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Summary

This report examines logistical support contracts for troop support services in Iraq primarily administered through the U.S. Army's Logistics Civil Augmentation Program (LOGCAP). LOGCAP is an initiative designed to manage the use of civilian contractors that perform services during times of war and other military mobilizations. On April 18, 2008, DOD announced the Army's LOGCAP IV contract awards to three companies - DynCorp International LLC, Fort Worth, TX; Fluor Intercontinental, Inc, Greenville, SC; and KBR, Houston, TX, through a full and open competition. The LOGCAP IV contract calls for each company to compete for task orders. Each company may be awarded up to $5 billion annually for troop support services with a maximum annual value of $15 billion. Over the life of LOGCAP IV, the maximum contract value is $150 billion. Congress is concerned about the Federal oversight and management of DOD contracting in Iraq. Recent assessments from the Government Accountability Office (GAO), DOD Office of the Inspector General (IG), and the Special Inspector General for Iraq Reconstruction (SIGIR) reveal a lack of accountability for large sums of money spent for Iraq contracts. For example, an audit conducted by the DOD IG revealed that the Federal government failed to substantiate the disbursement of at least $7.8 billion of $8.2 billion dollars believed to be spent for goods and services in Iraq. The IG's investigation estimated that the Army disbursed $1.4 billion in commercial payments that lacked the minimum supporting justification and documentation required for valid payments - such as certified vouchers and invoices. In one instance, a $320 million cash payment was made without justification beyond a signature.1 Many observers view these investigations as a call for new rules on contract oversight, management, and accountability. The Fiscal Year (FY) 2008 Defense Authorization Act (P.L. 110-181) contains provisions that are intended to reduce instances of DOD contract waste, fraud, abuse, and mismanagement. Other provisions require the Secretary of Defense to provide a plan for addressing skill shortfalls in the DOD acquisition workforce; provide for a periodic and independent management review of DOD contracts; prohibit the awarding of sole source contracts and non-competitive grants; and establish a commission on wartime contracting to investigate contracts in Iraq and Afghanistan. The House and Senate proposed FY2009 Defense Authorization bills contain new provisions that extend these safeguards to all for all Federal contracting. This report will be updated as warranted.

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