit and the enormous dhaet we're incurring on our children and grandchildr grandchildren, if we were to tackle that we had to cut spending. and we had to cut it fairly. and we had to have no sacred cows. and there are no sacred cows. we've touched everybody except defense -- well, we actually cut on defense. and veterans health care. we held that as a sacred cow. >> mr. dicks, i wanted to ask you -- i appreciated your offer to the ranking member to work with her to find a way to get at

those subsidies. and i would -- she stepped out, but i'd like to commit my vote to her if you all can find a way to get to those subsidies, you'll absolutely have my vote on the floor of the house when that ailment comendment comes. i hope you can do that. now, it could be that some of those tinges -- i know some of the items mr. mcgovern mentioned were tax items. i'm new. do we ever have an opportunity to go after the tax side of the ledger in an appropriations bill like this? >> usually you do it in a tax reform bill. 1986 was the last time we had a major tax reform bill where we went through the entire code. i think it's long overdue that we have -- that the ways and means committee, finance committee have another opportunity to do -- and present to the congress a tax reform bill that hopefully will close some of the loopholes and help bring revenue in. every time we have the big tax

cuts, you know, that costs money, too. >> right. >> because we don't get the revenue. >> i appreciate that. i happen to have a tax reform bill hr-25, the fair tax that would abolish every corporate subsidy that exists today, every loophole, every exemption, every lobbyist engendered preference that has accumulated since 1986 and even before. and i would welcome anyone's support in working on that because i believe that you can't compete on your own merits then you don't deserve to compete. but i appreciate you saying that, mr. dicks. i see how hard chairman rogers has been working. i couldn't believe he would have left something on the table if it would have been available to him. >> that's one-third of the budget. i mean, if we're serious, we've got to look at entitlements, social security, medicare, medicaid. we've got to be concerned about this debt because of the interest payment. it's huge. and we've got to look at taxes. we've got to look at these loopholes that have been there. if we do all of that, we have a chance of turning the corner.

we have to do it in a bipartisan way so both parties will feel secure as they did in the '80s last time we did it. >> you say bipartisan. as i see you and mr. rogers do things together, i think nonpartisan. it's about love of the country and folks in your neighborhood and responsibility to your constituents and partisan doesn't come into it at all. now, i share some of your frustration. i want to get into medicare and medicaid because i know that's where the dollars are. i want to get into social security because i know that's where the unfunded promises are. i want to get into the tax code because i think there's some real economically destructive things going on there. but you're saying that it would never have been your expectation that an appropriations bill like this the rules would have allowed for that? >> no. that is ways and means and senate finance. they're the ones that work on that part of it. sometimes people put certain things in our bills as riders.

sometimes the committees agree it's an emergency. but we try to avoid legislation in appropriations. >> well, i want to associate myself, mr. chairman, with mr. dicks' desire to get into not just discretionary spending but entitlement reform and tax reform. but give" that the only thing it appears we're able to work on today is discretionary spending, i want to say thank you for both coming -- >> and we did defense as well as dmes stick. i think that was important and we couldn't have done it without mr. rogers and mr. young. agreeing to do that. >> to see you all work so hard to have an open process here, that was one of the things that i heard over and over again, how in the world can my congressman represent me if they don't have a voice on the floor of the house? to see the two of you working together, i know we have time constraints and all sorts of other challenges on the floor, but to make that commitment, make that work, i sure would like to serve in a house where we can do that over the next two years. i appreciate your support of

that. >> thank you very much, mr. woodall. we do appreciate that and hope this can be a step toward entitlement -- >> on a bipartisan basis. >> absolutely. mr. hastings. >> thank you very much, mr. chairman. i thank chairman rogers and ranking member dicks for their work. all the years that i'm here in congress, both of them have been appropriated in different capacities and i recognize, as i'm sure all of us do, the difficulties that exist at this time in our country. every day that i'm here and every day that i have been here, i've thought about what we do from the standpoint of trying to

protect the least of us in our society. chairman, when you speak of shared sacrifice, let me share with you -- i apologize to my colleagues for being late getting here. i spent 30 minutes with congresswoman captor with the foreign minister of ukraine who is here in a joint program with the united states and ukraine dealing with security matters. he was put a question by our ways and means colleague sandy levin about what he's -- what is his had government going to do in ukraine to equalize the circumstances of the citizen. a part of his response covers a part of what you and i, i believe, and the rest of us

believe, and that is that in his country he says they come from 20 years now of having been away from the yoke of their 0oppressr and that the people paid no taxes. corruption was rife throughout their society, and the establishment of democracy is and has been difficult there. but what he said struck me, and it comes to mind here. and that is, in the establishment of taxes and teaching people that they are going to now need to look at it differently than they did when everything 0 steostensibly was care of by government, he said there needs to be equality of shared sacrifice.

and i borrow from him in that regard now. it is easy to demagogue the best off in our society. and to talk about what they can and i believe should do. but how can we, honestly, say that we, through this particular cr and the budgetary process as it goes through here and the senate and the negotiations with the executive branch, are now asking for the nation to have shared sacrifice and then have continuing resolution reductions that address, in large measure, the middle class and the poor? now, i have to echo what my

colleague mr. mcgovern said. it hasn't been just too long ago that we gave rich people who had already received every kind of benefit for all the 18 years that i'm here some more benefit. and then we come to without enumerating a gain of the various programs, how do we call that shared sacrifice, mr. chairman? >> well, let me just say to you. if you look at the 12 appropriation subcommittees who will be presenting later in the year, their individual bills for '12 funding, in this cr, for example, the agriculture rural development fda part of the budget will have been cut 22%. the commerce justice science part of the government, none of whom deal with the poor, if you

will, will be cut by 13%. the energy and water development, corps of engineers, and all of that will have been cut by 15%. financial services would be cut by 19%. interior department and the environment will be cut by 14%. labor hhs and education cut 14%, like the others. legislative branch, we cut ourselves, 13%. you and i are sharing in that sacrifice. state and foreign operations, cut 21%. transportation and hud cut 24%. so the cuts are almost consistent to a t across the board. >> i understand what you're saying. >> and it applies to everybody. that's why i say in solving this national crisis that we're in all of us have got to sacrifice

and help pay for it. >> mr. chairman, most respectfully, i'll disagree with "all of us are sacrificing." when you get granular and go inside the cuts that you just enumera enumerated, you will find programs that add up to those percentages that impact middle class people and the poor more than they do everyone else. now, let me ask you another question. did the committee -- i'm not into process here. you had the right to exercise, the prerogative, the continuing resolution is needed to be done. those dynamics a s i readily understand. but was there any analysis in the continuing resolution reductions as to just what the projections would be in loss of

jobs if in a perfect world this continuing resolution were to become law? >> yes, absolutely. we took the words of chairman bernanke, federal reserve, and the chairman of the joint chiefs of staff that, in essence, said that the -- that we were facing a real problem as a nation. and that has precipitated i think the voters last november saying, cut spending, we're broke, we've got to do something about it. that's why we wanted to try to be fair in these cuts and i think by and large we have. there are going to be instances i'm sure where one item or another may need to be explained, but bear in mind there are literally thousands of

accounts in the government that we're trying to deal with here. thousands of peopthem. >> i understand that. >> it's not a perfect world. >> the two people that you cited i've only met the joint chief of staff. i don't know him personally and i don't know mr. bernanke and i don't serve on either of the committees of jurisdiction nor have i or that caused me to come in contact with them. but just in reading, they would be two of the last people that i would rely upon for overall judgment. now, i don't have the same confidence that everybody else does and all of these marvelous economists. i think that they are in some respects just like lawyers. you put two of us in a room and we'll give you 2,000 opinions in two minutes. so i'm not one of those that buys into the notion. as a matter of fact, i think

they've been a part of the problem. not the joint chiefs of staff but the federal reserve and those associated with them. i sincerely think that they are a part of the problem. and i might add, every treasurer in the 18 years that i've been here i think has been a part of the problem. so i don't want to get caught down that road. i didn't serve on ways and means. i don't want to occupy much more time. you've answered my question. you all did an analysis, but you're not coming down to the point that, if in a perfect world all of this were to take place, thousands of americans would lose their jobs. and when they lose their jobs, the residual is a multiple that it doesn't take me, a liberal or conservative economist, to clearly understand. i'll return to the notion in just this one point.

you and mr. dicks had a very brief discussion on mr. dicks asserted that if you were to cut the homeless program for veterans, that it would have an impact. your response to that was that veterans health care is going to be plussed up. well, in my state last week my governor offered closing the homelessness office of the governor. florida is one of those states, because of its weather, that attracts a significant number of people not only veterans but others to live outdoors. i began by talking about the least of us. i don't want to participate in no program that's going to hurt the least of us when the best off of us in society have gone

about our business ordinarily. and something is wrong with this picture, not your responsibilities in offering a budget, but i just don't see how you're going to take police officers ost streets and expect crime to go down. how you're going to eliminate the most successful -- not eliminate but cut the most successful program empirically documented, the headstart program, that dmon stratively show that those who complete it do better in life, in high school and in college, and don't -- 88% of them that completed that program in the last 34 years did not go to jail. be damned if we ought not be plussing up headstart and try to have some of these people that we rely upon that are pretty well off themselves, i might

add, mr. bernanke and the joint chiefs of staff. i been on planes where generals had generals serving generals and that sounds all wrong to me. i thank you, mr. chairman. i know it's a difficult job. thank you. >> thank you. >> just a very brief comment p t about the issue of shared sacrifice. it seems to me that, if i recall right, mr. rogers or even mr. dicks might be able to help me, i believe we have about 40% of the people in this country who pay no taxes whatsoever. and so when you talk about shared sacrifices, those are people who are being given lots of things by the rest of us, but they certainly are not sacrificing in the sense that other people are who work and pay taxes. >> are you talking about -- >> thank you. >> thank you, mr. chairman. chairman rogers, appreciate all

the time and effort your committee put into this, mr. dicks, certainly appreciate your input. you know, when we're elected on november 2nd, it was a clear mandate in regards to they want government to operate differently, the american people. but the bigger problem is, we're out of money. and every one of these on this list i will tell you that i can sit down and go through them and there's a number that are near and dear to my heart that i wish we didn't have to touch. i think that's the case i'm sure with you, mr. dicks, and with the chairman. >> i represent the second poorest district in america, the poorest of my republican. my people are going to be asked to sacrifice more than anybody else except one other district. but they're willing to do it. i've talked to them.

they're willing to sacrifice to help this country survive. >> i agree. >> that's what i was trying to say. every one of these programs when you look at each individual program, each of them have merit. each of these programs touch someone, and we all have our pets or we all have those that we think are more important to our constituents. but it is about shared cost and also shared payment. if there was an easy way around this, i'm sure that your committee would have been dancing in the street and saying, we have a silver bullet, here's how we solve our problems in one quick and easy swoop. but that's not the case. we didn't get here with a single vote. we got here with multiple votes over a lot of years. you know, my experience doesn't compare to this, but as a sheriff when we had a downturn in our budget, in our

appropriating authority that gave us the money to spend, we had to sit down and look at our core mission as to what we're supposed to do in government and look at our core mission and that's how we funded it. we had to cut programs that i started that were the last things on the face of the earth that i wanted to cut. but when i looked at our core mission, that had to win out and trump everything else. i think that when we talk about entitlements, we all know that the small portion of the budget we looked at doesn't get us to where we need to go. we all recognize the fact that you can't spend more than you make. the federal government has been doing that, though, where the american people haven't been able to. so at some point in time, we've kicked this can for a long period of time, we're going to have to face stark realities to

where we want to go, what kind of future we want to leave to our kids and our grandkids. now, i hear mr. mcgovern talk about the war in afghanistan and iraq. trust me, i know what that's about. i've had a son that's served 15 months in afghanistan and two of them heading to iraq in the next four months. so some of us do understand that sacrifice. but as appropriators, that is one of the core missions of this government, to protect us from all enemies, foreign and domestic. i think that's one of the -- >> we've done that in this bill. >> and i appreciate that. from a person or father who has three sons serving in the military, obviously that's a huge thing for me. but for my constituents back in my district in florida, fifth district in florida, we have the largest number -- i think we

vacillate between having the largest number of veterans of any district in this country. 116,000. so we recognize their sacrifice and we certainly understand the need to provide health care for our veterans. that's something that we made a promise and a pledge to do. but as we move along here, this is actually, of all the discussions we're going to have i think over the next couple of months, probably -- i don't want to mine miez it, but this is probably one of the easier discussions we're going to have. when we goet to the actual budgt of 2012, to the point of the debt ceiling, those are all issue that's are -- this is going to pale in comparison once we get through this. but we have to have a starting point. and mr. hastings, when he brought up about attorneys, i have to laugh because, god bless him, that was never one of my favorite folks as a cop.

but with we do need to talk about tax reform. we do need to talk about all of those issues that you brought up. mr. woodall brought up the fair tax, which is a perfect scexamp of the way to level the playing field across the board. when you start talk being about the number of people who don't pay tax at all, i think that's an issue for us in the future. thank you. >> thank you very much, mr. nugent. let me say that there a vote on the floor and i'm told there's about five minutes left. and i think there are -- how many votes? three votes. so about three minutes left. if you want to proceed, mr mr. polis. we do have other witnesses so i'd ask you gentlemen to come back if you could. we're kind of winding down, but i don't know that we'll be able to complete that by the time we have to vote. so, mr. polis. >> thank you, mr. chairman. i think the discussion here has clarified what we are discussing, what we aren't discussing today. essentially we're looking at cuts to the important area of

domestic discretionary expenditures. i think we've all talked about that that alone is not nearly enough to make any meaningful impact on the deficit. he need to look at entitlements, revenues. part of what i think we're trying to do here is create a creative process where members have ideas to kucut spending. there's a few problems i think with the orchestration of that. one is simply the timing. i think most members, myself included, simply don't have enough time to get thoughtful amendments to cut spending on the floor. our staff has been really each person on my staff focused on cutting spending today. we think we have a couple of amendments, we hope. i just worry at what cost we're rushing this through, you know, tomorrow. i think, given 24, 48, 72 more hours members of congress and their staffs might be able to come up with buildings or tens of billions more in savings that will pass muster on the floor of the house.

you know, given the need to do this, of course, but also the ability of this body to take surely another day or two to do that -- again, my staff has been scrambling all day -- i'd like to inquire as to why we are not giving, in my opinion, sufficient time for members to come up with ideas for budget cuts that can pass house muster. >> well, because we're facing a march 4th deadline. we've got to act in time to pass a bill here, pass it to the senate. >> it's more a question of 48 -- another two days, talking about kind of going to wednesday or thursday instead of require -- from my understanding we have to have our amendments in basically within the next hour and we only saw the cr on friday. so we just had the weekend and today with of course a lot of our legislative services being closed over the weekend. i would hope that there would be more opportunity for members to advance cost-cutting ideas. i think we're missing out on

billions of dollars of cost-kugt ideas simply because of lodgeistics. >> you'll have an opportunity to offer amendments with a little more time to think about the consequences. >> one more suggestion in that vein. i think that the process would work even better to incentivize members to find creative cuts if there was some ability to reallocate some of the money that was found in the cuts. obviously they wouldn't be cuts if they could reallocate all of it to prevent cuts in other areas. if they were able to reallocate half of the additional savings to offset cuts elsewhere, it's quite likely that would result in more net savings. because what gets a lot of members going when they see these cuts -- there are cuts that we're all worried about. i was wondering if that's something you would consider asking for, the next time around, giving members the ability to allocate some of the money that they save to

encourage them to find more savings. >> the amendments now, you can do that. if you want to add something back, you have to have a corresponding cut. so, you know -- >> it's my understanding that wasn't possible. >> you can't take from defense and put in health care. >> you can't go across subkmeelt committees. >> mr. chairman, can we recess to go vote and come back? >> i'll be -- i'll just hold the floor. would you like us to return, then, mr. chairman and continue? >> what i'd like to do is make decision real quickly. we are in the midst of your testimony, we would return with you. would both of our witnesses be allowed to come back after the final vote? we have two additional votes after this one. i don't know when this will close. we'll now be in recess until the end of the -- >> mr. chairman, i'm almost done but i know several other people are left to go. >> that's correct. we'll be in recess until the

beginning of the last vote. thank you. live to the house rules committee that is setting the terms of the budget debate for tomorrow. [inaudible conversations] the rules committee will reconvene. we are here for furthertee ll consideration of h.r. one, and by a understand mr. sessions wai presiding. i recognize mr. polis. presiding. he had recognized mr. polipoelu >> well, again, the points i made earlier the produce the better outcome of members to

come up with cuts, more time would be helpful number one, and two, the ability to reallocate in different areas, critically not all of the money saved, but some of the money saved. i want to give a specific example of the unintended consequences of the way that the ut cans are being done. the major transportation artery in my district, highway 36 is facing under this $10 million cut, it had been awarded a tiger challenge grant, and $10 million tiger challenge grant, and of that $1.9 milg ylion of that is under the status of unobligated and that is because the highway of colorado was to leverage more. if they had taken the grant, it would have been a small part of something and they would have had it, but what they were encouraged to do, and they are doing is that they have leveraged it into a $305 million

project, including a loan and that is the intention of what they were to do with the $10 million grant is to leverage it with state and federal funding for the most important transportation artery in my district. now now, with this one broad stroke, grants like this $10 million tiger grant are in fact rescindeded and not just the $10 million that falls apart, but the whole $305 million piece falls apart, because it was based on the tiger challenge grant. i was wondering, and it is a shame that mr. rogers is not here, but perhaps you have some ideas of how to the do it in a thoughtful way to recognizing the difference of something that is truly unobligated and something that has a reason that it hasn't been obligated yet, because it was being leveraged in a way that was consistent with the original intent of the allocation? >> well, i know that the tiger grants were taken out.

something we were kenned abou n concerned about and the fast rail as well. you will have to ask the chairman about that when he comes back, but there was some effort to go after money that had been previously appropriated like under stimulus that had not been obligated yet. and, you know, that was -- i had the problem in my own state, and if i called the secretary of transportation and said, you better obligate and work out this agreement as fast as you can, because they will probably take the money if you don't do that. so that happened in a number of areas and sends a perverse incentive to local jurisdictions to spend this money as quickly as they can even if it is less than optimum, because they need to get it out the door, than

perhaps a more thoughtful way. so it sets a perverse incentive that they should have the money obligated as quickly as possible even if it serves as the less optimum in the outcome. with that i will yield back. >> thank you, thank you, mr. chairman. we have heard about shared sacrifice and when we think about it, i think of the shared sacrifice from generation to generation. the intergenration of spending money that we don't have is not thought of the next generation who will have to subsidize the benefits ascribed to ourselves. i think it is hard to look at all of the programs being cut and say that simply none of them are important. many of them are important, and many of them need more money if we had an endless supply of dollars we should look at it differently, but we don't. this year the estimate of the

deficit is $1.65 trillion. we have to be stop spending money that we do not have and ascribing to ourselves benefits that the next generation will have to pay for. >> thank you, mr. chairman. i'd like to say wrjust one thin. i heard the argument that we are slamming on the brakes, and that bothered me a little bit, because as mr. titus said, we are not really slamming on the brakes. we are not. there is a generation to think about, and that is a good point, however, if you look at the numbe numbers. we borrow between $4 and $5 billion every day. $5 billion in half of the month, and the other $4 billion. so half and half, because it is about $4.5 billion, so if you boiled it down to one thing,

what are we doing with this? this bill is one step forward and it is this. we are putting the federal credit card up for one day every month, that is all. one day. one day we won't borrow $5 billion out of the whole month, but other days we will borrow $4 to $5 billion every single day to keep going. just as mr. mcgovern said, this is borrowed money. that is an important note and important thing to talk about, but it is only one day. it is a right step, but it is not a slamming on the brakes. it is a small step forward in the right direction and that's all. it is hard to turn the rudder of government one degree. this may turn it a degree and that is about it, but it is at least a step in the right direction. >> thank you very much for being here, mr. dixon. and again, let me just express appreciation to you for your willingness to as we proceed

with what is nearly unprecedented. you have never seen a continuing resolution come to the house floor under a structure that we are considering, that this committee is reporting out right now. i remember them all being closed rules, as you have, and we decided 20 years ago an amendment or two had been made order so we will structure the rules, and so never before in history have we had a cr considered under a structure quite like this. so i want to express my appreciation to you, mr. dix for your willingness to be as cooperative as you have with what we are going to have a free-flowing and vigorous debate on the floor. mr. hastings, of course? >> when is the last time you will recall that we had modified open rule with caps? >> withp caps? >> caps on time limits? >> well, the definition of a modified open rule is twofold.

number one a modified open rule has a preprinting requirement, and second, it does have potentially an outside tell. i don't know if this rule will have caps or -- i don't know. >> well, it does have preprinting requirements and if it has requirements, then i would remind you. >> under the five-minute rule. >> yes, and five-minute rule. >> i have been here long enough where it took three weeks to do the defense authorization. >> maybe my friend from florida is offering a closed rule for this consideration of this? >> i don't care what kind of rule. >> you want an open rule. >> and i'm sure that the gentleman would be happy with an open amendment. >> well, what mr. hastings is trying to get is whether or not there is a total time limit on the debate. >> if i could reclaim my time i will say that the rules committee still has to work this out. we are hoping to have a modified

open rule. we will be able to have this debate once we see the rule. mr. sdixdix is a very busy man, he has spent a lot of time with us -- >> and it is valentine's day. >> and we seem to be engaged in the mark-up on this, but there is no reason for us to do this. mrs. slaughter? >> no, we have another witness from whom to hear. >> would we recess? >> well, i can't tell you, because we are in the midst of the hearing process right now and once we complete the hearing we will make a determination as to how quickly to proceed. thank you, again, mr. dix for being here, and appreciate it, and now we are happy to recognize the gentleman from iowa, mr. king. thank you, mr. chairman. i appreciate the opportunity to raise this issue before the

rules committee and i think it is probably none of it is a surprise to any of us on the committee where we are with this. i will just tell you that i'm asking for a waiver. i concede that if i bring language to the floor under an open rule in appropriations that has the word notwithstanding in it, it is an alarm bell that will cause a point of odder to be raised. i will concede that point of order is difficult to order and it is an order under the rule. we are at this point at the cr and this is maximum leverage we will see in the 112th congress. the amendment i am seeking a waiver for is the amendment that shuts off the funding for the automatically appropriated obamacare legislation. most in that congress were not aware that was written into the bill. we dug into it as recently as last week, and working with the crs, they did publish a report

on friday that totals $105.5 billion in automatic approa appropriations that are written into the obamacare bill, and those appropriations spanned over 10 years and some of it is load in different ways, but one might think of $10 billion a year, and because this house has voted to repeal obamacare, and we have voted as a majority of the house to remove all sections of the bill, my obamacare and the associated reconciliation package and my amendment goes in and uses the model that i pulled out from my memory of the vietnam war era actually where there is war there that was in a cr and they did it in several ways, but the primary one was the cr in 1974 that stated notwithstanding any other provision of law, no funds appropriated or here to for

appropriated for vietnam or the ajoining countries. i took that back and wrote that modelle into the amendment as essentially a standard and the rationale is this, that first, the automatic funding. with e saw the legislative maneuvering that passed obamacare and that came up and we first passed the bill and then we found out what was in it. most of us on our side of the aisle campaigned to repeal, and de-fund obamacare. we have taken the first step, and now the next step is to de-fund. this would change the implementation of obamacare and two courts have ruled it inconstitutional in part or in full, and for u us not to do that, it is our burden to uphold

the constitution of the united states, and there is a conundrum here, and gentleman, and gentlelady, i'm more sensitive to the burden of the rules committee than probably any time in my now starting the ninth year here. however, i would make the case that we do take the oath to uphold the constitution and not the rule. i followed the process that one would ask a responsible member to do, in that i requested that my language be written into the bill. it was not. this is the next stop along the way, and it is the last stop before the floor. there's been much discussion about letting the house work its will, and about regular order. well, i submit that regular order on a appropriations bill would be before subcommittees and mark-ups before the subcommittees and the full committee and two or three stops, there is a place for a

member to offer my amendment and it would have been in order and had it been passed, written into the base bill with or without the cooperation of the people whocisions on what is written into the bill. i have done my due diligence, and i believe that the amendment passes the floor of the house if it is allowed to be debated and i have a degree of confidence in that, that is, that the dedication to the rules is something that you in this committee have to be more sensitive to than any other members of this congress, and yet, the dedication to the constitution is what all of our oath is to. and so, i'm of this position that i want the house to work its will. we didn't have regular order or my language would have been voted on by now someplace along the way. this is the last stop before the floor. i want a regular order, but i want the house to work its will. i'm asking this committee to

grant a waiver for my amendment, so that there can be a debate on the floor and a vote on the floor. if we do this, we are consistent with the oath of office and also consistent with the fiscal responsibility, and it is not in a one-year cut that would be $105.5 billion, but over ten years it would be, and it is the only tool i know that freezes in place the implementation of obamacare, and if we let it grow, it will grow the roots down in and it is going to be harder and harder to eradicate. i wish there was an easier way to take this cuff from all of you and if there is way, i am happy to do it. i have carried this ball for a year and i have fought for it for a year and af half and i'm not this a moral position to make the moral responsibility to repeal obamacare, but i am in position

to lend an ear to the people in this committee and hear if there is a better one, and i yield my time back to the chairman. >> thank you, very much, mr. king. let me express ap prepreciation extraordinary dedication to a cause that every member of this side of the aisle shares. we have all cast a vote to appeal this outrageous health care bill which undermines creation of job growth and dramatically expands the size and scope and reach of government. legislation that did unfortunately pass was signed last march is something that i believe is potentially very, very dangerous. i share that. i appreciate your recognition of the challenge that this committee faces on this issue.

it is true that we are trying to have the most free-flowing open debate possible under a structure that has been a continuing resolution, it has not been done before. and the one thing that i can assure you is that we are going to pursue every possible means that we can to make sure that we don't fund this program. throughout the process, throughout the last 18 month whence you have been working so diligently on this, i said all along that i felt that the natural step for us would be to take the mandate which hires up to 18,000 new irs agents to enforce the mandate and i have read and i was just talking to daniel webster who happens to be a good friend of roger vinson's, the judge who offered the brilliant 78-page decision and i read every word of it.

in fact, he quotes some of my favorite framers federalist 34 which was authored by alexander hamilton and the two authored by james madison, 45 and 51 in which he points to the constitutional questions of this. so i will tell you that my lawyer and i actually went through it together. every one of the 78 pages of the vinson decision. so i will say that i share the goal of getting exactly where you are. i know that i can't speak for my colleagues on the other side of the aisle here, but i know that i speak for all of my colleagues here when i tell you that we do, and i want to get there. we know that we are now five or six weeks into this congress, and i believe that personally, that we need to proceed with as open an amendment process as possible. i respect your desire and willingness to continue to work with us so that we can get to

exactly where we want to be as we proceed. mr. sessions? >> thank you, mr. chairman. mr. king, welcome to the rules committee, again. as the facts you have been a regular visitor to rules committee and bring thoughtful ideas not only to the committee, but with a thoughtful ak tir yi -- articulation of what is behind your ideas. as you know this committee has the awesome responsibility of looking after and shepherd through including proposals crafted by the rules committee from hearing from all sorts of members with great ideas and this is one of the things that which the chairman drier and i want to hear from the floor with this free-flowing process. with that said, sometimes we

hear discussions that we may not have heard as thoughtfully as you presented, and i heard you talk about this 10-year $105 billion health care bill proposal, the funding of what might be known as obamacare. we are actually working under a one-year, right now, cr, and do you know how much money you would be seeking for us, because we certainly wouldn't include the language probably for the 10-year necessarily, but this one-year piece? we would be looking at stopping the funding for this cycle right now, what might be 2011? >> mr. sessions, my language goes through all of that is automatically enacted for obamacare, so it is $105.5 billion, and it freezes it all. if we looked at it on an annual basis, i did not break that apart for the 10 years, because we are under pressure here, but i know that -- i will say that i

believe that i read that there is a one single $5 billion component, and then if you average the balance of it, it is slightly more than $10 billion for this fiscal year. >> so about $10 billion? i mean, we could argue that if the we just did our mathematics and divided it out. and the reason why i say that is because you are not at odds at all with this committee, and this committee as the chairman indicated, you are our favorite son and we welcome what you bring to us, and we are attempting to also make sure that what we do to get it done. and the $100 billion that i think that we have had an active conversation across the country and many americans recognize and i saw on national tv, this is a big week in washington, d.c. with $100 billion. i want you to know that i am

very focussed on the amendments that you are bringing, the ideas that you bring, and i'm also very focused on getting $100 billion done as best as we can knowing that we have tried to sell this across the country, and want to put pressure on the senate and the president with actual spending this year. and so i find your amendment intriguing, and i appreciate your doing this. i, as always, my friend, look forward to continuing working with you, and i appreciate your thoughtful ideas. i give the remained over the time back. >> thank you, mr. chairman. one thing i overlooked that i have in my hand is an e-mail from a previous speaker who lived through one of these periods of time in 1995, that makes a recommendation, and i'd ask consent to deliver that to the committee members for their review? is. >> yes. >> and it is from newt gingrich or the the record. in summary, it asks the same

thing that i'm asking here as since he has perhaps as much experience with this type of issue of anybody on the planet, and that is how i raise the issue with him as a matter of fact. this is what he volunteered to respond back to and asked me to deliver this back to the rules committee and i'm appreciative of speaker gingrich of stepping up in support of this and along with other national groups that are engaged. i continue to make my point that i believe this is good for the country or i would not be sitting here. and i yield back. >> thank you very much, mr. chairman. i wanted to respond to mr. sessions, well, a couple of things. i know that two judges have found it unconstitutional, but two have found it constitutional and 10 states have thrown it out, so it is not decided yet, but mr. sessions asked how much you would save with your

amendment. i don't know that, but i do know that the nonpartisan congressional budget office said that 30, on ten years, this bill will cut the deficit by over $30 billion, and i certainly want to get that on the record. >> and if i could add into the record, that for the fiscal year fy '11, it would reduce by $4.9 billion for the fiscal year, and the rest of that is going forward in nine years from that point forward. >> and so the question is to make sure that you destroy that and take health care away for an awful lot of people, and that is the problem? >> i don't know if that has anything to do with my calculation. >> well, nobody has mentioned this, but i want to ask this, and i'm asking a lot, $250 has already been paid to senior

citizens who are in the doughnut hole, are you expecting them to pay that back? >> no. everything i have offered with the repeal or this amendment simply stops and freezing it in place, and it does not go back to un-do anything. >> doesn't un-do anything. >> no, it stops it as if you shut the valve off. both money coming and going. that has been the analysis, and we have gone back for more professional opinions than mine and they have concurred in that. >> you do not agree with the cbo? >> there are times they don't agree with the cbo, but i don't always know the assumptions they use to come to the conclusions, abi saw fast-moving tallies on this bill as it moved toward passage so that by the time it passed, i did not have confidence that the cbo numbers were accurate. i would like to see the difference of overall spending and overall revenue and i know there are tax increases in obama care and significant spending and the chairman of the budget

committee said that obamacare itself spends $2.66 trillion. so, that's a lot of money. >> well, i always have said this so many times before that you must get tired of hearing it. but we did don't that health care bill, because we wanted somebody to throw a brick through my window or my life threatened. we did it because 17% of the gdp was spent on health care and rising all of the time and at such a clip that there is no way in the world to keep up with it. and the eventually, the way we are going is to simply paying social security and medicare and very little else and we did it really to try to get it under control health care spending in the united states and i would like to see it work. the same debate you are making now was made about social security and medicare and they would be the ruin nation of the world. >> i made a lot of debates on that myself, and of course, we have two different viewpoints on how to approach this, and we

have heard the wvoice of the house, and 47 republicans in the senate and it is a strong position, and the public seems to be getting stronger in opposition over obamacare over the weeks and months and the more we are in session dealing with it, they are more lining up in the position i'm in, so i think that we owe them an opportunity to have a vote so that they can verify where we are on shutting off the funding. i made the argument for ten months on the tactic to eliminate obamacare is to first pass the repeal, and then begin to shut off the funding and every appropriations bill. i have got writings on that that go back to the middle of last summer at least. and this is the first one and the biggest one and the most leverage and the one that cries out the most to be addressed by this congress of what we did ath hr .. it is ironic that

this is hr-1. and it is not ironic that hr-2 is to repeal hr-1, and if we miss this opportunity, somehow the perfect symmetry of hr 1 and 2 won't be fulfilled and kind of like a love lost i would say, and something mised thsed that never be recaptured again. >> thank you. >> thank you, mr. chairman. thank you, mr. king, for coming. i want to echo the comments made by the chairman and mr. sessions in terms of our feeling like we are with you on this obviously, since every single one of us voted to repeal obamacare, but you pointed out something that needs to be mentioned. we voted to repeal -- well, i think that probably the reason that this is hr-1, because we

knew we were going to be facing the continuing resolution. we knew that we were going to have to continue the funding for the federal government. and obamacare was number two and appropriate to vote on it immediately and i don't have a problem with that at all, but we know what happened with the bill when it went over to the senate. at first, mr. reaid said no vot on it and then a dust-up in egypt and he had a good cover when people were paying attention to other things, and he simply brought it up for a vote, and of course, the the vote fail. now we have been accused over and over again of wanting to shut down the federal government, and we have said over and over again, that is not our intentions. we want to go forward with the continuing resolution. we are sorry that our colleagues on the other side of the aisle

could not get their appropriations passed last year, but what do you think would happen if p your amendment is put on the continuing resolution when it gets to the senate? >> well, it's fitting into the same category as what might happen with the $100 billion in cuts. it comes down to where are the votes and where's the leverage? i have made the point that there's not a dime that can be spent by the federal government unless the house at least concurs, and so that's something that can't be seen at this point. if we had not sent the repeal of obamacare over to the senate, then we would be accused of not picking up an issue that we believed in. and if we don't cut off the funding to the implementation of obamacare, the same accusations that we expected then would come on this. >> but we are cutting off the funding of the implementation of obamacare in this bill. we are cutting off the funding as we, as it is available to us

to cut off in the continuing resolution. so, all of the funding that we can identify that fits twhn category is being cut off in the continuing resolution. >> and do you know what that total? >> no, i have not added it up, but it is -- i don't know $300 -- almost $2 billion. >> and well, while that is going on, there is $4.9 billion in fiscal year automatically appropriate and then balance of roughly another $100 billionp appropriated to implement obamacare unless we find a vehicle to shut it off, obamacare is going to be implemented and it could happen on our watch while we are cutting a couple billion. >> but we have a lot of vehicles coming up to shut it off. we have the budget process and the appropriations process coming up, and so we have your assertion is that this is the

only chance that we have, and i don't believe -- >> the best chance. >> that is not the case, because we will have lots of opportunities to cut off the funding for obamacare, and again, i expect us to pass appropriations bills and through the appropriations process we can cut the funding off in future years and that is an option available to us. >> i would submit that the budget process is not a vehicle, but the appropriations will be, and each one of them will be significantly less in the leverage. so that if the leverage diminishes then the senate and the president's leverage diminishes appropriately. so this is the vehicle. >> but if we send it over on the resolution, and the senate rejects it, there is no leverage. and your argument is that there is leverage because it is on the continuing resolution, but the senate doesn't have to accept the continuing resolution as you just said. >> i would submit that if the

house is not willing to insist, the president will get what he wants eventually. >> well, the house has insisted, and we will continue to insist that this not be funded. every single one of us have taken as strong a position as you have taken. i have railed against obamacare as much as anybody in this body. i have spoken against it over and over again and i write letters against it over and over again and editorials against it -- i have is no positive thing to say about it. but, as you know, you are asking us to change the rules here in the rules committee, and what that does then is to open us up then to the same accusations that were made of our colleagues across the aisle over the last four years in terms of their not being fair to us. and i think that is putting us

in a very tough position. >> mrs. fox, i never thought i would be sitting here asking for a modified open rule in order to shut off the funding to obamacare was the implication that i should have somehow made deference, and not made the ask. this is too important not to ask and it is too important not to come before this committee and have it written into the bill. i would have liked it to have gone before the appropriations committee or open order, but now we have a rule that we can't have the vote or the debate unless there is a waiver provided by this committee. it is the only place i have this argument to make, and as i see it, maybe there is a disagreement tactically, and you may believe that the smaller appropriation bills offer a better opportunity to shut off this $10 5 billion, but i believe that the more money at stake, the more leverage you

need. >> but mr. king, you have another opportunity to do this. you can offer the amendment on the floor, and any member can offer any amendment on the floor, and you know that. and so, we are not shutting you out from offering your amendment on the floor. >> i announced as i sat down here that there will be a point of order raised, and the point of order is likely to be sustained and i have reservations about challenging the ruling of the chair if i think they have a parliamentary point. it is hard for me to make that argument when i have come before this committee to say, my amendment will not be in order. i understand it will not be in order and i knew that from the middle part of last summer. i marched down through all of the things that you can ask can a member to do. my franchise is as precious as anyone in the congress and we have the same passion to oppose this issue, but i have tried every other alternative and if this alternative does not succeed, the next thing i am facing is offer the amendment on the floor, and listen to

somebody raise a point of order, and ki and i can reserve my right to act, but to challenge the ruling of the chair when i have told my committee that i don't believe that my amendment is in order, and that is why i am here asking for the waiver because it is more ally inconsistent for me t do that, but it is morally inconsistent for this committee under the astute leadership of the chairman to go through the congress without a modifieded rule. i expect that to happenn't. and if i am not successful tonight, i hope we are not thinking that if we were going to write an unfunded modified rule, i hope we didn't do it to de-fund obamacare. >> i would like for you to offer your amendment on the floor to

de-fund obamacare, and that would be the fairest way to do it. again, i join with my colleagues and i'm sure that every single one of us are going to say the same thing to you. we agree with you that this program should be de-funded. it is my opinion an abomination to this country that this bill was passed and i find it curious that my colleagues on the other side have talked about how this process going so fast. they want to slow down everything that cuts fund, but always in a hurry when it comes to spending. this bill was pushed through. obamacare was pushed through. any time they want to spend money, they are in a big hurry to do it. when we want to slow down the spending of money or cut funding, all of the sudden, we are in too big of a hurry to do it, and we should slow down. but i appreciate your efforts. i have appreciated your efforts

for the last year and af half, as i said, because you have been joined many, many times by all of us here except the new people who are here saying basically the same thing. i appreciate your efforts. >> thank you, mrs. fox. >> i wanted to say that is one of the most fascinating discussions i have witnessed in the rules committee for a long time and i u think that you are being told in a polite way no, but as you know the rules committee can do whatever it wants to do and it can grant the waiver and if they want to make it an order, they can, but i want to point out for the record even though i strongly disagree with what you are doing, there are eight of them and four of us, and i can't help you even if i wanted to. thank you. >> well, thank you, mr. mcgovern and thank you for joining together for the state of the union address. >> that was a great time. we were seat mates.

>> jim was my date that night. [ inaudible ]. >> i would be looking forward to having that dialogue stronas lo it can be constructively enabled. thank you. >> i just wanted to tell you how happy i am that wow were here, mr. king. i think that you are a real champion on issues like this, and i appreciate what you have done on the fair tax time and time again and i have put this in that category of things that somebody has to stand up and say it. there's no doubt that you have

your colleague's attention and this committee's attention and the media's attention and with those kinds of talents combined with the bright minds that mr. bishop just talked about, i have no doubt that success is around the corner and success that we are all seeking. i thank you for having the courage to push this all of the way to the end. >> thank you, mr. woodall. >> mr. king, great seeing you tonight. you know, you have really stood out amongst a lot of folks in regard to the push and the desire in regards to de-funding obamacare. i don't think that you have to convince at least mr. drier over this way about doing just that. i think that's a mission of ours, and to get this country straight again particularly in regards to how it relates to obamacare. we want to get together, and we need to work together. we need to come up, and i think

that, we have heard of mr. bishop talk about the brightest minds, and i'm not the brightest mind, but i am certainly the one who loves to hear a good idea, and you have a good idea. and we need to be able to work cooperatively to get to the end-game. the end-game is to de-fund obamacare, and that is where we all want to go, so with that said. thank you. >> thank you. >> thank you, mr. chairman. this has been an interesting conversation, one that i keep hearing in my mind. please, please, please don't do this. but at the end of the day, here is what i am thinking. we will find a way to accomplish the goal. i novi a bill that has been, hopefully co-sponsored by many members of the freshman class and the republican conference to do what you are doing which is to de-fund obamacare, period. the process by which we get

there is important, and that we get there is more important. >> thank you, mr. scott, i appreciate your interest in this, and i am aware that you have been active to put language and initiative in to defeat obamacare and i appreciate that and supportive of that, but my point is that in this environment with the other party in the majority of the senate, and the president of the signature bill at stake, we nood -- we need a way to have leverage to accomplish this, so each piece contributes to the cause, and you are and we are, thank you. >> yes, sir. >> thank you, mr. chairman. thank you for your courage. it takes courage to stand alone and you are standing alone, and i appreciate your doing it. you have a great idea. >> well, thank you very much, mr. webster. it looks like we have wrapped this down to a moment for me to

conclude my statement. >> absolutely. >> and i could maybe reach back to some cassette in my mind and turn this thing up to the maximum amount of marketing, but instead, i would say this, i have had the ear of this committee, and on both sides. it has been a good and healthy discussion. i believe, and i would not be here if i didn't believe i am right. i believe this is the best opportunity with the maximum amount of leverage, and the best timing that we could have, and i think that of those who don't believe that they should come up with a proposal that has a better prospect of success, and i'd be happy to have that kind of dialogue, and it would be maybe more constructive before this committee would make a final decision. however, whatever it is, my level of intensity is going to go in a direction that is designed to bring about the end of obamacare. that you can count on, mr. chairman. however this committee decides.

i'm hopeful that the wise minds on this committee can come up with a better solution and ki know about that or participate in that discussion. >> thank you very much, mr. king, and i assure you as we proceed dedication to the constitution and the institution, and we will, obviously be taking your ideas and thoughts into consideration as we proceed. >> thank you very much. >> thank you, mr. chairman. >> thank you. >> the commeittee is going to stand in recess. i can assure my friends that we will ha

will have a copy to them as quickly as we can. we will be in touch with you. okay, so i don't think it will be hours. but we'll, let you know as quickly as we can. so the committee stands in recess. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

jonathan allen of politico, how are members of congress reacting to the release of president obama's proposed budget for fiscal 2012? >> on the republican side you have a pretty steady course of folks who are accusing him of spending, borrowing and taxing to do those two previous big spending and borrowing. on the democratic side there has been a bit of a mixed reaction. i think most democrats have praised president obama for attempting to address deficits in the future. at the same time, some of the praise has been lukewarm and in fact he has also been targeted for some criticism by some members of his own party, the congressional black caucus chairman, emanuel cleaver, question why he was cutting programs particularly those for the disadvantaged at a time when we have got such high unemployment and such pain going

on in the country. >> now that the president has unveiled his vision for spending, when and how will congress work on crafting a budget for next year? >> the joke is that the president budget is dead on arrival when it gets to congress. there is no obligation to the house or the senate budget committees to really pay attention to anything he put out there so it is more of a talking point in more of a position. this budget committees will start getting to work fairly soon here starting to develop their budgets for fiscal 2012 which begins october 1 of this year and runs through september 30 of next year. those committees probably will mark up their bills, probably let republicans know what it is they want to do in march sometime and that process will move through april in a be as late as may. >> you mentioned that the president's budget is dead on arrival on capitol hill but are there areas of agreement between the president and house republicans that can serve as a starting point for negotiations?

>> certainly there are things that almost everybody agrees on. in fact i would say the most of the budget that is in place every year, the result of some sort of an agreement. obviously there is an agreement that there should be funding for defense in harm's way that there should be certain health programs funded, education programs. there is a debate about that sometimes but it is usually about what types of programs are undertaken by the government, what the role of the federal government is and what the levels of spending our within the construct. so there are actually a fair number of areas of agreement that they spent most of their time talking about the areas of disagreement because obviously they have little to discuss where they agree. >> the house is scheduled to begin the day tuesday on the spending proposal for the rest of the current fiscal year. why is congress to working on this year spending? >> congress failed to do a budget last year and in addition to that fail to do their annual appropriation bill which gives

money to the various departments and agencies and programs so what happens if they pass was called a short-term continuing resolution that would fund the government intermittently this year. that runs out march 4 so republicans are now cleaning up -- house republicans and senate democrats are cleaning up the work of last year's congress. to build a house republicans will bring to the floor would cut $60 billion from current levels for domestic discretionary spending, basically nondefense spending that gets done on an annual basis over the seven month period and there is going to be a lot of screaming and yelling and hooting and crying on the house floor as that happens but what is likely to happen is there'll be some sort of negotiation between the house in the senate and the president on a final product that doesn't look quite as austere or there is a possibility they could simply pass another of the stopgap measures to get the

government funded for sure period of time even shorter than they seven months remaining in the fiscal year. they are having to do last year's work now even as they work on this issue are. >> jonathan allen of politico, appreciate your time. >> take care. >> you are watching public affairs probe landing on c-span2.

>> when i was sworn in as president i pledge to cut the deficit in half by the end of my first term. the budget i'm proposing today meets that pledge. >> president obama sent congress a $3.7 trillion budget that would reduce the deficit by $1.1 trillion over the next 10 years. this week here the details from the demonstration including cabinet officials and watch reaction from house and senate members on line at the c-span video library. search, watch clip and share any time. does washington your way. the commission on wartime contracting continued its investigation on how u.s. tax dollars are spent in construction projects in afghanistan. witnesses include officials from several companies that have contracts in afghanistan. the bipartisan commission is expected to issue its final report on contracting issues in iraq and afghanistan to congress in july. this is two hours.

>> good morning. i am christopher shays, cochairman of the commission on wartime contracting in iraq and afghanistan. this is a joint statement, a shorter one, on behalf of my cochair michael thibault and my fellow commissioners, cochair of thibault and commissioners katherine schinasi and grant green could not be here with us today. the other commissioners at the day as our clarke kent ervin, robert henke charles tiefer and that believe doug zakheim will be here shortly. today's hearing is a continuation of our january 24 session on recurring problems in afghanistan -- afghan construction. we were looking into the planning management and execution in accountability and sustainability of contract construction projects inf afghanistan.

there are literally thousands os these projects ranging from schools and clinic's in afghan villages to power plants and training centers in afghan cities to barracks and facilities for u.s. and natoth troops. they are all important and theys are all involving billions of taxpayer dollars, most funnel to contractors for the department of defense and state or for international development. at our january 24th session, we heard from government folks, special inspector general for afghanistan reconstruction, aid, and witnesses from the army corp. of engineer, and the air force center for engineering and the environment. we were also supposed to hear from the witnesses who are back today, but we got so involved in the first two panels that there wasn't enough time left in the room reservation to do justice to our guests. we apologize for the attendance

of our third panel which is here today, and we thank you gentlemen for agreeing to talk with us and take our questions, and we thank you for not complaining for having to come back. our witness panel compromises construction contractors who carried out some major construction in afghanistan. michael, president, government, environment, and nuclear divisions, ch2m hill. charles -- sinar, executive vice president environmental inc, and also appearing is bruce mckaren, regional sughs for project services. that is u.s. aid piece partner for the school project. i will note the united nations

mr. mr. karen available today without the status, privileges, and immunities enjoyed by the u.n.. he is a u.n. official. again, gentlemen, thank you for your cooperation with the commission. another witness scheduled to speak on the 24th had prior commitments and couldn't join us today. his larry dewalker. we are making arrangement for him to appear in a future hearing. we have brief oral hearings of their testimony. a written testimony was entered into the record last month. we will also accept any updated versions they may provide. we ask that the witnesses submit within 15 business days responses to any questions for the record and any additional information they may offer. now, if the witnesses would

rise, i'll swear you in. raise your right hand. do you solemnly swear and affirm that the testimony you're about to give before this commission is the truth, the whole truth, and nothing but the truth? for the record our witnesses responded in the affirmative. mr. karen, please join us, and i thank you, and let the record show that as i've said they responded in the affirmative. i think we'll start with you mr. colby and your testimony. let me say you have 5 minutes given that you were having to come back. if you run two more minutes, we'll allow it to happen, and i will definitely stop you after 7, and we'll finish by 11:30 because i know you have commitments, and that you can count on. >> thank you. chairman shays, distinguished members of the commission, i'm

michael president of overseeing the division that executes our government contracts, and our work in iraq in afghanistan. on behalf of the 23,000 men and women, i'm pleased to participate in the discussion of wartime construction in iraq and afghanistan. i'll keep remarks short and ask my written statement be submitted for the record. it was my pleasure to meet both cochairs of the commission along with the commission staff in our corporate office in denver last june and participated in the commission hearing last july. ch2m hill has a long service to the united states government and works on behalf of the army, navy, air force, epa, fema. we are in support of the federal government. since 2004, ch2m hill provided support to the u.s. military first in iraq and then afghanistan. this support embodies our

corporate commitment to follow the dod clients in both peace and war. while we served numerous clients and provided the full range of construction services in iraq and afghanistan, the majority of our work results from three large contracts. first, an army corp. transatlantic contract from january 2004 until january 2009. second, from april 2006 until the present, ch2m hill also held an heavy engineering construction contract, and lastly since july 2009, we're a subcontractor under log cap 4. i understand that many from the commission visited afghanistan last august as reference in the previous panel discussions and many were briefed on a project in kabul. on december 7, my government facilities and infrastructure

group president met with general ted johnson, the kabul based cluster commander who is anxious to receive the last barracks being built for the client. they are scheduled for completion within the next two weeks. ch2m hill appreciates the work that this commission has done to ensure troops in iraq and afghanistan receive the support they need and that taxpayer dollars are spent wisely. we are committed to serving the facility, infrastructure, andly gist ticks needs to the wartime environment. we are dedicated to protecting the men and women who fight for our interests. with that, i'll answer any questions the commission may have and share lessons learned from our work in afghanistan. thank you. >> thank you. >> chairman shays and distinguished members of the

commission, thank you for our experience to share our reconstruction projects in afghanistan. my name is charles mouzannar and i work in environmental inc. amec is a focused supplier of energying and product management services for the world's natural resources, clean energy, environmental sectors. they maintain assets for its customers worldwide with sales of approximately $4 billion. they are operations in the americas and united kiang dome and work for customers from the arctic to os trail australia. they employee 23,000 and more than 4,000 employees in the united states.

the sales to the u.s. government for work performed in afghanistan were approximately $58 million. the commission has invited us to appear at this hearing to provide our perspective on recurring challenges relating to u.s. funded construction projects in afghanistan. some of the key challenges that we have encountered along with our recommendations for improvements are provided in our written statements. i want to briefly outline a few points we have presented. a clear and comprehensive scope of work, site surveys, and geotechnical reports are a prerequisite for preparing reliable proposals for a firm fixed price on construction contracts. faced with aggressive deadlines, it appears the government is using firm fixed price on contracts, competed and awarded on the basis of lowest price

possible when access is limited. the firm's method is effective when site conditions are known, conditions a stable, the supply chain is available, and the scope of work is reasonably defined. many of the projects currently needed across afghanistan do not conform to the above criteria, an we believe they could easily result in significant cost overruns, delays in contract performance, and the government's inability to achieve its mission on schedule and at the desired cost. we recommend that acquisition officials reconsider the use of cost contracts by best value selection criteria for projects when site conditions are unknown, security conditions are unstable, the supply chain is unavailable, or the scope of work is not well defined. amec follows a local approach to

delivering projects. we focus on planning through commissioning and has developed various designs that maximize the stainability of facilities and minimize operations and maintenance efforts required during the useful life of the facility. for project delivery, amec maximizes the use of afghan workers and engineers in the afghan foreign policy. since 2006, amec delivered prongs consistenting of a minimum of 25% of afghan workers supervised by amec staff. we are proud to surpassed 5 million man hours on the afghan national defense university project without a recordable heflt and casted incident while also building a local and sustainable work force. we have positive results by training afghan workers and

engineers, yet are challenged with balancing these goals against achieving contract schedule and cost requirements. we believe the government can achieve desired stainability goals for the afghan work force by setting aside projects that allow contractors time and funding to train and develop afghan workers and engineers. last, but not least, amec sees training as an integral part of training in afghanistan. they give training to maximize the effectiveness of the management team, build manageable relationships with the stake holders and supply chain, and avoid incidents. we believe this approach is critical for government and contract and staff alike to successfully deliver projects in afghanistan. in closing, amec is proud and thankful for the opportunity to contribute to the reconstruction of the country of afghanistan. our ability to deliver projects in afghanistan during the

current challenging circumstances reflects the contributions of all stake holders including the afghan end users, u.s. government, and the amec team supported by our afghan engineers and workers. thank you for the opportunity to brief the commission on amec's perspective on successfully delivering reconstruction projects in afghanistan and i'll be happy to answer any questions you may have. >> thank you. mr. van dyke. >> good morning -- >> is your mic on, sir? it's the mistake we all make. >> that's better. i'm bill van dyke, a wholly owned subsidiary of black and veatch. i thank the mission for this opportunity to discuss my company's efforts in support of u.s.' mission in afghanistan. our corporation is a global

provider of power, water, communications, and other infrastructure. as part of the worldwide reach, the company proudly supported u.s. government projects for more than 90 years. since august 2006 as a partner in the group black and veatch venture, we assisted the client in develops essential energy infrastructure in order to improve the economy and quality of life for the people of afghanistan. from 2006 until today, total megawatts of power generation available for afghanistan have more than doubled, and us aid projects contributed to 90% of that increase. in december 2010, us-aid awarded them a separate contract for the

helmond project for distribution in the south for the support of u.s. government policy. working in support of the mission to increase energy delivery to afghan's people and with afghan government organizations, black and veatch's dedicated professionals has successes. we provided advice to the government in negotiating power agreements with other countries. we developed a successful plan in just 35 days that enabled afghanistan utility to transmit 70 megawatts of imported power to the northeast to a complex network of never before used existing facilities. we constructed the 105 megawatt power plant at a greenfield site northeast of kabul that provides the power for kabul and ultimately provides 100 jobs.

we trained kandahar workers to overhaul their generating engines rather than shipping them out of the country. this enhanced the power program. projects currently underway enhances their ability to better manage loads from domestic hydropower, fossil fuel, and generation forces. in achieving successes, we've had challenges. in april 2010, our joint ventures living quarters in kandahar was destroyed by an improvised explosion device. we had to evacwase our forces, afghan staff trained by black and veatch personnel continued to operate without interruption for weeks, a proven success in training for sustainable operations. in building the power plant, we had issues with the power

gerkses we were unable to resolve. we addressed this issue in two ways. first of all, we figured out how to transmit power from pakistan to kabul to deliver power in january 2009, and that was far earlier than originally thought possible. second, black and veatch immediately stepped in to performing the remaining work on the plant delivering a full power for the winter 2009 to 2010 ahead of the scheduled at the time of the subcontract termination. u.s.-aid turned over ownership of the plant in june 2010. the plant met all asks since it was -- requests since it was commissioned and we work 2.7 million person hours in building the facility without a serious safety incident. the cost of taking the project from an empty green field site to operation was by the u.s.

army corp. engineers. it was discussed before the commission in january. the costs in 2008 after all major subcontract work was awarded was $260 million as noted in the report. the cost is precisely within the range of black & veatch has worked hard to ensure that safety and the security of all who work on usaid projects. we have ongoing efforts underway with usaid with afghan government agencies and with our contractors to determine how we

will ensure the security of workers necessary to complete the important projects as we move forward to provide power in southern afghanistan in support of u.s. counterinsurgency policies. we are proud to support usaid's efforts which have been improve the availability of electrical power to hundreds of thousands of afghans and will benefit their lives for many years to come. we never forget that are professional, on the ground working in a hazardous environment and those supporting them are the ones who deliver these results. thank you for the opportunity to appear before you today. i will be pleased to answer any questions on these or any other issues. >> thank you mr. vandyke. mr. mccarron thank you for being here. >> chairman shays and members of the commission i am brucei' mccarron currently director for north america for the united nations office arctic services unops and formerly december 2010 o

brief the commission on unops work in afghanistan. we were established by the u.n. national assembly with a mission to implement peace building, humanitarian operations. we deliver approximately $1 billion through project implementation annually and spends $60 million administering it. it's a fee basis and has no core funding from the united nations. during periods of conflict or crisis, unops has a physical presence on the ground and engages governments and local communities. the services made the highest international standards. turning to afghanistan, unops had a delivery of infrastructure and other projects to the afghan people. it's funded by the afghan government and international community. one is the gazi boy school

project. presently under construction, the project is funded by the u.s. government, u.s.-aid, and represents the best standards of construction in afghanistan. designed to meet the california building codes as well as the demand of a several thousand students, this is the best in the portfolio. after the problems in contracting, despite the real security related limitations, it's hard to implement projects in afghanistan. this is not meant to down play the security risk on the delivery of capital infrastructure programs. side preparation is key within any construction project, but in afghanistan, there's the additional complexity of land ownership, ideal sites, and the remanents of explosives from war. there's a range from very poor to very good.

the situation makes construction management more essential if the investment made by the international community is to be effective. security in afghanistan is a major consideration for unops. they have been impacted by threats and intimidation from the various antigovernment and criminal elements operating across the country. unops found through long and sometimes bitter experience that infrastructure is not effectively delivered in afghanistan without the serious social inclusion effort working in parallel as well as the provision of security forces. unops does not at present use international security providers in afghanistan. we found that when allocate the appropriate resources, the national security forces and the minister of interior can be effective. they recently visited the project in kabul. that site is protected by interior on special assignment to unops.

they have a close relationship with the u.n. government team and the ministries of finance, public works, rural rehabilitation and development and agriculture livestock. at present, over 80% of the project work is on agreements with the afghan government while the remainder is by lateral with australia, italy, sweden, and the usa. the close relationships between the unops and the afghan governments mean they are thoroughly involved in capacity building. we invested in the necessary training and systems to ensure the best practice is observed in infrastructure, project management. in wartime contracting, operational imperatives arrive that load to cutting corners. we have ensured we have the procedures in place to respond to project demands in an

accountable manner. unpos observed for some years the investment in afghanistan has not included the concept of maintainability. unops design teams composed of local engineers ensures this is appropriate. recent experience emphasizes the need for safe buildings. the ghazi boy school that the commission soon visited is an example of safe high-quality maintainable and appropriate construction. this was not the case at the start of the project. we had to remove the initial contractor, not an ideal situation, but it led to a new contractedder to meet the deadlines on time. i hope my written statement has shown wartime construction in afghanistan has contract management to locations of

specific challenges like security threats. the international's ongoing investment in the area indicatings the important contribution to peace building, humanitarian, and development objectives provided by infrastructure development. if also demonstrates that results can be achieved even in the most challenging environments. thank you again for the opportunity to brief the commission on this important subject, and i stand ready to answer any questions. >> thank you. let me tell you the order we'll proceed. we'll start with commissioner ervin, and then commission ehank -- henke and then myself. >> thank you, mr. chairman. i want to echo the chairman's comments at the beginning by thanking all four of you for being at the first hearing and returning for this one. we know how busy everyone is and thank you for accommodating our

schedule. as you know. mr. van dyke, i want to spend the bulk of my time talking with you on the issue. just to get the facts on the record for those not present at the last hearing, there was a $266 million sole source contract awarded to black and veatch to provide power to kandahar, the real heart of the insurgency, and this was done in december of 2010 against a backdrop of having complained a number of times about your performance under the 2006 contract to provide power to kabul that the contract originally was projected to cost $100 million that ballooned to $300 million, and there were overruns in terms of time. the project was a year behind schedule. now, it is not fair, it seems to me, to blip black and veatch to

issue the sole source contract. i think it is fair, though, whether you have any better justification for it than we were provided last time. we spent time talking about this november 29, 2010 justification that aid prepared for that kandahar contract, and there's two terms used in it to justify it. first, they say that you were uniquely qualified to perform this work, and then the term uniquely positioned is used. if you really read this document as i'm sure you have, it seems to me, really the ultimate reason why black and veatch was chosessen is because you were uniquely positioned meaning you were the only contractor on site. it also says that to get other contractors in would have taken a tremendous amount of time even though, again, you were sited just months earlier for being a year behind schedule with regard to kabul.

>> commissioner ervin, there was a lot in that preamble. just one correction, the award was to black and veatch and not the joint venture, and it was to us directly. i think that -- i haven't seen the justification that our client wrote, but i believe we were both qualified and positioned. one thing that is not clear to the commission is that we had done an expensive study of power needs including projects necessary in the south for five provinces that included capped hair and helmand. we had a good understanding of the work up front, and that's important to know. the other thing that's important is you talked about past issues by u.s.-aid. you heard what we did sin that time, and i remember i was asked at the last hearing whether people were using evaluations of their contractors, and our

latest evaluation is very, very positive, and i'd like to read just one comment from it. the execution of the power plant resulted in a high quality state of the art pour plant capable of meeting all requirements and providing reliable power for 6,000 afghan citizens for years to come. this was given to us -- the date that we received it was 2010 in may. >> what's the date of it? you received it in may of 2010, but what's the date of the document? >> it reports on 2008 to 2009. >> we'd like a copy of that. >> i'll get you a copy of that. >> thank you. now, you say you did a number of things between march 20, 2009, the last document that we have from aid complaining about your performance in kabul. between then in december 2010 when the kandahar plant contract was awarded to you, can you

describe in document what improvements and performance you're referring to? >> some are in my original statement, so i'll go back to them. if you recall in the report, one the short term reasons for building the plant was fear that you couldn't get power through the neap -- nep power system, we were asked by the afghan government through u.s.-aid how can we get power? the creative engineers figured out how to do it in 35 days. .. then why wasn't that mentioned in the a.i.d. justification for the kandahar work? >> i would -- you would have to ask mr. thier that question.

the second thing we did was when we had an issue with the contract we stepped in and solve a problem by getting the contract build ourselves. the subcontract work, we don't subcontract responsibility. we took responsibility of the work time. we have done a number of things you troubled we haven't heard about but some are mentioned in our sigar report. one of things that is mentioned in the sigar report is the effect of this on energy. we are the advisers for usaid. >> my time is limited. let me stop you there.me do you have any reason as to why the work could not have been brook and up into discrete parts?br why was it necessary to sole source the entire contract? >> the fact is that is exactly what exactly what usaid has asked us to do. we are a power generating company and that's what we do for living, and we're going to break up the work into parts. we're going to competitively did it and award did some competition. >> isn't that a function of the government ought to perform rather than the contractor bidding out the work? >> i think the major question is

does the government have the ability to do the technical detail of dividing up technical work scope like a whole energy distribution transmission, generation system for the south. that's what we were asked to do. >> let me ask you about security. you talk in your statement about having the single biggest challenge that you have to get the work done with regard to kandahar. we understand that your security firm is blue heckel, is that right? >> that's the security firm we have at the tarakhil power plant right and which is the only job would have. tarakhil not mentioned anywhere here, we are providing training for operations and maintenance today, and so the only direct contractor we have is blue hackle. we have no contractors speedy's i understand that. spent we have no contractors. >> let's talk about the blue hackle contractor that you had at the kabul plant. we understand that the afghan government has called the

contractor the major offender. is that right? can you give us any details as to what's behind the afghan government judgment? >> we're aware that there have been discussions with blue hackle and we've seen the press releases that relate to those things. blue hackle is to license to do work and provide license -- provide services at this point. so we are using them. we understand usaid is -- >> yes. my time is limited. if any and the afghan government determines that blue hackle can no longer perform this function, what are your plans to provide additional -- >> we are working with usaid, the ministry with interior in afghanistan, with our own working contractors, people doing the work to forget what are path forward is on security across the board. we do not have firm answers yet because i think this commission needs to understand is the security issues in afghanistan are evolving daily.

i think dr. shah has been there this week. i know mr. thier is on his way back today. and we will talk with him about what they have learned, but there are not yet solution spent final question, the fact you don't have the contractor right now with regard to the kandahar plant, that surely poses some threat to the ability to perform with eye contact? >> we have some time because we are getting the equipment and subcontractors in place. we have some time but there's a window within which things need to be worked through. >> and what is the window? >> i would say the next six to eight weeks. >> thank you very much. >> thank you. dr. zakheim. >> thanks very much, mr. chairman. and thank you all for being here. i've got a few questions as well, a few from where my colleague left off. the first, mr. mccarron, did i hear you correctly that didn't think security was enough of a bar to your succeeding at what

you've been asked to do? [inaudible] >> h.r. mic on? >> it is now. i was trying to indicate the security -- we can still chase right things in afghanistan as long as they are the proper risk analysis and make the proper measures to address the security? >> you believe you have, i take it? >> it's very difficult to say. at the moment we seem to have a very good record in the last two and a half years while i was director of the operations center. we just a few incidents, and i'm very thankful for that. but anytime things can go wrong. i think even today it was a big ied explosion. so you never know when something is going to go wrong. >> i take it all of you gentlemen support the idea of

.. - just hold on one second. thank you for letting us know that. could we have staff sit in the back of the room, and if you can't hear, please let us know so the general audience can. i'll try again. is that better? >> can you hear the witnesses or the issue not -- >> canyon in the back now? still not. >> go for a. >> i take it you all support the idea of moving to cost-plus contract because of the security situation, is that correct? it is not. does anybody disagree with that? are you comfortable with the term fixed price? >> we actually did out subcontractors worked on a price basis. we do a lot of -- mr. mouzannar

mentioned which is we try to specify the work scope that is biddable with no conditions so that it can be bid. in terms of subcontracting we do go from first -- fixed contracting. >> but for your own contracts you prefer what? >> cost-plus is appropriate. >> let me ask you this. given that the security situation has pretty much been the same since about 2005, and you've had overruns, but the security situation is no better. why do you continue to bid on fixed-price contracts? why did you bid on the 2010 contract? you're not going to lose money. unite in the business to lose money. supposed the government complied with all its requirements, given the secret he situation it would be your neck, wouldn't? so why do you being?

>> the contract we have is a cost-plus contract. and i guess -- >> you wouldn't did if it was fixed-price? >> not on this particular work, no. >> okay. let me ask you this. the report of the sigar folks point out a number of things that were not a ids responsibility of, but yours are taken with subcontractors. you have ever had trouble doing things in time. do you have the same situation today? are all your subs lined up ?-que?-quex hasn't been any delays at all since you signed on nearly a year now and? >> actually, the contract was signed on december 4 of 2010. so we have a couple of months, we have projects out for bid. we are getting back speculative anybody lined up and? >> yet, we have one contract ready to order.

>> mr. mccarron, do you see yourself as a contractor century century have to raise your own money? >> interesting question. people have pondered over that for some time. no, we don't. unops, it has an implementation mandate from the u.n., and it doesn't have a political policy mandate. >> neither does any contractor i've ever heard. >> and we do approach things in a business like manner. we have to be efficient. we have to be very tight on our margins, and we have to perform. >> every contractor does that as well, right? >> but we don't have -- spent apart from that. >> apart from that we are a not-for-profit organization. >> but not for profits also have contracts, correct and they are

contractors, greg? >> that's correct. we are supervised -- >> who checks your books? >> the executive board of unops, as well as the united nations board. speaks of the audit all your books? >> they do. >> and your accountable to the? >> yes, for the last two years. >> i've got a couple of minutes left. let me ask mr. mouzannar, when you hire a sub to provide security, how do you go about that? >> ensure. what we do, typically we have our internal security department here they might be a global contractor. we are practically -- we have a regimented internal, how do we vet and audit internally the procurement process.

so in essence first we go through the typical financial business requirements but we physically go and visit with the locations and make sure that the contract has the appropriate systems and procedures that meet our requirements. >> that's a.i.d. ever come out and see your people in the feel? >> we don't work for a.i.d. >> black impeach, sorry. today, and see your people in the feel? >> yes. >> how often spirit it depends on the project. they been up to visit the projects where we're doing the iraqi power competition project so they come as necessary. >> what you define as necessary? >> at the tarakhil plant they were out their weekly as we're finishing to plant. i think they been up to the reactive our company probably

three or four times in the last six months. i would have to check. >> sigar says they provide quality control. >> i think if you carefully read cigars report, he talked about quality assurance, but the main issue was on an indication. been no allegation that tarakhil power plant had any quality issues but it is a high quality plant. >> i guess i'm puzzled with these folks coming out every week, how come there's no indication? >> i think the communication improved a lot after january 2009. spirit that maybe but i still don't understand how there can be no indication prior to that. can you explain it to me. >> i don't think there was no indication. i think we improved communication. by the time we told the client that we would completed in 2009, in fact we -- >> you mean a year late? >> after we had the issue with the client.

we did complete it late, but we did get our from the northern countries, uzbekistan, much earlier than anybody predicted and that was equivalent to the amount of power that would've been from the tarakhil power plant. >> thank you. my time is up. >> professor tiefer. >> thank you, mr. chairman. although chairman thibault could not be here today, i just want to acknowledge that like our previous panel on construction, i draw on his valuable leadership. he went out there. he saw these projects for himself. he was even correcting witnesses who may not even have seen those projects as much as he had seen them. so i can believe and follow his leadership. i want to build on commissioner ervin's recap, which was at the last hearing, as he said. we question aig about its sole-sourcing of the kandahar

power initiative to black & veatch. this past december. at the last hearing sigar said it had an investigation of the kabul power plant coming, and what i understand to be a preliminary inquiry of the kandahar power award. and that i have questions about prior projects because if that project had been completed, black & veatch might have problems in the competition due to a history of unsatisfactory past performance here so, let me start with one of the energy projects that interests me. which was, mr. van, about your unsatisfactory past performance on aids project to assess a natural gas deal. for those trying to follow this,

a.i.d. formally rated you after a year of the project over all as unsatisfactory, which is the rate on a scale from zero to five, and they rated it zero. i come in particular, they said my understanding is the position was that over all the contractor has to date that an unsatisfactory job in getting the project started. delays were due to unsatisfactory planning, about various things, and that the contractor missed every milestone date in its revised workplan. lack of coordination between offices also added to delays. my question is, do you at least acknowledge that you did get that overall unsatisfactory

rating that would count against you in competition for new projects and kandahar? >> we did get a rating partly to the project. the client later terminate the contract for its own convenience and we are in the process of settling that oath with usaid and subcontractor. i think the view of the project is a little different today than it was and the time to read that. if you look at the sigar report in january 2010. >> okay. now let's go on -- thank you and i appreciate the brief answer. let's take the kabul power plant where you were given in the course of its construction, and you discuss back and forth an argument you have about why your performance wasn't why aids appear but a.i.d. rated you formally poor and unsatisfacto unsatisfactory. it had four ratings and as i

understand, you got one unsatisfactory, to force, and one fair. i have to say i teach at the university of baltimore moscow and i have a diverse class there. but even the worst student in my class, when you rate on a scale from zero to five that's better than getting zero, two ones, and one-2. the key here was scheduled that they thought that the delays in the schedule of the plan could be attributed to the following performance deficiencies of the prime contractor, including again that the contractor has missed several scheduled milestones. did they give you ratings like that, and was a critical in that way of your missing milestones? >> they gave us those ratings partway through the project. i read to you and i were read against their latest one which is the execution of the

powerpoint have resulted in a high quality state-of-the-art power plant capable of meeting all technical requirements and able to provide reliable power for up to 600,000 afghan citizens for many years to come. i think the other thing you need to realize is, as i said in my statement, when we had issues with a subcontractor we stepped up and solve the problem and we did it two ways. one was to get power from uzbekistan much earlier than anybody got to kabul. >> i understand. spent and the second issue was that we did step in and finish the plant faster speed and i understand after that rating, yes. let me ask because commissioner ervin focus well on the fact that the jna for sole-sourcing is said that you were -- sole-sourcing the kandahar power initiative that you are uniquely positioned. i want to start -- this had two parts, and i discussed at the last panel with mr. thier, the

a.i.d. chief, and he agreed, you knows it was possible to separate into two halves, 1100 miles away, diesel plant in kandahar. what i want to ask about first is the damn part. although there have been previous work -- the dam part. in 2009, louis berger completed rehabilitation of the second of two working turbines at the power plant. the work was not done primarily by you at the power plant, but louis berger. isn't that right, in fact, you have said you don't want to take responsibility for the problems of your partner at that plant. haven't you said that you deny you ate any responsibility for

the problems with the kajaki dam because you certainly berger handled that part of a joint contract? >> it's a long question, mr. tiefer. let me clarify one thing. 6% of the total cost of the kandahar project is the kajaki dam. 6% of the major part of the work that has to be done in kandahar -- excuse me, kajaki dam, nobody else has done that were. i told you at the beginning, we've done an extensive study of the power demands, to aid the projects necessary in the south. there are 11 separate projects in the recently awarded contract. we did not do the work on the dam that was done prior, but we do to hydropower work. we are a power company. >> i think you did not do the work that was done prior? >> that's correct. >> you are not uniquely positioned to follow up that were. my time is almost expired.

>> mr. van dyke, he referred to a later review. what is the date of that? >> it's the one we received -- i told you we received it in me. it's 2008-nine. >> can you make that available to our staff? was there anything in that review that was not couple of entry? >> they acknowledge that early on in the project we had difficulties but we have stepped up and solve for them. so yes, they did talk about them spend back if you would allow one of our staff to take that, would like to -- >> i can e-mail it to you. >> no know. we want to make a reference to it. if one of the staff would get that document, please. >> i would just like to see it now if possible. >> can i just interrupt? >> as long as i have a copy back you can ask me any question. >> one seconds. we're going to make a copy for the commission members right now if we would. and they will get it right back to you. will not ask any question about and to get a copy back. >> mr. chairman, you are

referring to the evaluation, cracked? >> no. that was 2008-9. >> that was the species referring to an earlier one. >> this is the one -- >> yes. >> thank you. you will get a copy back. >> okay. >> mr. hanky, please. >> i would like to ask each of you some questions about security. mr. mckelvy, in your statement you say security risk is our first concern and along with safety and remains our primary concern throughout projects life. mr. mouzannar, you talk about access and you can't get to do site surveys and tell they are secure. and unexploded ordnance in getting a progress. mr. van dyke, you clearly state that your largest single

challenge is the security environment in afghanistan. and mr. mccarron you say in your statement that your staff have been directly impacted by abductions, ieds, threats and intimidation from various anti-government and criminal elements in the country. so i would like to ask each of you just were simple yes or no answer to the question of come is security your number one, your foremost challenge and operating in afghanistan? >> yes. >> yes. >> yes. >> yes. >> with that as background, how would you assess, how do you assess as a company trying to execute contracts, how do you assess the extent of your reliance on your security provision, your security contractors or in your case, mr. mccarron, afghan forces that torture projects? if you had to assess your extent of reliance on a scale from one

to five, one being not reliant if there was no security tomorrow, my projects would continue unimpeded, 25, heavily dependent, extremely reliant on that security. without that security it would come to a stop. just give me a numerical assessment of your extent of reliance and discuss for a few seconds the impact of that on your company. transport? >> i would say it is probably a format. for ch2m hill he'll reconsider the security of our people. there's many opportunities that we will not pursue if we deem them to dangers. so we really look to come in this case, the professional security companies to provide security for us. and should they become not available then we would reassess our interest and working in afghanistan. >> does that mean one of the options would be leaving?

>> that's correct. >> mr. mouzannar? >> i would echo the same comment made by mr. mckelvy, except that -- >> numerically? >> i would say more of a fight for us except projects out there, one which you would refer to as within the wire and others outside the why. obviously, within the wire such as at bagram, it would be a less of an issue, especially with fixed wing flights going in and out of these bases. so for the outside of the wire, a definite five. about a three for others. >> okay. think. you are drawing a distinction between whether you're behind a fence with u.s. forces or whether you're outside the wire, is that your distinction? >> none of our work is inside the wire. so i would say we're in a fortified range. security is very important to us. the situation is changing so weird we are working on solving

the problems but our first requirement is keeping our people safe. >> thank you. mr. mccarron? >> similarly with unops, how i figure as well, for the five. and, of course, priority is the case to keep people safe. we operate umbrella under the united nation secured also. so it's not just unops decided on its contractors. it's the whole of the united nations that we have to listen to in terms of safety and security and where we can put our people. that does complicate where we can send our staff are. >> with the understanding that security is your number one challenge, but you are all extremely reliant on security, how do you as a company, the three of you are contracting subcontracting for that security, how do you as a company ensure the quality of your private security? what vetting process if you go through, to what standards do you look?

to your contractors have, your security contractors, do they have certain professional standards that you hold into? how do you ensure the quality, transport? >> thank you. similar to what we said before we have an internal group that does an assessment of the companies that we had to choose from. in the case of afghanistan, we have three different companies that we use across the country based on what our investigation has found, their strengths are regionally. >> what are the company's? >> we use all of, blue hackle and cohort. what we found when we first went into the country is we use companies that were already in use in the area and that we got a good feedback from others as well as the u.s. government who uses the same countries to a certain extent from time to time. so they were prequalified in that respect, and they continue to serve us well over the last three years. >> to your companies subscribe to what people refer to as the

swish initiatives for private security? >> i'm not familiar with the swish and it is but i'm sure our security folks are. >> as i indicated earlier we have a very regimented security process that goes through prequalification, and that is only receiving documents but also on the spot looking at facilities. we ought all the way to the mechanic that is changing the tire, making sure they have processes and systems and very regimented reporting that we would get. we have an internal security, corporate security group that does all of that, and keeps close tabs on that. the other piece of the puzzle is when we go to different regions, we look at establishing companies that are there from our prequalified a list of companies because of the knowledge on the ground in being able to get. >> thank you. mr. van dyke. >> we have a corporate security operation that helps us figure out what we need to do.

we have individuals in afghanistan who have security background to help us also if i were contractors. >> black & veatch employee's? >> yes. we routinely keep in touch with the region secure the officer with what's going on in the area. and we evaluate contractors based on past expense and past practice. >> and with unops we have an in house security team of some internationals but mostly afghans who know the security environment. we have close liaison with the minister of interior. .. standards and the rigor. one of your subcontractors is g4s, the british firm. the company of armoured group of

north america. they were sited last week in the press and, i know, it's it's in the afghan system. they were sited as a major offender. they were sited more guards than allowed, kept bullet proof vehicles, and used off base for nondiplomatic purposes. how do your system of quality assurance not catch that? or did it catch that? >> actually it did. in essence the first we came across the information, we contacted their senior management. >> you came across the -- the press report? >> obviously in terms -- they have two different. >> you came across what information? >> well, we had obviously seen -- >> okay. so you saw it in the press and then responded. >> correct. >> okay. you found none of it. your quality assurance found none of it before -- >> well, again >> is that right?

>> correct. >> what did you do? >> we tried to find out. in the press, you get all kinds of reports. as far as the information, at that point, we had the change in security subcontractor from the one site that they are operating at with a different company. >> you said you fired finish >> we did not. it was almost a request from their part because there were still trying to resolve the issues with presidential decree. so in essence, it was a request that they came back for, you know, to try to. >> okay. you told me your system checks down to the guy that changes the tires. >> sure. >> you found none of these. your systems checking found none of the discrepancies before the press? >> my understanding that different groups that operate in afghanistan for g4s1 is in

support of the u.s. government. >> right. who operates for you? >> we have a whole group within g4s that we interact. >> i'm over my time. one brief last question for each of you. just yes or no. do your private security providers, are they on fixed price? lowest price acceptable contracts? >> yes. >> best value selection. >> best value. not lppa. >> no. >> yours? >> our are best value. there are minimum requirements. >> okay. >> yes. >> okay. sir? >> doesn't apply. we provide meal allowances for the guards. >> mr. mouzannar, you are why fixed price? >> they are. we provide the scope of work. we develop the scope of work and provide unit pricing for dividing the resources. >> thank you. my time has expired. >> gentleman, again, thank you for being here. we are going to be issued our second interim report next week. and it's focused on legislative

changes, some real tour changes maybe an executive order or two. we were -- we are wrestling with a lot of issues that i'm sure you wrestle with as contractors. first off, the combination of participating or basically the military, government civil servant contractors. then you have, obviously, contractors who are domestic to the united states and overseas. we wrestle with the fact that we'd like to know what that balance is. and we wrestle with the fact that nearly half as many military that we have in equal number of contractors. we started out thinking that we just needed to oversee contractors better and manage them better. and that it was a management issue. then we began to realize if we couldn't properly manage them, maybe we shouldn't do it. and it gets into the whole issue

of waste, fraud, and abuse. you have waste in projects badly cone. but you have waste in projects that are not sustainable, not culturally appropriate, and so on. we've seen a significant number of projects that we believe are not sustainable, and you wonder culturally absurd. and then we think we are building, mr. mccarron, to u.s. sanders. why would we do that? build an atrium in the school building. income the cost, heating and cooling when we have to basically bring in the diesel fuel and so on and so forth. when you see something that appears in the surface to be so stupid, why would we do it? and what is the obligation of is contractor when you are asked by the government to do it? >> mr. chairman, the atrium that you are refer to is not an

atrium. i provided a supplementary. >> let me back up. forget the atrium. u.s. standards, why? >> during the course of the project, there were two major earthquakes. one in china and one in afghanistan. the international community, including usaid, we don't want to see the buildings that we build kill children. usaid decided to impose the seismic design conditions to the california building code on the structure. that then determined the site limitations, three story building. that then determined -- >> why three-story building? why not one story? why three stories? why would we do that? :ild a three-story building? >> yes, we do. it's a reinforced concrete

structure. and we're servicing over 5,000 students and on a limited site. the ghazi school is hoe candidated within -- located within a short distance of the parliament, the old part of the city. so the available land was -- >> why a school for 5,000 students? >> that's the number of children that are being serviced at the moment. >> why not two schools, why not three? i'm just trying to understand why we would build buildings like this that then have huge energy costs, etc. so, i mean, isn't there a part of you that says maybe that wasn't the way to go? you're going to build what you're paid to build, but what we're trying to do is wrestle with, what is the role of a contractor when we are doing things that, you know, are so different than what's there? what is the role of the contractor? mr. mckelvey, what is the role of the contractor? >> i think we have the

responsibility to point out issues that are not culturally appropriate through the process of construction. when you look back on our experience in afghanistan, certainly several years ago there was quite a bit of united states standard being put into projects that, perhaps, was not applicable, i think was mentioned on the last panel. >> let me go through this a little more quickly. what is the rolesome. >> well, our role is to bring in design the engineering to try to min nice poise the instances where you need the very extensive operation and maintenance. it's keeping it basic, keeping it simple. that's our rule. >> keeping it basic, keeping it similar l. mr. van ciek? -- van dyke? >> i would add that it's also our job to operate with the training. >> mr. mckelvey, is there an instance when you had a conflict with what you were being asked to do because you thought it was

culturally insensitive, not sustainable? any examples you can share with us? >> there's been examples where we installed on an international building code and we've been asked to change to the other codes. >> so you did it? >> that's correct. >> so there's nothing, you're not given a document that allows you to put a protest in or at least be on record as saying this does not make sense? >> no, there's dialogue with the client, dialogue with the team that we feel -- >> how do you document it? if i were a contractor and i was being asked to do something i thought didn't make sense, i would at least want some documentation. >> there's documentation in correspondence. >> would you give us any documentation where you've actually said this doesn't make sense? >> we'll provide that for you. >> thank you very much. i'll ask you the same question.

>> same situation. i think the work that we're doing in afghanistan predominantly is with afcee. there's a lot of that communication. and beyond the client/contractor communication, we periodically get together as contractors and share lessons learned. actually there's some good case studies that we'd be happy to share how the contracting community worked with afcee, come back with some standard designs. >> i'd like an example where maybe you have objected to something being done. you know, whether you did it or not, once you've gone on record, you're going to do it. but i'd like an example of it. >> i meant more of an example of a positive situation where all together came in. i would have to research to see if there were instances where we came back and said, no, it doesn't make sense. >> mr. van dyke? >> i can think of two recommendations for change. one was the one i mentioned in my statement where engines in kandahar were being shipped out

for overhaul and we trained them to overhaul them themselves. the second is the issue with the kabul plant where we recommended if you're going to have the capability, wait for a while to use it until you get people trained on operating a diesel plant. and i could go into why as you want the details. >> thank you. >> i'd like to, perhaps, propose the kabul women's university -- sorry, kabul university women's dormitory as an example of where appropriate policy has been put in place and that the building was not only refurbished, but the infrastructure was established, the training, the personnel to insure that the facility was looked after and maintained, that students were enrolled and seen through to their graduation. so it was fully working before it was handed over, so the ministry of higher education had the capacity to keep it going. too often we build nice, shiny

buildings and hand them over -- >> the sustainability is appreciated, but i just wanted to ask do you have any example of where you were asked to do something that you thought was wasteful or inappropriate and, therefore, went on record as saying we shouldn't do this? >> not so far. >> okay. well, what's a little unsettling about your answers is that we know there are a number, and the fact that somehow you're not encouraged to do that and wouldn't, you know, want to be on record documented we didn't want to do this, this and this, i would have found a all littlee encouraging. going to -- >> thank you, mr. chairman. mr. van dyke, thank you for making this document available to us. it is an evaluation that -- i can't find a date here, but it appears it had to have been done sometime after 8/31/2009 because that's the final completion date of the kabul project.

and as you say, it does give an overall rating of good to black & veatch and commends you for the work you did. i would just note for the record, though, that it's not a bouquet. the two issues that were highlighted earlier, cost overruns and time delays are noted here. the rating was given a two, a fair. and it's interesting what it says here -- >> can i interrupt a second? we're all going to be taking on eight-minute questions, so you may start over again. >> thank you. since your cost records and documentation was very good and complete in line with requirements and good cost control practices, so you were given kudos for keeping record properly. it goes on to say, however, the project budget escalated substantially from original estimates, that's the 100 million to 300 million or whether or notes. >> to the initial estimates were

in the 40-240-290 range. >> [inaudible] >> 2-300. it's actually a little under that, but that's what the cost estimate was. so it did go up, and that was a result of the subcontract issue i talked about. that is the subject of a dispute resolution, and we've been asked not to talk about it further until the dispute is resolved. >> even asked by a.i.d.? >> no, no. i sent a note to you, maybe you haven't seen it. we have a dispute that is being resolved before the international chamber of commerce arbitration panel, they've asked both parties motto talk publicly about the issue before it's resolved. >> i look forward to following up on that. >> with by the way, nobody would be happier than i to talk more about that, but i do need to respect what the arbitration tribunal found.

>> i appreciate that. we'll talk to the panel about that. it also notes, of course, the timeliness issue. >> yes. >> you've been very transparent and forthcoming, and i appreciate that. in that spirit, are there other -- presumably there are -- are this other documents; letters, memos, etc., from a.i.d. to black & veatch between the last communication that we had, march 2009, and december 2010 when the kandahar plant was -- other than -- >> this is the only evaluation we received since the one that you had. >> do you have any other communications other than evaluations -- letters, memos, e-mails, anything? >> i'm sure we have thousands of letters and e-mails. we provide them with daily and weekly reports. >> would you be willing to make a representative sample of those documents available? >> i guess i could talk to your staff about what would be representative. >> do you have any internal audits? are you done any -- have you

done any internal audits of the kabul plant? >> not specifically the kabul plant. >> do any of those audits cover the kabul plant? >> no, they did not. >> so you haven't done any internal assessments of the kabul plant? i find that hard to believe. >> no. >> okay. finally, i was interested in your agreement that the preference for black & veatch would be cost-plus contracts, but you say that you use firm-fixed contracts for your subcontracting. why the difference there? >> well, i think the difference is in the work scope. you're asked -- we are asked to go figure out how to get distribution, transmission and dollar generation -- >> all right, let me stop you there. >> yeah. >> is the government -- [inaudible] would you prefer to have firm-fixed contracts? >> if many musen art laid out some requirements, you can get

adequately known conditions. that would be something we would consider. >> but not pledge to? >> something we'd consider. i've told you all very honestly that the biggest problem we face is security in afghanistan, and that's an issue that has to be addressed. >> both of you in your testimony, in your written testimony, your oral testimony, you've laid out to me some really common sense call things that would make life for contractors easier. thing like making sure the ordnance is removed beforehand, giving you access to topographic reports, taking cultural practices into consideration, etc. presumably, you two, your staffs, have raised these issues with the appropriate people in the united states government, right? and if so, what's the answer to that? why do we continue to do this? following the line of the chairman's questions. >> i think there has been improvement over time. when you draw the distinct between when we with all, together with afcee, for example, started doing work in

afghanistan, there's been a great improvement since then. there's still room for improvement with respect to consistency of standards that we're asked to build to and design to across the life cycle of the project, but there has been measurable improvement. >> i agree with that. one thing i'd like to add is, also, i think these types of common sense measures happen more and more on idiqs or framework contracts where an agency would work and interact with contractors. i think some of the issues, is where there are one-off contracts that are procured outside these idiys. -- idiqs. especially there are some projects that come up as urgent or mission critical where there is no time to conduct any of these types of analyses. and i think the temptation would be to just get them out. and i think this is something that, hopefully, the commission and others would look into, is

what are these instances where projects were just let out on a lump sum without that, you know, all of the common sense issue. and then, also, the linkage between these actions, the way it afejts -- effects the supply chain and subcontractors if these things happen and the contractors fail, what is the effect on the community. >> thank you. and finally let me ask you a couple questions about security. we understand security for you is provided by a company called g4? >> that's one of the units. olive group is the current company that is helping us out. >> with so you no longer use g4? >> they elected that they were going to retract because of the presidential decree that was going on, so they were practically pulling out at the time. so we went in with a different company. >> so you're not -- just to be clear, you're not using g4. >> i'll have to double check.

my understanding is, no, but i will confirm that and let the staff know. >> thank you. >> mr. mccarron, you mentioned earthquakes in china and pakistan. where in pakistan? >> there were, it was major earthquake in pakistan in the mid 2000s. >> but where? that's a pretty big country. >> exactly. but i can't tell you -- it was very well broadcast. >> was it close to the afghan border? >> i'm sorry, i can't say exactly where. >> what about china? was that close to the afghan border? >> no. but the seismic conditions in afghanistan are such that the risk of earthquake is similar or higher. >> when was the last earthquake in be kabul? i'm just curious. >> the last earthquake in kabul that i felt personally was just last year. but not, of course, wasn't substantial. but there's regular tremors in afghanistan -- >> that's finement but when you

go to california standards, it's much more than tremors, right? >> yes, of course. but afghanistan is a severe seismic area. >> kabul? >> and kabul included. kabul has had a devastating earthquake in its history. >> when was that? >> it was in the last century where it destroyed the famous walls of kabul. >> that's a while ago. okay. question for several of you gentlemen. you all said that security was the biggest concern you have. mr. mckelvey, do you have any firm-fixed price contracts right now? >> yes, we do. >> why'd you bid on them? >> we've gotten better at doing work in afghanistan, and we will bid on a contract when we determine that the schedule is achievable and it's within the fence, so to speak, it's within the purview of the military. >> outside the fence -- >> outside the fence we would not. >> okay. >> we have one firm-fixed price

project that is within the fence, inside the fence, and the reason because -- >> right. it's in the fence. but you have nothing else? >> not in afghanistan. >> and you as well? >> correct. >> and you, mr. mccarron? all right. question on -- >> mr. mccarron, we couldn't hear your answer. >> he said no. >> thank you. >> the electrical equipment that you actually install, was that t to the u.s. or to the british standard, mr. van dyke? >> it depends on the circumstances, primarily u.s. standard. >> can you explain to me why since the afghans use british standard? when we leaf -- >> well, i think we have made sure the interfaces work. >> the interfaces worksome. >> right. >> but if afghans -- but that makes it more costly. obviously, anyone who's ever used a shaver in london knows an

interface -- why are we doing that? is a.i.d. telling you to do that? >> no, they're not, and be i actually have to retract what i said because i i know, for example, on the piping for the kabul power plant, we used dim piping. so i need to probably check the specifics, but i don't think we're doing u.s. standards overall. >> uh-huh. primarily british standards? >> i think primarily, yes. >> okay. mr. mccarron? >> i think the criteria is international standards and that it'll take the most appropriate or the best for the country. generally, the international community and the afghan government require international standards. they don't want us to put in any old thing. >> those tend to be not one concern. [inaudible] >> definitely not. >> the american. how about you, mr. mckelveysome. >> the work that we do is initially done to the international building code and certain times we might be asked to do it to the nec code in the

united states. >> i how often is certain timesesome. >> well, the preponderance of the work we've done is to the international building code. on some of our work recently at camp phoenix we were asked to recertify the wiring to nec twows -- 2000 standards. >> not to my knowledge. >> we also in the same way we are required to follow the international building code. so it's practically the same, the same answer. and, yes, we are checking against, say, the u.s. standards on all of our facilities. >> okay. mr. mckelvey, i'm going to pick up on something that my colleague, commissioner henke, stated with respect to a different company. did i hear you correctly, you've got blue hackles as a subsome. subsome --

sub? >> that's correct. >> well, they, apparently, have employed 385 unregistered weapons, et, etc., and they're at camp eggers which is pretty easy to figure out having been there what they're up to. how come they're still your subs? >> this has come to our knowledge just recently -- >> you mean because of the article in "the washington post"? >> that's correct. >> with you mean to say you didn't notice a thing until you picked up "the washington post"? >> well, what i can say is the blue hackle has done a good job for us, and we use them specifically in kabul. and these allegations that you're referring to are something that our security brief is investigating right now. >> so you had absolutely no ink inkling this was going on even though kabul was as safe as anywhere in the country and camp camp -- how often do you guys run a check on these folks? >> we have security people that are in the theater with corporate security who are

currently, you know, and continually involved with those contractors. so i'd have to get you more information in regard to if they found out before i heard about it personally. but chances are they've been on top of it way ahead of the press release. >> be okay. if they were on top of it, i'd certainly be interested and i'm sure my fellow commissioners would be in seeing whatever report was sent back giving you a heads up. because if this was going on, i'm kind of puzzled -- and maybe it's just me -- but i'm puzzled why you continue to retain them. >> well, we'll certainly evaluate that. >> okay. last question. for each of you. in the past there have, clearly, been issues regarding house statements of -- how statements of work are defined by a.i.d. or your other clients. when you get an s.o.w. that's not clear, have you gone back to the u.s. government agency and said, look, this is not clear?

be can you give me an instance of when you do that? i want to go through the line. mr. mckelvey, can you give me an instance after when you said this is just unworkable, and it's going to take longer, etc., etc. >> i'm certain that happens on a frequent basis because of the contingent environment. many of our projects are scoped before the full details are known, sometimes even a year to a year and a half before troops arrive at the location, for example. so we've come back, and we've, we can probably provide you many examples where we've asked clarifying questions on scopes of work as how many people, when will those people be there, etc. and so forth, and in many causes the client -- cases the client cannot tell us that due to wartime strategies. >> and those circumstances you still sign on to the contract? >> we proceed, those are cost-plus contracts, and we proceed on -- >> then it's no-lose for you. the government, of course, has to explain why they're doing that, but that's not your

problem. >> that's right. >> from our standpoint when we cannot get answers, we don't bid. we have never bid a project where the scope of work was not up to our, you know, level of -- >> in the last three years, how many projects did you walk away from? >> about a billion and a half maybe. >> oh. if you could give us any examples of that, that'd be helpful. >> sure. >> mr. van dyke? >> we typically, under our joint venture contract, have gotten requests for proposals, and we go pack and forth on declining what the projects are before we finally arrive at something. one other comment i'd like to make, there is an issue for contractors on cost-plus. what you do is you agree to a given cost, and if you go over that cost, you don't get any more product. >> unless the government gives you new instruction. >> unless the government changes the work scope. >> which it always does? >> well, not always. >> how often does the government not change the work scope. what percent of the time, 10, 20, 30? >> sir, i don't have that off

the top of my head. >> oh, give me a rough -- >> i have no idea. >> but it's frequent? infrequent? >> i can tell you that on the work scopes that we've had even when there have been time frame delays in getting the work done, we've held the cost. that's the best i can tell you. >> mr. mccarron, how about you? s.o.w.s, what do you do? >> well -- [inaudible] on all of our relationships with usaid, one example would be the ghazi school -- >> yeah. >> where initially usaid had a design competition for that school and then awarded the winner. and then come to unops and during that initial phase we went pack to usaid and talked about solar efficiency and we changed the design in consultation with them. they came back to us and told us that we had to have disabled

access, for instance, to american standards. and so that was incorporated. so it was to and fro in relation to developing the final design for the ghazi school. >> you said to american standards, how sensible are all these american standards in the afghan context? >> well, in the case of the one i'm referring to, the americans with disabilities act standard for the access ramp which resulted in the linkway between the buildings, the main school buildings. >> are there many americans in those schools? >> no. but there's kids in wheelchairs that need to be able -- >> americans with disabilities act, last time i checked, that was an american law. thank you. >> [inaudible] >> thank, mr. chairman. mr. van dyke, let's focus for a second with respect to the

kandahar power initiative on the kandahar diesel plant that you're to build. your opening statement alluded indirectly to the fact that iap, another big construction firm, was awarded a $51 million contract, fixed-firm price, for the other power plant in the kandahar industrial park. and be you made, and it's entirely appropriate for you to make comparisons to show you are competitive in terms of what you charge. but what i want to ask is were you so uniquely positioned to use the words, the justification for sole sourcing, so uniquely positioned that there couldn't have been competition by iap, the builder in the same industrial park of a power plant, and if there had been

such competition, wouldn't your unsatisfactory past performance ratings have been evaluated? >> i think that all of our performance, past performance evaluations would have been rated, and there are a large number of them, many of them in the excellent and outstanding category. so i would hope they would look at all of them, number one. number two, it's for usaid to say if they could get another qualified client, or competitor, but i will tell you what i said before, we had done an extensive study of all the requirements defining -- >> thank you. thank you. i know, mr. van dyke. i was -- we'll take it that you're not -- we'll take it as what was just asked and answered. .. the jna names to six pieces and as you say there is not only the

work for the turbine for but also in a the substation. what i want to do, i asked mr. spear if he could imagine the helmand part which has those two pieces as distinct from the kandahar part which has four pieces could've been submitted separate. they are 100 miles apart. there is no transmission line between them and the dialogue between him and me went -- and could 124, the first four and five and six the separable? s and then i said again, couldn't they potentially be separated? t fear, yes i have said they could be separable. now hee disagreed as to whether they should have been separated and so forthr but we reach that

point. forth but we reached that point. what i want to ask, you must know, or i hope you know, the major breakdowns cost twice of that project. wouldn't be substation and the dam been at least out of the 255 million, 80 million, at least 89 in terms of cost breakdowns? >> i don't care the numbers in my head but my recollection is it was not that high. >> okay. among other questions for the record can ask for the cost breakdowns? >> i think usaid needs to provide those, but let me talk to usaid about that. >> okay. now, i want to go to the issue of delay in your prior projects. not only because this has to do with how it would have been if

kandahar power initiative had been competed, but even more fundamentally the kandahar project is urgent timewise, not like other projects, because general petraeus himself we were told by a.i.d. in the most direct way, general petraeus himself said he needs it as soon as possible, he's got a counterinsurgency to fight in kandahar province. that's the reason that we got from a.i.d. as to why they sole source it at why. the extreme urgency as part of a counterinsurgency strategy and they allude to that end the jna. looking at a kabul power plant seems to me that we have comments by a.i.d. i.t. and sigar. i'm reading from sigar, not years ago but in january of 2010.