type of work that was bid in kuwait using logcap three had@@r . . recommendations, what we're we have a challenge on believe and

that this when we go away, have we come up with procedures to permanent which would encourage follow-up? all of you have seen dozens and dozens and dozens of studies as i have with some very valid recommendations that collect dust. so one of the challenges we have, and a challenge you might have is how do we force some of these action all recommendations for word as we turn now the lights? and that is a problem that we face or a challenge that we face which is not much different than every other commission and oversight organization. >> i think if you have hit right

on. the three of us now if i look at the example collectively own riding on this so we are going to rely on the commission to give some direction at least which is when you think ought to be done. whose responsibility would it be to follow, the executive for the department or congress or whatever and it is going to come upon us to work with you to put the legislation is necessary and if it's not legislation to put up a series of hearings we put the spotlight on whoever is responsible and keep moving to get it done because it is ridiculous to have these hearings go out. thank you. mr. foster, you are recognized for five minutes. >> i was interested whether you think there will be the position to make some sort of retrospective analysis of, you know, the make verses by decision, to contract stuff out and the sole source or multi source the contract, whether at the end of this will people step back and set up the general principles that will tell

whether it is a good idea to contract out of a class of work or not. >> that may just make a comment when we talk about logcap-3 that was given to kbr before we went into iraq. no one anticipated it that we would be sending an incredible, over $30 billion to one contractor. when we went to logcap-4 which three contractors have and they would build internally among the three none of them getting more than i believe $5 billion a year. so we are talking over ten years 150 billion potentially, so we have introduced, the government has introduced a form of competition. but when we went into iraq, there was one person and one company that had in a sense won the contract. in terms of the whole number of

recommendations that had been made and 500 ports and so long, our task is to categorize every one of them to be able to come back and tell you which ones have been implemented, which ones haven't, why we think they've been implemented, why they haven't and our recommendations what could and should be done. so the value, when you see us looking at those past reports it is sent to rework them it is just to know what is done and make sure you know what's been done and hasn't been done. >> and, sir, to your point about are we going to look at the contract and mechanism, there's an absolute obligation to look at it and the type of contracts with their competition has been used and makes sense. i will make a couple observations. in fairness to the record, there are significant efforts to use competition in certain parts of contract and by the military and

by state but one of the areas we highlighted that we are going to focus on in terms of the type of contracts is subcontracting. for example on the logcap program its dollar for dollar. all of the sub contracts are fixed-price so the prime gets a dollar for dollar on a fixed price and all of their labor, but it's fixed price, so it kind of begs the question how good of a job is being done with that? there are four firms involved with that. what kind of data analysis and records are we going to be evaluating? that is the frustration in the report and the obligation of the prime contractor but we are going to get the prime contractor system to make sure they are fulfilling their contractual obligations. >> let's also look at the in-house versus contractor approach. once upon a time there were mess sergeants so the question is whether ultimately that would have been a better deal for the taxpayer to go the traditional

route, turn up the soldiers' salaries if necessary. similarly, are there rules of thumb he vaulting or maybe already existing in terms of the amount of contacting oversight per dollar spent, you know, there is a rule of thumb you want one person on the ground overseeing every $20 million of money spent or something like that? >> well, what lysol in afghanistan personally is the defense contract management agency went through and identified several thousands of tasks that needed to be done and drift down to 537 individuals theater why the need to go out and look at the work being done. the unfortunate part was the number was either 160 something or 180 something but it was only 36% of the positions filled. so about two out of three positions there's nobody looking at the contractor. they've done a good analysis, they just haven't done the work.

>> so what's the nature of the training that's missing? >> that's also a very good question because defense acquisition university developed a couple of courses but i would tell you my example at the tenth mountain division when we brought these individuals and, the military, great americans and said what about training? they have had none so there is a course at fort belvoir and then they told them we got this on line eight hour, 16 our workers and one of them looked at me and said right, because of current activity problems lie spend 30 days trying to take this course and off and on because i kept getting calls and i finally said head with it i can't finish this course so i am going to do the best i can. they are out there doing the best job they can that are not equipped with the training so there's training that's been developed but if they don't get it before they go, -- >> another point is as chairman thibault mentioned, in addition

to the shortage of oversight personnel whether it is 160 were 180, many of them are miscast, and we reference a few examples in the report where you have got a combat medic overseeing the security operations on a ford operating base. we've got other instances where one contract officer representative is overseeing 15 different contracts in addition to performing the principal duty which is unrelated to any of the contracts the person is overseeing so there is a shortage, there is a training problem, and there is a casting problem of supplying the right kind of skills to the contract oversight. and in many cases we don't have

those skills within the army. >> if i could add one other quick point. a number of these save the contract and officer representatives in the course -- they may come in and leave and the contractor is still there, so you know, they don't have the institutional knowledge and they don't stay long enough, so that's another part of the problem. >> thank you, mr. foster. mr. duncan, you're recognized for five minutes. >> thank you very much, mr. chairman and let me first say i think the work you're doing is very important, and i hope that it doesn't just gather dust, and i'm very pleased our former colleague, congressman shays, is on the panel because always thought chairman shays was one of the finest members of this committee ever had. >> can you pull the microphone a

little closer? thank you. >> i have been tremendously concerned about the horrendous waste that's been going on in the defense department especially after a year, a year and a half ago when the gao can now with the report that said we have $295 billion in cost overruns in just the 72 largest systems and it seems to me anybody who considers himself or herself to be fiscally conservative should have been extremely upset or horrified by that, get it didn't seem that many people were, and it looks as though both parties are trying to prove how patriotic they are or are concerned somebody one might feel they are not patriotic if they don't just give the defense department every penny that they want and then some, and now we are ramping up in afghanistan and

spending unbelievable amounts of money. and then on read in your testimony, mr. thibault, you're talking about massive confusion and loss, enormous waste. you save billions of dollars in wasteful spending has occurred and may still be occurring. and it looks to me like, you know, it really would be unpatriotic if we didn't question these things and do everything possible to stop all of this waste. very few people are willing to go out against anything that defense department wants, so apparently nothing is being done, and there is i sometimes wonder if there are any fiscal conservatives at the pentagon according to the congressional research service we are now spending and we had in the regular budget, the supplemental

bills and we are getting ready to vote on another supplemental bill within either this week or a few days from now, and in the emergency appropriations and all the money they throw into the omnibus we are spending more on defense than all the other nations of the world combined and it seems to me that, you know, a lot of it is generated because the defense contractor's higher all the retired admiral and generals and called for the revolving door of the pentagon but somebody is going to have to -- i don't think that we can just keep on wasting and blowing money in the way that we are doing. the only question i have, you say at one point in your testimony there are a number of new projects in the pipeline and he mentioned this 30 million-dollar facility. how many, rough guess, how many other new projects are going on?

>> i can't answer that because that is the immediate action, we are doing the analysis. we know it's $2 billion. we want to go out and touch those projects to see if they make sense. that's why you need people in theater. it just happened that this was shared when we happened to visit that base and you know, a couple hundred bases in iraq we visited three or four of them and there is obviously the need to do the analysis and then go out and look at the high dollar items and ask those questions does this make sense with the drawdown of iraq. >> so do you mean you from a visit to three or four and there are hundreds of basis so is the 2 billion just the tip of the iceberg estimate? >> that's what is in the pipeline has approved construction projects, and it's kind of interesting this project example of the dining facility

right next to it, and they need to feed 4,000 individuals. the upgraded because they have a lot of problems with the existing one and they spent $3.6 million. that had just occurred and what happened is the paperwork that showed all the problems that led to this upgrading cafeteria to conserve the number made it over to the planning documents for the new construction so they still felt they had this dilapidated dining facility and i don't -- the only thing i can think of and it's the importance of the chairman, you have to go out and look at it and spend the time in the country because if we hadn't known of that would have come forward. you can just do analysis on people work because it would say dilapidated facility company to build it. well if it had just been renovated we are going to have to great dining facilities. >> it was also down at a time before the agreement between iraq and the u.s..

so as it@ @ @ @ @ @ @ @ i thank you all for your great work. i haven't been to iraq as many times as mr. shays but i am up around a dozen now. one of my jobs before i came to the congress i spent a lot of time on construction sites and have a construction engineering degree and i am surprised we get as much work done in iraq and afghanistan given the contract

arrangements we have. i have seen horror shows. i've visited a lot of construction sites in iraq and afghanistan and i think that the special former special inspector general for iraq did a fantastic job but for my business to afghanistan i think that the situation and inspector general in afghanistan is far less able, he is new or but far less able to police the contract situation so i am very apprehensive about our ability to lose money and afghanistan wasted through incompetence as well as fraud. one of the earliest arings we had back in 2003, 2004 all iraq i asked the director for the

dca, the defense contracting agency, i said how many contractors, excuse me, how many of the terse do you have an iraq and he said we don't have any. at this point, we are spending billions of dollars, billions. and i said how does that work and he said well, we are auditing the work and contracts in iraq from alexandria va, which explained why, you know, it's reflected in your own report explains why we are having such a problem. and now i read again from the kennedys memo we've got four folks in the country spending billions of dollars. we have to add the blogger mer force base and two down in kandahar and that's it.

and if we don't get a handle on it with boots on the ground, people competent enough to review these contracts, this is a criminal. it's criminal. you know, there is nobody that would operate like this in a private basis if we were spending private corporate dollars this wouldn't be happening. i think it's happening only because we are spending taxpayer dollars and people feel that it doesn't have to be audited to that degree. we are terribly sloppy in iraq and afghanistan and have got to tighten our act. what do you see as the greatest need in terms of getting some accountability on the ground? we can't continue to operate this way in terms of the contract going out without tight enough accountability standards and recognizable standards. i go on to jobs in iraq just

from looking on to the job site ec substandard materials. i try to talk to the workers there. i had an iraqi interpreter with me and it turns out they are all from india. now, 60% unemployment in iraq, you know, why the heck are we bringing in foreign workers? god bless the folks from india but you watch people from iraq to work and it just seems there's no requirement in the contract that would help the overall cost of putting people to work and stabilizing the country but for some of your own attendance and observations on the ground what do you think needs to be done first and fastest? >> i think the first thing we need to do is encourage the department of defense to make this one of their highest priorities. we have spent and contract in

$103 billion. in afghanistan, 20 billion. in kuwait, 18 billion, and in the other countries supporting iraq and afghanistan, 12.7 billion. $154 billion. and we know is we don't have enough contract office representatives. we don't have enough quality assurance representatives, we don't have enough log -- cor 11 officers watching the contractors. we have 70% of the contracts go to subcontractors. adderall in this country makes it a requirement we can only oversee the subcontractor by going through the prime and so we have to get the information secondhand. i think we need to reexamine that 70% of the dollars i mentioned are actually going to the subs. we have another issue and that is if it is afghan employees or

iraqi employees we have to deal with those governments and there's certain protections and hoops we have to jump and it would strike me if we are going to spend our dollars there which should have greater ability to oversee the contracts done by the folks paid for by us. >> thank you. >> i do know in the report you used an example cutting through the prime going straight to the subcontractor making that person the prime. that is better capacity on our own standard not to rely on a contractor said they don't take the cut and you indicated one of the instances the contractor jacked the prices up and then the prime went and double it and passed it along and so they took that off the top so i think you are right and i hope you continue to look at that aspect and share that with us. page nine of the report you have a sidebar that talks about cracks in kabul. you have another compound where supposedly the united states

forces in afghanistan quarters are going to be where the general will be sitting eckert said he won't because the structural cracks, and proper plumbing and unusable bathrooms and correctly sized sewage systems braking and leaking pipes, sinking sidewalks and other construction defect spirited how does that happen? that somebody signs off on a project like that where we end up getting tagged for the bill and having an unusual building on that? >> one of the recurring themes is accountability. how does that happen? in this particular instance united states court of engineers -- this instance the corps of engineers linebaugh this 18 million-dollar contract by a turkish construction company was adequate. and it's interesting because it talks a little bid of our methodology. when we were over there we interviewed a senior that happened to be a major

individual that inherited this building. actually you talk about rework because as these repairs were wrong, the logistics contract, its essentials of they can have the tape is, kbr, is doing much of the work this turkish company did and they came in and if we did the warranty because they came in and approved everything. the only way you could physically approve it is to not be physically there. because in just this list where we ask for information paper from the responsible personnel major issues, septic, electrical , ceiling tiles falling down, 250 missing, fire alarm system, these are big deals, power generators. >> eight is kbr responsible for managing the work of the turkish of it? >> no, that was separate. >> it was the contractor at the time? >> yes, kbr came to the rescue but that is reworking.

>> do we know whether or not the army corps of engineers official who was responsible was never disciplined? >> no we don't and that is the accountability issue. somewhere and that is commissioner shlaes plight i think we have to start identifying who is responsible and not just that individual someone reviewing and training his workload so i think it goes up a little higher. my suggestion in this process as we have seen military accountability in situations but we just haven't yet seen where these situations occur. someone said why and they are in debt. >> i think they don't do business with us any more but they probably do. >> they do, 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 will fail. >> it speaks again to the presence in the country but he will work with this committee and we will try to help you with 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 pem