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Inside the World's Biggest Buyer
The federal government takes more than $1 trillion per year to operate, with nearly half of its operating budget spent on the acquisition of goods and services. Congress, executive branch political leadership and career federal managers all agree — federal acquisition needs to be a lot more efficient and effective. Federal News Radio's week-long special report, Inside the World's Biggest Buyer, takes a look at acquisition from every perspective: agency, industry, workforce, oversight, and suspension and debarment.
Contractors play central role in State-run mission in Iraq
Wednesday - 6/6/2012, 3:09pm EDT
The State Department entered new ground in Iraq on Jan. 1, taking on a diplomatic mission following the military's departure. And with its expanded role, State faced the challenge of managing thousands of contractors.
By the end of the first-quarter of 2012, 11,386 contractors supported the diplomatic mission in Iraq, according to the most recent report from the Special Inspector General for Iraq Reconstruction (SIGIR). That's significantly less than the 61,000 contractors that worked for DoD as of May 2011.
But the contractors now supporting State play a central role — they make up 89 percent of State's workforce there.
“For many contractors,
there was little
difference on Jan. 1.
From the contractor's
standpoint, from the
very little changed.”
— Alan Chvotkin
"The Defense Department has a huge internal infrastructure of logistics personnel, of equipment, of civil engineers and that kind of personnel," said Brian Friel, a federal business analyst with Bloomberg Government. "Whereas the State Department is a department made up of diplomats who don't have the skill sets associated with that kind of work."
The dynamic Friel described is a major reason why State's success hinged on DoD.
In the planning stages of the transition, the Pentagon and State agreed to keep a multi-billion dollar DoD contract in place after the military left Iraq.
That contract was LOGCAP, which DoD traditionally used to buy logistical services for bases.
For many contractors, that also meant business as usual when the transition occurred, said Alan Chvotkin, executive vice president and counsel for the Professional Services Council, an industry association.
"From the contractor's standpoint, from the logistics support, very little changed," Chvotkin told Federal News Radio in an interview for the special report, Trial by Fire: Overseas Contracting in Transition, part of the series, Inside the World's Biggest Buyer.
DoD created the Logistics Civil Augmentation Program (LOGCAP) in the mid-1980s to fill gaps in its traditional logistics forces — responsible for cooking, cleaning and maintaining base camps. Those forces bore the brunt of post-Cold War troop reductions.
The modern LOGCAP era began in 2001 with the creation of LOGCAP III shortly after 9/11 and the U.S. invasion of Afghanistan. DoD awarded global-services firm KBR the sole spot on the contract, which by the time it was phased out in 2009, had attained a value of more than $35 billion.
The mentality was a winner-take-all acquisition strategy, said LOGCAP Executive Director Tommy Marks.
"When that took place, we weren't even in what just became 10 years of conflict," he said. "And so the acquisition strategy drove us to one winner when the government needed it."
In hindsight, the lack of competition and a single contractor increased the risk for government, Marks said.
DoD developed LOGCAP IV in 2009 and awarded two other firms, in addition to KBR, a spot on the contract to compete for task orders: DynCorp International and Fluor. The value of the LOGCAP IV contract over 10 years is $2.4 billion.
DoD supports State
State and DoD worked out an arrangement that let State retain LOGCAP IV in Iraq and issue task orders against it. State continues to have support from the Defense Contract Management and Audit agencies as well as Army Materiel Command.
Catherine Ebert-Gray, State's Deputy Assistant Secretary for Logistics Management, said the decision to stick with LOGCAP was a practical one. Amid all the other planning, attempting to transition LOGCAP as well would have simply been too taxing, she said.
From an industry perspective, that decision made sense, Chvotkin said.
"There is a lot of history and a lot of talented folks both supervising and managing the LOGCAP IV work," he said. "And it didn't matter if they wore a Defense Department badge or a State Department badge. The fact is, they wore a U.S. government badge."
The hard deadline facing DoD and State at the start of the year also constrained State's desire for its own logistics contract.
"This is a transition — this is a wind-down of responsibility," Chvotkin said. "It would have been, I think, very difficult to engender a good competition for a declining mission."