Wartime commission scrutinizes contractors’ role in Iraq drawdown

The struggle to balance contractors with military and civilian government personnel in Iraq continues -- and might be intensifying -- as the military effort there tapers off.

Witnesses told the Commission on Wartime Contracting on Monday that contractors are playing a strong supporting role in the drawdown in Iraq, and the ratio of contractors to military personnel is likely to increase before it decreases. Rear Adm. Thomas Traaen, vice director for logistics for the Joint Chiefs of Staff, said the number of contractors will not decrease as quickly as the number of federal employees in theater, because contractors must help close forward operating bases and redeploy equipment.

According to Traaen, the ratio of contractors to military in Iraq was 1:1 for the past several years, but likely will increase to about 1.5:1 by August 2010. "As the forward operating bases close and equipment is redeployed, that ratio will also start to decrease," he said. "These numbers will be flexible, and there will be a continual decrease in both contractors and military as the drawdown progresses."

Commission co-chairmen Christopher Shays and Michael Thibault agreed that the absolute and comparative numbers of contractors could rise as military units move out of bases and contractors prepare for base handover or closure, but they said the general trend should move toward a decline in the number of contractors.

"We need to be clear about the role of contractors in supporting the Iraq drawdown and be sure that numbers of contractor personnel are appropriately geared to the reduction of U.S. military strength and base closures, and are being timely adjusted for that reduction," Thibault said, also speaking on behalf of Shays. "Either way, the government needs to monitor and adjust as appropriate the contractor staffing needed to support the mission."

William Solis, director of defense capabilities and management at the Government Accountability Office, testified that the Defense Department has not yet fully determined its need for contractors during the drawdown or the extent to which it will move contractors out of Iraq to address other needs.

The Defense Contract Audit Agency waved a red flag by reporting that contractor KBR Inc., which will manage significant portions of the drawdown under the Logistics Civil Augmentation Program (LOGCAP) III contract, already is costing the government millions of dollars by ineffectively withdrawing its own staff. Outgoing DCAA Director April Stephenson said an audit performed in October showed KBR could save the government at least $193 million by improving its staff management and aligning its drawdown with the military's.

"When the military reduced its troop levels from 160,000 to 130,000 -- a 19 percent reduction -- KBR's staffing levels remained constant," Stephenson said. "At the time of the audit, KBR did not have a detailed, written plan to reduce staffing levels in consonance with the military drawdown."

DCAA estimated that without significant action, the ratio of KBR staff to troops would shrink from 1:9.4 before troop drawdown began to 1:3.6 by August 2010.

Under LOGCAP III, KBR will be responsible for providing logistic services in support of the withdrawal of theater transportation equipment, the retrograding of supplies and equipment, and other logistics such as packaging equipment for shipment.

In addition to discussing contractors' role in the Iraq drawdown, the commission noted the difficulties the Defense Department and other agencies face as they track the number of contractors working in contingency zones.

"How can contractors be properly managed if we aren't sure how many there are, where they are and what they are doing?" Thibault asked.

The commissioners also followed up on the relationship between DCAA and the Defense Contract Management Agency, which panelists called dysfunctional during an August hearing. Officials from both agencies and Shay Assad, director of the Defense Procurement Acquisition Policy Office, said they were working to improve cooperation and take a more uniform, compatible approach to contractor oversight.