	Compliance with Competition Requirements

We found that the agencies responsible for rebuilding Iraq generally  complied with applicable requirements governing competition when  awarding new reconstruction contracts in fiscal year 2003. We reviewed 14 new contracts that were awarded in fiscal year 2003 using  other than full and open competition: a total of 5 sole-source contracts  awarded by the Army Corps of Engineers, the Army Field Support  Command, and USAID; and 9 limited competition contracts awarded by  the Department of State, the Army Contracting Agency, and USAID. With respect to issuing a task order under an existing contract, the  competition law does not require competition beyond that obtained for the  initial contract award, provided the task order does not increase the  scope of the work, period of performance, or maximum value of the  contract under which the order is issued. In light of the  exigent circumstances, such a justification was likely possible but needed  to be made and documented to comply with the law and protect the  taxpayer’s interests. DOD’s Use of Logistics Support Contracts

I will now turn to discussing our ongoing work on DOD’s use of global  logistics support contracts. Within this overall context, we found mixed results in each of the four  areas we reviewed—planning, oversight, efficiency and personnel—with  variations occurring among the four contracts and among the various  commands using them. Our report, which will be issued later this year, will  make a number of recommendations to address the shortcomings we  identified in these areas. Conversely, we found that the use of LOGCAP in Kuwait and Iraq was not  adequately planned, nor was it planned in accordance with applicable  Army guidance. In some cases, we saw military  commands actively looking for ways to save money in the contracts. In others, however, most notably the LOGCAP contract in Iraq  and Kuwait, we saw very little concern for cost considerations. Personnel and Training

We found that shortages of personnel have also made contract oversight  difficult. Logistics support contracts have developed into a useful tool for the  military services to quickly obtain needed support for troops deployed to  trouble spots around the world. Because of the military’s continuing and growing  reliance on these contracting vehicles, it is important that improvements  be made and that oversight be strengthened.
Why GAO Did This Study

The General Accounting Office (GAO) discussed some of the work the it is undertaking to address various operations and rebuilding efforts in Iraq. Specifically, GAO has a body of ongoing work looking at a range of issues involving Iraq, including Iraq's transitional administrative law, efforts to restore essential services to the Iraqi people, and the effectiveness of logistics activities during Operation Iraqi Freedom, among others. Importantly, given the challenging security environment in Iraq and the various other accountability organizations involved in the oversight process, it is attempting to coordinate its engagement planning and execution with other organizations as appropriate. In this testimony it discussed (1) its report (GAO-04-605) that was released yesterday on the contract award procedures for contracts awarded in fiscal year 2003 to help rebuild Iraq and (2) its preliminary findings on the military's use of global logistics support contracts. These support contracts have emerged as important tools in providing deployed military services with a wide range of logistics services.

What GAO Found

With regard to the award of fiscal year 2003 Iraq reconstruction contracts, GAO found that agencies generally complied with applicable laws and regulations governing competition when using sole-source or limited competition approaches to award new contracts. However, they did not always do so when issuing task orders under existing contracts. In several instances, GAO found that contracting officers issued task orders for work that was not within the scope of the underlying contracts and which should have been awarded using competitive procedures or, because of the exigent circumstances involved, supported by a justification for other than full and open competition in accordance with legal requirements. With regard to DOD's use of global logistics support contracts, GAO found mixed results in each of the four areas it reviewed: planning, oversight, efficiency, and personnel. GAO also found that while some military commands actively looked for ways to save money, others exhibited little concern for cost considerations. Finally, shortages in personnel trained in contract management and oversight is also an issue that needs to be addressed. The report will make a number of recommendations to address these shortcomings.