department of state, maureen shauket, chief acquisition officer u.s. agency for international development. and blalock, u.s. navy council and chairman, and chair, internet, enter agency suspension and debarment committee. and uldric fiore, director office of the judge advocate general, u.s. army. we have asked our witnesses to offer five minutes summaries other testimony. the full text of the written statements will be entered into the hearing record and posted on the commission's website. we also ask that witnesses provide within 15 business days responses to any questions for the record, and any additional information they may offer to provide. on behalf of the commission, we thank all of our witnesses today for participating what we believe will be a very important hearing their so now, if i could

i would ask you to rise and we will swear you in as we do all our witnesses. raising the right hands, do solemnly swear or affirm that the testimony will give before this commission will be the truth, the whole truth and nothing but the truth? know for the record all of our witnesses have responded in the affirmative. and let me just thank you for your service, for our country, both in the public and private sector. thank you, gentlemen. admiral, we will start with you. >> thank you, sir. good morning, chairman thibault, chairman shays and commissioners. my name is where admiral robert gilbeau and i'm the commander of international director for the defense contract management agency, or dcma. thank you for the opportunity to participate in today's hearings regarding contractor has performance and the suspension and debarment process. i'm would like to say that i think accountability is very important and i take it to heart as a navy supply corps officer. in our contract administration role, the dcma conducts reviews,

cost of liability determinations and past performance information for field level contract operations to activities such as the u.s. central command joint theater contracting command, and the army contracting command at rock island. we also provide comprehensive contract administration services for the army's logistics civil augmentation program, or logcap, and air force contract augmentation program, or ascap. as was other delicate contracts throughout a contingency a program offices and procure contracting offices, or pcl's interchanges are input to assess contractor performs and make a determination. if requested by the procuring contracting officer, our dcma contingency is the most, contract managing offices can input data into the do the contracting performance assessment reporting system, and a joint contingency contracting system or the jcc has.

our inputs rely on cost performance reports, customer comments, quality audit examinations, or process reviews, technical interchange meetings, production management reviews, contract operations reviews, and functional performance evaluations. it is used for us-based contractors were as jcc has issues for non-us contractors? >> when requested we uploaded these are going to pcl input requirements, typically every 12 months for contracts with performs in excess of one year, and at the end of every contract. dcma afghanistan inputting data into c. par four large -- logcap iv. contingency cmo is also provided by monthly performance evaluation port reports based on monthly audits, focusing on toward the evaluation criteria, technical costs and management. for the logcap iii contract and a logcap iv contract in afghanistan and kuwait.

these oddities inputs from dcma quality assurance represent as an appointed contracting officer representatives. ecma corrective action requests, administered contracting officers, customers, usually the camp of mayors, and the contractors of self-assessment. the tvs are compiled into an award field evaluation board every six months and embraced to the theater logcap pm representative. ecma also provides a weekly report on cars issued for the previous 90 days to the logcap program office and we participate in quarterly logcap where we breathe the program office and pco on performance trends for the preceding 90 days. d.c. images and provide support to the pc owes at the contractor corporate level for logcap, on matters such as contractocontractor system reduce, cost a liability determinations and past performance information. they also provide pc owes with past performance data associate with the contractors centralized systems such as current business

systems, financial capability, and summarize or targeted information. in regards to suspension and the debarment, art mission is contracted ministers. as such a function to hit by the suspension debarment officer. the we provide information to the military services and defense agencies that may support suspension and/or debarment proceeded having said that, dcma employers are required to report any instance of possible fraud or other irregular he by a contractor. dcma employers are provided fraud awareness training, and the dcma legal team works with our contracting staff, dod criminal investigators, federal prosecutors and contracting office is supporting appropriate judicial or administrative sanctions against contractors. in closing, i would like the commission to know that dcma understands the value of contractor past performance and the rule of suspension and debarment and takes as its

mission in the context. we remain committed to our warfightewar fighters, sewing employees, contractors and the american taxpayer to provide quality products and services delivered at a fair and reasonable price where and when they are needed. i welcome your questions. >> thank you, admiral. mr. carroll. >> good morning. co-chairman shays, chairman thibault, distinguished numbers of the panel, commission, thank you very much for the opportunity to appear today to discuss our views and opinions on the current state of u.s. 80 suspension and debarment program. i think the best way to do that is go back to the audit in 2009 on the agency suspension and debarment pro ram, a process and that audit covered the five year period of 2003-2007. and if i could summarize the findings and basically four major ones, the first found the agency didn't have a systematic

process for considering suspension and debarment actions but they didn't have a dedicated staff. it was rather ad hoc process. documentation when they did take procurement, suspension and debarment actions, the process was a good -- a bit ad hoc estrus document the process. and the use of the contractor performance database was marginally effective, both in inputting timely and accurate data, and also extracting data when making procurement decisions for the future. and so you wouldn't be surprised that based on those findings between 2003-2007, the agency only took, i say only, that's our point of view, only took 17 suspension and debarment actions over that five figure. that was then, and this is now. the audit made 12 recommendations to improve the process. we reached management decision and final action on all 12.

and i'm happy to say that the agency really has embraced the audit as a way to move forward and improve the process. and to demonstrate that, just quantitatively, from 2008, post audit through today, currently, they have taken 37, so more than double the amount they took in the five years, they have taken in the last two years basically, and that of those 37, within the last year they have taken 28 suspension and debarment actions. so i think that really reflects a renewed commitment and interest in contractor accountability. so i think we give the agency credit for that. in reference to what they have done to address our recommendations, i think one of the major steps they have taken is to create what they call the compliance in oversight of partner performance division within all in a, the office of

acquisition and assistance. it's going to dedicated solely to considering contractor accountability and suspension, debarment actions i think that's a major step the agency has taken. the processes are improving dramatically. they are supported very well by the office of general counsel within a.i.d., and we've even changed our philosophy in the way we operate. we share information, investigative findings much more quickly, in real-time so the agency can make informed decisions if they need to prior to any kind of referral for prosecution to the department of justice. and i think, you may of heard in speeches that the administrator has given that there is a renewed emphasis on contractor accountability. and i'd like to just give one example, if i could in the time i have left, of a successfully that we feel is a success story.

the agency feels is a success story that maybe we'll be talking later on. that's a recent suspension of the academy for educational development, aed. we opened the case on them in pakistan, in late 2009, based on evidence we had on the case, the contracting officer in pakistan cancel the contract for cause based on our evidence locally in afghanistan and pakistan. and then when we expanded the investigation to include the corporate entity, we found enough there and we're sharing this all with the agency, and they moved to suspend aed. now, that decision has major implications for the agency. they are huge implement partner in both afghanistan and pakistan. and around the world. so for the agency to take that step was huge, but we felt like the evidence, the evidence supported that decision and they

took that decision. so i would consider that sort of an example of how the agency has moved forward from the audit carried that we looked at in early 2002 where we are today. now, to conclude, i work in oig, we're entirely skeptical, but at least somewhat we have seen and the steps that the agency has taken post our audit, we are relatively confident that they're moving in the right direction. that concludes my remarks and i would be happy to ask -- answer any question. >> captain harrington? >> good morning. chairman thibault, chairman shays and dissing which limits of the commission, i'm captain tim harrington, the commanding officer of the naval sea logistics center. i want to thank you for the opportunity to speak about contractor past performance, information systems and specifically the contractor performed assessment reporting system. the past performance information retrieval system and the federal integrity information system.

under my command stewardship, both cpars and peepers have migrated from being and navy and duty solution and repository solution to being a solution is currently by all federal agencies. my command is responsible for manus and availability enhancements and updates, help desk support, and user training. while my command is trusted with their management, we are not responsible for past performance policy, nor do we enforce compliance with use of these systems. like avril, my employees take what they do very seriously and are dedicated to its management. having served on board five ships and twice been stationed overseas, i'd have appreciative of the work the commission is doing to support our mission overseas. and my fellow service members in peter.

mr. co-chairman, i am honored to be here to thank you for interest and i can take any questions. spent thank you, captain harrington. we appreciate that. >> i want to thank the commission for asking the project on government oversight to testify about the issues of contractor accountability and how past performance information and to suspension and debarment system can be used and continues see operation of the government has estimated that $177 billion has been spent on contracts and grants to support u.s. operations in afghanistan and iraq since 2001. according to the search of you is a spinning there were nearly 50,000 contract transactions for $21 billion in fiscal year 2010. i cannot overstate how important contractor accountability issues are in a line together to operate and accomplish its mission is important to remember that contractor account of irresponsibility are not

isolated. they usher between acquisition contract, program, oversight, and enforcement officers and inside agencies, a.i.d.'s and the department of justice. federal contracting law state that contracts are only supposed to be awarded to responsible contractor, no purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility. and contractor shall have, shall have a satisfactory performance record and a satisfactory record of integrity in business ethics. in an effort to place a spotlight on contractor accountability issues, pogo created a database in 2002. we have over 1000 civil, criminal and administrative people involving the 150 top contractors. the instances cited have resulted in $38.2 billion in fines, pills, so and restitution state since 1999. those include allegations of

fraud, bribery, overcharging, poor performance and contracts terminated for default or cause. the lack of contractor accountabaccountability data was the subject of virginia report of the department of defense entire report to congress on contracting fraud, which examined the extent to which the pentagon awarded contracts to countries that have defrauded the government. the report found from 2007-2009, dod awarded almost $270 billion in contracts to 91 contractors that were found liable in fraud cases, $682 million to 30 contractors convicted of criminal fraud. it also then companies prohibited from federal contracts continue to receive millions in taxpayer dollars. that said, i think that the system is likely to improve in the near future. laster the government unveiled a federal a warty performance and integrity information system -- it is modeled after pogo database.

it compiles annual set of information that helps government officials determine if contractors or grantees are responsible or risky. up until that point, that information wasn't readily in the hands of contracting officers pre-award. today you might hear about, i would counter with names like gtsi, actually, blackwater, are also known, formally known as blackwater. dyncorp, halliburton and kbr dignity of those companies are familiar contractors to the commission, and three of them hold all or a piece of logcap iii and logcap iv. the government inability to hold contractors accountable begs the question, is the government so reliant on large contractors that the actors are necessary evil? the answer to some contractor accountability questions were supposed to be answered by the interagency suspension and debarment committed pursuant to

law it is required to submit the contract and annual report on the progress of the suspension and debarment system despite multiple requests to the i is here, william blalock in 2010. pogo hasn't seen any annual report or received a reply from the isd sea as to its status. this is actually troubling considering the sharp decline in suspension and debarment through the years. and a congressional inquiry into doj possible interferes in to suspension debarment proceedings. even when it has been used to the years, it hasn't been used very effectively, especially against large contractors. boeing received three waivers when it was suspended. we've also seen ibm and gtsi suspend for a matter of days. world, suspension was lifted only days prior to the next long distance documentations contract. and was also seen other questionable contracts and activities, in order to promote

competition. and i think that's what you probably most likely here in a a lot of your q&a with his band and with the second panel come is there's a problem with the reliance on contractors and, therefore, it gives us 10 and, are you eliminating effective competition? that's a real problem. but the real, i think for this is the fact that the government is not providing and accountability agenda in normal government operations and, therefore, how will they do in a contingency operation when time and mission of congressmen are critical. i thank you for inviting me to testify today, and i look forward to working with the commission to further explore how the government can hold contractors accountable. thank you. >> thank you, mr. amey, and thank all of you for your testimony and for staying within the five minute rule. i appreciate that, and we're going to have questions. we each have eight minutes and it will be first co-chair mr. thibault. >> thank you, mr. co-chairman. thank you, gentlemen for being up there.

i have to thank the audience because sitting here thinking about this, when you say fapiis, cpars and all that, and it's a whole new world that it continues. >> it's kind of scary to some people are nodding their heads. >> yet. they're being polite maybe. before i start, the restaurant my questions i want to acknowledge a couple of things. admiral gilbeau, thank you for being here. i thank all of you, but whenever i have acquisition executive with a purple heart, you know, in simple sense it means spilled blood answers to the country. i thank you for that but i think the point to be made is in a war today where everybody is integrated so closely, acquisition officials, in your case iraq, put their lives in jeopardy, too. and i think it's an important part both for the government and the contractors. because i think there are sacrifices being made. i need to acknowledge something

that occurred yesterday that has nothing to do with this hearing, but the contractors program manager for the pentagon parking lot, everybody knows about it because traffic has been redirected, is a personal friend, he had a heart attack last night and died. he was 51 years old. i used to call him every morning, not a business because he had nothing to do with the work i was doing, but i would call him because i knew he had to get up and get to the pentagon by like 5:00 because of the way they do the arrangements to try to slow traffic. he's one of the most selfless, when you say he's a friend of mine, he's one of the three or four people that i consider a personal friend. the most personal friends had grown up with him, and i want to acknowledge his contribution and his contribution of himself was contribution to the last thing i have to say, and then i will get on with it, i will take it from a serious blow to a lighter mode. i want to acknowledge mr. amey's

magna cum laude at the baltimore law school. i think you all understand the staff understands they do a lottery, they each put a buck or something together and to try to predict how long it will be before professor tiefer mentions the university of baltimore law school. so whoever has the shortest tenure on that lottery is the winner, but we now have two distinguished alumni from there. our participants with the school. admiral gilbeau, i found your testimony, or your testimony, your statement very helpful in certain areas. you lay out that you begin using cpars -- i want is a couple of weeks ago, but january 2011, 30 days. and is currently consider inputs for two logcap task orders for the period of performance, july '09, july 2010. you took the initiative, but then he went on, and there's a

question about why did it take so long and want to ask that question, and i realize someone maybe should have come to you and you took the initiative. but then you say we've not been requested to input cpars for logcap iii or for contractors, and that's essentially the way it is arranged to help. it's very heavy, kbr their and dina floor where we are doing this in afghanistan. you have not been requested to input cpars for the two large programs and you continue to support the pco's request as you, but when you talk about army sustainment command are what we refer to as rock island, it's not something a financial process, and if they're not asking you for your testimony, my question is, is why not? what's going on here that you had to finally take the initiative and they can say well, it's important what they can say, we do important input

on the award fee, and i say you get input on the awardee but that's not the process. can you help us understand them and i'm a fan of dcma, totally. but, you know, my sense is it's wrong, you were asked in this late date, you had to take the initiative. why are you not being asked? >> yes, sir. first and foremost, it's not just me that made this finally happened. my team was working on it, and i was just in this particular case, i did provide a little bit of perhaps forcing function to get it working. i just had a meeting, actually the logcap aide who was held on wednesday of this last week. and i sat down with the program office, without question, we all agreed that my organization shouldn't be putting in the performance reviews, performance information into cpars for

logcap iv. now, logcap iii, the issue is, there's a little bit of a dual responsibility within a dcma, with our houston group and with my group. and we are working very closely with the houston group to ensure that we properly document past performance for even logcap iii is currently being executed. in iraq, we are starting to input data as well. i want to say about, probably about 50% of the data that we've been asked now to -- >> let me stop you there. i commend the current initiatives and indirectly you have answered the question and i'm going to move on. which is, you have taken the

initiative. it just seems to me wrong. .. >> mr. carroll, you're kind of stuck in the middle, and you said you were inherently middle. you used word like they're marginally effective and they embrace the audits, and yet your report, like, you use this exduded party system, another epls, and you said two-thirds of the cases they didn't put in the

data. and i guess they found religion, and you say they hadn't consistently used available, used available information. and it kind of fits the same theme that i'm trying to explore with admiral gilbeau. what the heck took so long? i mean, really, you know, this is about accountability, and the ig's doing their job and looking at it and bringing things, and the best you can say -- and i understand what you say is they embrace the audit. that means they they've told you everything's going to be okay, and we're inherently skeptical. can you tell me what took so long for usaid to step to the plate and start asking the question, where are our contractors that aren't presently responsible? >> i can only speculate. based on what we've seen over the years, but i would say that

they might describe the problem as staffing, as iraq and afghanistan were getting off the ground there are tremendous responsibility that aid had for implementing programs, and they weren't getting the adequate resources that were tracking as far as personnel and contracting officers and things like that. i would think they felt like that. i'm going to take a little bit, just a little bit of responsibility ourselves in that historically on our investigations we were reticent about sharing information with ongoing investigations until such time as it was complete, and it was referred to the department of justice for prosecution, then simultaneously the agency would get it and be able to make a decision on suspension and department, and we've changed that philosophy now and, you know, i think that resulted in the aid case. i'm inherently skeptical because i work in the ig, and we're sort of pleased with what the

agency's doing going forward. >> i understand. >> the decision to do the audit, actually, was based on our frustration with some referrals we made to the agency for suspension and debarment that they didn't act on and rather than continue to grind our teeth on that, we decided to find out what the problem was -- >> my time is up, but maybe i'll explore it a little more later. commissioner? >> thank you. we'll like to know sometime if you ever got responses as to why your recommendations were not made. and at this point we'll go to mr. green, commissioner green. >> thank you. again, let me welcome all of you and thank you for your service. i'd like to follow up just very briefly, mr. carroll, with the line of questioning that commissioner think bow was --ty bow was following before he stopped. i, like you, am skeptical.

i have watched aid's management for a number of years, and i think it in the one recommendation or the one finding -- and i commend the audit report, and i commend your boss' testimony a year or so later. i think it aired a lot of dirty linen that needed to be aired. but when we say usaid's decision making progress for suspension debarment, debarment actions contains flaws and constraints that prevent it from operating effectively, to me, that is senior management. and my question to you, very quickly, is aid's leadership and others have now said we're going to fix this problem, don't worry about it. you're st