The Department of Defense (DOD) relies greatly on contractors to support its current operations and is likely to continue to depend on contractors in support of future operations. As of December 2009, DOD estimated that over 207,000 contractor personnel were supporting operations in Iraq and Afghanistan. DOD expects to increase the number of contractors as more troops deploy to Afghanistan. The use of contractors in contingencies has challenged DOD in overseeing and managing contractors. This testimony addresses (1) the challenges DOD faces when trying to provide management and oversight of contractors in Iraq and Afghanistan, and (2) the extent to which DOD has made progress in institutionalizing a department- wide approach to managing and overseeing operational contract support. Today's testimony is based on GAO's ongoing audit work in Iraq and Afghanistan, looking at planning for operational contract support and at DOD's efforts to manage and oversee contractors, as well as on recently published related GAO reports and testimonies.

DOD continues to face a number of challenges overseeing and managing contractors in ongoing operations. These challenges include: (1) Providing an adequate number of personnel to conduct oversight and management of contractors. (2) Training personnel, including non-acquisition personnel such as unit commanders, on how to work effectively with contractors in operations. (3) Ensuring that local and third-country nationals have been properly screened, given the lack of standardized documents, the lack of national police agencies in many countries, and poor record keeping in many countries. (4) Compiling reliable data on the number of contractor personnel supporting U.S. forces in contingencies. (5) Identifying requirements for contractor support in ongoing operations, although GAO notes that some steps have been taken at the individual unit level. GAO has made many recommendations in the past aimed at addressing each of these challenges. While DOD has implemented some of our recommendations, it has been slow to implement others. For example, DOD has not developed agency-wide procedures to screen foreign national contractor personnel. In addition, the department has not fully addressed congressional direction to include operational contract support in predeployment training. Until DOD has fully implemented GAO's recommendations and congressional direction, it will not be in a position to ensure adequate management and oversight of contractors in contingency operations. Furthermore, inattention to these challenges may negatively affect the military's mission through the inefficient use of personnel, may increase the risk to U.S. personnel through inadequate background screenings, and may result in increased waste of taxpayer dollars. While DOD has taken some actions to institutionalize operational contract support, significant work remains to be done. For example, in 2006 DOD established the Assistant Deputy Under Secretary of Defense (Program Support) to act as a focal point for DOD's efforts to improve contract management and oversight at deployed locations. In addition, the department has issued a variety of contractor-related guidance, including the Joint Contingency Contracting Handbook and a Joint Publication that establishes doctrine for operational contract support; however, other guidance, including an Expeditionary Contracting Policy and an update of the DOD Instruction on Contractors Accompanying the Force, has yet to be finalized. Our ongoing work has also shown that the department continues to face challenges identifying contractor requirements in its plans for future operations. Until DOD institutionalizes operational contract support by incorporating it into its guidance, training, and planning, the department may continue to confront the challenges it faces in Iraq and Afghanistan in future operations.