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Opening Statement to the Senate Committee on Appropriations (Washington, D.C.)
As Delivered by Deputy Secretary of Defense Gordon R. England, Dirksen Senate Office Building, Washington, D.C., Wednesday, July 23, 2008

Mr. Chairman, distinguished members of the Committee, thank you for the opportunity to meet with you today, and to provide a perspective and an update on the progress the Department is making regarding our contracting activities and the oversight of those contracts for Operation Iraqi Freedom.

I am pleased to have with me my esteemed colleagues, Department of Defense Acting Inspector General Gordon Heddell, Commanding General, U.S. Army Materiel Command, General Ben Griffin, and Director of Defense Procurement, Mr. Shay Assad. 

Also, at the request of this Committee, I’m joined by representatives from the Defense Contract Audit Agency and the Defense Contract Management Agency.

I have provided a written statement for the record, and all of us are prepared to receive your questions at the conclusion of opening remarks.

As you are aware, the Department has struggled with our expeditionary contracting and the oversight of that contracting.  By way of perspective, since January of 2003, DoD has obligated approximately $71 billion dollars through nearly 98,000 expeditionary contract actions.  Unfortunately, this extraordinarily large volume of activity was not anticipated. 

The Department’s hindsight now is much better than was its ability to predict back in 2003.  Not to mention, of course, that much of this work was performed in a war zone – a dangerous and difficult environment.

That said, the Department takes our contract accountability and contract oversight responsibilities very seriously.  Multiple DoD agencies have engaged in thousands of aggressive reviews, audits, and oversight, and in so doing, have uncovered instances of fraud and abuse.  These reviews have led to recommended meaningful corrective actions coupled with holding people accountable and structural organization changes.  Many of these changes are centered in the Army and in our agencies, and you will be hearing about them this morning. 
The Department will continue to improve both effectiveness and efficiency across the enterprise.  I do need to comment, however, that it will take time to rebuild our acquisition and contracting workforce. As you may recall, these personnel were dramatically reduced during the 1990’s, some by Congressional direction, and I expect some from Department initiatives.  These professional personnel are hard to replace and there is a lengthy training time involved,  so even today it will likely take a few years before these critical skills are fully replenished.
Looking back, we have learned that there are many demands on an expeditionary force.  You are well aware of the many discussions regarding length of deployments and dwell times for our military.  These same considerations are also applicable to our military and civilian contracting personnel.  A deployable, rotational force presents unique challenges, and significantly more personnel than was anticipated back in 2003.
The Department is certainly wiser today.  We have benefited from our own experience, from independent studies and from the results of the thousands of audits that I mentioned earlier.  I can assure you that we will continue to be aggressive in the pursuit of excellence.  We owe no less to the American people.

Yesterday was another step forward in this process, as I had the pleasure to swear in our new Special Inspector General for Afghanistan Reconstruction, Major General Arnie Fields, USMC, Retired.  I am confident that Arnie Fields will help to do in Afghanistan for the Departments of Defense and State what Stuart Bowen has so ably accomplished over the past several years in Iraq.   
Mr. Chairman, members of the Committee, I thank you for your support of the outstanding men and women who wear the cloth of our nation and their families.  I also want to thank the people who deployed, and those deployed today, who do this work for America. 

While the Department had problems with some of its processes, we are extraordinarily grateful to the brave men and women who deployed to Iraq to accomplish this mission.  I look forward to your questions.