Wednesday, June 08, 2011

A slump in his pants





Nathan Hodge (Wall St. Journal) reports, "The State Department is preparing to spend close to $3 billion to hire a security force to protect diplomats in Iraq after the U.S. pulls its last troops out of the country by year's end." Hodge is referring to what it emerged in the Commission for Wartime Contracting hearing yesterday. The hearing was entitled "State Department contracting, response to CWC recommendations, and transition effort in Iraq and Afghanistan." If video of the hearing goes up, it will be there. (Currently there's no video and the page merely has a link to prepared remarks.) The Commission is comprised of co-chairs Christopher Shays and Michael Thibault and Commissioners Clark Kent Ervin, Grant Green, Robert Henke, Katherine Schinasi, Charles Tiefer and Dov S. Zakheim. The Commission heard from one witnesse, the State Dept's Under Secretary for Management Patrick F. Kennedy. From Kennedy's opening remarks:
All US personnel and contractors in Iraq will be under Chief of Mission authority and secruity arrangements have been worked out between State and DoD. [In written statement but not read outloud: "However, security will be a shared responsibility, with the State Department's Bureau of Diplomatic Security (DS) responsible for all State Department sites and DoD responsible for the Office of Security Cooperation-Iraq (OSC-I) personnel. As such, DoD will be staffing and funding its security operations. At those locations where OSC-I is collocated with State, DS and DoD security will closely coordinate movement security, but DS will have sole responsibility for facilities security."] On September 29, 2010, State announced the award of a base contract for Worldwide Protective Services to eight companies. Task order are being competed among base contract awardees and awarded on a best value basis thanks to the assistance of this Commission. Awarding to multiple companies allows for increased competition for each task order, thereby controlling costs and providing for increased capacity to perform crucial security services in contingency environments. It also gives the US Government timely options in the event of a company failing to perform.
Kennedy went on to note that DoD would be "loaning" Biometirc Input Equipment (BATS) to State by DoD and this would be used to "vet prospective employees." And to verify current ones but is this all that it will be used for? The US Army's Program Executive Office Enterprise Information Systems has a page on DoD's Biometrics which does note: "Biometric Identification System for Access (BISA) is a Force Protection initiative that collects multi-modal (fingerprint, facial and iris) biometric and biographical information to produce a smartcard or PIN badge to control local and third-country nationals, coalition forces, and a limited number of US Persons accessing US controlled facilities in Iraq." And, in his written statement (not out loud), he noted they would use the BISA database. But he said BATS and BATS is in the written testimony. This is what the US Army's PEOE notes of BATS:

BAT: Biometrics Automated Toolset (BAT) is a tactical, multi-modal biometric system that collects and fuses biometric (fingerprints, iris images, and facial photographs) and biographical information on persons of DOD interest.

BAT is used globally to support a wide range of tactical, operational, and strategic military operations, such as interrogations, combatant/detainee enrollment and management, local hire screening, population management, checkpoint maintenance, and base access control. This capability provides U.S. forces with an unprecedented capability to positively identify, track, and further exploit terrorists, recidivist combatants, detainees, criminals, locally employed persons, and other persons of interest.

If there is no extension of the SOFA or a new SOFA-type agreement, the White House's plan is to shift the US military under the State Dept umbrella (and having it legally allowed, therefore, under the terms of the Strategic Framework Agreement). The US military that remains will be doing the same tasks they are doing currently. And if BATS is being used, it needs to be noted that the US military has compiled a ton of biometric data on Iraqis. All Iraqis who have been imprisoned by the US military and all the residents of Falluja, for example, have biometrics that the US military has kept on file. Will the State Dept be using or accessing that already compiled information and, if so, for what purpose?
That question wasn't answered and Kennedy was a hostile witness who probably wouldn't have answered it straight forward if he'd been asked. How hostile? "Can I finish my answer to your question, sir," he snapped at Commissioner Charles Tiefer as he (Kennedy) droned on about Indonesia (even though Tiefer hadn't asked about it and pointed out, "I didn't ask about Indonesia"). Kennedy repeatedly attempted to eat up time and play beat the clock with the commissioners in their eight-minute rounds. Co-Chair Thibault had to repeatedly stop him in the first series of questioning alone and even had to declare, "You're chewing up my time.") During Co-Chair Shays second line of questioning, Kennedy let out a loud, exasperated sigh while Shays was speaking (and disagreeing with Kennedy).
Nathan Hodge has a strong report so I'm really not going to focus on what he's covered, read it for what he's covering. But what stood out to me at the hearing yesterday isn't in his report. It may be due to the fact that he's familiar with LOGCAP, for example. In 2006, when we started attending and reporting on these hearings, I had to learn what all those acronyms were and what they actually did. LOGCAP is the Logistics Civil Augmentation Program. And it popped up in many hearings. Usually, as with Rick Lamberth's November 6, 2009 testimony before the Democratic Policy Committee, it wasn't good. Lamberth was a LOGCAP Operations Manager and he noted, "When I tried to report violations, I was told by the head of KBR's Health Safety and Environment division to shut up and keep it to myself. At one point, KBR management threatened to sue me for slander if I spoke out about these violations." March 29, 2010, the Commission on Wartime Contracting held a hearing and the Commissioners were noting, especially Henke and Schinasi, that $193 million was wasted because of a LOGCAP program manager failing to follow up on auditing suggestions and what was the company? KBR. Schinasi was very clear that all the government had done was to write KBR, they didn't penalize KBR, they didn't enforce the contract or anything. As she noted, "You're not being pro-active enough, you're not taking the initiative" and that they weren't being penalized. In fact, let's note that aspect of the exchange from a year ago.
Commissioner Robert Henke: I-I-I appreciate that entirely but you're telling me that AMC has a comprehensive plan to drawdown contracts and contractos and the single biggest contractor in theater is KBR with 15,000 direct hires and 30,000 other peopl. I would think if an auditor would tell you, "There's a chance to save $193 million" that someone in the system would feel compelled to respond. I'm disappointed that the Army has not. We had the LOGCAP program manager up here before the Commission in December, asked him his response -- the report was just out -- so this is not new material. In fact, the point of the audit is that the savings are going, going gone. If the army had acted the savings could have been achieved but since the Army or the DoD hasn't responded, the savings are effectively gone. So my question to you, sir, is who is responsible for cost efficiency, for cost awarenss of expensive contracts in theater.
Lt Gen James Pillsbury: The Army Material Command leadership is as you well know. The contract oversight, we depend on our partners at DCMA and DCAA.
[. . . . ]
Commissioner Katherine Schinasi: And have you withheld award fee for that purpose? Because they have not done that?
James Loehr: Uhm. Yes. I think if you go back and look at the award fee evaluation, you'll find that K -- KBR, I don't think, has ever -- very rarely -- gets 100% in that category.
Commissioner Katherine Schinasi: Close to 100%?
James Loehr: Uhm. I think -- I'd have to get back to you for that specifically but they are generally in that-that high-very good, though, excellent range that category.
There are many, many other examples we could provide. But, as a result, when today, someone in the State Dept is praising LOGCAP and KBR, it sticks out for me. Now let's note this exchange from today's hearing.
Co-Chair Michael Thibault: My point that I'm trying to make here is-is, are you aware that DCAA, the last year -- You know, all of the costs that are going to flow through you now and do flow through you are audited by DCAA and it's critical on two things. Do they get an adequate submission and do they do the audits timely? And are you aware that in the case of DynCorp -- and I picked three because . . . I picked three, the last year that DCAA completed in an audit was 2004. Are you aware that at KBR, LOGCAP, the last year that they completed an audit was 2003? Are you aware that Triple Canopy, that they have yet -- to use their words -- complete a year of incurred costs? Now, yes or no?
Under Secretary for Management Patrick Kennedy: We -- I am certainly aware that DCAA has-has not uh executed --
Co-Chair Michael Thibault: Okay, okay.
Under Secretary for Management Patrick Kennedy: -- every request on a timely basis.
Co-Chair Michael Thibault: Okay. I know you're working with them, you said that. But then I would say, are you aware that picking those same three contractors, I picked DynCorps first, that DynCorps has submitted -- so they've done their part according to DCAA -- adequate submissions that have been accepted by DCAA for those years that are open? You know we're talking '05, '06, '07, '08' '09, 10. A lot of open years with billions and billions of dollars that historically there have been audit results. But I would say then, are you aware that KBR recently -- They had their certifcations on hand, and they were on paper or on DCAA's view, adequate submissions but they've withdrawn 2006, 2007, 2008, 2009 because in their words they want to relook at billed expenses and cost accounting practices. But in their quote, the company's quote to DCAA, they need to amend previous expense, allowability and allocability assumptions. Now those are a lot of words but to an auditor they mean that they have unallocable and unallowable within their claims, they've pulled them back because the certification is by a senior executive in the company and they don't want to be responsible for it. Now we can explore that some more, but my concern is that -- and in the case with Triple Canopy, a similar case exists where they didn't submit adequate submissions and they're feverishly working on it. The entire point on that is that it's of the highest risk possible and in my second round I'll be exploring some more of that.
At a time when the White House continually lectures about the need to cut money here and there and accountability, why in the world would companies who are known to have problems filing basic documents related to monies be used again? And are these cost-plus contracts? (I'm sure they are but I didn't hear that mentioned.) After the DPC established all the problems that the US government had with KBR's cost-plus contracts, it's appalling that it's still being used. And maybe Congress needs to hold a hearing on this and, if so, call former US Senator Byron Dorgan to offer testimony because he was Chair of the DPC and is very familiar with these issues.
Commissioner Schinasi questioned the model the State Dept was using -- noting there was nothing like Iraq in terms of the State Dept's current consulates. She noted that the State Dept was saying they would need $3 billion for diplomatic and consular programs in Iraq next year, that there would be 4,500 to 5,000 security contractors added and that the State Dept's Iraq mission is "going from 8 to 17,000 civilians in a couple of years." The estimates of how much the State Dept needs is not clear under the best of circumstances but the reality is they are guess-timating with very little basis in reality and, honestly, the plan is to ask for X, hopefully get X and when the costs go over X, come back to Congress and whine about unforseeables with the realization (or guess, if you prefer) that Congress won't pull the plug and will instead toss out more money. This is insanity at the best of financial times. In the current economy, the United States cannot afford it. Whether or not Congress will stand up to them, I have no idea.
Henke noted that Kennedy had approximately 250 supervisory positions but that Kennedy only had two of those postions in acquisitions. The idea that oversight is in place or exists within the State Dept on this issue is laughable. This was probably the most important hearing of the Commission on Wartime Contracting because they Commission wasn't coming in after X took place to explore how it happened. Instead, they were looking at prospective issues before anything started. The questions raised by the Commission need to be paid attention to.
Hodge reports Co-Chair Chris Shays questioned assertions, by Kennedy on behalf of the State Dept, that a State Dept employee in Iraq being injured and under fire needing to be given medical treatment and taken to the embassy, that these tasks would not be "an inherently governmental function"? And Kennedy insisted that it wasn't and that "we rely on contingency contracting, but we believe we have instituted a sound foundation to carry us forward." Again, Hodge's report stands on its own but a question needs to be asked in terms of contracting. Maybe Congress will ask it. Are contractors being used to meet quotas -- meaning is the State Dept limited to X number of US service members and, as a result of that limitation, are they taking on contractors for that reason and not because it's cost-effective as Kennedy and others have repeatedly insisted? If that's the reason for the contracting, my guess is that Senator Lindsey Graham's objections to the State Dept taking over the Iraqi mission are going to get a whole lot louder. (Especially since, as Shays pointed out, it would be breaking the law -- "not a criminal law".)
Moving over to Congress, tomorrow a US senator will receive an award:
(Washington, D.C.) -- Tomorrow, Wednesday, June 8th, U.S. Senator Patty Murray (D-WA) will receive the 2011 "Outstanding Legislator Award" from the Association of the United States Army (AUSA). The AUSA is honoring Senator Murray with this award for her work on veterans' employment issues and her continuing support for service members and their families.

WHO: U.S. Senator Patty Murray (D-WA)

WHAT: Association of the United States Army Outstanding Legislator Award reception

WHEN: Tomorrow -- Wednesday, June 8, 2011

Presentation at 12:00 PM ET

WHERE: Dirksen Senate Office Building, Room G11


Evan Miller

Specialty Media Director

U.S. Senator Patty Murray


The award ceremony will be part of a busy day for Senator Patt Murray. In addition, there's a Veterans Affairs Committee hearing:
(Washington, D.C.) -- Tomorrow, Wednesday, June 8th, U.S. Senator Patty Murray, Chairman of the Senate Veterans' Affairs Committee, will hold a hearing on pending legislation. During the hearing, Chairman Murray will discuss the next steps for her Hiring Heroes Act, and will hear from the Administration and veterans service organizations regarding their views on this critical veterans employment legislation.

WHO: U.S. Senator Patty Murray, Chairman Senate Veterans' Affairs Committee

Michael Cardarelli, Principal Deputy Under Secretary for Benefits, Veterans Benefits Administration, Department of Veterans Affairs

Robert L. Jesse, MD, PhD, Principal Deputy Under Secretary for Health, Veterans Health Administration, Department of Veterans Affairs

Jeff Steele, Assistant Legislative Director, The American Legion

Joseph A. Violante, National Legislative Director, Disabled American Veterans

Raymond Kelley, Director, National Legislative Service, Veterans of Foreign Wars

Jerry Ensminger, MSgt USMC (Ret.)

J. David Cox, RN, National Secretary-Treasurer, American Federation of Government Employees

WHAT: Steps forward for the Hiring Heroes Act and other pending legislation.

WHEN: TOMORROW - Wednesday, June 8th, 2011

9:30 AM ET

WHERE: Russell Senate Office Building
Room 418

Washington, D.C.


Evan Miller

Specialty Media Director

U.S. Senator Patty Murray


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