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Other Actions Needed to Improve DOD's Oversight and Management of 
Contractors in Future Operations' which was released on January 25, 
2008. 

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Testimony: 

Before the Committee on Homeland Security and Governmental Affairs 
Subcommittees, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:30 p.m. EST: 

Thursday, January 24, 2008: 

Military Operations: 

Implementation of Existing Guidance and Other Actions Needed to Improve 
DOD's Oversight and Management of Contractors in Future Operations: 

Statement of William M. Solis Director Defense Capabilities and 
Management: 

GAO-08-436T: 

GAO Highlights: 

Highlights of GAO-08-436T, a report to the Committee on Homeland 
Security and Governmental Affairs Subcommittees, U.S. Senate. 

Why GAO Did This Study: 

The Department of Defense (DOD) relies extensively on contractors to 
support deployed forces for services that range from food and housing 
services to intelligence analysis. Since 1997, GAO has reported on 
DODís shortcomings in managing and overseeing its use of contractor 
support. Part of the difficulty attributed to these shortcomings is 
that no one person or entity that made the decision to send 129,000 
contractors to Iraq. Rather, numerous DOD activities were involved, 
thus adding to the complexity of the problems which GAO identified in 
its past work on this topic. This testimony focuses on (1) the problems 
that DOD has faced in managing and overseeing its contractor support to 
deployed forces and (2) future challenges that DOD will need to address 
to improve its oversight and management of contractors at deployed 
locations. In addition, as you requested, we have developed several 
actions Congress may wish to consider requiring DOD to take. 

This testimony is based on previously issued GAO reports and 
testimonies on DODís management and oversight of contractor support to 
deployed forces that focused primarily on U.S. efforts in Southwest 
Asia. This work was conducted in accordance with generally accepted 
government auditing standards. 

What GAO Found: 

DOD leadership needs to ensure implementation of and compliance with 
existing guidance to improve the departmentís oversight and management 
of contractors supporting deployed forces. While DOD issued a 
comprehensive guidance on contractor support to deployed forces in 
2005, we found little evidence that DOD components were implementing 
this and other guidance. As a result, several long-standing problems 
have hindered DODís management and oversight of contractors at deployed 
locations, even in cases where DOD and its components have developed 
guidance related to these problems. These problems include failure to 
follow planning guidance, an inadequate number of contract oversight 
and management personnel, failure to systematically collect and 
distribute lessons learned, and lack of comprehensive training for 
contract oversight personnel and military commanders. Our previous work 
in this area has identified several instances where poor oversight and 
management of contractors led to negative monetary and operational 
impacts. 

Based on our past work, several challenges will need to be addressed by 
DOD to improve the oversight and management of contractors supporting 
deployed forces in future operations and ensure warfighters are 
receiving the support they rely on in an effective and efficient 
manner. Those challenges include: (1) incorporating contractors as part 
of the total force, (2) determining the proper balance of contractors 
and military personnel in future contingencies and operations, (3) 
clarifying how DOD will work with other government agencies in future 
contingencies and operations, and (4) addressing the use and role of 
contractors into its plans to expand and transform the Army and the 
Marine Corps. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-436T]. For more information, contact 
William M. Solis at (202) 512-8365 or solisw@gao.gov. 

[End of section] 

I am pleased to be here today to discuss a number of issues regarding 
the oversight and management of contingency contracting in hostile 
zones. As you know, the Department of Defense (DOD) relies extensively 
on contractors for services that include communication services, 
interpreters who accompany military patrols, base operations support 
(e.g., food and housing), weapons systems maintenance, and intelligence 
analysis to provide support to our military operations in Southwest 
Asia. Our previous work has highlighted long-standing problems 
regarding the oversight and management of contractors supporting 
deployed forces and we continue to conduct work looking at various 
aspects of these problems. Many of the problems we see in Iraq and 
Afghanistan stem from these long-standing problems and need to be 
viewed in that context. Moreover, although DOD estimated in its October 
2007 report to Congress that 129,000 contractors support deployed 
forces in Iraq, no one person or organization made a decision to send 
129,000 contractors to Iraq. Rather, the decision to send contractors 
to support forces in Iraq was made by numerous DOD activities both 
within and outside of Iraq. The scope and scale of contract support to 
deployed forces therefore contributes to the complexity of the problems 
we have identified in our past work on this topic. 

My testimony today will focus on (1) the problems that DOD has faced in 
managing and overseeing its contractor support to deployed forces and 
(2) future challenges that DOD will need to address to improve its 
oversight and management of contractors at deployed locations. In 
addition, as you requested, we have developed several actions the 
Congress may wish to consider requiring DOD to take. 

In preparing this testimony, we relied on previously issued GAO reports 
and testimonies on DOD's management and oversight of contractor support 
to deployed forces that focused primarily on our efforts in Southwest 
Asia. This work was conducted in accordance with generally accepted 
government auditing standards. A list of GAO products used to prepare 
this testimony is located in appendix 1. 

Summary: 

DOD leadership needs to ensure implementation of and compliance with 
existing guidance to improve the department's oversight and management 
of contractors supporting deployed forces. For example, DOD's 2005 
issuance of comprehensive guidance on contractor support to deployed 
forces is a noteworthy improvement. However, we found little evidence 
that DOD components were implementing this guidance or much of the 
additional guidance addressing the management and oversight of 
contractors supporting deployed forces. As a result, several long- 
standing challenges have hindered DOD's management and oversight of 
contractors at deployed locations, even in cases where DOD and its 
components have developed guidance related to these challenges. 
Examples of problems include failure to follow planning guidance, an 
inadequate number of contract oversight and management personnel, 
failure to systematically collect and distribute lessons learned, and 
lack of comprehensive training for contract oversight personnel and 
military commanders. For example, we found that the Army did not follow 
its planning guidance when deciding to use the Army's Logistics 
Capabilities Augmentation Program (LOGCAP) in Iraq, resulting in the 
plan being revised seven times in less than 1 year. Moreover, too few 
contract oversight and management personnel were deployed to locations 
using contractor support. Having too few contract oversight personnel 
results in surveillance not being performed sufficiently, and 
ultimately DOD not having reasonable assurance that contractors are 
meeting their contract requirements efficiently and effectively. 
Although DOD policy requires the collection and distribution of lessons 
learned to the maximum extent possible, our prior work found DOD lacks 
sufficient procedures to help ensure that lessons learned are collected 
and shared. In addition, DOD has long recognized the need to 
comprehensively train contract oversight personnel and military 
commanders; however, DOD does not routinely incorporate information 
about contractor support for deployed forces in its pre-deployment 
training of military personnel. During the course of our work, we found 
examples where limited or no pre-deployment training caused a variety 
of problems for military commanders in a deployed location, such as not 
being able to adequately plan for the use of contractors upon 
deployment, not knowing what services would be provided through 
contractors, or not being prepared to provide force protection. We have 
found several instances where poor oversight and management of 
contractors has led to negative monetary and operational impacts. 

Based on our past work, several challenges will need to be addressed by 
DOD to improve the oversight and management of contractors supporting 
deployed forces in future operations and ensure warfighters are 
receiving the support they rely on in an effective and efficient 
manner. Those challenges include a number of broader issues, such as: 
(1) incorporating contractors as part of the total force, (2) 
determining the proper balance of contractors and military personnel in 
future contingencies and operations, (3) clarifying how DOD will work 
with other government agencies in future contingencies and operations, 
and (4) addressing the use and role of contractors into its plans to 
expand and transform the Army and the Marine Corps. 

As requested, we considered specific legislative remedies for the 
challenges facing DOD. While we believe that DOD bears the primary 
responsibility for taking actions to address these challenges, these 
are three actions the Congress may wish to consider requiring DOD to 
take in order to move the debate forward: 

* Determine the appropriate balance of contractors and military 
personnel as it shapes the force for the future. 

* Include the use and role of contractor support to deployed forces in 
force structure and capabilities reporting. 

* Ensure that operations plans include specific information on the use 
and roles of contractor support to deployed forces. 

Background: 

The U.S. military has long used contractors to provide supplies and 
services to deployed U.S. forces, and more recently contractors have 
been involved in every major military operation since the 1991 Gulf 
War.[Footnote 1] However, the scale of contractor support DOD relies on 
today in Iraq and elsewhere throughout Southwest Asia has increased 
considerably from what DOD relied on during previous military 
operations, such as Operation Desert Shield/Desert Storm and in the 
Balkans. Moreover, DOD's reliance on contractors continues to grow. In 
December 2006, the Army alone estimated that almost 60,000 contractor 
employees supported ongoing military operations in Southwest Asia. In 
October 2007, DOD estimated that the number of contractors in Iraq to 
be about 129,000. By way of contrast, an estimated 9,200 contractor 
personnel supported military operations in the 1991 Gulf War. Factors 
that have contributed to this increase include reductions in the size 
of the military, an increase in the number of operations and missions 
undertaken, and DOD's use of increasingly sophisticated weapons 
systems. 

DOD uses contractors to meet many of its logistical and operational 
support needs during combat operations, peacekeeping missions, and 
humanitarian assistance missions. Today, contractors located throughout 
Southwest Asia provide U.S. forces with such services as linguist 
support, equipment maintenance, base operations support, and security 
support. In Iraq and Afghanistan, contractors provide deployed U.S. 
forces with communication services; interpreters who accompany military 
patrols; base operations support (e.g., food and housing); weapons 
systems maintenance; intelligence analysis; and a variety of other 
support. Contractors also provide logistics support such as parts and 
equipment distribution, ammunition accountability and control, port 
support activities, and support to weapons systems and tactical 
vehicles. For example, in Kuwait and Qatar the Army uses contractors to 
refurbish, repair, and return to the warfighters a variety of military 
vehicles, such as the Bradley Fighting Vehicle, armored personnel 
carriers, and the High-Mobility, Multi-Purpose Wheeled Vehicle (HMMWV). 

Since our initial work on the use of contractors to support deployed 
forces in 1997, DOD has taken a number of actions to implement 
recommendations that we have made to improve its management of 
contractors. For example, in 2003 we recommended that the department 
develop comprehensive guidance to help the services manage contractors' 
supporting deployed forces. In response to this recommendation, the 
department issued the first comprehensive guidance dealing with 
contractors who support deployed forces in October 2005. Additionally, 
in October 2006, DOD established the office of the Assistant Deputy 
Under Secretary of Defense for Program Support to serve as the office 
with primary responsibility for contractor support issues. This office 
has led the effort to develop and implement a database which, when 
fully implemented, will allow by-name accountability of contractors who 
deploy with the force. These database implements recommendations we 
made in 2003 and 2006 to enhance the department's visibility over 
contractors in locations such as Iraq and Afghanistan. 

DOD has Experienced Problems with Its Oversight and Management of 
Contractors at Deployed Locations, But Has Taken Some Steps to Address 
These Problems: 

DOD leadership needs to ensure implementation of and compliance with 
existing guidance to improve the department's oversight and management 
of contractors supporting deployed forces. Several long-standing 
challenges have hindered DOD's management and oversight of contractors 
at deployed locations, even though in many cases DOD and its components 
have developed guidance related to these challenges. These challenges 
include failure to follow long-standing planning guidance, ensure an 
adequate number of trained contract oversight and management personnel, 
systematically collect and distribute lessons learned, and 
comprehensively train contract oversight personnel and military 
commanders. We have found several instances where poor oversight and 
management of contractors has led to negative monetary and operational 
impacts. 

DOD Leadership Needs to Ensure Implementation of and Compliance with 
Existing Guidance Regarding Oversight and Management of Contractors: 

Based on our previous work, we believe for DOD to improve its oversight 
and management of contractors supporting deployed forces in future 
operations and ensure warfighters are receiving the support they rely 
on in an effective and efficient manner, DOD leadership needs to ensure 
implementation of and compliance with existing guidance to improve the 
department's oversight and management of contractors supporting 
deployed forces. DOD has taken a number of steps over the last several 
years to improve and consolidate its long-standing guidance pertaining 
to the use of contractors to support deployed force. Moreover, largely 
in response to the recommendation in our 2006 report, DOD established 
the office of the Assistant Deputy Under Secretary of Defense (Program 
Support) within the office of the Deputy Under Secretary of Defense for 
Logistics and Materiel Readiness to serve as the focal point to lead 
DOD's efforts to improve contract management and oversight. However, as 
we reported in 2006, although the issuance of DOD's new guidance was a 
noteworthy improvement, we found little evidence that DOD components 
were implementing this guidance or much of the additional guidance 
addressing the management and oversight of contractors supporting 
deployed forces. For example, additional DOD and service guidance 
requires, among other things, the collection of lessons learned, the 
appointment of certified contracting officer's representatives, and 
that all personnel receive timely and effective training to ensure they 
have the knowledge and other tools necessary to accomplish their 
missions. Given DOD's continued difficulties meeting these 
requirements, it is clear that guidance alone will not fix these long- 
standing problems. Therefore, we believe that the issue is now centered 
on DOD providing the leadership to ensure that the existing guidance is 
being implemented and complied with. 

DOD Has Not Followed Long-standing Planning Guidance Regarding the Use 
of Contractors to Support Deployed Forces: 

As we have noted in previous reports and testimonies, DOD has not 
followed long-standing planning guidance, particularly by not 
adequately factoring the use and role of contractors into its planning. 
For example, we noted in our 2003 report that the operations plan for 
the war in Iraq contained only limited information on contractor 
support.[Footnote 2] However, Joint Publication 4.0,[Footnote 3] which 
provides doctrine and guidance for combatant commanders and their 
components regarding the planning and execution of logistic support of 
joint operations, stresses the importance of fully integrating into 
logistics plans and orders the logistics functions performed by 
contractors along with those performed by military personnel and 
government civilians. Additionally, in our 2004 report, we noted that 
the Army did not follow its planning guidance when deciding to use the 
Army's Logistics Capabilities Augmentation Program (LOGCAP) in 
Iraq.[Footnote 4] According to Army guidance, integrated planning is a 
governing principle of contractor support, and for contractor support 
to be effective and responsive, its use needs to be considered and 
integrated into the planning process. Proper planning identifies the 
full extent of contractor involvement, how and where contractor support 
is provided, and any responsibilities the Army may have in supporting 
the contractor. Additional Army guidance stresses the need for the 
clear identification of requirements and the development of a 
comprehensive statement of work early in the contingency planning 
process. Because this Army guidance was not followed, the plan to 
support the troops in Iraq was not comprehensive and was revised seven 
times in less than 1 year. These revisions generated a significant 
amount of rework for the contractor and the contracting officers. 
Additionally, time spent reviewing revisions to the task orders is time 
that is not available for other oversight activities. While operational 
considerations may have driven some of these changes, we believe others 
were more likely to have resulted from ineffective planning. The lack 
of planning also impacts the post-award administration of contracts. 
For example, in our 2004 report,[Footnote 5] we noted that one reason 
the Army was unable to definitize the LOGCAP task orders was the 
frequent revisions to the task orders. Without timely definitization of 
task orders, the government is less able to control costs. 

Our 2003 report also concluded that essential contractor services had 
not been identified and backup planning was not being done.[Footnote 6] 
DOD policy requires DOD and its components to determine which 
contractor-provided services will be essential during crisis situations 
and to (1) develop and implement plans and procedures to provide a 
reasonable assurance of the continuation of essential services during 
crisis situations and (2) prepare a contingency plan for obtaining the 
essential service from an alternate source should the contractor be 
unable to provide it. According to DOD Instruction 3020.37, commanders 
have three options if they cannot obtain reasonable assurance of 
continuation of essential contractor service: they can obtain military, 
DOD civilian, or host nation personnel to perform the services, they 
can prepare a contingency plan for obtaining essential services, or 
they can accept the risk attendant with a disruption of services during 
crisis situations. However, our review found that essential contractor 
services had not been identified and backup planning was not being 
done. Without firm plans, there is no assurance that the personnel 
needed to provide the essential services would be available when 
needed. 

Moreover, because DOD and its components have not reviewed contractor 
support to identify essential services, the department lacks the 
visibility needed to provide senior leaders and military commanders 
with information on the totality of contractor support to deployed 
forces. As we noted in 2003 and 2006, [Footnote 7] having this 
information is important in order for military commanders to 
incorporate contractor support into their planning efforts. For 
example, senior military commanders in Iraq told us that when they 
began to develop a base consolidation plan for Iraq, they had no source 
to draw upon to determine how many contractors were on each 
installation. Limited visibility can also hinder the ability of 
commanders to make informed decisions regarding base operations support 
(e.g., food and housing) and force protection for all personnel on an 
installation. Similarly, we found that limited visibility over 
contractors and the services they provide at a deployed location can 
hinder the ability of military commanders to fully understand the 
impact that decisions such as restrictive installation access and 
badging requirements can have on the ability of contractors to provide 
services. 

As noted above, DOD has taken some steps to improve its visibility over 
contractor support. In addition, according to a October 2007 DOD report 
to Congress on managing contractor support to deployed forces, the 
department is developing a cadre of contracting planners whose primary 
focus will be to review contractor support portions of combatant 
commanders' operations plans and contingency plans, including the 
requirements for contractor services. 

DOD Lacks an Adequate Number of Trained Contract Oversight and 
Management Personnel: 

As we noted in several of our previous reports, having the right people 
with the right skills to oversee contractor performance is crucial to 
ensuring that DOD receives the best value for the billions of dollars 
spent each year on contractor-provided services supporting forces 
deployed to Iraq and elsewhere. Since 1992, we designated DOD contract 
management as a high-risk area, and it remains so today, in part, due 
to concerns over the adequacy of the department's acquisition 
workforce, including contract oversight personnel. While this is a DOD- 
wide problem, having too few contract oversight personnel presents 
unique difficulties at deployed locations given the more demanding 
contracting environment as compared to the United States. Although we 
could find no DOD guidelines on the appropriate number of personnel 
needed to oversee and manage DOD contracts at a deployed location, 
several reviews by GAO and DOD organizations have consistently found 
significant deficiencies in DOD's oversight of contractors due to an 
inadequate number of trained personnel to carry out these duties. 

In 2004, we reported that DOD did not always have enough contract 
oversight personnel in place to manage and oversee its logistics 
support contracts such as LOGCAP and the Air Force Contract 
Augmentation Program (AFCAP). As a result, the Defense Contract 
Management Agency was unable to account for $2 million worth of tools 
that had been purchased using the AFCAP contract. The following year, 
we reported in our High-Risk Series that inadequate staffing 
contributed to contract management challenges in Iraq.[Footnote 8] 
During our 2006 review, several contract oversight personnel we met 
with told us DOD does not have adequate personnel at deployed 
locations. For example, a contracting officer's representative for a 
linguistic support contract told us he had only one part-time 
assistant, limiting his ability to manage and oversee the contractor 
personnel for whom he was responsible. The official noted that he had a 
battalion's worth of people with a battalion's worth of problems but 
lacked the equivalent of a battalion's staff to deal with those 
problems. Similarly, an official with the LOGCAP Program Office told us 
that the office did not prepare to hire additional budget analysts and 
legal personnel in anticipation of an increased use of LOGCAP services 
due to Operation Iraqi Freedom. According to the official, had adequate 
staffing been in place early, the Army could have realized substantial 
savings through more effective reviews of the increasing volume of 
LOGCAP requirements. More recently, we reported that the Army did not 
have adequate staff to conduct oversight of an equipment maintenance 
contract in Kuwait. During our review of the contract, we found that 
vacant authorized oversight personnel positions included a quality 
assurance specialist, a property administrator, and two quality 
assurance inspectors. Army officials also told us that in addition to 
the two quality assurance inspectors needed to fill the vacant 
positions, more quality assurance inspectors were needed to fully meet 
the oversight mission. According to Army officials, vacant and reduced 
inspector and analyst positions meant that surveillance was not being 
performed sufficiently in some areas and the Army was less able to 
perform data analyses, identify trends in contractor performance, and 
improve quality processes. 

In addition to our work, a number of other reviews of DOD's contractor 
oversight personnel have identified similar problems. A 2004 Joint 
Staff review of the Defense Contract Management Agency's responsiveness 
and readiness to support deployed forces found that the agency had not 
programmed adequate resources to support current and future contingency 
contract requirements. The review also found that the Defense Contract 
Management Agency manpower shortages were aggravated by internal 
policies that limited the ability of personnel to execute those 
missions. More recently, the 2007 report of the Commission on Army 
Acquisition and Program Management in Expeditionary Operations stated 
that the Army lacks the leadership and military and civilian personnel 
to provide sufficient contracting support to either expeditionary or 
peacetime missions. According to the commission, Army contracting 
personnel experienced a 600 percent increase in their workload and are 
performing more complex tasks, while the number of Army civilians and 
military in the contracting workforce has remained stagnant or 
declined. As a result, the commission found that the vital task of post-
award contract management is rarely being done. 

As we noted in our 2006 report,[Footnote 9] without adequate contract 
oversight personnel in place to monitor its many contracts in deployed 
locations such as Iraq, DOD may not be able to obtain reasonable 
assurance that contractors are meeting their contract requirements 
efficiently and effectively. However, some actions have been taken 
since our report to address the issue of inadequate numbers of trained 
contract oversight and management personnel. For example, in February 
2007, the Deputy Assistant Secretary of the Army (Policy and 
Procurement) issued guidance that for service contracts greater that 
$2,500, the contracting officer shall appoint certified contracting 
officer's representatives in writing, identify properly trained 
contracting officer's representatives for active service contracts, and 
ensure that a government quality assurance surveillance plan is 
prepared and implemented for service contracts. In addition, Congress 
has taken steps to improve oversight by increasing the budgets for the 
Defense Contract Audit Agency, Defense Contract Management Agency, and 
the Defense Department's Inspector General in the fiscal year 2008 
Defense Department Appropriations.[Footnote 10] 

DOD Is Not Systematically Collecting and Distributing Lessons Learned: 

Although DOD and its components have used contractors to support 
deployed forces in several prior military operations, DOD does not 
systematically ensure that institutional knowledge regarding the use of 
contractors to support deployed forces, including lessons learned and 
best practices, is shared with military personnel at deployed 
locations. We previously reported that DOD could benefit from 
systemically collecting and sharing its institutional knowledge to help 
ensure that it is factored into planning, work processes, and other 
activities.[Footnote 11] We have also made several recommendations 
that, among other things, called for DOD to incorporate lessons learned 
from its experience in the Balkans to improve the efficiency and 
effectiveness of the Army's LOGCAP contract, implement a departmentwide 
lessons-learned program to capture the experiences of military units 
that have used logistics support contracts, and establish a focal point 
within the Office of the Under Secretary of Defense to lead and 
coordinate the development of a departmentwide lessons-learned program 
to collect and distribute the department's institutional knowledge 
regarding all forms of contractor support to deployed forces.[Footnote 
12] 

Although DOD has policy requiring the collection and distribution of 
lessons learned to the maximum extent possible, we found in our 
previous work that no procedures were in place to ensure that lessons 
learned are collected and shared. For example, DOD has established the 
Joint Lessons Learned Program, designed to enhance joint capabilities 
through discovery, knowledge development, implementation, and sharing 
of lessons learned from joint operations, training events, exercises, 
and other activities.[Footnote 13] The program applies to the Joint 
Staff, combatant commands, services, and combat support agencies that 
are to coordinate activities and collaboratively exchange lesson 
observations, findings, and recommendation to the maximum extent 
possible. According to DOD policy, combatant commands are responsible 
for executing and supporting joint lessons learned functions including 
lesson discovery, knowledge development, and implementation activities. 
U.S. Joint Forces Command is responsible for developing and 
implementing the capability to collect and analyze observations from 
current operations and ensuring key findings are appropriately 
disseminated. 

The Army regulation which establishes policies, responsibilities, and 
procedures for the implementation of the LOGCAP program makes customers 
that receive services under the LOGCAP contract responsible for 
collecting lessons learned. Nonetheless, we have repeatedly found that 
DOD is not systematically collecting and sharing lessons learned on the 
use of contractors to support to deployed forces. Despite years of 
experience using contractors to support forces deployed to the Balkans, 
Southwest Asia, Iraq, and Afghanistan, DOD has made few efforts to 
leverage this institutional knowledge. As a result, many of the 
problems we identified in earlier operations have recurred in current 
operations. In 2004, we reported that despite over 10 years of 
experience in using logistics support contracts, the Army continued to 
experience the same types of problems it experienced during earlier 
deployments that used LOGCAP for support.[Footnote 14] For example, we 
found that U.S. Army, Europe, which has had the most experience in 
using logistics support contracts, has not consolidated its lessons 
learned and made them available for others. Similarly, we learned that 
a guidebook developed by U.S. Army, Europe on the use of a logistical 
support contract was not made available to military commanders in Iraq 
until mid-2006. 

During the course of our 2006 work, we found no organization within DOD 
or its components responsible for developing procedures to capture 
lessons learned on the use of contractor support at deployed 
locations.[Footnote 15] Likewise, we found that neither the Joint 
Force's Command Joint Center for Operational Analysis nor the Army's 
Center for Army Lessons Learned was actively collecting lessons learned 
on the use of contractor support in Iraq. We noted that when lessons 
learned are not collected and shared, DOD and its components run the 
risk of repeating past mistakes and being unable to build on the 
efficiencies and effectiveness others have developed during past 
operations that involved contractor support. We also found a failure to 
share best practices and lessons learned between units as one redeploys 
and the other deploys to replace it. As a result, new units essentially 
start at ground zero, having to resolve a number of difficulties until 
they understand contractor roles and responsibilities. 

DOD Does Not Comprehensively Train Contract Oversight Personnel and 
Military Commanders: 

DOD does not routinely incorporate information about contractor support 
for deployed forces in its pre-deployment training of military 
personnel, despite the long-standing recognition of the need to provide 
such information. We have discussed the need for better pre-deployment 
training of military commanders and contract oversight personnel since 
the mid-1990s and have made several recommendations aimed at improving 
such training as shown in figure 1. 

Figure 1: Previous GAO Recommendations Highlighting the Need for Better 
Training on the Use of Contractor Support to Deployed Forces: 

This figure is a timeline showing previous GAO recommendations 
highlighting the need for better training on the use of contractor 
support to deployed forces. 

2/97: Providing training to commanders on using LOGCAP, including 
information on contractor capabilities and roles and responsibilities 
in planning an execution; 
9/00: Direct a more extensive pre-deployment training program for all 
contract oversight personnel; 
6/03: Develop training courses for commanding officers and other senior 
leaders deploying to locations with contractor support; 
7/04: Develop and implement training courses on the role of commanders 
in others in the contracting process for commanding officers and other 
senior leaders deploying to locations with contractor support; 
7/05: Develop a training package to ensure commanders deploying to Iraq 
have a clear understanding of the role of private security providers in 
Iraq and the support the military provides to them. 

[See PDF for image] 

Source: GAO. 

[End of figure] 

Moreover, according to DOD policy, personnel should receive timely and 
effective training to ensure they have the knowledge and other tools 
necessary to accomplish their missions. Nevertheless, we continue to 
find little evidence that improvements have been made in terms of how 
DOD and its components train military commanders and contract oversight 
personnel on the use of contractors to support deployed forces prior to 
their deployment. For example, in an October 2007 report to Congress on 
managing contractor support to deployed forces, DOD discussed broad, 
contractor management-related training programs that it intends to 
implement in the future. Without properly trained personnel, DOD will 
continue to face risks of fraud, waste, and abuse. 

Limited or no pre-deployment training on the use of contractor support 
can cause a variety of problems for military commanders in a deployed 
location. As we reported in 2006, with limited or no pre-deployment 
training on the extent of contractor support to deployed forces, 
military commanders may not be able to adequately plan for the use of 
those contractors.[Footnote 16] In its 2007 report, the Commission on 
Army Acquisition and Program Management in Expeditionary Operations 
found that combatant commands do not recognize the significance of 
contracts and contractors in expeditionary operations, and concluded 
that the Army needs to educate and train commanders on the important 
operational role of contracting. Several military commanders we met 
with in 2006 said their pre-deployment training did not provide them 
with sufficient information regarding the extent of contractor support 
that they would be relying on in Iraq. These commanders were therefore 
surprised by the substantial number of personnel they had to allocate 
to perform missions such as on-base escorts for third-country and host- 
country nationals, convoy security, and other force protection support 
to contractors. In addition, limited or no pre-deployment training for 
military commanders on the use of contractor support to deployed forces 
can result in confusion regarding their roles and responsibilities in 
managing and overseeing contractors. For example, we found some 
instances where a lack of training raised concerns over the potential 
for military commanders to direct contractors to perform work outside 
the scope of the contract, something commanders lack the authority to 
do. As Army guidance makes clear, when military commanders try to 
direct contractors to perform activities outside the scope of the 
contract, this can cause the government to incur additional charges 
because modifications would need to be made to the contract and, in 
some cases, the direction may potentially result in a violation of 
competition requirements. In addition, our 2005 report on the use of 
private security contractors in Iraq noted that commanders told us they 
received no training or guidance on how to work with private security 
providers in Iraq. To highlight the lack of training and guidance, 
representatives from one unit told us that they did not know there were 
private security providers in their battle space until the providers 
began calling for assistance. They also said that any information about 
who would be in the battle space and the support the military should be 
providing would be useful. 

We also found that contract oversight personnel such as contracting 
officer's representatives received little or no pre-deployment training 
regarding their roles and responsibilities in monitoring contractor 
performance. Many of the contracting officer's representatives we spoke 
with in 2003 and 2006 said that training before they assumed these 
positions would have better prepared them to effectively oversee 
contractor performance. Although DOD has created an online training 
course for contracting officer's representatives, individuals we spoke 
with noted that it was difficult to set aside the time necessary to 
complete the training once they arrived in Iraq. Furthermore, in most 
cases, deploying individuals were not informed that they would be 
performing contracting officer representative duties until after they 
had deployed. We found several instances where the failure to identify 
and train contracting officer's representatives prior to their 
deployment hindered the ability of those individuals to effectively 
manage and oversee contractors. For example, the contracting officer's 
representative for an intelligence support contract in Iraq had not 
been informed of his responsibilities prior to deploying and had no 
previous experience working with contractors. The official told us he 
found little value in the online training course and subsequently did 
not believe this training adequately prepared him to execute his 
contract oversight responsibilities, such as reviewing invoices 
submitted by the contractor. Similarly, officials from a corps support 
group in Iraq told us that until they were able to get a properly 
trained contracting officer's representative in place, they experienced 
numerous problems regarding the quality of food service provided by 
LOGCAP. The 2007 report of the Commission on Army Acquisition and 
Program Management in Expeditionary Operations also discussed the need 
to train contracting officer's representatives and warned that the lack 
of training could lead to fraud, waste, and abuse. 

Some steps have been taken to help address the issue of pre-deployment 
training of military commanders and contract oversight personnel. In 
DOD's response to our 2006 report, the Director of Defense Procurement 
and Acquisition Policy stated that the Army is making changes to its 
logistics training programs to be better positioned to meet current and 
future challenges.[Footnote 17] This included incorporating contracting 
officer's representatives training into its basic and advanced training 
for its ordnance, transportation, and quartermaster corps. In addition, 
the Defense Acquisition University has updated its contingency 
contracting course to include a lesson on contractors accompanying the 
force. More recently, the National Defense Authorization bill for 
fiscal year 2008 included a provision addressing the need for 
contingency contractor training for personnel outside the acquisition 
workforce. This provision requires that military personnel receive 
training sufficient to ensure that they understand the scope and scale 
of contractor support they will experience in contingency operations 
and are prepared for their roles and responsibilities regarding 
contractor oversight and program management among others. 

DOD's Problems in Managing and Overseeing Contractors Have Had Negative 
Impacts at Deployed Locations: 

DOD's problems managing and overseeing contractors at deployed 
locations make it difficult for the department to be assured that it is 
getting the services it needs on time and at a fair and reasonable 
price. Over the past few years, we reported some of the results of 
these long-standing problems. While many of the situations we discuss 
below highlight monetary consequences, poor contract management and 
oversight can affect military operations as well. Furthermore, although 
determining the extent of the financial impact is not always feasible 
or practicable, the inability to quantify the financial impact should 
not detract from efforts to achieve greater rigor and accountability in 
DOD contracting practices. The following are examples of negative 
impacts that have occurred at deployed locations. 

* On January 23, 2008, we issued a report on the Army's equipment 
maintenance contract in Kuwait and concluded that the Army did not 
always follow key principles included in the Army Quality 
Program.[Footnote 18] This instruction specifies the use of performance 
information to perform root-cause analysis and foster continuous 
improvement. In addition, the battalion's July 2006 draft maintenance 
management plan requires that contractor performance data should be 
analyzed to help identify the cause of new and/or recurring quality 
problems and evaluate the contractor's performance. However, we found 
that the Army did not begin to track contractor pass/fail rates until 
July 2007. According to Army quality assurance officials, this metric 
was not tracked and monitored because they did not have sufficient 
quality assurance staff to perform such an analysis. By not tracking 
and monitoring the percent of equipment submitted for Army acceptance 
that failed quality assurance inspection, the Army did not know the 
extent to which the contractor was meeting the specified maintenance 
standard requirements nor could it identify problem areas in the 
contractor's processes and initiate corrective action. Furthermore, our 
analysis of Army data found that for five types of vehicles inspected 
by quality assurance personnel between July 2006 and May 2007, 18 
percent to 31 percent of the equipment presented to the Army as ready 
for acceptance failed government inspection. In addition, some 
equipment presented to the Army as ready for acceptance failed 
government inspection multiple times, sometimes for the same 
deficiencies. When the Army inspected equipment that did not meet 
standards, it was returned to the contractor for continued repair. Our 
analysis of Army data found that since May 2005 an additional 188,000 
hours were worked to repair equipment after the first failed government 
inspection, which translates into an additional cost of approximately 
$4.2 million. 

* In July 2004, we reported that the Air Force had used the Air Force 
Contract Augmentation Program (AFCAP) contract to supply commodities 
for its heavy construction squadrons because it did not deploy with 
enough contracting and finance personnel to buy materials quickly or in 
large quantities. Additionally, the U.S. Agency for International 
Development has used the contract to provide disaster relief and 
humanitarian assistance supplies. In some cases, the contractor simply 
bought the supplies and delivered them to the customer under cost-plus 
award fee task orders. We noted that the contractor had received more 
than $2 million in award fees since February 2002 for these commodity 
supply task orders. While permitted, the use of cost-plus award fee 
task orders to obtain supplies may not be cost-effective, as the 
government reimburses the contractor's costs and pays award fees for 
orders with little risk. Air Force officials recognized that this 
business arrangement may not be cost-effective. Under the current Air 
Force Contract Augmentation Program (AFCAP) contract, commodities may 
be obtained using only firm fixed price orders or cost-plus fixed fee 
orders. 

* The lack of sufficiently trained personnel can also lead to the 
inefficient use of military personnel. In our December 2006 report, 
officials with a Stryker brigade told us a lack of contractor 
management training hindered their ability to resolve staffing issues 
with a contractor conducting background screenings of third-country and 
host-country nationals. In this case, shortages of contractor-provided 
screeners forced the brigade to use its own intelligence personnel to 
conduct screenings. As a result, those personnel were not available for 
their primary intelligence-gathering responsibilities. 

* In June 2004, we reported that a disagreement between the LOGCAP 
contractor and the Defense Contract Audit Agency (DCAA) on how to bill 
for services to feed soldiers in Iraq involved at least $88 million in 
questioned costs. In this case, the statement of work required the 
contractor to build, equip, and operate dining facilities at various 
base camps and provide four meals a day for the base camp populations. 
The statement of work did not specify, however, whether the government 
should be billed on the camp populations specified in the statement of 
work or on the actual head count. This is an important distinction 
because the specified camp population was significantly higher than the 
actual head count, and the subcontractors providing the services 
generally billed the contractor for the specified base camp population. 
A contractor analysis of selected invoices over a 4-month period found 
that it had billed the government for food service for more than 15.9 
million soldiers when only 12.5 million--more than 3.4 million fewer-- 
had passed through the dining facilities. DCAA believed that the 
contractor should have billed the government on the actual head count 
services, whereas the contractor believed that it should have billed 
the government based on the camp populations specified in the statement 
of work. A clearer statement of work, coupled with better DOD oversight 
of the contract, could have prevented the disagreement and mitigated 
the government's risk of paying for more services than needed. 

Future Challenges DOD Will Need to Address to Improve Its Oversight and 
Management of Contractors at Deployed Locations: 

Looking at our past work, I would like to make a number of broad 
observations about challenges we believe will need to be addressed by 
DOD to improve the oversight and management of contractors supporting 
deployed forces in future operations and ensure warfighters are 
receiving the support they rely on in an effective and efficient 
manner. There are four issues in particular that merit attention by 
DOD: (1) incorporating contractors as part of the total force, (2) 
determining the proper balance of contractors and military personnel in 
future contingencies and operations, (3) clarifying how DOD will work 
with other government agencies in future contingencies and operations, 
and (4) addressing the use and role of contractors into its plans to 
expand and transform the Army and the Marine Corps. 

Incorporating Contractors as Part of the Total Force: 

DOD relies on contractors as part of the total force, which the 
department defines as its active and reserve military components, its 
civil servants, and its contractors. As DOD's 2006 Quadrennial Defense 
Review noted, "The department and military services must carefully 
distribute skills among the four elements of the total force (Active 
Component, Reserve Component, civilians, and contractors) to optimize 
their contributions across the range of military operations, from peace 
to war." Furthermore, in a November 2007 briefing on challenges and 
opportunities associated with DOD's transformation efforts, the 
Comptroller General called on DOD to employ a total force management 
approach to planning and execution (e.g., military, civilian, and 
contractors). Similarly, the 2007 report of the Commission on Army 
Acquisition and Program Management in Expeditionary Operations called 
on the Army to transform its culture with regard to contracting and 
establish contracting as a core competency. Many of the long-standing 
problems we have identified regarding the oversight and management of 
contractor support to deployed forces stem from DOD's reluctance to 
plan for contractors as an integral part of the total force. This is 
evidenced by the fact that DOD does not incorporate the use and role of 
contractors in its professional military education. For example, an 
official from the Army's Training and Doctrine Command said it was 
important that all DOD components incorporate into their institutional 
training information on the use of contractors in deployed location so 
that all military personnel who deploy have a basic awareness of 
contractor support issues prior to deploying. We therefore recommended 
in our 2006 report that DOD develop training standards for the services 
on the integration of basic familiarity with contractor support into 
their professional military education. This would be an important first 
step towards incorporating the use and role of contractors across the 
department. 

Determining the Proper Balance of Contractors and Military Personnel in 
Future Contingencies and Operations: 

DOD needs to determine the appropriate balance between contractors and 
military personnel in deployed locations in order to ensure its ability 
to meet its future mission requirements while at the same time assuring 
it has the capacity to oversee and manage contractors supporting those 
future missions. As the Comptroller General stated in April 2007, given 
DOD's heavy and increasing reliance on contractors in Iraq and 
elsewhere, and the risks this reliance entails, it may be appropriate 
to ask if DOD has become too reliant on contractors to provide 
essential services.[Footnote 19] This is becoming a more important 
issue, as DOD becomes increasingly involved in missions such as 
stability operations. Looking towards the future, the department needs 
to consider how it will use contractors to support those missions and 
how it will ensure the effective management and oversight of those 
contractors. What is needed is a comprehensive, forward-looking review 
of contractor support to deployed forces that provides the proper 
balance between contractor support and the core capabilities of 
military forces over the next several years. The National Defense 
Authorization bill for fiscal year 2008 requires the Secretary of 
Defense to conduct, every 4 years, a comprehensive assessment of the 
roles and missions of the armed forces and the core competencies and 
capabilities of DOD to perform and support such roles and missions. 
This could provide the foundation for a comprehensive examination of 
the support DOD will require contractors to provide in future 
operations and core capabilities the department believes it should not 
be relying on contractors to perform. Only when DOD has established its 
future vision for the use and role of contractors supporting deployed 
forces can it effectively address its long-term capability to oversee 
and manage those contractors. 

Clarifying How DOD will Work with Other Government Agencies in Future 
Contingencies and Operations: 

As DOD works to improve its oversight and management of contractors 
supporting deployed forces, it is increasingly working with other 
government agencies at those deployed locations. This has raised a 
number of issues that will likely continue to affect future operations 
unless the U.S. government acts to resolve them. For example, the 
Department of the Defense and the Department of State need to determine 
who should be responsible for providing security to the U.S. government 
employees and contractors working in contingency operations. If the 
U.S. government determines that it will use private security companies 
during contingency operations, it is imperative that DOD and the other 
agencies agree on regulations and procedures to govern the use of 
private security companies and clarify their rules of engagement. 
Another question that has come up in Iraq and may occur in future 
operations is which agency should be responsible for reconstruction 
efforts. Moreover, there are issues that arise from the different rules 
and regulations governing military personnel, DOD civilians, other 
government agency employees, and contractors who may all be living and 
working on the same installation. For example, concerns have been 
raised about the applicability of the Military Extraterritorial 
Jurisdiction Act to crimes committed by contractors who support 
agencies other than DOD at deployed locations. In addition, contractors 
working for DOD in Iraq and Afghanistan fall under military policies 
that prohibit the use of alcohol, gambling, and other behaviors. 
However, contractors working for other agencies are generally not 
required to follow these policies, which can lead to tensions and erode 
military efforts to maintain discipline and morale. Given that DOD can 
expect to work more closely with other agencies in the future, the 
department will need to develop memoranda of understanding with those 
agencies and update its guidance to improve its working relationship 
with its partners across the U.S. government. 

Addressing the Use and Role of Contractors into Plans to Expand and 
Transform the Army and the Marine Corps: 

DOD also needs to address the role and use of contractor support to 
deployed forces as the department develops its plan to expand and 
transform its military forces. The department is in the process of 
planning for a substantial increase in the size of the Army and the 
Marine Corps. As it develops these plans, it is important that the 
department address the impact this growth in military forces will have 
on the contractor services needed to support those forces. Moreover, 
DOD should recognize that not all of the additional personnel must be 
dedicated to combat arms; a portion of that increase should be 
dedicated to expanding and enhancing the department's professional 
acquisition corps. In addition, as the Department continues to 
transform its forces, DOD should ensure that it is addressing contract 
oversight and management requirements, such as personnel requirements. 
For example, the 2007 report of the Commission on Army Acquisition and 
Program Management in Expeditionary Operations recommended that the 
Army establish an Expeditionary Contracting Command that would be 
responsible for providing skilled, trained, contracting personnel for 
the support of expeditionary forces, assigned to deployable or deployed 
commands. 

Concluding Observations: 

In closing, I believe the long-standing challenges DOD faces transcend 
the current operations in Iraq and Afghanistan and demand a 
comprehensive effort to resolve. As requested, we considered specific 
legislative remedies for the challenges facing DOD. While we believe 
that DOD bears the primary responsibility for taking actions to address 
the challenges discussed above, these are three actions Congress may 
wish to consider requiring DOD to take in order to move the debate 
forward: 

* Determine the appropriate balance of contractors and military 
personnel as it shapes the force for the future. A Quadrennial Defense 
Review-type study of contracting may be in order, one which 
comprehensively examines the support DOD will require contractors to 
provide in future operations and the core capabilities the department 
believes it should not be relying on contractors to perform. In 
addition, as the department continues to grow and transform its 
military forces, it should ensure that the role of contractor support 
to deployed forces is incorporated into its planning efforts. 

* Include the Use and Role of Contractor Support to Deployed Forces in 
Force Structure and Capabilities Reporting. DOD regularly reports on 
the readiness status, capabilities assessments, and other review of the 
status and capabilities of its forces. Given the reality that DOD is 
dependant on contractors for much of its support in deployed locations, 
the department should include information on the specific missions 
contractors will be asked to perform, the operational impacts 
associated with the use of contractors, and the personnel necessary to 
effectively oversee and manage those contractors. In addition, these 
reports should address the risks associated with the potential loss of 
contractor support. 

* Ensure that operations plans include specific information on the use 
and roles of contractor support to deployed forces. DOD guidance 
requires that contractor support be fully integrated into the logistics 
annex of operations and contingency plans. However, our previous work 
indicates that this is not being done at a sufficient level. Because of 
the increased use of contractors to support deployed forces and the 
variety of missions DOD may be asked to perform, Congress may want to 
take steps to gain assurances that operations plans for those missions 
sufficiently consider the use and role of contractors. 

Mr. Chairman and member of the subcommittee, this concludes my prepared 
remarks. I would be happy to answer any question you may have. 

Contacts and Acknowledgments: 

For questions about this statement, please contact Bill Solis at (202) 
512-8365. Other individuals making key contributions to this statement 
include Carole Coffey, Assistant Director, Sarah Baker, Grace Coleman, 
and James Reynolds. 

[End of section] 

Appendix I: Related GAO Products: 

* Defense Logistics: The Army Needs to Implement an Effective 
Management and Oversight Plan for the Equipment Maintenance Contract in 
Kuwait. GAO-08-316R. Washington, D.C.: January 23, 2008. 

* Defense Acquisitions: Improved Management and Oversight Needed to 
Better Control DOD's Acquisition of Services. GAO-07-832T. Washington, 
D.C.: May 10, 2007. 

* Military Operations: High-Level DOD Action Needed to Address Long- 
standing Problems with Management and Oversight of Contractors. GAO-07- 
145. Washington, D.C.: December 18, 2006. 

* Rebuilding Iraq: Continued Progress Required Overcoming Contract 
Management Challenges. GAO-06-1130T. Washington, D.C.: September 28, 
2006. 

* Military Operations: Background Screenings of Contractor Employees 
Supporting Deployed Forces May Lack Critical Information, but U.S. 
Forces Take Steps to Mitigate the Risks Contractors May Pose. GAO-06- 
999R. Washington, D.C.: September 22, 2006. 

* Rebuilding Iraq: Actions Still Needed to Improve the Use of Private 
Security Providers. GAO-06-0865T. Washington, D.C.: June 13, 2006. 

* Rebuilding Iraq: Actions Needed to Improve Use of Private Security 
Providers. GAO-05-737. Washington, D.C.: July 28, 2005. 

* Interagency Contracting: Problems with DOD's and Interior's Orders to 
Support Military Operations. GAO-05-201. Washington, D.C.: April 29, 
2005. 

* Defense Logistics: High-Level DOD Coordination Is Needed to Further 
Improve the Management of the Army's LOGCAP Contract. GAO-05-328. 
Washington, D.C.: March 21, 2005. 

* Contract Management: Opportunities to Improve Surveillance on 
Department of Defense Service Contracts. GAO-05-274. Washington, D.C.: 
March 17, 2005. 

* Military Operations: DOD's Extensive Use of Logistics Support 
Contracts Requires Strengthened Oversight. GAO-04-854. Washington, 
D.C.: July 19, 2004. 

* Military Operations: Contractors Provide Vital Services to Deployed 
Forces but Are not Adequately Addressed in DOD Plans. GAO-03-695. 
Washington, D.C.: June 24, 2003. 

* Contingency Operations: Army Should Do More to Control Contract Costs 
in the Balkans. GAO/NSIAD-00-225. Washington, D.C.: September 29, 2000. 

* Contingency Operations: Opportunities to Improve the Logistics Civil 
Augmentation Program. GAO/NSIAD-97-63. Washington, D.C.: February 11, 
1997. 

[End of section] 

Footnotes: 

[1] Contractors supporting deployed forces refer to DOD contractor 
personnel who are authorized to accompany U.S. military forces in 
contingency operations or other military operations, or exercises 
designated by the geographic Combatant Commander. 

[2] GAO, Military Operations: Contractors Provide Vital Services to 
Deployed Forces but Are Not Adequately Addressed in DOD Plans, GAO-03-
695 (Washington, D.C.: June 24, 2003). 

[3] The Joint Chiefs of Staff, Doctrine for Logistic Support of Joint 
Operations, Joint Publication 4-0 (Washington, D.C.: April 2000). 

[4] GAO, Military Operations: DOD's Extensive Use of Logistics Support 
Contracts Requires Strengthened Oversight, GAO-04-854 (Washington, 
D.C.: July 19, 2004). 

[5] GAO-04-854. 

[6] GAO-03-695. 

[7] GAO-03-695 and GAO, Military Operations: High-Level DOD Action 
Needed to Address Long-standing Problems with Management and Oversight 
of Contractors Supporting Deployed Forces, GAO-07-145 (Washington, 
D.C.: December 2006). 

[8] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: 
January 2005). 

[9] GAO-07-145. 

[10] Conference Report 110-434, accompanying Pub. L. No. 110-116 (13 
November 2007). 

[11] GAO, Information Technology: DOD Needs to Leverage Lessons Learned 
from Its Outsourcing Projects, GAO-03-371 (Washington, D.C.: Apr. 25, 
2003); and Military Training: Potential to Use Lessons Learned to Avoid 
Past Mistakes Is Largely Untapped (GAO/NSIAD-95-152 (Washington, D.C.: 
Aug. 9, 1995). 

[12] GAO-07-145 

[13] Chairman of the Joint Chiefs of Staff Instruction 3150.25C, Joint 
Lessons Learned Program (11 April 2007). 

[14] GAO-04-854. 

[15] GAO-07-145. 

[16] GAO-07-145. 

[17] GAO-07-145. 

[18] GAO-08-316R. 

[19] GAO-07-525T. 

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