alarm system, these are big deals, power generators, kitchen exhaust. >> was k b i responsible for managing the work of that turkish outfit? >> that was a separate -- k b r came to the rescue, but that is all rework. >> do we know whether or not the army corps of engineers official who was responsible for that was ever disciplined? >> no we do not, and that is the accountability issue. we have to start identifying who is responsible, and not just that individual, but someone is reviewing and training his workload. so i think it goes up a little higher. my suggestion in this process, we have seen military accountability and situations, but we just have not yet seen where these situations occur, if

they are an apt -- if they are inept. . . sir. >> said that is one of the things he will be investigating is what process to put in place so when that happens they don't do more business with us and people that be held accountable for that. are you getting enough action to the information or do you feel you need the assistance of anybody in congress? are people being responsive and helpful or obstructionists? >> i would say that we have had the need to explain in detail sometimes why we need information but by and large, but part of defense and the department of state has supported us. where we really are straining is the point about getting in the country. the first two trips were delayed about one month because of conflicts and scheduling. they did it. the trips went very well and they supported it, uscentcom but we have the need for four other

trips and they are singing whoa, so we have to find that out. will they allow us to go in and do the job because if we can't look at the records there we wi fail. >> it speaks again to the presence in the country but he will work with this committee and we will try to help youith that. >> as soon as we have a delay, yes, sir. >> i would like to say it's helpful for your encouragement that we be in iraq and afghanistan. i remember the inspector general of dod said he didn't need to be there and your committee made him go and we benefited from that. >> it's not likely go for vacation, it certainly isn't some place you want to be but you do as i think chairman thibault mengin you see things on paper that present themselves entirely differently and work on that, so we are conscious of that and want to work with you to make that happen. will you talk a little bid about the challenges where are the

contractors or subcontractors third country nationals or post country nationals and the problems those present and what we are going to look into to resolve those issues and challenges. >> charles? >> when we have followed there have been audits we followed up as noted. the prime contractor might be kbr but the dining facilities being run or the other work being done is being done by a third country company like the first trading company and the audits show those subcontractors may get away with overcharging because it isn't that much in kbr's interest or have the business systems to create competition under it. the overcharges from the subcontractor then get passed up with a factor for award fees and

overhead until it comes to the treasury. we are facing -- the commission is trying to figure out the legal challenge and it is a new one. you don't find this as a problem in the domestic united states but it is a big one in theater where we are and we are looking what can be done to increase the ability to say what it such a third country companies. >> could i just emphasize, so we have the government that's supposed to oversee the contractors, and we have less than half of we need. they aren't specialists. they have to be taught and then they are asked to leave sooner than the contractor who is there and then we have the dca point out that most of the technology that the contractor's use is outdated, inaccurate and not helpful and doesn't provide the right information. so then when we want the information we are getting it

from the company itself that can't provide well documented information. >> do our contracts not require these contractors to have updated technology with certain specifications that would serve as our needs? >> they are required to have it but they don't have it. >> that is something we will be chasing down. mr. flake? >> thank you. mr. thibault can you cite specific examples of services? [inaudible conversations] >> sorry about that. can you cite specific examples of services that can be provided under a different contractor under logcap and why you believe switching contractors might be able to yield better results? >> yes, the way that the contract is structured now is every task order now is

theoretically supposed to be did out and evaluated for those three contractors, dyncorp, fluor and kbr. the early results or that is a very good thing for the government in terms of price and cost, the competition. those are the three organizations. that is a long-running contract also. the problem is 90 plus% of the charges are with the old contract which is the supplier and one of our emphasis -- and i will point out to think it was general odierno identified the same issue which is get on with the competition part of logcap-4. lots of planning and effort and it isn't happening the extent it should. >> thank you. the pace of withdrawal nye wire rack you mentioned some of the challenges that presents us

with. what are some of those challenges on the rapid pace of withdrawal? somebody else want to take that? >> sure. i think that there are a number of factors and centcom is planning for this whether they have done enough planning, whether that planning is moving at a pace that's going to accommodate the downsizing and the ramp up we don't know yet. >> but specifically what opportunities are there for abuse or fraud or waste with rapid withdrawal? >> i think as the troops are withdrawing from iraq as an example, we are probably going to have to rely on contractors to remain there to close down the bases or pass them on to the iraqi east. and one difficulty that was brought to our attention for example just shows lack of

planning and for thought on this is they pulled out the air conditioning units in buildings that were going to be passed to the iraqi some and then had to go back and reinstall them again because they just didn't think enough about when they took the equipment out it would still be needed because the iraqi is were going to take over. but all the decisions on reset, which equipment gets sent back here for rehab, which is going to go to the reserve components, which will be scrapped, which will be turned over to the iraqi, all of those planning decisions are currently being made by centcom. but again, i am not yet comfortable that there are not a lot of holes in the planning process. >> and i might add as an example when we were on one of the

bases, the military enlisted person that is going to be involved in some of the support activity pointed over and said it will get all those containers. i haven't opened them, i don't know what is in there and that is the point we accumulate material and now we are going to have to inventory while the military it is dwell time if they are given 90 days they're going to leave and 90 days about the outcome is contractors are going to have to go out and figure out because there could be very sensitive equipment so you can just give it to them and so the important point is as we see it decline in the military there isn't going to be proportional decline in the contract in fact it might go the other way depending on the activity. 600,000 line items have to be tracked. >> we all know we need contractors. we had one contractor for every six military and the revolutionary war and now it is one for one. the irony is we get out of iraq and we may have more contractors and we have military. and we have what we call white

property, that's property in the hands of the contractors but owned by the u.s. government and then we have items on the basis that no one knows who is responsible for. but i would love to just reiterate and review the list that commissioner brandt talked about. we can do need that to the iraqi government, returning to the united states, use it elsewhere in iraq or move it to afghanistan, transfer to other government agencies, sell it and it has no commercial value, scrap it. we are asking people to make those decisions and they may not know what is needed in another base. so they might decide we should give it away when we are still going to purchase it somewhere else and bring it from the united states to afghanistan when it was in iraq and we could have gotten it from there. >> so it speaks to the need for more coordination. >> and is it worth it to ship it home? it's simple to say we ought to

give it to the iraqi is. well maybe that is the right decision. to follow-up on commissioner shays first point, i think that we need to think hard as does the subcommittee. there is an inherent implied concern that we have too many contractors. whether we do or not i'm not prepared to answer that and the joint staff is in fact got a task force looking at what things are procrit to be contract out, and it goes to governmental and those things. but how did we get to this point? and then what decisions were made by the services, what decisions were made by osd, omb and by the congress that get us on this one to one ratio would ever it might be? i think more important is what

are the options? do we increase the force structure within the dod and state so that we have not just the contracting oversight expertise but we have got folks to do some of these jobs being done by contractors. do we change the emphasis within the services to push more things into the system meant force out of the operational force? do we provide just less services or less quality services or do we just accept the fact this is the way we are going to go to war? and i think those questions we need to focus on in addition to waste, fraud, and abuse. >> that was a large part of the formation of this from reading your own charge in the legislation that is a piece of

work that we seriously want to have done. >> mr. don? >> mr. chairman, one last comment. i think we have far to the contractors. when i read we have four -- 240,000 contractors in the arena as in afghanistan and iraq put together and 80% of them are foreign nationals it seems to me that this is just a gravy train of money for these defense contractors, number one, and for all these contractors and i think almost anybody in this country, almost in the average american would say that it's ridiculous that we are still spending all this money hiring all these foreign nationals and doing, committing all the waste fraud and abuse and allowing it to go on over there and i think it's really sad and it's really

shameful. thank you. >> i think the other question we asked were part of that question is what is inherently the governmental responsibility and what is not. what are we doing with some of these people? are they doing a job that should only be entrusted to somebody that is a u.s. citizen or a member of the armed services or in some respect responsible in the chain here, security strikes me as one of those things very much who's protecting whom within these countries and that is the hearings we have had in the past and we are looking forward to your work on that issue to help of and for what are the many definitions of an apparent government responsibility, what is the one we are going to settle on and how are we going to make that determination? colonel green i agree nobody has discussed the proper number of contractors. and commissioner, you mentioned the ratios, one-to-one went out and then back down and now it is

where it is. but the fact of the matter is at but the fact of the matter is at some point the argument we@@@@@ if you can help us with that. but in that vain, we have people in 1,000 bases elsewhere, that for some reason we seep incapable of reviewing and deciding whether they deserve to be there, whether they should be there. are they adding something of value to our national security

interests? what are all the people there doing? and what are the people they're doing? can't you take some of them and train them? somebody might have technical expertise, somebody might have the ability wetter than sitting at a base for a reason as validated 25, 30 years ago they may not be valid today. we will be looking at separately but i think it is something to note. the other is national guard and reserve to have expertise particularly in security and other areas where maybe a better identification who is in the forces and their deployment would put them in the proper position and be easier to train police officers and things of that nature for security so somebody in the management structure in the department of defense and state has to be looking at these issues in a much more sophisticated and better way even the civilian corps we are developing and hopefully will be helpful also would isn't going to happen as quickly as we want. let me wrap up my question with

a defense acquisition university aspect of it. did anybody think of putting on a disk ehud didn't necessarily have to connect? i was just on the defse universities campus. >> i propose to probably have on the disk but took the individual to take it on line so it got kind of silly if you don't have a set of disks you can't give them a desk. >> that would seem the way to get it done to get people through on that basis. i'm concerned that contractors are now using the kind of technology that the need to use. it seems that is a contractor in force at issue and for all we are going to hear for contractors coming and telling the are the good guys and all this stuff about your bad management they are partially right. these organizations over it to their own people over their giving their lives and being injured as the chairman said and to the taxpayers of this country to do with the contract says and the technology in there that needs to be put in some contracts these things and

follow-through. they owe it to us to speak up when they're building a 30 million-dollar place for people to eat or whatever and repairing another place and should know probably better than anybody that is not funny it may be profitable but it's not a good. they allow the taxpayers of this country cannot just double. so there's enough criticism to go around on that and they certainly have a portion of it and that is why the management oversight if we trust them to do everything on the up and up we wouldn't be so concerned but when i look at the exit polls you stated and the others in previous reports we have a capacity issue we need the oversight in there and we have to move forward on that basis. we have a lot we want to talk about over the coming period of time and credit you for the work you've done. the situation is one that is important in the report that we look forward to you expanding as you say that you will in your report but with work you are

doing i think it will be very helpful to in terms of legislation or probably oversight and all the feed to the fire of the people that are not doing the management what they should be doing and organizing and planning as they should and we need to do to help them if they are on getting the capacity. mr. flake comedy have anything you'd like to add before we let the panel go? thank you for the testimony and for your service and we will work with you if we can be helpful in having your responsibilities fulfil. we will take a five minute break before the second panel starts. [inaudible conversations] >> the subcommittee will receive

testimony from the second panel. mr. allen chvotkin servers on the council for professional service where he is responsible for the association's federal acquisition legislative regulatory policy. prior to this mr. chvotkin was vice president of at&t services and held a number of staff positions in the united states senate including counsel to staff director of the senate small business committee as well last council on armed service. he holds a j.d. from american university school it is the policy of the committee to swear you in before you testified. would you please do you solemnly swear to tell the truth, the whole truth and nothing but the truth? thank you. you're earlier estimate will be placed on the record and we like to of 45 minutes to make opening remarks before we start questioning and i invite you to do so at this time.

>> congressman flake, members of the committees before to appear before the committee today. professional service council is a leading national trade is a seizure of government professional technical services, firms more than three injured 30 member companies represent small, medium and large businesses to provide federal agencies with courses of all kinds. the members and we hundreds of thousands of americans in all 50 states. we've been actively engaged in policy issues relating to the federal government contracting and iraq since the first days. we testified before the senate and in fact before this committee on three separate occasions to and past four years twice at hearings chaired by the vice-chairman of the commission, mr. shea is, when he was in the house of representatives. we've submitted comments on legislation and participated in the comprehensive lessons learned projects conducted by special inspector general for iraq reconstruction and accountability office and in 2005 conducted a formal joint lessons learned review with commanding general of the army. we know the commissioners appointed to conduct this review

and had the opportunity to work professionally with many of them during the past and we worked professionally with senior commission staff and each and every individual brings expertise and perspective to these important tasks. we also have the a fraternity to work with the key federal agencies involved in developing the requirements including the oversight activities and special inspector general for iraq reconstruction. we appreciate challenges they faced and commitments they've shown to fulfill the government's mission. we've also been privileged to work with dozens of companies and hundreds of executives from across the membership in the industry that put their companies and employees on the line every day to further the u.s. government missions and objectives regrettably too many members of the military government's civilian employees and contractor employees both u.s. citizens as well as a third country nationals have given their lives in the support. mr. chairman i can say without fear or contradiction the issues in iraq and afghanistan contract in are among the most complex ever experienced and are in a related and interdependent among

numerous and changing government directive missions activities and priorities. while it is possible and certainly easier to be selected on the issues chosen for their review the value of any analysis on the current or past government contractor activities in iraq in particular must take into account several sets of realities. first, iraq contracting isn't one activity at all. it is three different subsets to support the military and military related activities, and the reconstruction of iraq and third, economic development assistance provided in iraq and afghantan. second, we must look up the time frames for the nation's i effort. the reactions to the fall of the saddam regime presented a different set on the ground actions from the work undertaken by the coalition provisional authority and different style from the more recent rapidly changing physical security environment and new set of contract and directives and policies some initiated by congress and undertaken by the

defense department, state, centcom and joint contract in command for iraq and afghanistan. the final set of realities is what i refer to as situational contracting. to understand the nature of the contract and activities in iraq is essential to understand the differences between emergency contract in during a heightened military action, contingency contracting during heightened physical challenges and longer-term sustainment contracting that could characterize the situation today. it would be a mistake to select any subset of acquisitions written for normal contracting and expect procedural protection when they are applied in the wartime environment. we have known from almost the opposite of the conflict they were too few trained government acquisition professionals assigned to support the rapidly escalating observations of iraq, the significant growth in the number of contracts and number of contractor employees deployed into theater. we've known for almost the opposite of the conflict many contractors awardedusiness in the theater of operation will

overwhelmed by rapidly changing magnitude of the work and pressures put on the standard business operations while responding to the wartime requirements. it comes as no surprise to many in the private-sector who've been watching and commenting the activities and i hope it isn't a surprise to anyone in government who had responsibility for part of these that the lack of contract and officers deployed into the theater, lack of qualified contracting officer representatives assigned to supervise contractors, the lack of state department diplomatic security bullets or the lack of government program management or technical skills. that had an impact on the government ability to execute, manage, and overseas capabilities. as we read you the elements of the interim report that found their way to the public domain prior to today wilbur struck by the fact these examples cited did not in fact speak to abuse or fraud, rather to some of the structural challenges that are all too well known. for example the bill of a dining facility had cost to the government despite questions as to the need for the base.

it isn't a case of contractor or government fraud or misconduct inefficient and waste but not fraud or misconduct. similarly as the commission continues on highly publicized and often tragic defense and demystified perceptions that at times overwhelmed the facts. finally, the commission has held only two public hearings and in both cases on the government officials were invited to testify. there are however numerous perspectives that must be heard from to ensure balance objective review. ..

>> you heard the last panel, you were present for that. what, if any, do you disagree with the recommendations of the panel? >> mr. flake, thank you. i've had a chance to look at the report quickly last night. the thank you. i had a chance to look at the report quickly last night. the panel focused on oversight is appropriate but i think mrs. an important part of the front in the process, making sure there are the resources available to execute the work correctly in the first instance. i support oversight and i think it is an important element of the overall system but a we don't have the right people doing the right things to the beginning of the process, we can

be assured that the oversight function will find errors and mistakes, so we have been strong proponents for increasing the number of officers and representatives come increasing the amount of program management, bringing the work in iraq and afghanistan closer to the theater of operations rather than from alexandria or rock island illinois and with more resources on the ground at the front and we will address those issues, some of the issues the commission identified as the lawyers and management and deficiencies. >> are there cases where fraud is alleged among contractors but never proven and that is the case, what damage is done to the contractor? >> there many allegations of fraud and certainly allegations of contractor overbilling and mischarging. many of them did not prove that to be the case but there are of course litigation issues. the justice department does not push through every allegation of fraud. sometimes the cases are there,

sometimes the prosecutorial discretion is and there but every one of those damages the reputation of the company and i think calls into question the functioning of the entire acquisition system. if there's no credibility in the system from the requirements generation for the contractor war to t oversight-- oversight to the responsibility if allocations are made that are not sustain simply for the sake of making allegations than that damage is thought only the contractor itself with the entire acquisition system. >> you mentioned the dining hall facility controversies surrounding that. apparently was the same contractor that was doing the reconstruction or i am sorry, the refurbishment and got the same contract for 30 million to rebuild the facility or to build a new facility. and come the commission pointed to the lack of coordination and that nobody knew the contractor or those overseeing