Contingency Contracting: Agency Actions to Address Recommendations by the Commission on Wartime Contracting in Iraq and Afghanistan

GAO-12-854R Published: Aug 01, 2012. Publicly Released: Aug 01, 2012.
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What GAO Found

In summary, DOD reported having taken or planned actions that directly align with about half of the CWC recommendations applicable to it, and State and USAID each reported having taken or planned actions that directly align with about one-third of the recommendations applicable to each of them. Officials from the three agencies explained that for the remaining recommendations no actions were taken or planned that directly aligned with the specific recommendation. This was because, for example, the agencies had determined that existing policies or practices already meet the intent of the recommendations or had disagreed with the recommendations. The following are examples of actions that DOD, State, and USAID have taken or planned that directly align with specific CWC recommendations:

  • DOD issued a final rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) in February 2012 to improve the oversight of contractor business systems, including the ability to withhold a percentage of payments on certain covered contracts when a contractor’s business systems contain significant deficiencies. This action aligns with the CWC’s recommendation to strengthen authority to withhold contract payments for inadequate business systems.

  • State issued guidance in October 2011 describing a process for drafting a determination memorandum each time the potential need to suspend or debar a contractor arises, including for those cases in which no action against the contractor is ultimately recommended. This guidance aligns with a CWC recommendation to strengthen enforcement tools by requiring a written rationale for not pursuing a proposed suspension and debarment.

  • USAID issued guidance in January 2012 that requires sustainability analysis for all projects and developed a tool that contains questions, issues, and examples to help USAID project design teams think through project sustainability objectives and maximize sustainable outcomes. This guidance aligns with a CWC recommendation related to project sustainability (i.e., ensuring that host nations will be able to operate and maintain U.S.-funded projects on their own).

The following are examples of instances in which DOD, State, and USAID reported not having taken or planned actions that directly align with specific CWC recommendations:

  • The three agencies generally have not and do not plan to elevate the positions and expand the authority of officials responsible for contingency contracting as recommended by the CWC. Officials from DOD, State, and USAID explained that they regard existing organizational structures as meeting the recommendations’ intent. For example, DOD officials stated that the CWC’s recommendation to create a new directorate for contingency contracting is not needed because DOD already has a significant amount of senior leadership involvement and support for operational contract support. Similarly, State officials stated that there were no plans to establish a separate bureau led by an Assistant Secretary for Acquisition as recommended by the CWC because their current organizational structure, in which contingency contracting is overseen by the Assistant Secretary for Administration in coordination with the Under Secretary for Management, is sufficient to meet the department’s needs. USAID officials stated that there were no plans to make the chief acquisition officer position a non-career appointment as recommended because they believe that having a career foreign service officer in that role provides the necessary knowledge of the agency’s unique mission and acquisition needs.
  • None of the three agencies agree with the recommendation requiring performance incentives and performance assessments as tools for preventing human trafficking by contractors. Officials from each agency explained that contractors should not need incentives to comply with anti-trafficking laws and other ongoing initiatives, such as training for contract administration personnel, were better tools to help combat human trafficking.

Why GAO Did This Study

Over the past decade, the Department of Defense (DOD), Department of State (State), and U.S. Agency for International Development (USAID) have relied extensively on contractors to help carry out their missions in Iraq and Afghanistan. Between fiscal year 2002 and fiscal year 2011, these agencies reported combined obligations of approximately $159 billion for contracts with a principal place of performance in either country. Contractor personnel have provided a range of services related to supporting troops and civilian personnel and to overseeing and carrying out reconstruction efforts, such as interpretation, security, weapon systems maintenance, intelligence analysis, facility operations support, advice to Iraqi and Afghan ministries, and road and infrastructure construction. The use of contractors in contingency operations such as these is not new, but the number of contractors and the type of work they are performing in Iraq and Afghanistan represent an increased reliance on contractors to support agency missions.

Congress established the Commission on Wartime Contracting in Iraq and Afghanistan (CWC) in 2008 to assess contracting in Iraq and Afghanistan and provide recommendations to Congress to improve the contracting process. The CWC was directed by Congress to assess contracting in Iraq and Afghanistan for reconstruction, logistics, and security functions; examine the extent of waste, fraud, and abuse; and provide recommendations to Congress to improve various aspects of contingency contracting, including defining requirements and identifying, addressing, and providing accountability for waste, fraud, and abuse.

Led by six commissioners appointed by congressional leadership and two commissioners appointed by the president, the CWC conducted its work between 2008 and 2011. In a series of interim and special reports and in a culminating final report, the CWC made multiple recommendations about contracting practices in current and future contingency environments.The recommendations in the final report were organized into 15 strategic areas related to improvements in contingency contracting. Some recommendations were made specifically to DOD, State, USAID; others were made to Congress; and the remaining recommendations were not made to a specific entity. Only one recommendation from the final report included a date by which implementation should be completed, with the CWC noting that some reforms will take many years for agencies to fully implement because of the complexity of the issues involved.

DOD, State, and USAID have taken different management approaches for addressing the CWC’s recommendations. For example, at DOD, the Under Secretary of Defense (Acquisition, Technology, and Logistics) established a senior-level board that used a formal process for determining which recommendations DOD would address and assigning responsibility for addressing them to specific DOD offices. The board also monitors the status of efforts to implement the recommendations. At State, officials told us that the Office of the Under Secretary for Management has general responsibility for coordinating the department’s efforts to address the CWC’s recommendations. These officials explained that when the CWC’s final report was issued, the Office of the Under Secretary for Management assigned responsibility to bureaus and offices with related portfolios for determining and reporting on how the department was addressing the recommendations at a strategic level. They explained, however, that State does not have a formal process for assigning responsibility for or monitoring the implementation of the specific recommendations. USAID has taken a decentralized approach to the CWC recommendations. The agency does not have an office designated for addressing or monitoring the efforts to address the CWC’s recommendations. According to a senior USAID official, the Office of Acquisition and Assistance is responsible for addressing recommendations related to agencywide procurement policy. However, USAID officials explained that efforts to respond to other CWC recommendations are more appropriately addressed at the individual mission level, as each country has specific needs and circumstances.

In response to congressional request, we determined whether DOD, State, and USAID have taken or planned actions that directly align with recommendations the CWC made in its final and last two special reports—including those recommendations directed to one or more of the agencies and those recommendations not directed to a specific entity but that one or more of the agencies considered applicable to them. We also described agency positions on recommendations the CWC made to Congress when the agencies provided their positions to us.

For more information, contact John P. Hutton at (202) 512-4841 or or Cary B. Russell at (202) 512-5431 or

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