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United States Government Accountability Office: 


Before the Subcommittee on Contracting Oversight, Committee on 
Homeland Security and Governmental Affairs, U.S. Senate: 

For Release on Delivery: 
Expected at 10:00 a.m. EDT:
Thursday, June 30, 2011: 

Operational Contract Support: 

Actions Needed to Address Contract Oversight and Vetting of Non-U.S. 
Vendors in Afghanistan: 

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


GAO Highlights: 

Highlights of GAO-11-771T, a report to Senate Subcommittee on 
Contracting Oversight, Committee on Homeland Security and Governmental 
Affairs, U.S. Senate. 

Why GAO Did This Study: 

The Departments of Defense (DOD) and State (State) and the United 
States Agency for International Development (USAID) have collectively 
obligated billions of dollars for contracts and assistance to support 
U.S. efforts in Afghanistan. The work of GAO and others has documented 
shortcomings in DOD’s contract management and oversight, and its 
training of the non-acquisition workforce. Addressing these challenges 
can help DOD meet warfighter needs in a timely and cost-conscious 
manner; mitigate the risks of fraud, waste, and abuse; and minimize 
the operational risks associated with contractors. 

This testimony addresses the extent to which (1) DOD’s Contracting 
Officer’s Representatives (COR) are prepared for their roles and 
responsibilities and provide adequate contract oversight in 
Afghanistan; (2) DOD, State, and USAID vet non-U.S. firms for links to 
terrorist and insurgent groups in Afghanistan; and (3) DOD has 
implemented GAO’s past recommendations. The testimony is based on GAO’
s recently published reports and testimonies on operational contract 
support, including a June 2011 report on vetting of non-U.S. vendors 
in Afghanistan, as well as providing preliminary observations as a 
result of ongoing audit work in Afghanistan. GAO’s work included 
analyses of a wide range of agency documents, and interviews with 
defense officials including CORs, contracting officers, and contract 
management officials in the United States and Afghanistan. 

What GAO Found: 

DOD has taken actions to better prepare CORs to conduct contract 
oversight and management in Afghanistan; however, CORs are not fully 
prepared for their roles and responsibilities to provide adequate 
oversight there. To improve the capability of CORs to provide contract 
management and oversight in contingencies, DOD has developed a new, 
contingency-focused COR training course, issued new guidance, and 
developed a COR certification program. Nonetheless, gaps in the 
training exist. For example, according to DOD personnel in 
Afghanistan, the required training does not provide CORs with enough 
specificity about contracting in Afghanistan, such as information 
about the Afghan First Program, which encourages an increased use of 
local goods and services, or working with private security 
contractors. Also, whether a COR has relevant technical expertise is 
not always considered prior to assigning an individual to oversee a 
contract, even though CORs have a significant role in determining if 
products or services provided by the contractor fulfill the contract’s 
technical requirements. However, according to officials, some CORs 
appointed to oversee construction contracts have lacked necessary 
engineering or construction experience, in some cases resulting in 
newly constructed buildings that were to be used by U.S. or Afghan 
troops having to be repaired or rebuilt. According to CORs and 
commanders in Afghanistan, poor performance on construction contracts 
has resulted in money being wasted, substandard facilities, and an 
increased risk to bases. For example, contracting officials from one 
regional contracting center told GAO that construction of guard towers 
at a forward operating base was so poor that they were unsafe to 

DOD and USAID have both established processes to vet non-U.S. vendors 
in Afghanistan, but GAO has identified limitations; additionally, 
State has not yet developed a vendor vetting process. The purpose of 
DOD’s vetting process begun in August 2010—which includes the 
examination of available background and intelligence information—is to 
reduce the possibility that insurgents or criminal groups could use 
U.S. contracting funds to finance their operations. Additionally, in 
January 2011 USAID also began to implement a process to vet 
prospective non-U.S. contract and assistance recipients (i.e., 
implementing partners) in Afghanistan. GAO made recommendations, such 
as to formalize their vetting processes, which, both agencies 
concurred with. For example, USAID signed a mission order in May 2011 
codifying the details of its vetting process. As of May 2011, State 
had not developed a vendor vetting process for non-U.S. vendors in 
Afghanistan, though officials stated they are considering several 

GAO has made numerous recommendations in areas such as developing 
guidance, tracking contractor personnel, providing oversight 
personnel, and training, and DOD has made strides in addressing some 
of them. However, it has not fully implemented other previous 
recommendations, such as ensuring training for commanders and senior 
leaders and improvements to the contracting personnel tracking system 
in Afghanistan. 

View [hyperlink,] or key 
components. For more information, contact William Solis at (202) 512-
8365 or 

[End of section] 

Madam Chairman, Ranking Member Portman, and Members of the 

Thank you for inviting me to be here today to discuss a few of the 
challenges that the Department of Defense (DOD) faces in providing 
contract oversight in Afghanistan and that the DOD, the U.S. Agency 
for International Development (USAID), and the Department of State 
(State), face vetting non-U.S. vendors. Guidance issued in September 
2010 by the Commander of the International Security Assistance Force 
(ISAF) and United States Forces-Afghanistan stated that, with proper 
oversight, contracting can spur economic development and support the 
Afghan government's and ISAF's campaign objectives. In fiscal year 
2010, DOD reported obligating approximately $11.4 billion on contracts 
with a principal place of performance in Afghanistan, while USAID 
obligated about $331.5 million and State obligated $775 million. Our 
work, as well as that of the inspectors general and the Commission on 
Wartime Contracting in Iraq and Afghanistan, has documented the need 
for improvements in DOD's contract management and oversight, and 
training of the non-acquisition workforce. Additionally, U.S. 
government agencies and congressional committees have paid increasing 
attention to the risks of DOD, USAID, and State contracting and 
reconstruction funds being diverted to criminal or insurgent groups. 
Legislation to address this issue has recently been proposed in 
Congress, and there have been congressional hearings and reports 
detailing examples of corruption and financing of insurgents in 
Afghanistan.[Footnote 1] 

Addressing DOD's oversight challenges is essential if DOD is to meet 
the warfighters' needs in a timely and cost-conscious manner; mitigate 
the risks of fraud, waste, and abuse; and minimize the operational 
risks associated with contractors not only in today's operations but 
also in future contingencies. Similarly, DOD, USAID, and State must 
address the challenges they face in ensuring that U.S. funds do not 
help finance the insurgency. 

My statement today will focus on the extent to which (1) DOD's 
Contracting Officer's Representatives (COR) are prepared for their 
roles and responsibilities and provide adequate contract oversight in 
Afghanistan; (2) DOD, USAID, and State vet non-U.S. vendors for links 
to terrorist and insurgent groups in Afghanistan; and (3) DOD has 
implemented our past recommendations to improve contract management 
and oversight. My statement is based on preliminary observations from 
ongoing work looking at the extent to which DOD and the services have 
taken actions to improve the capabilities of CORs to provide contract 
management and oversight in Afghanistan. During the course of our work 
we reviewed relevant DOD and service publications, guidance, and 
training material; attended DOD and Army operational contract support 
training; and interviewed officials both in the United States and in 
Afghanistan responsible for contracting and contract management and 
oversight including contracting officers, CORs, officials from the 
Defense Contract Management Agency, representatives from the U.S. 
Central Command (CENTCOM) Contracting Command, and other personnel 
responsible for contract management and oversight in 
Afghanistan.[Footnote 2] In addition, this testimony is based on a 
June 2011 published report on vendor vetting, and testimonies that 
examined the extent to which contract management and oversight has 
improved.[Footnote 3] Our work was conducted in accordance with 
generally accepted government auditing standards. Additional 
information on scope and methodology is provided in previously issued 


Oversight of contracts--which can refer to contract administration 
functions, quality assurance surveillance, corrective action, property 
administration, and past performance evaluation--ultimately rests with 
the contracting officer, who has the responsibility for ensuring that 
contractors meet the requirements as set forth in the contract. 
Frequently, however, contracting officers are not located in the 
contingency area or at the installations where the services are being 
provided. As a result, contracting officers appoint contract monitors 
who are responsible for monitoring contractor performance. For some 
contracts, such as LOGCAP or theaterwide service contracts like the 
Afghan trucking contract or some Afghan security guard contracts, 
contracting officers may delegate contract oversight to the Defense 
Contract Management Agency (DCMA) to monitor contractor performance. 
[Footnote 4] In Afghanistan, DCMA teams include administrative 
contracting officers, and quality assurance representatives, who 
ensure that the contractors perform work to the standards written in 
the contracts and oversee the CORs assigned to DCMA-administered 
contracts.[Footnote 5] The DCMA team also includes property 
administrators and subject matter experts who advise the agency on 
technical issues such as food service, electrical engineering, and 
fire safety. DCMA does not administer construction contracts because 
according to the head of DCMA in Afghanistan it lacks the technical 
expertise to manage these types of contracts. Generally, construction 
contracts in Afghanistan are administered by organizations like the 
Army Corps of Engineers, or they may be administered by the 
contracting officer assisted by a COR. 

If DCMA is not delegated responsibility for administrative oversight 
of a contract, the contracting officer who awarded the contract is 
responsible for the administration and oversight of the contract. 
These contracting officers, such as those from the CENTCOM Contracting 
Command, appoint CORs or contracting officer's technical 
representatives to monitor contractor performance. CORs appointed by 
the CENTCOM contracting command and others are typically drawn from 
units receiving contractor-provided services. These individuals are 
not normally contracting specialists and serve as contract monitors as 
an additional duty. They cannot direct the contractor by making 
commitments or changes that affect price, quality, quantity, delivery, 
or other terms and conditions of the contract. Instead, they act as 
the eyes and ears of the contracting officer and serve as the liaison 
between the contractor, the contracting officer, and the unit 
receiving support or services. In Afghanistan, CORs who have been 
appointed as contracting officer's representatives for contracts 
administered by DCMA report their oversight results to DCMA personnel. 
For contracts not administered by DCMA, CORs provide oversight 
information to the contracting officer, who may be located in 
Afghanistan or outside the theater of operations. In addition to their 
oversight responsibilities, CORs have been tasked with other duties 
such as developing statements of work, developing requirements 
approval paperwork and preparing funding documents. 

DOD's CORs Are Not Fully Prepared for Their Roles and Responsibilities 
in Afghanistan: 

DOD's Training Does Not Fully Prepare Most CORs for Their Roles and 
Responsibilities of Contract Management and Oversight: 

DOD has added new training for CORs serving in contingencies, but some 
gaps in training remain and not all of the required training is being 
conducted or completed. In Afghanistan, much of the day-to-day 
surveillance of contracted projects is done by CORs. The Federal 
Acquisition Regulation (FAR) requires that quality assurance, such as 
surveillance, be performed at such times and places as necessary to 
determine that the goods or services conform to contract requirements. 
[Footnote 6] DOD guidance requires CORs be trained and assigned prior 
to award of a contract. DOD training is intended to familiarize the 
COR with the duties and responsibilities of contract oversight and 
management. Contracting organizations such as CENTCOM Contracting 
Command require that personnel nominated to be CORs complete specific 
online training courses, as well as locally developed training and 
contract-specific training, before they can serve as CORs. DOD has 
taken some actions to improve the capability of CORs to provide 
management and oversight of contracts in contingency operations such 
as Afghanistan. These actions include developing a new COR training 
course, with a focus on contingency operations, and developing a COR 
certification program. Additionally, DOD has begun to emphasize the 
need for qualified CORs in military doctrine and other guidance with 
the publication of Joint Publication 4-10, Operational Contract 
Support and the Defense Contingency Contracting Representatives 
Officers Handbook and memoranda issued by the Deputy Secretary of 

However, our analysis of DOD's COR training and interviews with CORs 
and contracting personnel from organizations like the regional 
contracting centers and the Defense Contract Management Agency 
indicated that some gaps and limitations continue to exist. According 
to personnel in Afghanistan, none of the required COR training 
provides enough specifics about contract management and oversight in 
Afghanistan. For example, the required training does not provide CORs 
with information regarding important issue areas like the Afghan First 
Program, which encourages an increased use of local personnel and 
vendors for goods and services as part of the U.S. counterinsurgency 
strategy, and working with private security contractors. Some CORs 
told us that they were unfamiliar with the challenges of working with 
Afghan contractors, and had believed that contracting with Afghan 
vendors would be similar to contracting with U.S vendors. However, 
some of the CORs and other contracting officials we interviewed said 
they found that providing oversight to Afghan contractors is more 
challenging than working with other vendors because Afghan vendors 
often did not meet the time lines established by the contract, did not 
provide the quality products and the services the units had 
anticipated, and did not necessarily have a working knowledge of 
English. For example, one COR told us during our visit in February 
2011, that the unit was still waiting for barriers that they had 
contracted for in May 2010. While some of the barriers had been 
delivered, the unit had not received all of the barriers they required 
even though the contract delivery date had passed. Other CORs and 
contracting officials and contract management officials described 
similar situations where services were not provided as anticipated or 
not provided at all. As a result, items such as portable toilets, 
barriers, gates, water, and other items or services were not available 
at some locations when needed, raising concerns about security, 
readiness, and morale. Officials we spoke with noted similar problems 
with construction contracts awarded to Afghan contractors. For 
example, according to another COR, an Afghan contractor was awarded a 
$70,000 contract to build a latrine, shower, and shave unit. However, 
when the contractor was unable to satisfactorily complete the project, 
another contract was awarded for approximately $130,000 to bring the 
unit to usable condition. Similarly contracting officials provided 
documentation of other construction problems including, a latrine or 
shower facility built without drains, and a facility constructed in 
the wrong location, and facilities that were poorly constructed. 

Because of the nature and sensitivity of security contracts, CORs for 
private security contractor contracts have unique responsibilities. 
For example, CORs are responsible for compiling a monthly weapon's 
discharge report and for ensuring contractor adherence to contractual 
obligations on topics such as civilian arming requirements, personnel 
reporting systems, property accountability and badging. According to a 
senior military officer with U.S. Forces Afghanistan's private 
security contractor taskforce, because of gaps in training, CORs do 
not always understand the full scope of their responsibilities and so 
do not always ensure that a contractor is meeting all contract 
requirements. He noted that CORs do not always understand that they 
have the responsibility to ensure that the terms of the contract are 
met and therefore do not bring contractors' performance issues to the 
contracting officer's attention for resolution. As a result, DOD may 
pay contractors for poor performance and installations may not receive 
the level of security contracted. 

Further, we found that the training programs do not provide enough 
information on preparing statements of work or preparing documentation 
for acquisition review boards--two responsibilities that CORs are 
routinely tasked with. The Defense Contingency COR Handbook describes 
statements of work as specifying the basic top-level objectives of the 
acquisition as well as the detailed requirements of the government. 
The statement of work may provide the contractor with 'how to" 
instructions to accomplish the required effort, and forms part of the 
basis for successful performance by the contractor. Well-written 
statements of work are needed to ensure that units get the services 
and goods needed in the required time frame. CORs we spoke to 
highlight the problems they encountered when preparing statements of 
work. For example, several CORs told us of instances when statements 
of work needed to be rewritten because the original statements of work 
did not include all required contractor actions, or because they 
included incorrect requirements. Military officials responsible for 
reviewing and approving requests for contract support told us that 
poorly written statements of work are a principal reason why units do 
not receive the contract support they require. In 2000 and 2004, we 
reported that poorly written statements of work can result in 
increased costs and in contractors providing services that do not meet 
the requirements of the customer.[Footnote 7] According to DOD, the 
acquisition review board--known in Afghanistan as the Joint 
Acquisition Review Board--reviews and recommends approval or 
disapproval of proposed acquisitions to ensure efficiency and cost 
effectiveness and so it is important that CORs understand and are able 
to complete the required documentation in order to obtain needed goods 
and services. 

Furthermore, in addition to required on-line training, CENTCOM 
Contracting Command guidance requires that contracting officers 
discuss with CORs their specific contract requirements and 
responsibilities after they have been nominated and before they have 
begun their duties. However, contracting officers we interviewed at 
regional contracting centers in Afghanistan said they are frequently 
unable to provide the required contract-specific training for CORs 
because they are busy awarding contracts. Without this follow-on 
training on the specific contract, the COR may not have a clear 
understanding of how to perform contract oversight or the full scope 
of their responsibilities. In contrast, DCMA is able to provide 
specific contract training and mentoring to its CORs because DCMA has 
quality assurance personnel who have been tasked with providing COR 
training and assistance. 

CORs Lack Needed Technical Expertise to Oversee Some Contracts: 

Although CORs are selected from a group of candidates who have 
completed the basic COR training, their technical expertise, or lack 
thereof is not always taken into consideration when they are appointed 
to oversee contracts. The Defense Contingency COR handbook indicates 
that CORs are responsible for determining whether products delivered 
or services rendered by the contractor conform to the requirements for 
the service or commodity covered under the contract. The COR handbook 
notes that personnel nominated as CORs should have expertise related 
to the requirements covered by the contract, and suggests that 
commanders should consider the technical qualifications and experience 
of an individual when nominating a COR. In addition, the CENTCOM 
Contracting Command requires that commanders identify the nominee's 
qualifying experience. 

However, these requirements are not always taken into consideration 
when CORs are selected to oversee certain contracts. According to CORs 
and other personnel we interviewed in Afghanistan, CORs frequently 
lack the required technical skills to monitor contractor performance. 
For example, military personnel have been appointed to oversee 
construction contracts without the necessary engineering or 
construction experience, in part because their units lack personnel 
with those technical skills. While DCMA has subject matter experts in 
key areas such as fire safety available for CORs needing technical 
assistance, CORs for contracts written by the CENTCOM Contracting 
Command have no subject matter experts to turn to for assistance, 
particularly in the construction trades. As a result, according to 
officials there have been newly constructed buildings used by both 
U.S. and Afghan troops that had to be repaired or rebuilt before being 
used because the CORs providing the oversight were not able to 
adequately ensure proper construction. According to personnel we 
interviewed, this resulted in a waste of money as well as lower morale 
due to substandard facilities; and in an increased risk to bases and 
installations because required infrastructure such as guard towers, 
fire stations, and gates were lacking. Contracting officials from one 
regional contracting center told us that guard towers at a forward 
operating base were so poorly constructed that they were unsafe to 
occupy; they were subsequently torn down and reconstructed. According 
to a contracting officer, it is not uncommon for CORs to accept a 
portion of the contractor's work only to find, at the project's 
completion, that the construction was substandard. Similarly, 
officials told us that before the LOGCAP program will accept 
responsibility for maintenance of a facility not constructed by the 
LOGCAP contractor, the LOGCAP contractors are often required to repair 
or replace wiring or plumbing in buildings constructed by Afghan 
contractors to meet U.S. building codes. 

The Number of CORs Is Not Sufficient to Adequately Oversee the 
Thousands of Contracts Being Used in Afghanistan: 

DOD continues to lacks a sufficient number of oversight personnel to 
oversee the numerous contracts and task orders used in Afghanistan. 
While there is no specific guidance on the number of contracts for 
which a COR can be responsible, the CENTCOM Contracting Command's 
standard operating procedures for COR nomination requires that 
memoranda for COR nominations, signed by the unit commander, contain a 
statement verifying that the COR will have sufficient time to complete 
assigned tasks. Similarly, the Defense Contingency Contracting Officer 
Representative Handbook states that the requiring unit must allow 
adequate resources (time, products, equipment, and opportunity) for 
the COR to perform his or her COR functions. However, we found that 
CORs do not always have the time needed to complete their oversight 
responsibilities. While available data do not enable us to determine 
the precise number of contracts that require CORs, in fiscal year 2010 
CENTCOM Contracting Command awarded over 10,000 contracts.[Footnote 8] 
According to contracting officials and CORS we interviewed in 
Afghanistan, some CORs are responsible for providing oversight to 
multiple contracts in addition to their primary military duty. For 
example, one COR we interviewed was responsible for more than a dozen 
construction projects. According to the COR, it was impossible to be 
at each construction site during key phases of the project, such as 
the wiring installation or plumbing, because these phases were 
occurring almost simultaneously at different locations. Consequently, 
according to officials, construction was completed without sufficient 
government oversight, and problems were not always identified until 
the buildings were completed. This often resulted in significant 
rework, at a cost to the U.S. taxpayer. In addition, in some cases 
units did not assign enough CORs to provide oversight. For example, we 
were told at one unit that they did not have a sufficient number of 
CORs to provide proper oversight of dining facilities. Although the 
unit was able to provide one COR for each dining facility, the dining 
facilities operate 24 hours a day, and ideally, enough CORs would have 
been assigned to provide contract oversight 24 hours a day. Army 
guidance requires that supervisory staff for dining facilities 
(military food advisors, food program manager, CORs, and contractors 
operations) check food for sanitation and safety at dining facilities 
at every meal period.[Footnote 9] Without verification that food is 
prepared in a safe manner, the health of military personnel, DOD 
civilians, contractors, and others could be put at risk, with the 
potential to impact ongoing operations. 

DOD Has Not Institutionalized Operational Contract Support: 

An underlying cause for the oversight issues discussed above is DOD's 
inability to institutionalize operational contract support. Army 
officials stated that commanders, particularly those in combat units, 
still do not perceive contract management and oversight as warfighter 
tasks. As a result, units may not always use the tools available to 
help prepare for contract management operations in Afghanistan. For 
example, according to Army officials, personnel nominated as CORs are 
not always provided the opportunity to practice their COR roles during 
pre-deployment training events, despite Army guidance that requires 
the CORs to be exercised during these training events. Army CORs we 
interviewed in Afghanistan expressed their desire for more specific 
and in-depth training at their units' predeployment training events. 
In addition, we and others have made recommendations to provide 
operational contract support predeployment training for commanders and 
senior leaders and DOD agreed with our recommendations.[Footnote 10] 
However, little or no operational contract support training for these 
personnel is available prior to deployment. As a result, commanders do 
not always understand their units' roles and responsibilities to 
provide contract management and oversight. For example, some 
commanders and other personnel we interviewed questioned the idea that 
units should be responsible for contract oversight, and believe that 
contract oversight should be provided by other organizations. 

DOD, USAID, and State Efforts to Vet Non-U.S. Vendors in Afghanistan 
Need Improvement: 

Interagency Efforts Are Underway to Address Corruption in Afghanistan: 

In response to continued congressional attention and concerns from 
DOD, USAID, and other agencies about actual and perceived corruption 
and its impact on U.S. and International Security Assistance Force 
activities in Afghanistan, several DOD and interagency (including 
USAID) efforts have been established to identify malign actors, 
encourage transparency, and prevent corruption. While our recent work 
has not directly addressed anti-corruption activities in Afghanistan, 
we can report that these efforts include the establishment of several 
interagency task forces. One of them is Task Force 2010, an 
interagency anticorruption task force that aims to provide commanders 
and civilian acquisition officials with an understanding of the flow 
of contract funds in Afghanistan in order to limit illicit and 
fraudulent access to those funds by criminal and insurgent groups. 
Another is the Afghan Threat Finance Cell, an interagency organization 
that aims to identify and disrupt the funding of criminal and 
insurgent organizations. 

While DOD Has Recently Begun to Vet Non-U.S. Vendors in Afghanistan, 
Its Approach Has Limitations: 

In August 2010, DOD began to vet non-U.S. vendors in Afghanistan by 
establishing a vetting cell called the Vendor Vetting Reachback Cell 
(hereinafter referred to as the vetting cell).[Footnote 11] The 
purpose of this vetting process--which includes the examination of 
available background and intelligence information--is to reduce the 
possibility that insurgents or criminal groups could use U.S. 
contracting funds to finance their operations. The vetting cell is 
staffed by 18 contractor employees operating from CENTCOM headquarters 
and is supervised by DOD officials. The contract used to establish the 
vetting cell for Afghanistan was awarded in June 2010, and in August 
2010 the cell began vetting non-U.S. vendors.[Footnote 12] Names of 
non-U.S. contractors who are seeking a contract award with DOD in 
Afghanistan are forwarded to the cell, and an initial assessment is 
made about the prospective vendor. Once an initial assessment is made 
by the cell about a non-U.S. vendor, a final determination is made by 
a DOD entity in Afghanistan as to whether to accept or reject the 
prospective vendor for the particular contract. 

However, some limitations exist in the vendor vetting process. 
According to the CENTCOM Contracting Command Acquisition Instruction, 
all awards of and options for contracts equal to or greater than 
$100,000 to all non-U.S. vendors in Afghanistan are subject to vetting 
by the vetting cell.[Footnote 13] Additionally, all information 
technology contracts in Afghanistan, regardless of dollar value, are 
subject to vetting.[Footnote 14] However, while the acquisition 
instruction does highly recommend that all vendors be submitted for 
vetting-which would include those with contracts under $100,000-it 
does not require that vendors with contracts below $100,000 be vetted. 
This presents a significant gap in the vetting requirements for non-
U.S. vendors as nearly three-quarters of the new contracts awarded and 
options exercised for FY 2010 to non-U.S. vendors were valued at under 
$100,000.[Footnote 15] Additionally, currently, CENTCOM Contracting 
Command does not routinely vet subcontractor vendors, even though 
according to DOD officials, subcontractors do much of the work in 
Afghanistan. Also CENTCOM Contracting Command officials said that when 
the contract was established, it was with the intention of determining 
a non-U.S. vendor's eligibility to be awarded a contract in 
Afghanistan prior to award. However, according to CENTCOM Contracting 
Command officials, when they began submitting names to the vendor 
vetting cell in 2010, the focus was on vendors who had already 
received contracts in order to address immediate corruption and 
illicit funding concerns.[Footnote 16] CENTCOM Contracting Command has 
not yet to determined how many of the remaining non-U.S. vendors that 
have already been awarded contracts valued above $100,000 will be 
vetted in the future, and at the same time, the number of vendors 
awarded contracts prior to vetting continues to grow as contracts 
continue to be awarded in Afghanistan by CENTCOM Contracting Command 
during fiscal year 2011. This may mean that the number of non-U.S. 
vendors who have not been vetted will continue to grow and further 
delayed by the fact that CENTCOM Contracting Command has also not 
established a timeline for when it will begin vetting vendors prior to 
award, nor have they developed an estimated number of prospective 
vendors that it anticipates vetting in the remainder of the fiscal 
year. Furthermore, the command does not use a formalized risk based 
approach to prioritize vetting needs. Officials from CENTCOM 
Contracting Command told us that they considered factors such as the 
risk, complexity, and nature of the contract to prioritize the first 
tranche of non-U.S. vendors sent to the cell for vetting, but they 
have no documentation identifying these considerations as a process. 

To address these vendor vetting limitations in Afghanistan, in our 
June 2011 report we made several recommendations to DOD. These 
recommendations included that CENTCOM Contracting Command consider 
formalizing a risk-based approach to enable the department to identify 
and vet the highest-risk vendors--including those vendors with 
contracts below the $100,000 threshold--as well as subcontractors, and 
to work with the vendor vetting cell to clearly identify the resources 
and personnel needed to meet the demand for vendor vetting in 
Afghanistan, using a risk-based approach. DOD concurred with our 
recommendations and in their response provided additional 
clarification about the limitations that currently exist on its 
resources, including limitations on expanding its joint manning 
document and the current mandate to reduce staff at CENTCOM. 

USAID Has Recently Begun to Implement A Vendor Vetting Process: 

In January 2011, in order to counter potential risks of U.S. funds 
being diverted to support criminal or insurgent activity, USAID 
created a process for vetting prospective non-U.S. contract and 
assistance recipients (i.e., implementing partners) in Afghanistan. 
This process is similar to the one it has used in the West Bank and 
Gaza since 2006. This process was formalized in USAID's May 2011 
mission order, which established a vetting threshold of $150,000 and 
identified other risk factors, such as project location and type of 
contract or service being performed by the non-U.S. vendor or 
recipient.[Footnote 17] The mission order also established an 
Afghanistan Counter-Terrorism Team, which can review and adjust the 
risk factors as needed. USAID officials said that the agency's vendor 
vetting process was still in the early stages, and that it is expected 
to be an iterative implementation process of which aspects could 
change--such as the vetting threshold and the expansion of vetting to 
other non-U.S. partners. In our June 2011 report we recommended that 
USAID consider formalizing a risk-based approach that would enable it 
to identify and vet the highest-risk vendors and partners, including 
those with contracts below the $150,000 threshold. We also recommended 
that in order to promote interagency collaboration so as to better 
ensure that vendors potentially posing a risk to U.S. forces are 
vetted, DOD and USAID should consider developing formalized 
procedures, such as an interagency agreement or memorandum of 
agreement, to ensure the continuity of communication of vetting 
results and to support intelligence information, so that other 
contracting activities may be informed by those results. USAID 
concurred with our recommendations and noted that the agency has 
already begun to implement corrective measures to ensure conformity 
with the GAO recommendations and adherence to various statutes, 
regulations, and executive orders pertaining to terrorism. 

State Has Not Created a Vendor Vetting Process for Afghanistan: 

As of May 2011, the State Department (State) was not vetting vendors 
in Afghanistan. As we reported in June 2011, State officials told us 
that currently many of their contracts are awarded to U.S. prime 
contractors, and that they award relatively few contracts to non-U.S. 
vendors. Nonetheless, our analysis of contract data shows that State 
does work with many non-U.S. vendors in Afghanistan, and embassy 
officials in Kabul told us they do not do any vetting or background 
checks on the vendors other than for the security risks posed by 
individual personnel with physical access to the embassy property or 
personnel. State has endorsed the Afghan First policy, which will 
likely result in increased contracting with Afghan vendors in the 
future, which will in turn increase the need to have procedures in 
place to prevent funds from being diverted to terrorist or insurgent 
groups. Given this potential increase in local contracting, and 
without a way to consider--after specific vendors are known to be 
candidates--the risk posed by funding non-U.S. vendors to perform 
particular activities in Afghanistan, the department may increasingly 
expose itself to contracting with malign actors. 

To help ensure that State resources are not diverted to insurgent or 
criminal groups, we recommended that State assess the need and develop 
possible options for vetting non-U.S. vendors--for example, these 
could include leveraging existing vendor vetting processes, such as 
USAID's, or developing a unique process. State partially agreed with 
our recommendation, and in written comments noted that while it 
recognized the risk of U.S. funds under State's management being 
diverted to terrorists or their supporters, there were significant 
legal concerns related to contracting law, competition requirements, 
and the conflict between open competition and the use of classified 
databases to vet contractors and grantees that have required analysis 
and discussion. We recognize these concerns and encourage State to 
continue to address these various issues should they develop and 
implement a vetting process. 

DOD, USAID, and State have Not Developed a Formal Method of Sharing 
Vendor-Vetting Information in Afghanistan: 

Although DOD, USAID, and State likely utilize many of the same vendors 
in Afghanistan, we found and reported in June 2011 that the agencies 
have not developed a formalized process to share vendor vetting 
information. Currently, DOD and USAID officials in Afghanistan have 
established informal communication, such as biweekly meetings, ongoing 
correspondence, and mutual participation in working groups. Further, 
DOD and USAID officials said that their vetting efforts are integrally 
related and are complementary to the work of the various interagency 
task forces, such as Task Force 2010 and the Afghan Threat Finance 
Cell, and that their mutual participation in these task forces 
contributes to interagency information sharing in general and vetting 
results in particular. However, a formal arrangement for sharing 
information such as would be included in a standard operating 
procedure or memorandum of agreement between DOD and USAID has not 
been developed for vetting efforts. In addition, though the U.S. 
Embassy also participates in various interagency task forces, such as 
Task Force 2010, there is no ongoing information sharing of vendor 
vetting results, either ad hoc or formally. According to CENTCOM 
Contracting Command officials, the command is in the process of 
developing a standard operating procedure for sharing the vendor 
vetting results specifically with USAID, but this document has not yet 
been completed. To promote interagency collaboration so as to better 
ensure that non-U.S. vendors potentially posing a risk to U.S. forces 
are vetted, we recommended that DOD, USAID, and State consider 
developing formalized procedures, such as an interagency agreement or 
memorandum of agreement, to ensure the continuity of communication of 
vetting results and to support intelligence information, so that other 
contracting activities may be informed by those results. DOD and USAID 
both concurred with our recommendation, but State did not comment on 

DOD Has Not Fully Addressed GAO Recommendations: 

Since the beginning of our work on operational contract support in 
1997, we have made numerous recommendations to DOD to help improve the 
oversight and management of contractors used to support contingency 
operations. Specifically, we have made recommendations in the areas of 
developing guidance, planning for contractors in future operations, 
tracking contractor personnel, providing sufficient numbers of 
oversight personnel, and training non acquisition personnel including 
CORs and other key leaders such as unit commanders and senior staff. 
DOD has implemented some--but not all--of these recommendations. 

DOD has taken some actions to address or partially address some of our 
previous recommendations regarding operational contract support, such 
as establishing a focal point to lead the department's effort to 
improve contingency contractor management and oversight at deployed 
locations, issuing new guidance, incorporating operational contract 
support into professional military education, and beginning to assess 
its reliance on contractors. For instance, based on our work, in 
October 2006, the Deputy Under Secretary of Defense for Logistics and 
Materiel Readiness established the Office of the Assistant Deputy 
Under Secretary of Defense (Program Support) to act as a focal point 
for leading DOD's efforts to improve contingency contractor management 
and oversight at deployed locations. Among the office's 
accomplishments is the establishment of a community of practice for 
operational contract support comprising of subject matter experts from 
the Office of the Secretary of Defense, the Joint Staff, and the 
services. In March 2010, the office issued an Operational Contract 
Support Concept of Operations, and it has provided the geographic 
combatant commanders with operational contract support planners to 
assist them in meeting contract planning requirements. 

To provide additional assistance to deployed forces, the department 
and the Army introduced several handbooks and other guidance to 
improve contracting and contract management in deployed locations. For 
example in October 2008, the department issued Joint Publication 4-10, 
Operational Contract Support, which establishes doctrine and provides 
standardized guidance for, and information on, planning, conducting, 
and assessing operational contract support integration, contractor 
management functions, and contracting command and control 
organizational options in support of joint operations.[Footnote 18] 

Additionally, in 2003 we recommended that DOD develop training for 
commanders and other senior leaders who are deploying to contingencies 
and we recommended that CORs be trained prior to assuming their 
duties.[Footnote 19] DOD has partially implemented this 
recommendation; training is available for commanders and other senior 
leaders however these courses are not required prior to deployment. In 
2006, we recommended that Operational Contract Support training be 
included in professional military education to ensure that military 
commanders and other senior leaders who may deploy to locations with 
contractor support have the knowledge and skills needed to effectively 
manage contractors.[Footnote 20] Both DOD and the Army have taken some 
actions to implement this recommendation. For example, the Army 
includes operational contract support topics in its intermediate 
leaders course and includes limited operational contract support 
familiarization in some but not all of its pre-command courses. DOD 
has established a program of instruction for use in senior leader 
professional military education but the instruction has yet to be 
incorporated in this level of professional military education. 

We have made several recommendations to improve contractor visibility 
in contingencies. While DOD, along with USAID and State, has 
implemented a system--the Synchronized Predeployment and Operational 
Tracker (SPOT)--to track information on its contractor personnel in 
Afghanistan and other countries, we have issued a series of reports 
that highlight shortcomings in the system's implementation.[Footnote 
21] The shortcomings are due, in part, to varying interpretations of 
which contractor personnel should be entered into the system. As a 
result, the information SPOT does not present an accurate picture of 
the total number of contractor personnel in Afghanistan. In October 
2009, we recommended that DOD, State, and USAID develop a plan, to 
among other matters, ensure consistent criteria for entering 
information into SPOT and improve its reporting capabilities to track 
statutorily required contracting data and meet agency data needs. The 
agencies did not agree with our recommendation and when we reviewed 
the system a year later, we found that many of the issues our 
recommendation was intended to address had not been resolved. We are 
currently evaluating the status of SPOT's implementations and the 
agencies' efforts to improve SPOT. 

Concluding Observations: 

DOD and the services have taken some important steps to 
institutionalize OCS--for example, by issuing joint doctrine, 
including some training in professional military education, and 
establishing a vetting cell to vet non-U.S. vendors in Afghanistan, to 
minimize the risk of criminal groups using contracts to fund their 
operations but DOD's efforts have not gone far enough. Our previous 
work has emphasized the need to institutionalize operational contract 
support within DOD and improved vetting processes for contractor 
personnel and vendors, as well as highlighting long-standing problems 
regarding oversight and management of contractors supporting deployed 
forces. Contract management, including contract oversight, remains on 
our high risk list in part because of DOD's challenges in managing 
contracts used to support deployed forces.[Footnote 22] Since 2004, we 
have identified the need for a sufficient number of trained oversight 
personnel, including CORs, as challenge to effective contract 
management and oversight. While the department has improved contract 
management and oversight by adding training requirements for CORs, the 
current system of using CORs to provide contract management and 
oversight still has significant weaknesses. As a result, contract 
oversight and management issues are resulting in a waste of money and 
raises concerns about security, readiness, and morale. The Secretary 
of Defense recently called for a change in culture related to 
operational contract support and directed the joint staff to identify 
the resources and changes in doctrine and policy necessary to 
facilitate and improve the execution of operational contract support. 
This reexamination of culture, policies, and resources along with 
implementing solutions to the contract oversight problems identified 
by us and others should help DOD address its longstanding issues 
oversight issues. 

Madam Chairman, Ranking Member Portman, and members of the 
Subcommittee this concludes my statement. I would be happy to answer 
any questions you may have at this time. 

Contact and Acknowledgments: 

For further information on this testimony, please contact William 
Solis at (202) 512-8365 or 

In addition, 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 are Carole 
Coffey, Assistant Director; Vincent Balloon, Natalya Barden, Tracy 
Burney, Carolynn Cavanaugh, Alfonso Garcia, Melissa Hermes, 
Christopher Miller, James Reynolds, Natasha Wilder and Sally 
Williamson. Michael Shaughnessy provided legal support, and Cheryl 
Weissman, Vernona Brevard, and Peter Anderson provided assistance in 
report preparation. 

[End of section] 


[1] These examples of corruption and insurgent financing are reported 
in the Senate Committee on Armed Services's Inquiry into the Role and 
Oversight of Private Security Contractors in Afghanistan, S. Rep. No. 
111-345, released in October 2010, and by the majority staff of the 
House Subcommittee on National Security and Foreign Affairs of the 
Committee on Oversight and Government Reform in its report Warlord, 
Inc., in June 2010. See also National Defense Authorization Act for 
Fiscal Year 2012, H.R. 1540, 112th Cong. § 821 (2011) (as passed by 
the House May 26, 2011); No Contracting with the Enemy Act of 2011, S. 
341, 112th Cong. (2011) (as introduced in the Senate, Feb. 14, 2011) 

[2] CENTCOM Contracting Command is the commonly used name for what is 
formally known as the Joint Theater Support Contracting Command, 
formerly the Joint Contracting Command-Iraq/Afghanistan. 

[3] GAO, Afghanistan: Efforts to Vet Non-U.S. Vendors Need 
Improvement, [hyperlink,] 
(Washington, D.C.: June 8, 2011). 

[4] 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 provides the majority 
of base and life support services to U.S. forces in Iraq and 

[5] The administrative contracting officer is a certified contracting 
officer with specialized training and experience. Administrative 
contracting officers may be responsible for many duties including 
ensuring contractor compliance with contract quality assurance 
requirements, approving the contractor's use of subcontractors, 
reviewing the contractor's management systems, reviewing and 
monitoring the contractor's purchasing system, and ensuring that 
government personnel involved with contract management have the proper 
training and experience. 

[6] Surveillance generally involves government oversight of 
contractors with the purpose of ensuring that the contractor (the 
service provider) performs the requirements of the contract, and the 
government (the service receiver or customer) receives the service as 

[7] GAO, Military Operations: DOD's Extensive Use of Logistics Support 
Contracts Requires Strengthened Oversight, [hyperlink,] (Washington, DC: July 19, 

[8] CENTCOM Contracting Command does not require a COR for every 
contract awarded. According to the CENTCOM standard operating 
procedures, CORs will be nominated for all service contracts exceeding 
$2,500, both commercial and non-commercial, with significant technical 
requirements that require ongoing advice and surveillance from 
technical/requirements personnel. However, contracting officers may 
exempt service contracts from the requirement for a COR when the 
contract will be awarded using simplified acquisition procedures, the 
requirement is not complex, and the contracting officer documents in 
writing why the appointment of a COR is unnecessary. 

[9] See Department of the Army Pamphlet 30-22, Operating Procedures 
for the Army Food Program (Feb. 6, 2007). 

[10] [hyperlink,]. 

[11] While the term vetting can be used to describe any sort of 
background verification or fact checking, for purposes of our work in 
this area, vetting is used to describe the examination of available 
background and intelligence information to determine whether 
prospective vendors or assistance recipients are affiliated with 
insurgent or criminal groups, or appear to pose a significant risk of 
diverting funds or security information to terrorist, criminal, or 
other corrupt organizations. 

[12] The vetting cell contract awarded in June 2010 is an indefinite- 
delivery/indefinite-quantity contract that currently has two task 
orders that separately establish vetting cells for Afghanistan and 
Iraq that are collocated at CENTCOM headquarters in Tampa, Florida. 
The task order for Iraq was awarded slightly later, in August 2010, to 
allow the period of performance for the prior Iraq vetting cell 
contract to conclude. 

[13] Specifically, the Acquisition Instruction applies vendor vetting 
"to all awards of, and options for, any contracts or Blanket Purchase 

[14] According to the Acquisition Instruction, this process is to be 
implemented for information technology contracts as soon as feasible 
and practicable but not later than April 2, 2011. 

[15] Figure based on GAO analysis of Federal Procurement Database 
System-Next Generation (FPDS-NG) data, April 2011. Non-U.S. 
contractors were identified in the system as contractors for which the 
vendor country was not the United States or for which the contractor 
name was "miscellaneous foreign contractor." Award amount is the 
amount of the initial obligation for contracts and purchase orders; 
the obligation for options exercised in fiscal year 2010; and because 
of the lack of estimate value for blanket purchase agreements and 
indefinite delivery contracts, the fiscal year 2010 obligated amount 
for calls and orders performed in Afghanistan. FPDS-NG includes 
unclassified contracts that are estimated to be $3,000 or more and any 
modifications to these contracts, regardless of dollar value. Further, 
the number of contracts and task orders does not necessarily equal the 
number of vendors, as some vendors may have more than one contract or 
task order. Also, the number of contracts and task orders does not 
necessarily equal the number of vendors. as some vendors may have more 
than one contract or task order. Totals may not correspond due to 

[16] Although the Acquisition Instruction primarily focuses on vetting 
prospective contract actions (i.e., award), one subsection addresses 
the potential for termination of existing contracts where a 
contracting officer becomes aware of a contractor with a "rejected" 
eligibility status. See CENTCOM Contracting Command Acquisition 
Instruction, § 25.7704-1203(k) (Nov. 5, 2010). 

[17] See USAID Mission for Afghanistan, Mission Order No. 201.04, 
National Security Screening (Non-US Party Vetting) (May 9, 2011). The 
Mission Order specifies that awards to non-U.S. parties for private 
security services are subject to vetting regardless of the award 
amount. See GAO, Afghanistan: Efforts to Vet non-U.S. Vendors Need 
Improvement, [hyperlink,] 
(Washington, D.C.: June 2011). See USAID agency comments, pg. 37. 

[18] Joint Publication 4-10 expressly does not pertain to contracting 
support of routine, recurring (i.e., noncontingency) DOD operations. 

[19] GAO, Military Operations: Contractors Provide Vital Services to 
Deployed Forces but Are Not Adequately Addressed in DOD Plans, 
[hyperlink,] (Washington, D.C.: 
June 24, 2003). 

[20] GAO, Military Operations: High-Level DOD Action Needed to Address 
Long-standing Problems with Management and Oversight of Contractors 
Supporting Deployed Forces, [hyperlink,] (Washington, D.C.: December 
18, 2006). 

[21] GAO, Iraq and Afghanistan: DOD, State, and USAID Face Continued 
Challenges in Tracking Contracts, Assistance Instruments, and 
Associated Personnel, [hyperlink,] (Washington, D.C.: Oct. 1, 
2010); GAO, Contingency Contracting: DOD, State, and USAID Continue to 
Face Challenges in Tracking Contractor Personnel and Contracts in Iraq 
and Afghanistan, [hyperlink,] 
(Washington, D.C.: Oct. 1, 2009); and GAO, Contingency Contracting: 
DOD, State, and USAID Contracts and Contractor Personnel in Iraq and 
Afghanistan, [hyperlink,] 
(Washington, D.C.: Oct. 1, 2008). 

[22] GAO, High-Risk Series: An Update [hyperlink,] (Washington, D.C.: February 
16, 2011). 

[End of section] 

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