Since 2002, DOD obligated at least $166.6 billion on contracts supporting reconstruction and stabilization efforts in Iraq and Afghanistan. Many of these contingency contracts, in particular those awarded in Iraq, need to be closed. Contract closeout is a key step to ensure the government receives the goods and services it purchased at the agreed upon price and, if done timely, provides opportunities to use unspent funds for other needs and reduces exposure to other financial risks. To assess DOD's efforts to close its Iraq contracts, GAO examined the (1) number of contracts that are eligible for closeout and the extent to which they will be closed within required time frames, (2) factors contributing to contracts not being closed within required time frames, (3) steps DOD took to manage the financial risks associated with not closing contracts within required time frames, and (4) extent to which DOD captured and implemented lessons learned from closing its Iraq contracts. GAO reviewed contingency contracting guidance, analyzed contract and closeout data for contracts awarded between fiscal years 2003 and 2010, and interviewed DOD officials from six organizations responsible for awarding or closing out these contracts.
Recommendations for Executive Action
|Department of Defense||1. To help address the current backlog of contracts supporting the efforts in Iraq and Afghanistan that need to be closed out, the Secretary of Defense should direct the Secretary of the Army to take steps to ensure the Army Contract Command-Rock Island's (ACC-RI) planned resources are adequate to meet forecasted closeout demands.|
|Department of Defense||2. To help improve DOD's ability to manage the closeout of contracts awarded in support of future contingencies, the Secretary of Defense, in coordination with the Chairman of the Joint Chiefs of Staff, should revise DOD's contingency contracting doctrine and guidance to reflect the need for advanced planning for contract closeout.|
|Department of Defense||3. To help improve DOD's ability to manage the closeout of contracts awarded in support of future contingencies, the Secretary of Defense, in coordination with the Chairman of the Joint Chiefs of Staff, should require senior contracting officials to monitor and assess the progress of contract closeout activities throughout the contingency operation so steps may be taken if a backlog emerges.|