	Background

Section 861 of the National Defense Authorization Act for Fiscal Year 2008  (NDAA for FY2008) directed the Secretary of Defense, the Secretary of  State, and the USAID Administrator to sign a memorandum of  understanding (MOU) related to contracting in Iraq and Afghanistan. Lack of Information on Contracts, Grants, and Cooperative Agreements and Associated Personnel Can Hinder Agencies’ Management and Oversight

DOD, State, and USAID’s significant reliance on contracts, grants,  cooperative agreements, and their associated personnel makes it critical  that agency officials have accurate and reliable information to inform  decision making and properly oversee work being performed in Iraq and  Afghanistan. We have reported extensively on the management and  oversight challenges of using contracts and grants to help agencies carry  out their missions during contingency operations. As our prior work has  shown, the agencies’ lack of complete and accurate information may  inhibit planning, increase costs, and introduce unnecessary risk:    Limited visibility over contractors obscures how extensively  agencies rely on them to support operations and carry out  missions. For example, we reported in November  2009 that without insight into services provided by contractors as part  of the drawdown in Iraq, DOD planners may lack information  necessary to efficiently allocate contracted services to support the  remaining U.S. forces as the drawdown progresses. We determined this impaired USAID’s ability  to make informed decisions on resource allocations for the strategy. In particular, by not having a  centralized, interagency database of all ongoing projects in  Afghanistan, the U.S. government may not be in a position to fully  leverage the resources available and risks duplicating reconstruction  efforts. These officials  indicated SPOT has the potential to bring some of this dispersed  information together so it can be used to better manage and oversee  contractors. SPOT may offer the same potential for managing grants and  cooperative agreements since data on them and their associated personnel  in Iraq and Afghanistan are similarly dispersed. Though SPOT Implementation Continues, Challenges Remain in Tracking Personnel and Contracts, Grants, and Cooperative Agreements

DOD, State, and USAID have made progress in implementing SPOT, but as  we reported in October 2009, the agencies’ ongoing implementation of  SPOT falls short of providing information that would help facilitate  oversight and inform decision making as well as fulfill statutory  requirements. Specifically, we found the criteria for deciding which  contractor personnel in Iraq and Afghanistan are entered into the system  varied and as a result, not all required personnel have been entered. Because of  SPOT’s limitations, the agencies have relied on other sources, such as  periodic surveys, for information on contractor personnel, including those  that were killed or wounded, but we have found these sources to be  unreliable as well. Although our prior findings are specific to tracking contracts they point to  challenges the agencies may face as they use SPOT to track similar  information on grants, cooperative agreements, and the personnel working  on them. Specifically, DOD, State,  and USAID officials stated the primary factor, particularly in Iraq, for  deciding which contractor personnel were entered into SPOT was whether  a contractor needed a SPOT-generated letter of authorization (LOA). As the three agencies continue to implement SPOT for  personnel working on grants and cooperative agreements, our ongoing  work to date indicates that they will experience challenges similar to those  with contractor personnel, such as ensuring consistent criteria for whom  to enter and accounting for local nationals. Tracking Information on Contracts, Grants and Cooperative Agreements with Performance in Iraq and Afghanistan

Although the agencies are entering information on contracts into SPOT,  the system continues to lack the capability to accurately import and track  the contract data elements as agreed to in the MOU. Therefore, the agencies will need to determine how the  information from multiple databases is to be entered or linked to SPOT. Specifically, we recommended    ensuring the agencies’ criteria for entering contracts and contractor  personnel into SPOT are consistent with the NDAA for FY2008 and  with the agencies’ respective information needs for overseeing  contracts and contractor personnel;  revising SPOT’s reporting capabilities to ensure they fulfill statutory  requirements and agency information needs; and    establishing uniform requirements on how to enter contract numbers  into SPOT so contract information can accurately be pulled from  FPDS-NG as agreed to in the MOU. DOD, State, and USAID agreed that coordination among the three agencies  is important, but DOD and State disagreed that they needed a plan to  address the issues we identified. In developing this plan, each  agency should further consider its respective information needs.
Why GAO Did This Study

The Departments of Defense (DOD) and State (State) and the U.S. Agency for International Development (USAID) have relied extensively on contractors, grantees, and cooperative agreement recipients to support troops and civilian personnel and carry out reconstruction efforts in Iraq and Afghanistan. This reliance increases the importance of agencies having reliable data to inform decision-making and oversee the work performed. To help increase oversight of activities supporting DOD, State, and USAID's efforts in Iraq and Afghanistan, the National Defense Authorization Act for Fiscal Year 2008, as amended, required the agencies to identify common databases of information on their contracts, grants, cooperative agreements, and associated personnel. In their July 2008 memorandum of understanding (MOU), the three agencies designated the Synchronized Predeployment and Operational Tracker (SPOT) as their system for tracking the required information. GAO's testimony addresses (1) how a lack of information hinders agencies' management and oversight of contracts, grants, cooperative agreements, and associated personnel, (2) the status of the agencies' continued efforts to implement SPOT, and (3) GAO's prior recommendation to improve SPOT's implementation. It is drawn primarily from GAO's prior work on contracting in contingency operations.

What GAO Found

GAO has reported extensively on the need for agencies to have reliable information to manage and oversee work being performed to address challenges related to using contracts and grants. The lack of such information may inhibit planning, increase costs, and introduce unnecessary risk. For example, GAO reported last year that by not having insight into contractor provided services, DOD may lack needed information to efficiently allocate contracted services to support remaining U.S. forces in Iraq. GAO also previously determined that by not considering contractor and grantee resources in developing an Afghan assistance strategy, USAID's ability to make resource allocation decisions was impaired. Many of GAO's prior recommendations on contractors supporting contingency operations focused on increasing agencies' ability to track contracts and contractor personnel. Agency officials have indicated that SPOT has the potential of consolidating dispersed information to help them better manage and oversee contractors. SPOT may offer the same potential for grants and cooperative agreements as information on them and their personnel are similarly dispersed. Although the agencies have made progress in implementing SPOT, the database falls short of providing information to facilitate oversight and fulfill statutory requirements. GAO reported in October 2009 that the criteria used to determine which personnel are entered into SPOT varied and not all personnel were being entered as required. In particular, the agencies cited the need for a SPOT-generated letter of authorization as the primary factor for deciding whether personnel were entered, but not all personnel, particularly local nationals, need this authorization. As a result, officials from the three agencies acknowledge that SPOT data are incomplete, with some questioning the need for detailed data on all contractors. Because of SPOT's limitations, the agencies have relied on other sources, such as periodic surveys, for data on contractor personnel, but we have found these sources to be unreliable. Although contract information is being entered into SPOT, the system continues to lack the capability to accurately import information from other sources as agreed to in the MOU. For example, because SPOT does not require users to enter contract information in a standardized manner, our work has shown that there will be challenges in identifying which contracts' dollar values and competition information should be imported. While our prior findings are specific to contracts and their personnel, together with our ongoing work they point to challenges the agencies will face in using SPOT to track similar data on grants, cooperative agreements, and their personnel. Last year GAO recommended that the agencies develop a plan for addressing the shortcomings identified in SPOT's implementation. While the agencies agreed coordination is important, they disagreed with the need for a plan. GAO continues to believe that a plan with timeframes that provides consistent criteria and standards is necessary for ensuring that SPOT meets statutory requirements and helping the agencies identify their information needs to manage and oversee contracts, grants, and cooperative agreements.