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Highlights

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.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
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.
Closed - Implemented
The Department of the Army determined the total number of contracts that needed to be closed, determined the number of personnel required to close the contracts, and took steps to hire an adequate number of staff to close the contracts. The Army reported that as of June 2015, over 99 percent of the Iraq and Afghanistan contracts that needed to be closed out were closed.
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.
Closed - Implemented
In May 2012, in response to our recommendation, DOD amended the Defense Federal Acquisition Regulation Supplement (DFARS) Procedures, Guidance, and Information (PGI) to require the written acquisition plans for contracts in support of contingency operations to include a plan for contract closeout support as necessary. Further, in July 2014, DOD revised its contingency contracting planning doctrine, Joint Publication 4-10, to emphasize that in-theater contracting planning should include ensuring that contracts are closed out in a timely manner and account for personnel turnover and contracting workload.
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.
Closed - Implemented
In May 2012, DOD amended the Defense Federal Acquisition Regulation Supplement (DFARS) to require heads of contracting activities to monitor and assess on a regular basis the progress of contingency contract closeout activities and take appropriate steps if a backlog occurs.

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