Defense Leaders Promise Improved Contracting Oversight

By Donna Miles
American Forces Press Service

July 23, 2008 - The U.S. military depends heavily on the support contractors provide in Iraq and Afghanistan and is stepping up efforts to ensure dollars dedicated to their activities are spent appropriately, Deputy Defense Secretary Gordon England told Congress today.

England joined Army Gen. Benjamin S. Griffin, commander of U.S. Army Materiel Command; acting Defense Department Inspector General Gordon S. Heddell; and Shay Assad, DoD's director for defense procurement and acquisition policy, during a Senate Appropriations Committee hearing on contractor accountability.

The Defense Department takes its contract accountability and oversight responsibilities "very seriously," England told the lawmakers. He noted that multiple department agencies have conducted "literally thousands of aggressive reviews, audits and oversight."

In doing so, "they have indeed uncovered incidences of fraud and abuse," he said.
The Defense Department takes meaningful corrective actions and makes structural organizational changes where appropriate, England said. Meanwhile, it holds people accountable for their actions.

Heddell, who became acting DoD inspector general last week, noted that the department is completing or conducting audit oversight efforts that cover about $158.9 billion related to Defense Department efforts in Iraq alone.

As of June 30, the Defense criminal Investigative Service had 124 ongoing investigations related to Southwest Asia that involve 286 subjects, he told the committee. Thirty-two of these investigations have been adjudicated, resulting in 22 federal criminal indictments and 32 felony convictions, he reported. It also resulted in 32 federal "criminal informations" -- essentially, cases where defendants agreed that evidence against them was so strong that they agreed to forego trial proceedings and accept sentencing, Heddell said.

The adjudications have resulted in 54 years of confinement, 44 years of probation, debarment of 10 people and four companies, and suspension of 28 people, Heddell said.
In addition, the U.S. government accepted three settlement agreements, received $13.5 million in restitution, levied more than $374,000 in fines and penalties, received $1.76 million in forfeitures and seized another $2.65 million in assets, he reported.
With $71 billion obligated to 98,000 contracting activities since January 2003, the department has struggled to provide full oversight for this huge volume of contracts, England conceded. Complicating the process, he said, is the fact that 98,000 expeditionary contract actions have occurred since 2003, with much of the work performed in a dangerous and difficult environment.

The department "will continue to improve the effectiveness and efficiency of our contracting across the entire enterprise," but recognizes that it will take time, England said. He noted that the defense contracting force was cut dramatically during the 1990s, and that bringing replacements up to speed won't happen overnight. "It will likely take a few more years before all of these critical skills are fully replenished," he said.
Meanwhile, England pointed to yesterday's swearing-in of retired Marine Corps Maj. Gen. Arnie Fields as special inspector general for Afghanistan reconstruction as a positive step forward.

"I'm confident Arnie Fields will help to do in Afghanistan for the departments of Defense and State what [special inspector general for Iraq reconstruction] Stu Bowen has been able to accomplish over the past several years in Iraq as part of his special investigative status," England said.

Griffin told the senators the military knows it has improvements to make in its contracting systems and oversight.

"I will state up front that we are not where we want to be today in terms of contracting," he said. "But we have made significant progress. We are committed to improve our ability and capability, to provide not only first-class expeditionary contracting, but also to implement improvements across the entire contracting system."

While vowing to improve oversight of contractor activities, England told the lawmakers the military depends on contractors who work as partners with servicemembers in harm's way. "I ... want to thank the people who deployed and who are deployed today who do this contracting work for America," he said.