MISSION STATEMENT

This site is where I will post documents, articles, links and my comments related to issues which concern me.  These issues may be classified as pertaining to my main area of concern, the Army's LOGCAP Program; and will include comments on Government and Politics and the Economy. 

March 6, 2010

The great Walter Pincus has a column on the top-heavy military departments which recommends cutting some of the Under, Deputy Under, Assistant and Deputy assistant secretary slots in DoD. This would accomplish three things, in my opinion:


1. It would save a bit of money.
2. It would reduce the time it takes to get things done. Now, if you need a decision from the Under Secretary for Acquisition, it must be staffed through assistants, deputy assistants, command channels, etc., with little value added.
3. It would reduce the positions where leaders have an incentive to favor contractors, anticipating a well-paid job when they leave office.

Well worth the read.

February 21, 2012

My old  former professor, Robert Reich has an important column on the current discussion concerning the revival of the manufacturing sector in the United States. Professor Reich has been studying these issues for over 20 years and puts this problem into a realistic perspective.

February 17, 2012

I have an article at Truthout.org concerning the new attack on Federal pay. I have watched the debate on pay for civil servants over 33 years and noted that when Federal pay obviously was behind private sector pay for the same jobs, it was too large a gap to close. Now that there may be some reason, not conclusive, that Federal pay has slightly exceeded private pay, there is a clamor (Republican and Fox News) to cut Federal pay. An interesting aspect of this debate is that now Republicans are arguing it is "unfair" for Federal employees to have pay which exceeds that of private sector employees. Try telling them that it is unfair for CEOs to make 400 times the pay of their employees.


February 14, 2012

Dina Rasor has an article on Truthout.org titled Reclaiming Civilian Control: How to Keep Generals as Warriors, Not Politicians. While discussing a particular problem at DOD, this issue is part of the general problem of the too close links between Government agencies and the contractors and other firms with which they deal. This not limited to the military, as recent articles on the revolving door at the Securities and Exchange commission have revealed. Real reform requires dealing with this set of problems.

Now for something completely different. I though that every so often I would post some music which has caught my attention. This is often through my daughters saying, "here is a group you might like, Dad." We start with Fleet Foxes from their CD Helplessness Blues. The whole CD is very good and worth the purchase.


February 4, 2012

My good friend Dina Rasor and the folk at Truthout.org have published an e-book collection of Truthout Solutions columns dealing with the Department of Defense. It is titled Pentagon Solutions: How to Actually Get Control of Defense Spending. This book is available in an Amazon Kindle version for $2.99. Some of my articles for Truthout are in there (I do not receive any money from this), along with some great analysis. I believe it is well worth the small price. If you do not have a Kindle, you can download a Kindle app for your PC (it is free) and then download the e-book.

February 1, 2012

I have been very critical of the Office of Special Counsel (OSC) in the past. When the appear to have done some good work I should point that out. An article in the Washington Post indicates that OSC played a key role in protecting whistleblowers at Dover Air Force Base from retaliation. The civilian employees publicized the mishandling of the bodies of soldiers at the mortuary at Dover. Their supervisors retaliated by trying to fire and suspend the whistleblowers. OSC opened an investigation and found retaliation had occurred. They were supported by members of Congress and various veterans groups in putting pressure on the Air Force.

January 30, 2012

A couple of books well worth reading:

The Operators by Max Hastings. This is the reporter who wrote the Rolling Stone article on Stanley McChrystal which led to President Obama firing the general. The larger story of Hastings reporting on Afghanistan and our military leadership is well written and informative.

We Meant Well by Peter Van Buren is the story of a State Department foreign service officer who worked for a year as the leader of a Provincial Reconstruction Team (PRT) in Iraq. Almost every thing done by his team and others were complete failures. The book describes why those programs failed and also gives a nice picture of life at small Forward Operating Bases (FOBs.) Van Buren has a nice sense of humor which makes this an enjoyable read.

January 12, 2012

Last year the Commission on Wartime Contracting finished their work and issued a final report. As expected, the report is very disappointing. My complete thoughts on this may be found here.

July 27, 2011

I want to suggest an online, short book about military matters, including contracting. The book is The Pentagon Labyrinth. The book and back up material are posted at the linked site. Heavily recommended!

A New Article at Truthout

I have a new article posted at Truthout. I follow up on an article by Dina Rasor discussing the conflicts of interest caused by hiring contractors for program management, program integrator and contract management functions.

July 26, 2011

Some good and bad news

KBR whistleblower, Ms Bunnatine Greenhouse, who fought the Corps of Engineers over the Restore IRaqi Oil project has settled her case with the government. According to Democracy Now she will be paid $970,000 in back pay and legal fees and punitive damages. She deserves the money!

Unfortunately she only settled after she was the victim of physical violence at the Corp and Army refused to protect her. Knowing Ms. Greenhouse's character, she wanted a court fight, testimony under oath and evidence more than a financial settlement. It is highly probable that no individual in the Corps will be held accountable for the retaliation or for the physical attack.

My latest posts to Trughout are concerning:

An article on the Office of Special Counsel (OSC)

This office is designated by the Whistleblower Protection Act as the venue for protection against retaliation for Government employees. Unfortunately it does not even come close to doing this job. 97% of all complaints recieved are turned down with no investigation. Some of this may be attributable to the left over mismanagement of Scott Bloch. It may also be due people who are content to work on their metrics at the expense of thier job. Read the article for more details.

April 25, 2011

The Commission on Wartime Contracting is holding a hearing today on Implementing Improvements to Defense Wartime Contracting. Unfortunately the have only some major experts and insiders as witnesses. They need to bring a few outside experts who are critical of how contracting has been done throughout the war.

April 4, 2011

A new book, Outsourcing War & Peace, by Laura A. Dickinson is a fairly academic, quite readable study of the impact of military and Department of State contracts on our puublic values. She offers some valuable reccomendations for increasing oversight. I highly reccomend this book.

March 27, 2011

My latest two posts at Truthout were written with my good friend and DoD expert Bob Bauman. Contractors Watching Contractors, Where is the Oversight? Part one and Part two discuss the problem of hiring contractors to provide financial and performance oversight of other contractors.

March 7, 2011

There is a really good article by Bryan Bender at the Boston Globe web site. It concerns the increasing direct movement of retired military officials to companies where their contacts and influence can be used to obtain contracts. The military industrial complex is very much alive and well and costing taxpayers money. This confirms information in my earlier post of January 15, linking to work by Janine R. Wedel and Linda Keenan and Dina Rasor.

Feb 28, 2011

I have two articles posted at Truthout.org.

They concern:

1. Creating a Federal ContractAudit Agency to improve both DoD and other agency contract auditing.

2. Does the Army really save money by contracting out LOGCAP?

Jan 15, 2011

An issue which has been on my mind for some time is the web of connections, personal relationships and undue influence which constitute the military/corporate complex. (With the advent of major service contracts the Eisenhower term of the "military/industrial complex" does not quite capture the totality of the problem.)

Let me give you an example. MG (RET) Jerome Johnson was the Commander of the Army Sustainment Command from 2004-2007. In this capacity he had a strong influence on future projects of the Command and on the careers of a number of senior civilian leaders. He now is a VP with Honeywell, who announced they would be a strong contender for the Enhanced Army Global Logistics Enterprise (EAGLE) contract. This program will be managed by the Army Sustainment Command. Honeywell announced that Johnson will lead their team in trying to win this program at his old command.

Try another one. Lt. Gen. (RET) Robert T. Dail left the Defense Logistics Agency (DLA) in 2008, shortly after he named Supreme Foodservice New Contractor of the Year at DLA. This company is providing food to troops in Afghanistan. Four months after he retired, Dail became a Prsident of Supreme Group, USA. Now DLA has extended the contract, on a non-competitive basis, for two years. Walter Pincus tells the story in the Washington Post.

This appears to be business as usual for DLA as a retired Major General became the President of Agility who also held a Prime Vender Food contract. (See comment below on December 17, 2010.)

I could give many more examples just from my personal experience in military contracting. I plan to discuss this more in the future. For know you should look at the column by Janine R. Wedel and Linda Keenan. Dina Rasor has a valuable take on this issue, with proposed solutions.


January 7, 2011

failed to manage the contracting officers, the program and their organization.The DoD IG has released a report on the Army mismanagement of the LOGCAP IV Support Contract. As usual, this is a mixed bag. The IG identifies some significant problems with the management of this contract. It has been used for non-LOGCAP work which should have been competed, award fees may be too high and oversight has been poor.

However, the IG ignores the major problem with this contract. The Army has used this contractor to supplant financial analysis by DCAA on the LOGCAP III and IV contractors. DCAA is the DoD audit agency responsible for audits and financial analysis of contractor proposals, business systems and final costs on cost type contracts. Using a contractor for this work is contracting out an inherently governmental function, which is illegal. The Commission on Wartime Contracting has raised this issue, but the Army tends to ignore them. One result of not using DCAA was on the first LOGCAP IV task order with DynCorp for support in Kuwait. The support contractor (SERCO) analyzed the DynCorp proposal and award was made. DynCorp later submitted a request for contract adjustment, claiming they underbid by over $50 million. DCAA usually catches this type of problem, SERCO apparently did not.

In addition, the IG continually uses language that blames the contracting officers, rather than the senior leaders at Rock Island Contracting Command who should be responsible for these failures. Evidently they assigned six different contracting officers to this contract since award in 2007. The contracting officers did fail to properly manage the contract, but the senior leaders

December 18,2010

I have placed my thoughts on the general issue of using contractors for the type of support (CS/CSS) provided by LOGCAP, on the LOGCAP page of this site. Use the menu on the left to go there. If you have some comments you would like to share, please e-mail me at charles.smith14@us.army.mil

December 17, 2010

Additional information on the Agility, Prime Vendor Food contract scandal, can be found in this Houston Press article. The Prime Vendor Food contract provides all of the soldiers food at the DFACs in Iraq and Afghanistan. The holder of the contract, Agility (formerly Public Warehousing Corportation) is currently under indictment for fraud.

This article indicates that their vendors were also comitting fraud by providing bad food for our troops. This whole scandal deserves more press coverage than it has had so far. It invloves former Army general officers who work for the company, a powerful Kuwaiti family and current efforts by DoD to settle this and continue to do business with the company.

As usual, Ms. Sparky is on top of this.


December 15, 2010

A high five to Ms. Sparky for her 1000th post.
Old friends and new friends have posted for this occasion. Ms. Sparky is a great ecxample of what a blog should be. She hosts a blog where civility and facts are the order of the day. People who disagree with her post their experience and receieve respect for being rational and fact driven. Well worth your time to go to this site and look around if you are interested in military contracting issues.

December 9, 2010

Solutions

Dina Rasor has launched a new column at the Truthout.com website. Dina's column may be found here. This will be a great source for information on military acquisition as Ms. Rasor hasquite a bit of experience in this area. Please book mark Truthout.com and check there frequently.


May 12, 2010

More Good News For KBR

The Army has announced award fee for KBR for May 2008 through August 2009. Rating KBR as either Good, Very Good or Excellent for various pools for this period, the Army delivered fee in the amount of $60 million to KBR. If you remember, KBR was given no fee for the 1st Quarter of 2008 since this was the period in which SSG Ryan Maseth was electrocuted at a KBR managed facility. Apparently you are only responsible for a quarter for getting caught killing one soldier. Then it is back to normal!

In a sane world, the Army would have gone back and taken all award free for 2007, when KBR managed the installation where SSG Maseth was killed and failed to perform proper maintenance. Unforunately the Army has consistently protected the financial interests of KBR, often at the expense of soldiers. Why would the Army do this? Perhaps you should ask LTG (Ret) Richard Hack, who was Deputy Commanding General of Army Materiel Command (AMC) in 2004 and 2005. AMC had responsibility for LOGCAP during this period and performed numerous actions to support KBR. LTG (Ret) Hack now works for KBR.

Since the Army has just given all life support in Iraq to KBR under LOGCAP III, rather than compete under LOGCAP IV and save money (see below), this has been a good couple of weeks for KBR. The deal is especially sweet as the Army is now hinting that they may remain in Iraq for longer than the President's time-table for withdrawel. As long as the Army is there, KBR will be earning profit on LOGCAP III without any of that pesky competition.

It is time for the Senate in the form of the Armed Services Committee or the Sub-Committee on Contract Oversight to demand answers from the Army on why they are still taking care of KBR at the expense of taxpayers and soldiers. They should explore the web of retire general officers working for KBR who may have improper influence on current Army decisions. The Senate has the leverage to hold promotions or programs until the Army provides honest answers and corrects their actions.


May 6, 2010

The Army has canceled the LOGCAP IV competition for life support services in Iraq and will continue to provide those services through LOGCAP III and KBR. (Story at Government Executive Web site) Why on earth would they do this? The LOGCAP IV contractors had prepared proposals, which were originally due in April. All the Army had to do was open them and see if one of them met their needs at a competitive price.

Yet the Army prepared a Business Case Analysis (BCA) to consider cancelling the competition and now has done so. The stated reason will be that the operational concerns of the Combatant Commander led to the decision that transition to a new contractor during the draw-down period would be too disruptive. However the Army has also claimed that transition from KBR to two new contractors (DynCorp and Fluor) in Afghanistan has been successful. Arguably operations in Afghanistan, which have experienced an increased optempo, with more troops, would have been more susceptible to disruption.

In 2005 the Army wanted to waive the withholding of 15% of KBR vouchers since KBR would not prepare an adequate proposal to definitize task orders. This waiver required the signature of the Director of Defense Procurement and Acquisition Policy (Ms. D. Lee). A recent DoD IG report found the Army did not provide an honest analysis to Ms. Lee, suppressing key facts in their waiver request. It would not strain credibility to believe they have done the same with the BCA.

The Army has already claimed savings in Afghanistan and Kuwait by competitively awarding under LOGCAP IV. Even though KBR has a lower profit margin on LOGCAP III, winning competitive proposals have provided real savings. The Army is willing to ignore these savings, which will cost soldiers the opportunity for more support, to stay with KBR.

One can only wonder what the real reason is. A coincidental issue is that KBR has experienced a drop off in revenue of late. First quarter profits were off 40% according to CNBC. The Army has a long history of taking care of KBR. I was essentially removed from managing the LOGCAP contract because I would not get with the program and channel over a billion dollars in unearned revenue to KBR. This timing is unfortunately consistent with prior actions. I saw first hand the influence that KBR, through a network of retired general officers, exerts over Army decisions.

Also disturbing about this action is the Army’s willingness to ignore the Commission on Wartime Contracting. At a recent hearing the Commissioners made it clear that they knew the recommendation of the BCA would be to cancel the competition and that they disapproved. The panel from DoD was comprised of Shay Assad, Director of Defense Procurement and Acquisition Policy, Department of Defense; Lt. Gen. William Phillips, principal military deputy to the Assistant Secretary of the Army (Acquisition Logistics and Technology); and Edward Harrington, Deputy Assistant Secretary of the Army (Procurement). Mr. Assad indicated that he would be in favor of competition generally, but had not seen the BCA. Once he saw the BCA, he appears to have lost his enthusiasm for competition.

I have written elsewhere that the Commission on Wartime Contracting has had disappointing results. The Army sees no repercussions in misleading and ignoring the Commission. Unlike the Truman Committee, which was able to change Army direction on occasion and save the taxpayer money, the Commission does not have the clout. This is despite the highly experienced commissioners, their obvious motivation to accomplish reform and a very able staff.

The only real recourse is for the Senate Armed Services Committee to demand an explanation of this decision and a reconsideration of the decision. I suggest the SASC because they have leverage over DoD and the Army through program authorizations and confirmation of general officers. The Army must answer questions such as:

• · Why is the Army unable to manage a successful transition in Iraq?
• · What discussions did Army leadership have with KBR over this decision?
• · Is the BCA a complete and accurate portrayal of the situation?
• · By forgoing savings through competition, what services will the troops have to give up?

On March 3, 2010 the DoD IG issued Report No. D-2010-046, Contracting for Tactical Vehicle Field Maintenance at Joint Base Balad, Iraq. The basic conclusion of the report is that, under Task Order 159 of the LOGCAP III contract with KBR, the Army paid approximately $5 million dollars for this service and received approximately $400,000 worth of value. The remaining $4.6 million was spent maintaining an idle workforce.

This operation was not in compliance with Army Regulation 750-1 “Army Materiel Maintenance Policy,” chapter 4-14, “Manpower Utilization Standards,” September 20, 2007, which requires such an activity to have a manpower utilization rate of 85% or greater. The DoD IG found that from September 1, 2008, through August 31, 2009, the utilization rate ranged from a low of 3.97% to a high of 9.65%.

The DoD IG methodology is straightforward. Available maintenance hours, based upon the KBR workforce assigned to this function are compared to actual work performed, as contained in KBR time sheets. Data came from the automated Standard Army Maintenance System Level 1 (SAMS-1). This system is used by the Army and required for contractors performing maintenance on Army tactical vehicles. My experience includes using this system for the maintenance of Army Pre-Positioned Stocks Afloat, in Southwest Asia and in Japan. If properly managed the system provides accurate data. The DoD recognized some discrepancies in reporting numbers and made appropriate adjustments. I consider this investigation to provide reliable data.

The report leads to the conclusion that the Army wasted $4.6 million through a lack of proper management controls. This is true, as far as it goes. I would suggest some additional considerations. The first question is why was KBR performing tactical vehicle maintenance at Joint Base Balad? Task Orders 59, 89 and 139 did not contain this requirement, to the best of my knowledge. KBR’s maintenance responsibilities were clearly for Non-Tactical Vehicles.

The Expeditionary Support Command should have several options for obtaining maintenance of tactical vehicles at this base. I believe they should be chosen in this order, ahead of using LLOGCAP.

1. Units have some organic capability to provide such maintenance. If this capability is available, then it is the preferred alternative.

2. Contractor Logistics Support (CLS) is the general terminology for maintenance support provided, usually, by the manufacturing contractor. When I was at this base in 2004, a number of contractors, such as GDLS, BAE and others were providing CLS for tactical vehicles.

3. The Army Sustainment Command has a contract called GMASS (Global Maintenance and Support Services) which provides maintenance capabilities for tactical vehicles and other equipment through a multiple contractor ID/IQ contract. I believe it is still in operation and would have been a competitive way to obtain this support.

4. The Pre-Positioned Stocks contractor for SWA has a capability which can be utilized at other locations than the main base at Doha, Qatar. We used this alternative in 2002 in Kuwait to prepare for operations.

I recognize that the drawdown may have removed some of these options. I find it hard to believe that KBR, under LOGCAP, was the only available source for this maintenance activity.

The period reviewed by the DoD IG was from 2008 to 2009. As early as 2004 the Army, DCMA and DCAA were aware that additional resources were necessary to provide proper contract oversight for LOGCAP III. It is astounding that in 2009 this oversight is still as defective as reported.

Similarly, the defects in the LOGCAP III task order scopes of work which inhibited efficient performance and proper oversight should have been corrected by Task Order 159. That manpower utilization reporting requirements were still unclear is also astounding.

I have not seen the scope of work for task order 59. Two issues are key for the future:

1. The scope of work should have been performance based and not specified any specific number of mechanics. If the scope specified the number of mechanics, then it failed as a performance based scope.

2. Is it a cost type fee contract and performance based? If so, then KBR’s failure to provide an efficient service should negatively affect award fee. In addition, DCAA can perform a post-contract audit and determine some costs to be unreasonably incurred and recommend recovery of those costs by the Government.

DCAA, with the assistance of Army technical support, should perform an audit of this maintenance activity asking such questions as:

1. What was the KBR guidance to maintenance workers for filling out timecards?

2. Even when there was little work, did employees fill out 12 hours per day, weekends included, rather than 8 hours, five days per week?

3. Did KBR have employees qualified to work on tactical vehicles? Up until this order they had maintenance requirements for only non-tactical vehicles.

4. How did KBR hours for various maintenance operations match the MAC standard hours for these tasks?

Finally, as usual, the DoD IG Report, recommendations and responses do not appear to hold anyone accountable for wasting $4.6 million of taxpayer funds and funds which could have been utilized for more soldier support. Ultimately, the Army Contracting Command and the Army Contracting Command Rock Island have the responsibility for writing effective task orders under the LOGCAP contract. This report does not suggest any measures to hold those who failed accountable. As Senator McCaskill often says, “Has anyone been fired over this?”

See also Mother Jones Article

HASC Subcommittee on Acquisition Reform

David Isenberg has in interesting Huffington Post article on the March 11 hearing of the HASC Subcommittee on Acquisition Reform. Issues regarding sevice contracting, along with other issues were discussed. A few comments:

1. The DoD Comptroller indicated that doing audits in IRaq and Afghanistan was impossible! If this is true, then using cost type contracts, such as LOGCAP IV, is not a good decision. Without the ability to audit contractor work, the integrity of the procurement system is damaged. If the Comptroller is correct, then we need organic support for these services, not contractor support.

2. Ashton Carter also dicusses the problems with contractor oversight in Iraq and Afghanistan. He states that you cannot send civilians into theatre to do the work. I think he is wrong, as there are many civilians who are on designatet positions which are deployable.

3. Mr. Hale, the DoD Comptroller also stated that he is changing DCAA to a more risk based operational policy. I am not sure what this means, but it appears to be a substitute to hiring more auditors. DCAA auditors have produced quality results in Iraq and Afghanistan, we just need more of them. If "risk based" means we will not hire the needed auditors, then we cannot monitor contractor performance in Iraq and Afghanistan.

There are critical issues discussed here, but the information and perspective appears to be quite limited.

The subcommittee as also posted their intermim report at the web site, linked above.

Is LOGCAP IV Failing?

When my team designed the strategy for LOGCAP IV we had several goals:

1. Introduce Competition to reduce costs,

2. Use Competition to provide an incentive for superior performance to obtain more work,

3. Use the additional contractors to ensure that poor performance would result in losing more work, possibly even having current work terminated.

The Army’s management of LOGCAP IV suggests that these goals are not being achieved. The Army appears to have managed the contract so that each contractor gets their piece of the work. DynCorp has Kuwait and a piece of Afghanistan. Fluor has a piece of Afghanistan. Now KBR has Iraq. The lesson of LOGCAP III was the Army will take care of its contractors, even at the expense of troops. Since the Army has never acknowledged that problem with LOGCAP III, they are apparently repeating the problem on LOGCAP IV. The same contracting organization, Contracting Command Rock Island, which gave away everything to KBR is still managing LOGCAP in the same way.

In each area of operations the Army will likely come to rely on a specific contractor and be unwilling to change. We are already seeing poor performance in Afghanistan from both Fluor and DynCorp reported in the national media and from bloggers who follow these matters, such as Ms Sparky. KBR received a $0 award fee due to their poor electrical performance, which resulted in the death of at least one soldier, and yet immediately received a $2.8 billion award for Iraq. Even better, they receive a higher profit margin on this work than they would have received if this work was under LOGCAP III.

David Isenberg quotes Charles Tiefer, a professor of government contracting at the University of Baltimore Law School and a member of the Commission on Wartime Contracting: “Giving KBR this contract while denying them award fees for their enormous problem of accidentally electrocuting soldiers amounts to rapping them on the knuckles on one hand while handing them a multibillion dollar deal in the other.”

The Army Sustainment Command, also located at Rock Island, manages the LOGCAP Program. This Command and the Contracting Command Rock Island report to the Commander Army Materiel Command (AMC). GEN Dunwoody, the four star commander of AMC needs to take action to redirect the LOGCAP Program or Congress must, once again, provide the oversight which this program needs.