This is the accessible text file for GAO report number GAO-10-179 
entitled 'Operation Iraqi Freedom: Preliminary Observations on DOD 
Planning for the Drawdown of U.S. Forces from Iraq' which was released 
on November 2, 2009. 

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Statement Before the Commission on Wartime Contracting in Iraq and 
Afghanistan: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 9:30 a.m. EST:
November 2, 2009: 

Operation Iraqi Freedom: 

Preliminary Observations on DOD Planning for the Drawdown of U.S. 
Forces from Iraq: 

Statement of William M. Solis, Director: 
Defense Capabilities and Management: 

GAO-10-179: 

GAO Highlights: 

Highlights of GAO-10-179, a statement before the Commission on Wartime 
Contracting in Iraq and Afghanistan. 

Why GAO Did This Study: 

The United States and the Government of Iraq have signed a Security 
Agreement calling for the drawdown of U.S. forces from Iraq. Predicated 
on that agreement and U.S. Presidential guidance, Multi-National Force-
Iraq (MNF-I) has issued a plan for the reduction of forces to 50,000 
U.S. troops by August 31, 2010, and a complete withdrawal of forces by 
the end of 2011. The drawdown from Iraq includes the withdrawal of 
approximately 128,700 U.S. troops, over 115,000 contractor personnel, 
the closure or transfer of 295 bases, and the retrograde of over 3.3 
million pieces of equipment. 

Todayís statement will focus on (1) the extent to which the Department 
of Defense (DOD) has planned for the drawdown in accordance with 
timelines set by the Security Agreement and presidential directive; and 
(2) factors that may impact the efficient execution of the drawdown in 
accordance with established timelines. This statement is based on GAOís 
review and analysis of DOD and MNF-I plans, and on interviews GAO staff 
members conducted with DOD officials in the United States, Kuwait, and 
Iraq. It also draws from GAOís extensive body of issued work on Iraq 
and drawdown-related issues. 

What GAO Found: 

While DODís primary focus remains on executing combat missions and 
supporting the warfighters in Iraq, several DOD organizations have 
issued coordinated plans for the execution of the drawdown within 
designated time frames. In support of these plans, processes have been 
established to monitor, coordinate, and facilitate the retrograde of 
equipment from Iraq. DODís organizations have reported that their 
efforts to reduce personnel, retrograde equipment, and close bases have 
thus far exceeded targets; since May 2009, for example, DOD reports 
that the number of U.S. servicemembers in Iraq has been reduced by 
5,300, and another 4,000 are expected to be drawn down in October. 
However, many more personnel, equipment items, and bases remain to be 
drawn down. For U.S. forces, contractor personnel, selected vehicles, 
and bases, the graphic below depicts drawdown progress since May 2009, 
as well as what remains to be drawn down by August 31, 2010 and 
December 31, 2011, respectively. 

Figure: Drawdown Progress Since May 2009 and What Remains to Be Drawn 
Down through August 31, 2010, and December 31, 2011: 

[Refer to PDF for image: horizontal bar graph] 

U.S. Forces: 
Drawn down since May 2009, as of Sept. 2009: 4%; 
To be drawn down through Aug. 31, 2010: 59%; 
To be drawn down through Dec. 31, 2011: 37%. 

Contractor personnel: 
Drawn down since May 2009, as of Sept. 2009: 8%; 
To be drawn down through Aug. 31, 2010: 32%; 
To be drawn down through Dec. 31, 2011: 60%. 

Tracked and wheeled vehicles: 
Drawn down since May 2009, as of Sept. 2009: 11%; 
To be drawn down through Aug. 31, 2010: 51%; 
To be drawn down through Dec. 31, 2011: 38%. 

Bases: 
Drawn down since May 2009, as of Sept. 2009: 22%; 
To be drawn down through Aug. 31, 2010: 67%; 
To be drawn down through Dec. 31, 2011: 11%. 

Source: GAO analysis based on DOD data. 

[End of figure] 

Efficient execution of the drawdown from Iraq, however, may be 
complicated by crucial challenges that, if left unattended, may hinder 
MNF-Iís ability to meet the time frames set by the President, the 
Security Agreement, and MNF-Iís phased drawdown plan. First, DOD has 
yet to fully determine its future needs for contracted services. 
Second, the potential costs and other concerns of transitioning key 
contracts may outweigh potential benefits. Third, DOD lacks sufficient 
numbers of contract oversight personnel. Fourth, key decisions about 
the disposition of some equipment have yet to be made. Fifth, there are 
longstanding incompatibility issues among the information technology 
systems that may undermine the equipment retrograde process. And sixth, 
DOD lacks precise visibility over its inventory of some equipment and 
shipping containers. While much has been done to facilitate the 
drawdown effort, the efficient execution of the drawdown will depend on 
DODís ability to mitigate these challenges. We will continue to assess 
DODís progress in executing the drawdown from Iraq and plan to issue a 
report. 

View [hyperlink, http://www.gao.gov/products/GAO-10-179] or key 
components. For more information, contact William M. Solis at (202) 512-
8365 or solisw@gao.gov. 

[End of section] 

Chairman Thibault, Chairman Shays, and Commissioners: 

I appreciate the opportunity to be here today to discuss issues related 
to the drawdown of U.S. forces from Iraq. When GAO last reported on the 
progress of planning for the Department of Defense's (DOD) drawdown 
from Iraq in September 2008, the pace and overall extent of drawdown 
had yet to be determined, although various defense commands had already 
begun planning toward that end.[Footnote 1] Since then, the United 
States and the Government of Iraq have signed a Security Agreement that 
took effect on January 1, 2009, which includes a timeline and 
requirements for the drawdown of U.S. forces from Iraq. In addition, on 
February 27, 2009, President Obama announced that by August 31, 2010, 
Multi-National Force-Iraq's (MNF-I) mission will change from combat to 
supporting the Iraqi government and its security forces. In light of 
these developments, MNF-I has issued a phased plan aligned with goals 
and time frames set forth by the Security Agreement and the President, 
including a transition in mission, the reduction of forces to 50,000 
U.S. troops by August 31, 2010, and a complete withdrawal of forces by 
the end of 2011.[Footnote 2] 

The drawdown effort has already begun. It is, however, one of several 
tasks U.S. forces in Iraq are conducting concurrently in a continuously 
evolving environment during a period of Iraqi political uncertainty. 
For example, besides overseeing operations in Iraq, MNF-I and its 
subordinate headquarters are also merging into a single headquarters, 
called United States Forces-Iraq, which is scheduled to become mission 
capable on January 1, 2010, and includes a 40 percent reduction of 
headquarters personnel. Moreover, brigade combat teams are being 
replaced by relatively new Advise and Assist Brigades that will focus 
primarily on training Iraqi security forces while retaining the 
capability to conduct full-spectrum operations. Finally, although DOD 
has reported that enemy activity has decreased markedly since its 
highest point in June 2007, the insurgency in Iraq remains dangerous. 
[Footnote 3] 

As of August 31, 2009, there were approximately 128,700 U.S. military 
personnel in Iraq, spread among 295 bases throughout the country. 
Additionally, there were over 3.3 million pieces of Army equipment in 
Iraq worth $45.8 billion, 18 percent of which is theater provided 
equipment, which is a pool of permanent, stay behind equipment that has 
accumulated in Iraq and Kuwait since combat operations began in 2003. 
Although much of this theater provided equipment has remained in 
theater as units rotate, the withdrawal timelines in the Security 
Agreement will compel DOD to make critical decisions regarding the 
future of this equipment. Figure 1 below provides a more detailed 
breakdown of the U.S. Army equipment in Iraq. In addition, DOD reported 
over 119,000 contractor personnel in Iraq as of third quarter fiscal 
year 2009.[Footnote 4] Contractor personnel in Iraq and Kuwait perform 
a wide range of tasks essential for drawdown including repairing 
military vehicles, providing trucks and drivers for logistics convoys, 
and providing transportation assets and personnel necessary for the 
retrograde of equipment. In addition, contractor personnel working on 
the Logistics Civil Augmentation Program (LOGCAP) provide the majority 
of base and life support in Iraq.[Footnote 5] 

Figure 1: Breakdown of U.S. Army Equipment in Iraq: 

[Refer to PDF for image: pie-chart] 

Unit owned/authorized equipment (2,143,699): 65%; 
Contractor acquired property (604,623): 18%; 
Theater provided equipment, non-standard (369,298): 11%; 
Theater provided equipment, standard (212,556): 6%. 

Source: GAO analysis based on DOD data. 

[End of figure] 

You asked us to provide our preliminary observations concerning DOD's 
progress in planning for the drawdown of materiel from Iraq, and 
challenges that may affect the smooth execution of the drawdown. My 
statement today will focus on: (1) the extent to which DOD has planned 
for the drawdown from Iraq in accordance with timelines set by the 
Security Agreement and presidential directive, and (2) factors that may 
impact the efficient execution of the drawdown in accordance with 
established timelines. Additionally, we will continue to assess DOD's 
progress in executing the drawdown and plan to issue a report. 

My statement is based on our review and analysis of DOD and MNF-I 
plans, and interviews GAO staff members conducted with DOD officials in 
the United States, Kuwait, and Iraq. Additionally, I have drawn from 
our body of issued work examining Iraq and drawdown-related issues. 
[Footnote 6] This work was conducted in accordance with generally 
accepted government auditing standards. Those standards require that we 
plan and perform the audit to obtain sufficient, appropriate evidence 
to provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We provided copies of a draft of this statement to the 
Department of Defense for its review and comment. We considered and 
incorporated its comments, as appropriate. 

Summary: 

While DOD's primary focus remains on executing combat missions and 
supporting the warfighters in Iraq, several DOD organizations have 
issued coordinated plans for the execution of the drawdown from Iraq 
within designated time frames. Furthermore, in support of these plans, 
processes have been established to monitor, coordinate, and facilitate 
the retrograde of equipment out of Iraq. Additionally, several 
organizations have been created to oversee, synchronize, and ensure 
unity of effort during the drawdown.[Footnote 7] Moreover, DOD reports 
that it has exceeded its goals during the initial months of the 
drawdown. While DOD's progress since May 2009 has exceeded its targets, 
a large amount of personnel, equipment, and bases remain to be drawn 
down within the established timelines: 

Several unresolved issues may impede effective execution of the 
drawdown in accordance with time frames set by the President and the 
Security Agreement and which are encompassed in MNF-I's phased drawdown 
plan. These include: 

* contract services that have not been fully identified; 

* potential costs and other concerns of transitioning key contracts 
that may outweigh potential benefits; 

* longstanding shortages of contract oversight personnel; 

* some key decisions about the disposition of equipment that have not 
yet been made; 

* longstanding information technology system weaknesses; and: 

* a lack of precise visibility over some equipment. 

Without resolution, these issues may inhibit the efficient and 
effective execution of the drawdown. 

DOD Organizations Have Issued Coordinated Plans and Established 
Processes and New Organizations to Facilitate the Drawdown from Iraq: 

A number of DOD organizations have issued orders outlining a phased 
drawdown from Iraq that meet the time frames set forth in the Security 
Agreement and presidential guidance, while being responsive to security 
conditions on the ground. Additionally, much has been accomplished to 
prepare for the retrograde[Footnote 8] of materiel from theater, 
including establishing processes to monitor, coordinate, and facilitate 
the flow of equipment out of Iraq. Furthermore, several organizations 
have been created to facilitate the retrograde of equipment and support 
unity of effort. To date, these efforts have contributed to MNF-I 
meeting or exceeding its targets for drawing down forces, retrograding 
equipment, and closing bases. While DOD has made significant progress 
executing the drawdown, there remains a large amount of personnel, 
equipment, and bases that must be drawn down within the established 
timelines. 

Headquarters, Department of the Army, MNF-I, and its subordinate 
command responsible for executing the drawdown in Iraq--Multi-National 
Corps-Iraq (MNC-I)--have issued plans outlining how the drawdown should 
be managed over time. These plans also endeavor to provide flexibility 
to commanders on the ground to conduct ongoing combat operations while 
simultaneously executing the drawdown. For example, in order to balance 
operational needs with the requirement to meet drawdown goals, 
commanders have the discretion to choose which of their equipment is no 
longer essential for ongoing operations, and can therefore be 
retrograded. Subsequent phases will see an increase in the flow of 
equipment retrograded from Iraq as the pace of the drawdown quickens. 

In support of these plans, processes have been established to monitor, 
coordinate, and facilitate the retrograde of equipment out of Iraq. As 
we reported in September 2008, MNF-I had processes in place to manage 
the retrograde of various types of equipment from Iraq. Since that time 
these processes have been refined and new elements have been 
established to improve them. For example, partly in response to our 
previous work, representatives from the Office of the Secretary of 
Defense's Lean Six Sigma office conducted six reviews to optimize 
theater logistics, one of which focused on the process for retrograding 
equipment from Iraq.[Footnote 9] This work informed the development of 
a new data system, referred to as the Theater Provided Equipment 
Planner, which is intended to streamline the retrograde process by 
facilitating the issuance of disposition instructions for theater 
provided equipment while it is still in Iraq. In addition, a second new 
data system, Materiel Enterprise Non-Standard Equipment, has also been 
developed to facilitate the issuance of disposition instructions for 
non-standard equipment. 

In addition to refining the retrograde processes, several organizations 
have been created to oversee, synchronize, and ensure unity of effort 
for the retrograde of equipment from Iraq. In September 2008, GAO 
reported that the variety of organizations exercising influence over 
the retrograde process and the resulting lack of a unified or 
coordinated command structure was not consistent with joint doctrine, 
led to increased confusion and inefficiencies in the retrograde 
process, and inhibited the adoption of identified mitigation 
initiatives. To bolster unity of effort, MNF-I has created a Drawdown 
Fusion Center, the mission of which is to provide a strategic picture 
of drawdown operations, identify potential obstacles, address strategic 
issues, and assist in the development of policy and guidance related to 
several aspects of drawdown. To accomplish this mission, the Drawdown 
Fusion Center provides guidance on the disposition of materiel, 
monitors and advises on transportation options, tracks and monitors the 
capabilities of ports through which materiel is shipped, tracks 
logistics actions that impact disposition during drawdown, and acts as 
a focal point for all external agencies and the Government of Iraq in 
matters related to the drawdown. Assisting the Drawdown Fusion Center 
is U.S. Army Central's Support Element-Iraq, a liaison element 
established to enhance synchronization and coordination among MNF-I; 
MNC-I; U.S. Army Central; Headquarters, Department of the Army; and 
Army Materiel Command. It also generates theater and Department of the 
Army disposition guidance for all forces and materiel redeploying and 
retrograding out of Iraq. Finally, the Department of the Army, with 
Army Materiel Command as the lead agency, created a Responsible Reset 
Task Force to facilitate the provision of disposition instructions for 
materiel retrograding out of Iraq and synchronize those instructions to 
facilitate the reset of Army equipment.[Footnote 10] 

DOD organizations reported that their efforts to reduce personnel, 
retrograde equipment, and close bases in the initial months of the 
drawdown have exceeded targets. First, according to the MNF-I 
commanding general, U.S. forces have already begun drawing down in Iraq 
without compromising security. For example, since May 2009, the number 
of U.S. servicemembers in Iraq has been reduced by 5,300. Furthermore, 
the MNF-I commander testified on September 30, 2009, that another 4,000 
servicemembers will likely be drawn down in October 2009--earlier than 
originally planned--due to improvements in Anbar province. Second, as 
of August 2009, the Army reported that it has exceeded its target 
figure for the retrograde of rolling stock by 1,800 pieces.[Footnote 
11] Finally, the Army has reported that as of August 2009, it had 
closed three more bases than originally planned. 

While DOD's progress since May 2009 has exceeded its targets, a large 
amount of personnel, equipment, and bases remain to be drawn down 
within the established timelines. To meet the presidential target of 
reducing the number of U.S. forces in Iraq to 50,000 by August 31, 
2010, MNF-I must reduce its forces by almost 60 percent by next summer. 
Furthermore, to meet the other targets established by MNF-I and the 
Army for August 2010, MNF-I must draw down 32 percent of its contractor 
personnel workforce, retrograde over 50 percent of its tracked and 
wheeled vehicles, and close 67 percent of its bases in Iraq. The 
remaining forces, contractor personnel, and equipment will have to be 
drawn down during the final 16 months, from September 2010 to December 
31, 2011, during which time some of the largest bases in Iraq will also 
need to be closed or transferred to the Government of Iraq, a task the 
commanding general of MNF-I stated could take 9 to 10 months to 
complete. Figure 2 below illustrates the numbers of U.S. forces, 
contractor personnel, tracked and wheeled vehicles, and bases that have 
been drawn down since the initiation of drawdown; that must be drawn 
down by the August 31, 2010, change of mission date; and that must be 
drawn down before December 31, 2011. 

Figure 2: Drawdown Progress Since May 2009 and What Remains to Be Drawn 
Down through August 31, 2010, and December 31, 2011: 

[Refer to PDF for image: horizontal bar graph] 

U.S. Forces: 
Drawn down since May 2009, as of Sept. 2009: 4% (5,200); 
To be drawn down through Aug. 31, 2010: 59% (78,800); 
To be drawn down through Dec. 31, 2011: 37% (50,000). 

Contractor personnel: 
Drawn down since May 2009, as of Sept. 2009: 8% (9,900); 
To be drawn down through Aug. 31, 2010: 32% (40,300); 
To be drawn down through Dec. 31, 2011: 60% (75,000). 

Tracked and wheeled vehicles: 
Drawn down since May 2009, as of Sept. 2009: 11% (4,500); 
To be drawn down through Aug. 31, 2010: 51% (21,200); 
To be drawn down through Dec. 31, 2011: 38% (15,500). 

Bases: 
Drawn down since May 2009, as of Sept. 2009: 22% (83); 
To be drawn down through Aug. 31, 2010: 67% (255); 
To be drawn down through Dec. 31, 2011: 11% (40). 

Source: GAO analysis based on DOD data. 

[End of figure] 

Efficient Execution of the Drawdown Requires the Resolution of Several 
Key Issues: 

Efficient execution of the drawdown from Iraq may be complicated by 
crucial challenges regarding several unresolved issues that, if left 
unattended, may hinder MNF-I's ability to meet the time frames set by 
the President, the Security Agreement, and MNF-I's phased drawdown 
plan. These challenges include: 

* contract services that have not been fully identified; 

* potential costs and other concerns of transitioning key contracts 
that may outweigh potential benefits; 

* longstanding shortages of contract oversight personnel; 

* some key decisions about the disposition of equipment that have not 
yet been made; 

* longstanding information technology system weaknesses; and: 

* a lack of precise visibility over some equipment. 

Some of these issues are outside MNF-I's purview and require action by 
the Office of the Secretary of Defense and the Military Departments. 
Others require a coordinated effort by MNF-I, U.S. Army Central, and 
other DOD organizations supporting the drawdown effort. 

Contract Services Needed to Support the Drawdown Have Not Been Fully 
Identified: 

DOD has not fully defined the additional contracted services it will 
need to successfully execute the drawdown and support the remaining 
U.S. forces in Iraq. Experience has shown that requirements for 
contracted services will likely increase during the drawdown and joint 
guidance states that planners should work closely with contracting 
officers to determine the best approach for purchasing contract 
services.[Footnote 12] In Iraq, such efforts may be hampered because 
contracting officials in Iraq do not have full visibility over the 
approximately 52,000 contracts in theater.[Footnote 13] Officials at 
Joint Contracting Command-Iraq/Afghanistan, the organization 
responsible for coordinating contract support during the drawdown, are 
currently trying to get the full picture of operational contract 
support in Iraq. However, DOD lacks a centralized repository of the 
specific services available on the various contracts. For example, 
there are several contracts for trucking services currently being used 
to transport materiel in support of the drawdown, but planners may lack 
the details necessary to allocate these services efficiently as 
drawdown progresses. Joint guidance also calls for DOD to identify 
contracted support requirements as early as possible to ensure that the 
military receives contracted support at the right place, at the right 
time, and for the right price.[Footnote 14] In particular, for the 
drawdown of forces to occur according to the timelines, commanders will 
need to determine their contract support requirements and communicate 
these to contracting officers several months in advance. Although the 
MNF-I drawdown order anticipates an increase in its need for contracted 
services through September 1, 2010, as of July 2009 commanders had not 
identified the specific types and levels of contracted services they 
will need during the drawdown. For example, Army officials in Kuwait 
responsible for the retrograde of theater provided equipment had not 
defined the specific level of contracted services needed to perform 
functions such as repairing vehicles and requesting disposition 
instructions. 

In planning for the contractor presence needed during the final phase 
of the drawdown, MNF-I has made assumptions in the absence of defined 
requirements or full visibility over contracted services that may 
contribute to wasted resources and may hinder the timely execution of 
drawdown. Even though it anticipates an increase in contracted services 
needed during the drawdown, MNF-I has set a target for reducing the 
number of contractor personnel in Iraq to 75,000 by September 1, 2010. 
According to MNF-I officials, this target was based on the historic 
ratio of contractor personnel to servicemembers in Iraq, rather than 
requirements for contracted support. However, as GAO has previously 
reported, the drawdown of forces may create additional requirements for 
contracted support, and officials in Iraq have acknowledged that 
additional contractor personnel will be needed to provide services 
currently being provided by U.S. forces.[Footnote 15] For example, 
according to DOD, in the third quarter of fiscal year 2009 the number 
of armed private security contractors in Iraq went from 10,743 to 
13,232, a 23 percent increase. This increase in private security 
contractors was due, in part, to an increased need for private security 
contractors as the military began drawing down its forces. Without 
identifying the level and types of contractor support needed to 
facilitate the drawdown, the actual number of contractor personnel 
needed remains unknown. Unless commands in theater define and 
communicate contract requirements with sufficient lead time, DOD risks 
not having the right contracted services in place to meet drawdown 
timelines and may resort to contracting methods that could cost the 
government more and that may be conducive to waste. Moreover, in 
determining the best means to meet commanders' requirements, planners' 
limited visibility over the range of contracted services available may 
contribute to decisions based on incomplete information, buying 
services that are already on contract, experiencing difficulty in 
enforcing priorities, and using limited contracting resources 
inefficiently. These outcomes may impact the timely execution of the 
drawdown. In 2006, we reported that a lack of visibility over 
contracted support negatively impacted MNF-I and MNC-I planning for 
base closure, among other things.[Footnote 16] 

Near-Simultaneous Transition of Key Contracts Creates Risks for 
Interruption of Services: 

The transition of key contracts that are scheduled to expire during the 
height of the drawdown presents the potential for the interruption of 
vital services. With the exception of LOGCAP, major contracted services 
in Iraq and Kuwait, including those for base and life support, convoy 
support, and equipment maintenance will soon reach their expiration 
date and are scheduled to be re-competed and re-awarded.[Footnote 17] 
If contracts are awarded to new contractors, outgoing and incoming 
contractors would be required to transition within a certain time 
period to continue vital services. If these contracts are re-awarded as 
scheduled, major contracted services in Iraq and Kuwait will be 
transitioning nearly simultaneously during the height of the drawdown, 
increasing the risk that services will be interrupted. According to a 
DOD lessons learned document, during the transition from LOGCAP III to 
LOGCAP IV in Kuwait which concluded in June 2009, the incoming 
contractor intended to hire at least 80 percent of the outgoing 
contractor's personnel to begin providing services according to 
schedule. However, the outgoing contractor needed to retain its 
employees in order to continue to provide the services for which it was 
contracted. Although the incoming and outgoing contractors agreed to a 
protocol for transferring employees, poor execution at some sites led 
to staffing shortages and some service interruptions. To prevent 
similar service interruptions when other key contracts transition, it 
will be critical that DOD ensures that the outgoing contractor release 
personnel to the incoming contractor as anticipated. Furthermore, if 
contractor personnel choose not to transfer to the new contractor, the 
transition may result in greater-than-anticipated costs and delays as 
the contractor hires, screens, and deploys new personnel. Additionally, 
a lack of experienced personnel may also lead to service interruption. 
For example, according to the lessons learned document, a shortage of 
personnel available to operate large machinery in Kuwait forced 
officials to shut down operations critical to the drawdown. In 
addition, offices responsible for issuing credentials to employees were 
not prepared to handle the large volume of employees needing to obtain 
new badges, a situation exacerbated by the provision of inaccurate 
employee lists by the incoming contractor, resulting in a further 
disruption of services. As of July 2009, officials had not considered 
possible stresses on these offices that might occur during the 
upcoming, near-simultaneous contract transitions expected to occur 
during the drawdown. Finally, the outgoing contractor refused to 
provide, and in one case erased, data it was required to provide to the 
government. Government officials confirmed that these data would have 
facilitated a more efficient transition process. Contract management 
officials stated that challenges experienced during the transition from 
LOGCAP III to LOGCAP IV in Kuwait will likely be magnified during the 
upcoming contract transitions in Iraq, given the scope of contract 
transitions during the height of the drawdown. 

Even though LOGCAP III in Iraq does not expire during the drawdown time 
frame, DOD plans to undertake a complex transition to other means of 
contracted services despite concerns that the potential benefits of 
doing so may not be fully realized. According to DOD officials, MNF-I 
plans to transition base and life support and logistics functions 
currently provided by LOGCAP III to other contracts, including LOGCAP 
IV, the Air Force Contract Augmentation Program (AFCAP), and individual 
sustainment contracts with Iraqi contractors.[Footnote 18] However, 
unlike convoy support and maintenance contracts in Iraq and Kuwait, 
LOGCAP III does not expire until January 2012. A senior DOD official 
has stated that the rationale for making the transitions includes 
reducing the cost of base and life support services and mitigating the 
risks associated with relying on a single contractor to provide 
essential services. However, this official and others have raised 
concerns, indicating that these potential benefits may not be fully 
realized. For example, while cost savings may result from transitioning 
from LOGCAP III to other contracts, the senior DOD official with whom 
we spoke has conceded that costs may actually increase during the 
transition when both the incoming and outgoing contractors have 
duplicative personnel, including large transition teams. These costs 
may offset potential savings, in part because the new contracts would 
have, at most, about a year to realize their potential benefits, given 
the time needed to conduct the transition and the date that the 
Security Agreement states U.S. forces must be out of Iraq. Moreover, 
according to Army officials, there has been no formal cost-benefit 
analysis to weigh potential benefits against risks such as cost 
increases. In the absence of a robust cost-benefit analysis, the 
benefits of making the transition remain uncertain. 

The upcoming LOGCAP transition in Iraq will potentially increase the 
contract management and oversight responsibilities of the combat forces 
and impact the quality of service provided to the warfighter. Unit 
commanders, as customers of LOGCAP, play a significant role in the 
management and oversight of the LOGCAP contractor. For example, 
customers are required by the Army to periodically evaluate the 
contractor's performance. Currently, units provide feedback to the 
contractor during monthly performance evaluation boards. Because the 
Army intends to award several task orders for services for base and 
logistics services--possibly to multiple contractors--it is possible 
that the number of monthly evaluations would increase for some 
commanders. Furthermore, while service disruptions like those 
experienced in Kuwait during the transition to LOGCAP IV between 
February and June of 2009 may have amounted to temporary 
inconveniences, in a continuously evolving environment like Iraq they 
have a greater potential to negatively impact ongoing operations. For 
example, according to a senior Defense Contract Management Agency 
official responsible for contract management and oversight in Iraq, 
there is concern about DOD's plan to begin transitioning the theater 
transportation mission at the beginning of 2010, since it could require 
a new contractor to assume the mission just as the department 
undertakes a significant troop-level reduction that is planned for 
March-April 2010. Executing the rapid movement of troops and equipment 
out of Iraq will require significant truck assets. Transitioning the 
mission to a new contractor and requiring the new contractor to provide 
23,000 trucks and crews could be daunting. Additionally, this official 
expressed concerns about the ability of a new LOGCAP IV contractor to 
quickly obtain the necessary staff to execute the mission if the 
transitions from LOGCAP III are done as currently planned. As we noted 
above, if an incoming contractor needs to hire a significant number of 
new personnel, service interruptions could result. 

For commanders in the field already tasked with conducting complex 
counterinsurgency operations and the drawdown of forces, among other 
responsibilities, it is important to know who is responsible for 
providing particular services. However, increasing the number of 
contracts in Iraq, as is planned to occur during the upcoming 
transition, may complicate commanders' abilities to obtain essential 
contracted support. For example, under the current LOGCAP III contract 
in Iraq, commanders generally need to speak with one program manager to 
obtain the full range of contracted services. Under LOGCAP IV, however, 
services may be divided among multiple contractors for any particular 
location. As a result, the tasks of determining how to obtain essential 
services and correcting service problems may divert commanders' limited 
resources from other responsibilities, which potentially increases risk 
to the mission. 

In addition, complex transitions to local contractors may impact the 
quality of services provided to the warfighter. For example, commanders 
in Iraq noted that some base and life support services being provided 
to U.S. forces through a newly transitioned contract managed by local 
sustainment contractors were not meeting the level of quality that U.S. 
forces had come to expect. We also found that a similar strategy in 
Kuwait resulted in service interruptions, including inefficiencies at 
key storage areas that led to expanses of disorderly materiel such as 
tires and cylinders.[Footnote 19] Should the upcoming LOGCAP transition 
in Iraq proceed as planned, the need for commanders to overcome 
challenges on which we have previously reported, such as inexperience 
in dealing with contractors, uncertainty regarding oversight 
responsibilities, and inability to dedicate resources for oversight, 
would be particularly acute.[Footnote 20] 

Limited oversight resources coupled with a projected significant 
increase in oversight demands during the LOGCAP transition in Iraq 
heightens the risk of waste. The successful transition from LOGCAP III 
to multiple base and life support contractors will require a large 
number of government oversight personnel, as the transition from LOGCAP 
III to LOGCAP IV in Kuwait demonstrated. However, overseeing the LOGCAP 
transition in Iraq would be an added responsibility for the Defense 
Contract Management Agency, which will continue to be responsible for 
the day-to-day management and administration of the LOGCAP III 
contractor, private security contracts, and other large contracts in 
Iraq. A Defense Contract Management Agency official expressed concern 
about conducting LOGCAP transitions at multiple locations 
simultaneously throughout Iraq because this would require a greater 
number of oversight personnel than a consecutive transition. For 
example, Defense Contract Management Agency officials cited 
insufficient numbers of property administrators available to transfer 
billions of dollars worth of property from LOGCAP III to one of several 
dozen possible contracts. These personnel shortages may delay the 
transfer of property, such as materiel handling equipment critical for 
loading, unloading, and moving containers which, in turn, may inhibit 
the timely retrograde of equipment from Iraq. Contract oversight 
requirements would further increase following the transition. 
Specifically, the Defense Contract Management Agency may go from 
overseeing one LOGCAP contractor to having to oversee three LOGCAP 
contractors and the AFCAP contractor. In addition, the contracts for 
specific base services that the Joint Contracting Command-Iraq/ 
Afghanistan plans to award to Iraqi contractors could increase the 
workload for contracting officers from this command. Furthermore, as 
the number of contracts increase at an installation, commanders will be 
required to increase the number of personnel to ensure responsible 
oversight of contractor personnel. As a result, the number of personnel 
available for other operations will decrease. 

Longstanding Contract Oversight Personnel Shortages May Increase the 
Likelihood of Wasteful Practices During the Drawdown: 

DOD's longstanding challenge to provide an adequate number of trained 
oversight personnel in deployed locations will continue to plague the 
department as it proceeds through the drawdown. Since 2004 we have 
reported on DOD's inability to provide an adequate number of oversight 
personnel in CENTCOM's theater.[Footnote 21] Joint doctrine emphasizes 
the importance to commanders of ensuring that appropriate 
administration and oversight personnel are in place when using 
contractors.[Footnote 22] While MNF-I guidance recognizes the need to 
ensure oversight, DOD is likely to find it difficult to meet the 
oversight requirement as forces are withdrawn and the pool of personnel 
available for oversight decreases. Historically, as forces decrease, 
the need for contracted services increases. The oversight challenge in 
Iraq and Kuwait is exacerbated by the competing need to provide 
professional contract management and oversight personnel from agencies 
like the Defense Contract Management Agency to meet the increased 
oversight requirements in Afghanistan. DOD officials at all levels have 
expressed concern about the department's ability to provide the 
required number of oversight personnel. For example, an Army unit in 
Kuwait with 32 government personnel that is currently providing 
oversight for more than 3,000 contractor personnel anticipates doubling 
its contractor workforce, but is not anticipating a concomitant 
increase in oversight personnel. The unit has identified the lack of 
oversight personnel as a significant concern to successfully moving 
equipment out of Kuwait. 

As we noted in several of our previous reports, having the right people 
with the right skills to oversee contractor performance is crucial to 
ensuring that DOD receives the best value for the billions of dollars 
spent each year on contractor-provided services supporting forces 
deployed to Iraq. For example, we reported in 2004 that the Defense 
Contract Management Agency could not account for $2 million worth of 
tools purchased using the AFCAP contract, in part because of a lack of 
contract management and oversight personnel in CENTCOM's theater. 
[Footnote 23] In January 2008, we reported that the Army did not have 
adequate staff to conduct oversight of an equipment maintenance 
contract in Kuwait.[Footnote 24] We have found in the past that, as a 
result of the vacant oversight positions, the Army was unable to fully 
meet the oversight mission including fully monitoring contractor 
performance. In that same report we noted that poor contractor 
performance resulted in the Army spending $4.2 million to rework items 
that were presented to the Army as meeting contract standards but 
failed Army inspection. We have also noted that an inadequate number of 
oversight personnel results in some contracts receiving insufficient 
oversight. For example, in 2008 we reported that the Army assigned 
seven contracting officer's technical representatives to provide 
oversight for about 8,300 linguists in 120 locations across Iraq and 
Afghanistan. In one case, a single oversight person was responsible for 
linguists stationed at more than 40 different locations spread 
throughout the theater of operations. Officials responsible for the 
contract agreed that there were not enough contracting officer's 
technical representatives to effectively oversee the contract.[Footnote 
25] Having too few contract oversight personnel precludes DOD from 
being able to obtain reasonable assurance that contractors are meeting 
their contract requirements at every location where the work is being 
performed. Without adequate contract oversight personnel in Iraq and 
Kuwait during the drawdown, DOD risks not receiving the level and 
quality of service it needs to effectively and efficiently meet the 
goals of the drawdown. 

Execution of the Drawdown Is Dependent Upon Key Decisions over the 
Disposition of Equipment: 

MNF-I's execution of the drawdown from Iraq in accordance with 
established timelines depends on its obtaining clear guidance as to 
what equipment can and will be provided to the Government of Iraq and 
what will be retained by the U.S. military; identification of the 
mechanisms that are to be used to transfer equipment to the Government 
of Iraq; determinations of what will be done with certain types of non- 
standard equipment, such as Mine Resistant Ambush Protected vehicles 
(MRAP); and resolution of other decisions related to the Army's 
modernization and reset plans. 

DOD plans to transfer military equipment to the Government of Iraq in 
order to achieve U.S. objectives in Iraq, but decisions still need to 
be made by DOD on what can and will be transferred to the Government of 
Iraq, contributing to planning uncertainty. Multi-National Security 
Transition Command-Iraq, an MNF-I subordinate command responsible for 
training and equipping the Iraqi security forces, has prepared a list 
of equipment it believes will enable the Government of Iraq to provide 
for its own security after U.S. forces have left Iraq.[Footnote 26] 
This list comprises about 1.5 percent of the estimated 3.3 million 
pieces of equipment in Iraq, with a projected value of about $600 
million. This list is currently undergoing progressively higher levels 
of review within DOD, for potential approval by the Military Department 
Secretaries and the Secretary of Defense. Until this list is approved, 
and an appropriate transfer mechanism determined, the equipment that 
will be transferred to the Government of Iraq remains uncertain. 
Currently, no decision has been made as to what authorities will be 
used to transfer these items to the Government of Iraq. While certain 
authorities exist that may permit the transfer of excess defense 
articles, DOD has also requested additional authority to transfer non- 
excess defense articles.[Footnote 27] Section 1234 of the National 
Defense Authorization Act for Fiscal Year 2010 provides an additional 
authority, requested by the Department of Defense, under which the 
Secretary of Defense, with the concurrence of the Secretary of State, 
may transfer certain equipment to the Government of Iraq without the 
Military Departments declaring it excess to their needs.[Footnote 28] 
Because this provision does not specify a mechanism for reimbursing the 
Military Departments for the transfer of non-excess equipment, the loss 
of which may affect unit readiness, senior Army officials expressed 
concern about it prior to its passage, and the conference report 
accompanying the Act urged the Secretary of Defense to develop a plan 
to reimburse the Military Departments for such items.[Footnote 29] In 
addition, other DOD officials expressed strong reservations about 
section 1234 prior to its passage, arguing that existing authorities, 
such as those which underpin Foreign Military Sales, are sufficient to 
transfer U.S. military equipment to the Government of Iraq, but are not 
fully understood within the department. Clarification of authorities to 
be used for transferring equipment to the Government of Iraq will help 
facilitate decisions on which equipment will be transferred, and will 
assist in ensuring that DOD will meet its stated timelines. 

The complexity of issues surrounding transfer authorities has already 
presented obstacles to transferring equipment to the Government of 
Iraq. For example, beginning in May 2009, MNC-I undertook an initiative 
to turn over the Ibn Sina hospital, located in the International Zone, 
to the Government of Iraq as a fully equipped, fully operational 
hospital. However, 100 of the approximately 9,800 pieces of equipment 
in the hospital, such as intensive care unit beds, trauma centers, and 
patient vital signs monitoring equipment, were ineligible for transfer 
because, according to Army officials, the Army could not declare them 
as excess to the needs of the Army.[Footnote 30] As a result, officials 
had to seek alternate means to transfer or sell the remaining pieces of 
equipment necessary to outfit the hospital. Ultimately, the hospital 
was transferred to the Government of Iraq on schedule. However, Army 
officials stated that after exhausting all legal options for 
transferring or donating the remaining equipment, the hospital was 
transferred without these 100 pieces of important equipment. 

According to the Army, disposition for nearly all currently identified 
non-standard equipment in Iraq has been determined, but all items 
needing disposition have not yet been identified. Non-standard 
equipment is mainly theater provided equipment that has been issued to 
units that is not listed on their modified table of organization and 
equipment.[Footnote 31] Non-standard equipment includes a wide range of 
items such as construction equipment, materiel handling equipment, flat 
screen televisions, certain types of radios, and MRAPs. To facilitate 
the retrograde of non-standard equipment, the Army is implementing a 
new process in which the Life Cycle Management Commands are cataloging 
all types of non-standard equipment in Iraq for entry into a new 
database.[Footnote 32] The Army then determines the location to which 
each type of item will be shipped upon retrograde from Iraq. Army 
officials state that they have determined disposition for the majority 
of types of non-standard equipment already identified in Iraq. However, 
these officials also state that additional types of non-standard 
equipment are still being entered into the database as efforts to gain 
accountability over non-standard equipment continue. Until this effort 
is complete, the disposition of some types of non-standard equipment in 
Iraq may be delayed. 

Decisions on the disposition of MRAPs also have not been finalized, and 
DOD faces challenges in retrograding the large number of these vehicles 
that remain in Iraq. MRAPs are a unique type of non-standard equipment 
that were initially procured specifically for use in Iraq to better 
protect servicemembers from improvised explosive devices. As the 
drawdown progresses, DOD officials acknowledge that most of the MRAPs 
retrograded from Iraq will return to the United States, and that only 
some of these vehicles are suitable for use in Afghanistan. According 
to Army officials, the Army, which manages most of the MRAP fleet, has 
issued preliminary disposition instructions for MRAPs to be retrograded 
from Iraq, but service-wide requirements for MRAPs have not yet been 
finalized. Moreover, although in January 2008, DOD designated the Red 
River Army Depot and Marine Corps Logistics Command bases in Albany and 
Barstow as the depots that would repair MRAPs in the United States, 
Headquarters, Department of the Army only recently issued a message 
directing the shipment of 200 MRAPs from Kuwait to Red River Army Depot 
as part of an MRAP Reset Repair Pilot Program. To date, all MRAPs 
retrograded from Iraq have passed through the MRAP Sustainment Facility 
in Kuwait for repair. However, at the time of our July 2009 visit to 
the CENTCOM area of operations, this facility could process only 20 
MRAPs per week, contributing to a build-up of nearly 900 MRAPs in a 
retrograde lot in Kuwait. The officials who manage this lot stated that 
it was nearing full capacity for holding MRAPs. However, data provided 
by U.S. Army Central indicate that DOD's capacity to process and ship 
MRAPs out of Kuwait exceeded the relatively few numbers of additional 
vehicles that left Iraq since our visit, decreasing the total number of 
MRAPs that are sitting in the retrograde lot to under 800 as of October 
2009. Nevertheless, according to U.S. Army Central, over 8,000 MRAPs 
remain in Iraq. To remove MRAPs from Iraq according to the timeline set 
by the Security Agreement, the pace of their retrograde will need to 
significantly increase as the drawdown progresses, which heightens the 
potential for bottlenecks. 

The disposition of equipment in theater may also be affected by other 
decisions that have not been made related to the Army's future 
composition and equipment reset needs. For example, the Army has not 
decided what equipment and how much of each type of equipment will be 
transferred to Army Prepositioned Stocks[Footnote 33] and Theater 
Sustainment Stocks.[Footnote 34] Also, the Army is currently drafting 
an "Equipping White Paper" that describes how the Army plans to 
allocate equipment in accordance with future force structure designs. 
For example, Army officials stated that they are considering changing 
one or more heavy brigade combat teams into Stryker brigade combat 
teams. Other factors also add uncertainty to the disposition of 
equipment. For example, while the Army has taken steps to streamline 
the reset induction process for equipment in Iraq, disposition for 
reset depends on when the equipment is retrograded from Iraq and the 
condition of the equipment. In addition, the extent to which equipment 
may be stored in Kuwait is unclear. Specifically, some officials from 
the Office of the Secretary of Defense told us that some equipment may 
be stored at depots or in Kuwait while decisions about disposition are 
made, while Army officials told us that the Army has no plans to store 
equipment in Kuwait. Finally, decisions have not been finalized on what 
additional equipment will be transferred from Iraq to Afghanistan. 

Longstanding Information Technology System Weaknesses May Compromise 
the Timely Retrograde of Equipment: 

Weaknesses in data systems used to retrograde equipment from Iraq that 
we cited in our September 2008 report remain uncorrected, and a new 
problem has surfaced. In our September 2008 report, we noted that when 
theater provided equipment reached Kuwait, the 401st Army Field Support 
Brigade, which received the equipment, had to undertake two concurrent 
manual data entry processes in separate logistics information systems 
to establish accountability and visibility for the equipment. We also 
reported that the process for requesting disposition instructions was 
lengthy and involved sending spreadsheets populated with equipment data 
from Kuwait to the appropriate Life Cycle Management Command in the 
United States and then back to Kuwait. According to DOD officials we 
interviewed in Iraq and Kuwait in July 2009, the manual manipulation of 
data and extensive reliance on spreadsheets still occurs while other 
DOD officials stated that any problems that delay equipment from being 
retrograded can be problematic given the rapid pace of the drawdown. In 
addition, during our recent field visits we identified another data 
system problem that prevented the timely issuance of disposition 
instructions for equipment identified for retrograde from Iraq. 
Specifically, due to a data corruption error that occurs during data 
transfer between two legacy Army systems, Army officials in Kuwait were 
unable to issue orders to move the equipment to its designated 
destination. Officials stated that this problem had a negative effect 
on their ability to retrograde equipment, and officials in the United 
States and Kuwait worked together during regularly scheduled meetings 
to discuss issues delaying the transmission of these instructions. To 
fix the problem in the system, programmers had to implement manual 
fixes for each individual set of disposition instructions. According to 
Army officials, a solution to correct the data corruption error has 
been implemented since our visit. However, we have not been able to 
validate this claim and, according to Army officials, similar problems 
with legacy systems occur regularly. 

Higher projected flows of theater provided equipment during later 
phases of the drawdown may also put the timely issuance of disposition 
instructions at risk. We reported in 2008 that receipt of disposition 
instructions for some rolling stock took anywhere from three to nine 
months, resulting in equipment being held in Kuwait awaiting 
disposition instructions. Although officials told us during our July 
2009 visit to Kuwait that this situation had improved, the data used to 
support that claim may be unreliable. With increased flows of 
equipment, inefficiency resulting from the reliance on the entry of 
data by hand will be magnified. The higher volume of equipment 
requiring disposition instructions may stress the manual processes 
currently being used, thereby increasing the risk that more time will 
be necessary to request and receive disposition instructions, which may 
again cause equipment to sit idle in Kuwait. While the Theater Provided 
Equipment Planner may improve retrograde process efficiency by 
automating the issuance of disposition instructions that would 
otherwise need to be issued through the existing manual process, the 
extent to which items will be retrograded using the new system, 
especially as the volume of equipment being retrograded increases 
during later phases of the drawdown, is unclear. In addition, the 
increased volume of equipment projected for the later phases of the 
drawdown will require additional contractor personnel to make the 
manual entries made necessary by the system incompatibility issues. 

DOD's Lack of Precise Visibility Over Its Inventory of Equipment and 
Shipping Containers Inhibits Planning for Retrograde from Iraq: 

The execution of the drawdown may also be affected by the lack of a 
complete and accurate inventory of three broad types of equipment. 
These three types of equipment include contractor acquired 
property,[Footnote 35] non-standard equipment, and shipping containers. 
According to Army data, these three types of equipment comprise 28 
percent of the total DOD property in Iraq. To facilitate a more 
complete and accurate record of equipment in Iraq, MNF-I required its 
subordinate units to complete a 100 percent inventory of their 
equipment, identify excess equipment that can be immediately 
retrograded, and account for previously undocumented equipment by June 
27, 2009. Undocumented equipment, however, continues to be identified 
and added to the inventory. 

According to MNF-I guidance, the command's ability to meet drawdown 
requirements and timelines depends upon establishing an accurate and 
complete inventory of the amount and types of equipment that will have 
to be retrograded from Iraq. In that vein, MNF-I ordered a 100 percent 
inventory of all U.S. government owned equipment in Iraq. Overall, DOD 
officials stated that property accountability has improved in Iraq 
since 2006, especially with regard to theater provided equipment. The 
guidance calling for completion of an inventory by June 27, 2009 was 
intended to account for undocumented items. When these previously 
undocumented items are entered onto property books, commanders become 
accountable for them. The intent is to facilitate drawdown planning and 
execution by providing an incentive for commanders to take action on 
previously undocumented items that otherwise may not be factored into 
the retrograde plans. However, although MNC-I states that the inventory 
is complete, previously undocumented equipment continues to be found 
every month. Until all undocumented equipment is included in the 
inventory, DOD's information on the number of items requiring 
retrograde remains incomplete, which adds risk to meeting the drawdown 
timelines. 

During our visit to the CENTCOM area of operations in July 2009, 
officials in Iraq and Kuwait stated that, of all categories of 
equipment, they had the least visibility over contractor acquired 
property. Army officials stated, however, that as of October 2009, this 
situation had improved. While contractors are typically required under 
the terms of their contract to maintain property accountability over 
this equipment, there is no standardized process for doing so, limiting 
MNF-I's and U.S. Army Central's accountability and visibility over this 
equipment. During the drawdown, accountability of contractor acquired 
property is important to ensure the efficient allocation of the 
transportation assets used to retrograde this equipment. 

U.S. Army Central officials also noted that they lack full 
accountability and visibility over non-standard equipment in Iraq, 
adding another potential risk to their ability to efficiently 
retrograde this equipment out of Iraq. Army officials have estimated 
that there could be as many as 360,000 pieces of non-standard equipment 
in Iraq, but concede that they have low confidence in property 
accountability for non-standard equipment. Moreover, Army and U.S. Army 
Central officials note that obtaining an accurate inventory of non- 
standard equipment is complicated by the fact that many of these items 
have multiple identification numbers and that commanders have 
significant flexibility in accounting for this equipment. For example, 
a piece of non-standard equipment that is valued at greater than $5,000 
must be recorded on a military unit's property book, but after the 
value of that item depreciates below the $5,000 threshold, it is left 
to the individual commander's discretion whether to continue recording 
the property. Not knowing the precise amount of non-standard equipment 
in Iraq that will need to be retrograded contributes to planning 
uncertainty for the organizations tasked with executing the drawdown, 
and may put at risk the ability to position transportation assets and 
personnel to manage the many aspects of the retrograde process in time 
to facilitate a steady flow of equipment from Iraq. 

Another factor compounding planning uncertainty is the lack of an 
accurate accounting of the quantity and serviceability of shipping 
containers in Iraq. Containers are unique in that not only are they 
items that have to be retrograded from Iraq, they are also a primary 
vehicle for shipping other types of equipment out of Iraq. According to 
U.S. Army Central officials, the data system in place to track 
containers is inaccurate and incomplete because, among other factors, 
it must be manually updated every time a container arrives at or leaves 
a specific location. Reports based the data from this system indicate 
that the system is at best 25 percent accurate. Furthermore, updates to 
the location and status of containers may not occur routinely because 
of personnel shortages. For example, according to officials in charge 
of container management, 200 containers listed as located in Iraq were, 
in fact, in Afghanistan. Moreover, in addition to inaccurate data on 
the number of containers and their locations, officials also lack data 
on the serviceability of containers. In an effort to rectify this 
problem, MNC-I issued an order directing a 100 percent inventory of 
containers, including instructions for reporting the serviceability of 
the containers. Subsequent reports indicate that approximately 54,000 
containers had been physically inventoried as of August 2009, which was 
almost 25,000 fewer than the number of containers in the data system. 
Out of these containers entered in the data system, the location of 
over 7,000 could not be verified and the serviceability of 39 percent 
remained unknown. Moreover, many containers in Iraq are being used for 
storage, office space, and living quarters, among other purposes, yet 
are not documented as such, and may not immediately be available for 
retrograde. Due to limited container accountability, MNF-I and U.S. 
Army Central's ability to plan for the steady flow of equipment out of 
Iraq necessary to meet the drawdown timelines may be at risk. 

Concluding Observations: 

As I have stated today, much has been done in Iraq and Kuwait to 
facilitate the drawdown effort. However, the effective execution of the 
drawdown may be compromised by several complex challenges: notably, 
identification of contractor requirements needed for the drawdown, and 
development of plans to address the challenges created by key contract 
transitions and to mitigate the risk of waste caused by an inadequate 
number of trained oversight personnel that would aid the successful 
management of contract services. Additionally, the effective execution 
of the drawdown is dependent upon decisions about what equipment can 
and will be transferred to the Government of Iraq, the clear 
establishment of transfer mechanisms, and final decisions on the 
disposition of non-standard equipment. Moreover, longstanding data 
information system incompatibility issues and a less-than- 
comprehensive inventory of some types of equipment in Iraq may hamper 
the drawdown. 

GAO Contacts and Acknowledgments: 

For further information about this statement, please contact William M. 
Solis (202) 512-8365 or solisw@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this statement. Individuals who made key contributions to this 
statement include Vincent Balloon, Carolynn Cavanaugh, Carole Coffey, 
Timothy DiNapoli, Laurier Fish, Walker Fullerton, Guy LoFaro, Greg 
Marchand, Jim Melton, Emily Norman, Jason Pogacnik, David Schmitt, 
Cheryl Weissman, Gerald Winterlin, and Gwyneth Woolwine. 

[End of section] 

Footnotes: 

[1] GAO, Operation Iraqi Freedom: Actions Needed to Enhance DOD 
Planning for Reposturing of U.S. Forces from Iraq, [hyperlink, 
http://www.gao.gov/products/GAO-08-930] (Washington, D.C.: Sept. 10, 
2008). 

[2] In a separate initiative, the Government of Iraq introduced a 
referendum on the Security Agreement which may be voted on during the 
January 2010 national elections. If passed, it could require U.S. 
forces to leave Iraq much earlier than the December 31, 2011 deadline 
set in the Security Agreement. 

[3] DOD, Measuring Stability and Security in Iraq: Report to Congress 
in Accordance with the Department of Defense Supplemental 
Appropriations Act 2008, Section 9204, Public Law 110-252 (July 23, 
2009). 

[4] We have determined that agency-reported data should not be used to 
identify trends or draw conclusions about the number of contractor 
personnel in Iraq, due to limitations such as incomplete and inaccurate 
data. GAO, Contingency Contracting: DOD, State, and USAID Continue to 
Face Challenges in Tracking Contractor Personnel and Contracts in Iraq 
and Afghanistan, [hyperlink, http://www.gao.gov/products/GAO-10-1] 
(Washington, D.C.: Oct. 1, 2009). 

[5] The Logistics Civil Augmentation Program, commonly referred to as 
LOGCAP, is a program to provide worldwide logistics and base and life 
support services in contingency environments, and is currently 
providing most base and life support in Iraq. 

[6] For a list of this work, see GAO's web page, Topic Collection: Iraq 
and Afghanistan, at [hyperlink, 
http://www.gao.gov/docsearch/featured/oif.html]. 

[7] Unity of effort requires coordination and cooperation among all 
forces toward a commonly recognized objective, although they are not 
necessarily part of the same command structure. Joint Publication 1, 
Doctrine for the Armed Forces of the United States (Mar. 20, 2009). 

[8] We use the term "retrograde" to indicate the removal of military 
equipment from an operating area. 

[9] Lean Six Sigma, a disciplined process improvement methodology, has 
been endorsed by DOD leadership as a key means by which the department 
will become more efficient in its operations and more effective in its 
support of the warfighter. On April 30, 2007, the Deputy Secretary of 
Defense created a program office to drive DOD-wide activities 
associated with Lean Six Sigma. 

[10] We use the term "reset" to refer to the repair, recapitalization, 
and replacement of military equipment in order to restore units' 
equipment to a desired level of combat capability commensurate with 
mission requirements and availability of resources. 

[11] Rolling stock is a subset of class VII equipment and includes 
wheeled vehicles, tracked combat vehicles, wheeled/tracked construction 
equipment, trailers, semitrailers, and standard trailer-mounted 
equipment such as generators. 

[12] Joint Publication 3-33, Joint Task Force Headquarters (Feb. 16, 
2007). 

[13] The total of 52,207 contracts is measured in accordance with the 
definition of "contract" from section 864(a)(2) of the National Defense 
Authorization Act for Fiscal Year 2008, which includes task orders, 
among other things. See GAO-10-1. 

[14] Joint Publication 4-10, Operational Contract Support (Oct. 17, 
2008). 

[15] GAO, Military Operations: Contractors Provide Vital Services to 
Deployed Forces but Are Not Adequately Addressed in DOD Plans, 
[hyperlink, http://www.gao.gov/products/GAO-03-695] (Washington, D.C.: 
June 24, 2003). 

[16] GAO, Military Operations: High-Level DOD Action Needed to Address 
Long-standing Problems with Management and Oversight of Contractors 
Supporting Deployed Forces, [hyperlink, 
http://www.gao.gov/products/GAO-07-145] (Washington, D.C.: Dec. 18, 
2006). 

[17] We met with Army officials, including contracting officers 
responsible for these contracts. These officials acknowledge that the 
contracts will expire well before the end of the drawdown and in no 
case did these officials indicate they are considering extending the 
expiring contracts through the drawdown period. 

[18] Sustainment contracts provide supplies and services to deployed 
U.S. forces, such as food services and housing. 

[19] GAO, Defense Acquisitions: Sound Practices Critical to Ensuring 
Value for the Defense Logistic Agency's Acquisitions, [hyperlink, 
http://www.gao.gov/products/GAO-09-1040T] (Washington, D.C.: Sept. 24, 
2009). 

[20] GAO, Military Operations: Implementation of Existing Guidance and 
Other Actions Needed to Improve DOD's Oversight and Management of 
Contractors in Future Operations, [hyperlink, 
http://www.gao.gov/products/GAO-08-436T] (Washington, D.C.: Jan. 24, 
2008). 

[21] For a summary, see [hyperlink, 
http://www.gao.gov/products/GAO-08-436T]. 

[22] Joint Publication 4-10. 

[23] GAO, Military Operations: DOD's Extensive Use of Logistics Support 
Contracts Requires Strengthened Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-04-854] (Washington, D.C.: July 19, 
2004). 

[24] GAO, Defense Logistics: The Army Needs to Implement an Effective 
Management and Oversight Plan for the Equipment Maintenance Contract in 
Kuwait, [hyperlink, http://www.gao.gov/products/GAO-08-316R] 
(Washington, D.C.: Jan. 22, 2008). 

[25] GAO, Military Operations: DOD Needs to Address Contract Oversight 
and Quality Assurance Issues for Contracts Used to Support Contingency 
Operations, [hyperlink, http://www.gao.gov/products/GAO-08-1087] 
(Washington, D.C.: Sept. 26, 2008). 

[26] GAO recently issued a classified report on the capabilities of the 
Iraqi security forces. See GAO, Securing and Stabilizing Iraq: U.S. 
Drawdown Plans Should Include Contingency Plans for Use If Key 
Assumptions about Security and Iraqi Capabilities Prove Wrong, 
[hyperlink, http://www.gao.gov/products/GAO-09-939C] (Washington, D.C.: 
Sept. 30, 2009). 

[27] For instance, under section 516 of the Foreign Assistance Act of 
1961 (22 U.S.C. ß 2321j), excess defense articles may be transferred to 
other countries under certain circumstances. 

[28] Pub. L. No. 111-84, ß 1234 (2009). 

[29] H.R. Conf. Rep. No. 111-288, at 838-839 (2009). Section 1234 
requires a report including a description of "the plan, if any, for 
reimbursing military departments" for non-excess equipment, and 
prohibits transfers that would have an "adverse impact on the military 
readiness of the United States," in accordance with section 516 of the 
Foreign Assistance Act of 1961 (22 U.S.C. ß 2321j). 

[30] Under section 644 of the Foreign Assistance Act of 1961 (22 U.S.C. 
ß 2403), the term "excess defense articles" generally refers to defense 
articles, with some exceptions, owned by the U.S. government that is 
excess of the approved level of stock for all DOD organizations at the 
time the equipment is transferred. 

[31] A modified table of organization and equipment documents the 
specific types and amounts of equipment Army units are authorized to 
have. 

[32] The Army Materiel Command has five Life Cycle Management Commands, 
each of which is responsible for certain types of equipment. They are: 
Aviation and Missile, Chemical Materials Agency, Communications-
Electronics, Joint Munitions & Lethality, and Tank-automotive & 
Armaments Command. 

[33] The Army Prepositioned Stocks program supports the National 
Military Strategy by strategically prepositioning critical war stocks 
afloat and ashore worldwide and, thus, reducing the deployment response 
times of the modular expeditionary Army. 

[34] Theater Sustainment Stocks are a pool of military equipment in 
theater that can be used to expedite the replacement of equipment 
damaged during operations. 

[35] For simplicity, we use the term "contractor acquired property" to 
include all items that the contractor manages expressly to perform the 
contract, including items given to the contractor by the government 
(government furnished equipment) and items acquired/fabricated by the 
contractor using government funds. 

[End of section] 

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