Transcript: Sen. Rob Portman on wartime contracting reforms

Transcript of opening remarks by Sen. Rob Portman(R-Ohio), Ranking Member of the Senate Subcommittee on Contract Oversight, on April 17, 2012:

Sen. Rob Portman (R-Ohio), Ranking Member on the Senate Subcommittee on Contract Oversight. SOURCE:

“Thank you, Madame Chair. I appreciate your comments and I’m pleased that our witnesses are experts that can give us input, as you say. And it was good to hear from our colleague from Virginia, Sen. [Jim] Webb.

“It’s an incredibly important hearing. It’s important to examine the lessons we have learned from wartime contracting from our experience over the last decade – 10 years in Afghanistan, 9 years in Iraq.

Read more: McCaskill & Webb tout bill to reform wartime contracting

“And it’s a chance to hear from witnesses on some of these reforms that are necessary to improve the stewardship of our taxpayer dollars in some very challenging environments.

“This past August, as was noted, the bipartisan Wartime Contracting Commission issued their final report in its investigation of government use of contractors in Iraq and Afghanistan.

“And in my view, the commission came to a very troubling bottom-line conclusion. It was estimated by the commission that out of the $206 billion that we spent on service contracts in Iraq and Afghanistan, which includes everything from building military installations to election workers, between $31 billion and $60 billion was lost to what they termed to be ‘avoidable waste.’

“So out of $206 billion spent on service contracts, between $31 billion and $60 billion lost to avoidable waste.

“It is difficult environment. Winston Churchill once famously said, ‘The only thing certain in war is that it is full of disappointments and also full of mistakes.’ And it’s true – it’s a tough environment.

“But when it comes to wartime contracting, we certainly have a responsibility to look back and understand what reforms are necessary to avoid making more costly mistakes.

“And this is not just a retrospective exercise. of course, because contractors are still very much engaged, particularly in Afghanistan where the United States still as – as we count them – over 100,000 private contractors. Even in Iraq today, after the last U.S. troops returned home in December, the Departments of Defense and State maintained roughly 30,000 private contractors.

“At this time of serious fiscal challenges and trillion dollar deficits, we must do all we can to avoid waste and to get the best possible value out of the taxpayers’ dollar.

“The War Contracting Commission, along with a long series of Inspector General reports, identified some of the issues we should be focused on ranging from improving the use of reliable price information, which we will talk about today, to ensure that the government is getting a fair deal, to tightening restrictions on the use of non-competitive contracts to strengthening oversight of subcontractors who are too often insulated from direct accountability.

“In addition, looking ahead one of my principal concerns is that of sustainability, and by that I mean how do we ensure that our work – reconstruction, government work and so on – will last and be carried on by the Afghan and Iraqi governments and people of those countries.

“The issue is critically important because it’s about making sure that our good investments don’t go bad. That means we’ve got to consider not only, for example, how many additional schools and health clinics we can construct but who’s going to sustain them. Do they have the medical professionals and the teachers to be able to sustain them and keep them going?

“On this issue, the Wartime Contracting Commission was not very optimistic, and I’ll look forward to hearing from our panel on what steps are needed to reduce this risk of future waste or, again, lack of sustainability.

“Of course, beyond ensuring that wartime contracting is fiscally sound, we’ve also got to ensure that its performed consistently with our deeply-held values as Americans. On that score, it was concerning to see the commission’s report in what they called ‘the tragic evidence of the recurring problem of trafficking in persons by labor brokers or subcontractors of contingency contractors.’ The report said that existing prohibition on such trafficking have failed to suppress favored brokers or subcontractors and incentives to lure third-party nationals into coming to work for a U.S. contractor only to be mistreated or exploited.

“One of the commission members, Dov Zakheim, a former Reagan and Bush administration official, testified before the Armed Services Committee here in the Senate that these findings in his view were just the tip of the iceberg. And both DOD and State Department IGS have said we lack sufficient monitoring to have clear visibility into labor practices by contractors and subcontractors.

“As many of you know, that’s why we introduced legislation recently. Sen. Blumenthal and I are the original co-sponsors but it’s a bipartisan legislation. We’ve been joined by Sen. McCaskill, the Chair here this morning, as well as Sen. Rubio, Sen. Lieberman, Sen. Collins, Sen. Franken. And it’s intended to strengthen the existent protections against human trafficking directly in connection with overseas government contracts.

“Broadly defined, human contracting means forced or other coercive labor practices contribute to trafficking and it includes recruiting workers to leave their home countries on fraudulent promises, confiscating passports to limit the ability of workers to return home, charging workers recruitment fees that consume more than a month’s salary, and many other forms of abuse that were mentioned in the commission’s report.

“We should be clear that the overwhelming majority of the U.S. contractors and the subcontractors are law-abiding and reputable, and they’re doing a good job in a difficult situation. They’ve made it a priority to ensure that abusive labor practices play no role in this challenging work that they’re doing in Iraq and Afghanistan.

“Our proposal is designed to ensure that the best practices adopted by those contractors become standard practice for all contractors, and they include requiring contractors to have compliance plan in place, reporting and monitoring requirements to ensure that credible evidence immediately triggers an investigation, and giving contracting officers more tools to hold violators accountable.

“I’m hopeful we can make these common sense and bipartisan reforms the law of the land.

“We’ve invested heavily to achieve the goal of building up civil institutions, functioning economies, and constitutional governments in both Afghanistan and Iraq, and our military men and women have done everything they’ve been asked to do and more in Iraq and Afghanistan. They’ve performed extraordinary and bravery through the toughest of circumstances. Getting this overseas contracting right, especially in the area of reconstruction and development, is critical to consolidating the hard-won gains that they have achieved.

“Madame Chair, thanks again for holding this hearing. I look forward to hearing from our witnesses today.”


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