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The cost of the war in Iraq has ballooned, in part, because of the dearth of trained acquisition professionals assigned to the theater and the failure of federal agencies to establish a uniform set of procurement policy guidelines, a pair of government watchdogs testified this week.

Defense and State Department officials, meanwhile, said that while slow out of the gate, they have altered many of their policies and are well on their way to reasserting control of contractors that work alongside military personnel.

At a joint hearing of two Senate Homeland Security and Governmental Affairs subcommittees Thursday, Stuart Bowen Jr., special inspector general for Iraq reconstruction, said post-conflict operations have been plagued by a lack of oversight and a convoluted mismanagement system, which placed no one entity in charge of the contingency contracting efforts.

"The contracting process in Iraq suffered from a tapestry of regulations applied by diverse agencies, which caused inconsistencies and inefficiencies that inhibited management and oversight," Bowen said.

William Solis, director of defense capabilities and management at the Government Accountability Office, said the Defense Department's inability to supervise contractors could be tracked back to a number of long-standing management problems.

Solis said Defense refused to integrate contractors into its long-term planning process; failed to properly allocate and train sufficient procurement staff, and did not systematically analyze lessons learned from previous conflicts that involved contractors -- most notably the 1991 Gulf War and military operations in the Balkans in the mid-1990s. The result, Solis said, has hurt both taxpayers and military operations.

"We have found several instances," he said, "where poor oversight and management of contractors has led to negative monetary and operational impacts."

The Defense Contract Audit Agency reported that out of $57 billion in contracts for services and reconstruction in Iraq, more than $10 billion either is questionable or cannot be supported because of a lack of information.

Meanwhile, federal agencies have opened at least 80 separate criminal investigations into wartime contracts totaling more than $5 billion, said Sen. Thomas Carper, D-Del., chairman of the Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.

Despite the waste outlined in several audits and government reports, no contracting officials appear to have lost their jobs or been denied a promotion, according to Solis and Bowen.

Sen. Claire McCaskill, D-Mo., who co-sponsored a recently passed amendment to create a Commission on Wartime Contracting, said the Bush administration had failed to hold officials accountable. If top officials do not lose their jobs or, in the case of uniformed military leaders, are stripped of a star, McCaskill said, "things will not change."

Defense officials have conceded that they underestimated or misread many of the problems that came as a result of the military's reliance on contingency contractors, but said they now have a better handle on the workforce and oversight issues.

"Faced with this unprecedented scale of our dependence on contractors, we have confronted major challenges associated with the visibility, integration, oversight and management of a large contractor force working alongside our deployed military personnel that, frankly, we were not adequately prepared to address, said Jack Bell, deputy undersecretary of Defense for logistics and materiel readiness.

Bell said his office was working on a "comprehensive policy and program management framework" that would better determine the requirements of contractors in support of wartime efforts; establish a deployable contingency acquisition unit, and improve training and education for contracting professionals thrust into the theater. The Defense and State departments, he added, also have made progress implementing an agreement, passed last year, to improve the oversight of private security contractors.

Defense, Bell said, also is reviewing the recommendations of a report issued last year by a commission chaired by Jacques Gansler, who served as undersecretary of Defense for acquisition, technology and logistics from 1997-2001. The Gansler report suggested that the Army beef up its depleted contracting workforce by adding nearly 2,000 more workers and restructure its management organization to create five new Army general officers, and one Senior Executive Service position, to oversee the wartime contracting effort.

"The Army needs general officers who know contracting and can serve as functional advocates for expeditionary operations; and to avoid the problems that are now being experienced in Iraq, Afghanistan and Kuwait, said David Maddox, the now retired former commander in chief of the U.S. Army Europe and a member of the Gansler Commission.

The estimated number of contractors working in Iraq has ranged in recent years from 125,000 to 180,000, although a high percentage of that figure is believed to be Iraqi laborers and foreign nationals. At the end of fiscal 2007, U.S. Central Command reported more than 196,000 contractor personnel working for Defense in Iraq and Afghanistan, Bell testified.

COMMENTS

• There seems to be a failure to ask why did the DoD go down this path. Yes, it's true that Contractors have been in the battlefield however never to this extent. The premise that it would be cheaper to have all these life support services provided by private industry versus the GI. Well, is there any real cost savings? I fear not (and no one is asking!). The only savings I can figure out is politcal. By not having to draft our young and our leadership Top~DOD are playing shell games as they know best. The American people truly does not see the impact of this war first hand in the streets. This is only one part of the problem but should be the genisis of the discussion to include soulions to fixing this problem and creating new contrating TTP to help our troops. God Blees America D Posted February 7, 2008 7:42 AM
• These issues are no surprise to those of us who have experienced years of neglect in the health of the contracting community, which includes many more people than those engaged in writing contracts. We critically need more functional experts who can serve as inspector of services so we can be assured we're receiving what we're paying for. Without additional resources applied in correct balance, simply adding more contracting personnel will not hit the target of making us more effective in curbing potential waste. I'm anxious to see how NSPS cures this situation. former active duty Procurement Officer and current 1102. Posted January 29, 2008 7:45 AM
• Adding 5 general officer's and an SES who understand contracting has no value added and verges on the ridiculous. The problem is not with contracting for major systems acquistion. The problems identified are at the camp post and station contracting level (supplies and services, contruction, repair and maintenance. In the Air Force, senior NCO's and company grade officers have established career paths and can perform, manage and administer all types of contract oversight or surveillance. The other services must follow suit. Given that the ultimate military customer for whom the contract was written provides a professionally written statement of work, adequately quantifiable and clearly measureable, and the customer provides a competent (contracting and quality) representative to measure and report results of contractor performance nothing can or will save the system. General Officer's will not add value and will only add to more top down pressure on the contracting officer(s) and technical folks. Normally the government fails to accurately define what it wants, when it wants it, who will use it, why it is needed and where it will be used. The base, post camp and installation procuremtnt system will fail without the DOD and Congress fully funding requirements up front and maintaining continuity of the contracting personnel and support staff. Integrating the contractor(s) community at all stages of the contracting process will reduce costs, minimize schedule variances, and ensure performance goals are met. Bottom line, government planning without funding is pure fantasy. We do not allow the incremental funding of our government workforce why do we incrementally fund the contractor and expect outstanding performance? on a promisory note? How and what are the additional general officer's and SES going to to add value to this process. All DOD should be mandated to follow the Air Force blue print for professional contracting. Dan B Posted January 28, 2008 5:08 PM