is the ig office going to do to insure follow-up? >> well, what we're going to do in 2012 is do a follow-up audit on the process to see where they've come from then to now, and in addition to that in just working with them on a regular basis between our investigators and our auditors and the office of acquisition and assistance we'll just get inherently a sense of how they're moving forward. and, you know, to say again, i really do think under, under administrator shaw there has seemed to be a cultural shift in contractor accountability. >> i hope so. thank you. all of you in one way or another in your opening statements talked about accountability, the fact it's important, that past performance is important, you take it seriously, but a fairly

recent -- 2009 -- gao report indicated that 60% of contracting officers they called it, contracting personnel don't factor in past performance in the selection process. we all understand reasons for that. i mean, it can go back to, you know, the focus for a shorthanded contracting community is getting the next contract out, it's not necessarily closing out the old ones to include follow-up and indicating past performance. there are objective factors that they feel are more important. sometimes they're reluctant to upset the apple cart with a contractor, particularly when there are few contractors that might be able to perform that mission.

there's fear of protest and, very frankly, sometimes it's hard to separate the contract's fault from the government's fault. now, all that being said, is past performance important, and how do we fix it? admiral gilbeau? >> yes, sir. i'd like to say that i think we've come a long way in fixing it, and i think it is extremely important. and virtually everybody i've talked to over the last sex months since i've been in this job understand the criticality of documenting and getting good past performance information. i believe continuing our efforts in improving the database, improving accessibility and improving the input is going to take us a long way in achieving the results that we all want

which is giving the pco access to unfettered information that will show the true performance of contracts whether it's in a contingency environment or not. thank you. >> mr. carroll, any comment? >> from an ig perspective, we think it's huge. but that perspective comes from a real accountability perspective. we don't take into account that the agency still has to get the work done, and i'm not saying that's the reason why you should overlook contractor past performance. you absolutely should overlook contractor past performance. but i would say that the past and the present could be two different thicks. -- things. and if these organizations based on our audits, investigates or -- investigations or whatever action taken, if their current situation reflects a change in attitude, change in focus, change in performance, then i

wouldn't see why you wouldn't use a contractor going forward if they have made changes in their processes for accountability. >> i guess one of the things that bothers me, and i have difficulty coming to grips with is that if you hired somebody to paint the inside of your house and they tracked paint all over your carpet, you probably wouldn't hire them again. and you might even negotiate a price with them less than what you originally had agreed to. but that's money coming out of your pocket. what, what i'm concerned with, one thing i'm concerned with is the fact that we may see this as just free money. it's coming out of some big treasury pot that doesn't really impact us. and so we don't treat these contractors the same way you would treat a contractor doing

work in your house, for example. >> yes, and e i agree with that. -- and i agree with that. we're better consumers and shoppers in our personal lives, and i think -- than i think the overall federal government is. to answer your question, yes, it is very important. i'm going to add one on why now, it's because the dod ig came out with a report criticizing the databases back in 2008. gao followed it up in 2009. it's a topic of discussion now, and it wasn't before. how to fix it? i would say we need genuine evaluations. i've heard too many stories about grade inflation where you give the lowest possible grade that avoids a protest or a complaint from a contractor, and timeliness and accuracy in that data that provides a genuine tool for a contracting officer, suspension debarment official, whoever it may be, the igs, you know, to have a genuine

grade in front of them or at least factors in front of them that make them make better decisions preaward. >> thank you. one last point, not a question. another of my major concerns is we have gone through various hearings and written our reports, how do we maintain this? how do we maintain this interest that exists today, to whatever level it exists, how do we maintain that interest when we're no longer in iraq, we're no longer in afghanistan, we've disappeared? how do we, how do we do that? i don't want an answer, i just want you to think about it, and i may come back in the second round and solicit your ideas. thank you. >> thank you, mr. green. mr. tiefer. >> thank you, mr. chairman. i just want to mention i've pointed out before that in the

2000s our co-chair, mr. think ball, was part of a leading group of auditors in the government who were trying to keep contractors like kbr accountable against major head winds. i don't think i fully understood what an uphill task that was until our preparation for today's hearing when i found that the past performance systems were closed. not just virtually closed, literally closed to entries of bad ratings for kbr performance. it was like you were banging on a locked door, mr. chairman. and i congratulate you for your work. although i'm shocked to discover that gambling is going on in this place about my mentioning of the university of baltimore law school. now we all agree you'll menace it quickly -- mention it quickly.

mr. amey, you're the custodian of the, the enormous database, unique cay that base about -- database about contractor misconduct, and i want to try to flesh out. we've heard the anonymous but gigantic figure of $280 billion in new contracts given out to contractors who have criminal convictions or civil judgments for things like fraud. and i want to, i want to ask you about what i would call the flagrant five, the five contractors i would ask you to draw on your database for because your database is about all the contractors of the government, and we're interested in the ones that do wartime work in iraq and afghanistan. the first would naturally be kbr which you mentioned in many your, your testimony.

what -- i don't want to use my whole time up just on them, but they have been sole sourced billions of dollars in if contracts in iraq in recent years. what's their record? >> we have approximately 23 instances of misconduct. i think it's actually 24 because i think there was a doj intervention in a civil false claims act last week which includes six government contract cases and eight guilty pleas. >> okay. another contractor that you mentioned in your testimony is agility which is renamed, used to be called public warehouse company. now, they did get suspended. was that the end of their getting new contracts? >> no. that's the only instance that we have many our federal contractor misconduct base, but they have received two extensions that i'm aware of that currently go until august of 2011. so once again, despite the

government holding them accountable, there's been, you know, an exception to the rule that they have been able to stay on the contract for another eight or ten months. >> i'm beginning to get the picture that bad performance can be good business. let's go on to louis bear jay or -- louis berger. i want to stay with you with. i know that this book just this past december, there is a criminal conviction of their chief financial officer, a criminal conviction of their controller. the company -- not just individuals somewhere down in the ranks, but the company was falsifying its cost-plus contracting which strikes at the very heart of what we employ these contractors in theater to do. what do you have on them? >> nothing. unfortunately, they are not one

of the top 100 government contractors, and through the years we've expanded that because people have jumped in and out of the top 100, so we have about 150, and they're not in our list. >> well, let me ask, the noteworthy feature is they were not suspended because they did a guilty plea, technically called a deferred prosecution agreement. what do you think about a company which has, basically, pleads guilty to felony-level charges not getting suspended? >> oh, they would be in our database if they had criteria. the deferred prosecution is a problem was you're weighing the department of justice and what they're doing to punish a company against what a suspension and debarment officer may do to protect the taxpayers from from awarding future contracts to that contractor. so they're supposed to be different animals, but the problem is in that case i would say somebody that entered a deferred prosecution, i think some length of a suspension to

make sure that they have all their systems in place, have improved their management and their culture is needed. >> indeed. let me, a fourth company is familiar to the commission. we actually had a hearing which somewhat concerned it, and it was a witness at that hearing. as we went into at that time, they had a manager who was convicted felony level for a kickback-related offenses in kuwait and iraq. their witness was still not cooperating with us, the dcaa, the company's still not cooperating with us, they still will not provide the records for us to find out whether the company was paying for the kickbacks or the manager was just doing it out of the company's spirit from his own resources. although you can understand why one would have been interested in looking at the company books. what do you think about a contractor like that mymy who

has gone on to receive lucrative contracts? >> again, it's not in our database. kickbacks is a problem. the -- it's often excused with one bad apple theory, but at that point you need to still look at overall corporate culture. i'm probably more concerned by the latter part of your comment, and that is that they didn't -- aren't cooperating with dcaa or this commission in providing information as a government contractor. i would probably consider them nonresponsible, and at that point they shouldn't be eligible for contracts whether it's a suspension, debarment or a de facto suspension in the fact that that should be something that's taken a look at during an award decision. >> i, i can't -- i remember our frustration when they wouldn't give us the records. the fifth on my flagrant five list is the first kuwaiti company, a construction company which became famous or infamous for its work on the new embassy for the united states in

baghdad. are you, are you at all -- does it ring any bells with you? >> well, it does. again, they're not in pogo's contractor database, but i have seen issues at the embassy and, therefore -- that would be something that would get entered into our database if they met the criteria because we do include investigative findings in trying to present a full, complete track record of the companies that are doing business with the government. >> well, the specifics of -- you mentioned the inspector general report at the state department who found that they owe the united states $132 million for their embassy work, that's how bad it was. yet they are still receiving new construction work. they were in the news receiving something for us in saudi arabia. do you think that should be made difficult for them? >> i would say so, yes.

that and being deliberate on your -- delinquent on your taxes, if people owe the federal government money, i would think the government would think twice before they do business with them. >> thank you. >> thank you, mr. tiefer, commissioner tiefer. commissioner henke. >> thank you, mr. chairman. thank all of our witnesses for being here today. you know, mr. amey, i'm looking at your statement, and it's probably one of the clearest i've seen in a long time, and i thank you for that. there are some points i want to highlight while the staff puts up a board here that i'll talk about later. your statement makes a very clear accusation, i guess, that the federal government, quoting, the federal government is shirking its responsibility to protect its constituents. and later in your statement you say the suspension and debarment system is riddled with problems and, as a result, speed and convenience frequently trump accountability and oversight. those are all from your statement, mr. amey? is. >> yes, sir. >> of course, you still stand by them? >> yes, sir.

>> another quos on page 5 of your -- quote on page 5 of your testimony is this: government officials who are making a decision about contracting are at a disadvantage because they do not have the time to sufficiently assess a contractor's history of performance and responsibility. they do not have the time to sufficiently assess a contractor's responsibility? i would make the observation if they don't have the time to do it, they don't have the time to make that contract. would you react to that? >> i would, i would agree. unfortunately, the work force has been stretched thin, you know, if you had a list of the amount in this contract dollars that have been awarded through the years and the level of the acquisition work force through the years, you know, like there's a big difference between those two lines on the line chart. >> dramatic difference. >> dramatic difference. you have, you know, two wars going on, so at that point speed, you know, who wants to be the person that slows down the process and is blamed for that. >> right. >> so those two things go hand

in hand, you know? the government needed things yesterday. >> right. >> and at that point you don't want to be the one, well, hold on, check all the boxes and give a true, genuine assessment of responsibility because at that point, you know, some service or good is needed in the field. >> i'd like to ask each of the witnesses, it seems to me that accountability mechanisms that past performance, tools, rigorous performance evaluations, active suspension debarments, active oversight by both the contracting community and the ig community is important in peacetime, but it's doubly important in wartime. we're moving faster, we're spending money faster, we're trying to get things done more quickly. there's a lot more risk. just a quick yes or no from each of you. would you agree that these accountability tools are more important or less important in wartime? admiral gilbeau? >> i think it's important in

wartime and in peacetime because -- >> is it more important in wartime when you're on cost-plus contracts and you're trying to spend billions of dollars quickly? >> yes. >> mr. carroll? >> i'd say the same, yes. >> captain harrington? >> yes, i would. >> mr. amey? >> yes, and not only because of mission accomplishment, but also lives are at risk right now. if you're buying defective weapons or, you know, there's a product substitution case, you know, you could be putting, you know, u.s. men and women in, you know, at risk. >> now, it seems to me with regards to past performance you need three things. you need to have the reports in the system, you've got to have input, they've got to be well written, they have to be quality reports, and then later on someone has to use them. the point isn't to collect the information and put it in a file, the point is to use it later to make better decisions. would you all agree with that? i think the witnesses are indicating they yee with that --

agree with that. so the point is to use this information, but first you have to have it in the system. second, it has to be good information that you can act on. and number three, you have to use it going forward as a discriminator on whether you use that contractor again. our staff took a look at, the chart here, we created this chart working with the detention department and captain harrington's office. we took a look at just 2009 and just three agencies. from are our analysis -- from our analysis we can tell that the first column -- the middle column, rather, those are the number of contract actions cut by that agency in 2009. 1485 for dod, 93 for state and 81 for usaid. and the contracting data system automatically sends something over to the past performance system to know it's out there. we could not find any reports

for state department performance reports, for state department or usaid. zero. and we found less than 10% compliance at dod. so we're cutting 1485 contracts, and this is -- we put it back in '09 to give it some distance. by now those should have had at least one evaluation cycle, and we found fewer than 10% of those contracts had a report in the past performance database. so i would make the statement here that with these kind of results, everyone's convinced it's important. everyone says it's important, we have to do better, we have to do -- and,, mr. amey, e i get it about the work force. they're some of the most overworked people out there. i get it. they need to be a larger, more deployable work force. but until we start having meaningful outcomes, there's no point in doing it. we can have meetings, we can set

up committees, we can set up task forces, but until we start moving the meter on having useful reports -- and i'm not even talking about quality reports here or using the reports, i'm just talking about step number one which is put reports in the database, okay? can you react to this chart, admiral gilbeau, each of you, please? >> yes, sir. obviously, i can't substantiate the numbers or anything there, but i agree with what you just said in that you have to be able to use the information before there will be a self-impetus to put it in, not just a driven requirement to put it in. >> right. >> and i think we've come a long way to getting that repository accessible and usable. we've got a long way to go, but the key is having a capability to deliver a finished product at the end -- >> okay. >> -- so that we can, the time we invest will be worthwhile. >> mr. carroll? >> we didn't specifically look

at the system on our 2009 audit. >> right. >> but based on this information we will, clearly, include it in the audit we do on the follow-up. >> okay. mr. harrington? captain harrington, excuse me. >> yes. my office did compile this data, it was taken from fbds, and we used it and provided that information. i would tell you that from the assistant administration side and what we do since 2008 over 16,000 people have been trained on -- [inaudible] >> okay. mr. amey? >> two words: mission failure. less than 10%, they're not performing their mission. >> commissioner, can i -- >> sure. >> i have a question, captain harrington, right on that line which is you said you provided that information. it shows gaps, and we all acknowledge an issue. who did you provide it to, and when you say provided it, who do

you provide it to? >> sir, we provided that information to osd, tnl, and i do not conduct any analysis on it. we just provided the information. we did the data mining. >> so you're not aware of what they -- you're not aware of how they've used this data in the present mode? >> no, sir. >> okay. >> captain harrington, what i think we're getting at here is that your system allows the users, dod, the agencies, contracting offices to do this analysis themselves. is that accurate? they could, they could look at this and say i've got 20 things in fdps and i've got zero things in cpars. >> currently upon request from each agency we will provide this data to them. in the future there's an initiative out there, april 15th, they'll be able to pull this off the web site. >> and, in fact, when you told us that you -- your staff in working up this hearing, you told us you prepopulate the

database. you take the contracting database, and you send it into the performance database, and you open up reports which is why we can get this kind of data. so you're making it easy to do this, and you're providing a lot of training. >> yes, sir. >> okay. mr. amey, you put it well. you said mission failure, we're not doing it, we don't take it seriously. would you react to this characterization? there's no real accountability, and it's business as usual. >> i would agree. i'm hoping that based on these reports and attention like today's hearing provides the issue that it will improve, but i'm skeptical. you know, why has it taken this long? we were $200 billion in contracts two years ago, now we're over $500 billion. >> thank you. i'm out of time. >> thank you, commissioner henke. commissioner, dr. zackon. >> thanks very much, mr. co-chairman. first of all, to the folks in the government, thank you for your service, and to mr. amey, thank you for yours too. and if you're associated with my

colleague here to my left, so much the better for you. i'm also concerned with implementation and with measuring implementation. i haven't heard very much about measuring implementation maybe because there isn't much to begin with as commissioner henke just said. it reminds me of the agencies that gave their sesers 90% better than average. think about that for a second. so you have great inflation when you enter grades at all, then nobody seems to pay attention to the grades anyway. i'm struck, admiral gilbeau, could you clarify for me, you guys in dcma have the ability to furnish information for cpars, correct? >> in some instances, yes, sir. >> do you provide that information 100% of the time when you do have the information? >> we would provide it -- we are suppose today provide it 100% of

the time when asked to do it. >> why don't you -- i mean, i was in government on both sides of the river, actually. people take the initiative. after ten years in afghanistan, why do you not see the need given that you have the information to provide it as a matter of course all the time? >> again, it's not a matter of my personal opinion not thinking that we -- >> no, no, no, i'm asking you as direct -- in your capacity. if dcma has the information -- >> yes, sir. >> -- why wait, given what you've heard? and this isn't exactly new news. after all's been said and done there's been aid reports, pogo's been driving the government crazy. why after all these years you do not feel the absolute imperative to provide every ounce of information available to you whether it was requested or not? >> yes, sir. i would respond by saying i do feel that imperative.

however, there is policy that exists that we are actually currently reviewing to see if we can change that limits our ability to input that data. >> what kind of policy, could you specify, please, and who made the policy, and when was it made? >> i don't know when it was made. i'm -- and i believe it is a local policy, either dcma or perhaps dod, and i'm not positive there. >> you mean you're a senior official at dcma, and you don't know if you've made policy? is that what you're telling me? >> nono, sir, i would know if i made policy. >> i know you personally, but you wouldn't know whether it was the deputy secretary or whoever on something as important as this where lives and taxpayer dollars are both at stake? >> at this point, yes, sir. it -- caveat to say the policy exists. it's -- i have a dcma policy on it, and we're researching it to insure we can follow the string to make sure we can make appropriate changes to put the

proper emphasis on filling. >> i don't get it. when i was in government and if my shop had made a policy and i wanted to change the policy, the policy was changed. it was as simple as that. that's what senior government positions are all about. and to somehow, i mean, this is, this is the classic passive verb form. mistakes were made. who made 'em? god knows. maybe god made 'em. but i that is just, to me, a totally unsatisfactory answer, with respect. let me ask you something else, and i'd like to ask mr. amey as well. the contingency contracting handbook says that cpars is too complex and too time consuming for contingencies. now, i've been a contractor about half my professional life, the other half i was in government. i'm no longer either. and i've seen cpars. they're no more nor less complex than any other government document. they're no more come mention than an oer, for example. --

complex than an oer, for example. so why isn't it time consuming, why isn't it mandatory even in contingency environments? why -- what's the logic behind this, admiral gilbeau? >> yes, sir. as of two months ago, again, when per the policy that we were just discussing, when we are asked to do it, it is required that my folk put it in. now, i can tell you because of bandwidth issues and sometimes connectivity issues it is sometimes difficult, and we are working to try to figure mechanisms where it's just inputting on a spread sheet that we can get access, we're working those issues. but there are some technological problems that we're trying to overcome. >> well, and by the way, i'm not picking on you because you're you. whoever was sitting there would get this from me. i mean, it comes from the territory as i learned to my regret when i used to have to testify. but i've got to ask you, you say connectivity