Defense Contracting in Iraq and Afghanistan: Issues and Options for Congress

Publication Date: February 2009

Publisher: Library of Congress. Congressional Research Service


Research Area: Military and defense


Coverage: Afghanistan Iraq


The Department of Defense (DOD) is the largest agency in the federal government. It obligated nearly $270 billion on contracts for goods and services in FY2005 -- an 88% increase over the amount obligated in the year 2000. The growth in DOD spending has been primarily for the acquisition of services. Furthermore, there has been a substantial shift in the types of contracts for troop support services, the size of the contracts, and the lack of effective management control over the administration of the contracts, and the oversight of the contractors. These new contracts have characteristics that make oversight difficult. One factor is that the concept of "full and open competition" has been historically the guiding principle by which the federal government has awarded contracts. Yet the majority of contracts for troop support services in Iraq have been awarded on a "noncompetitive" or sole-source basis.

This report will examine logistical support contracts for troop support services (also known as service contracts) in Iraq, primarily administered through the United States'(U.S.)Army's Logistics Civil Augmentation Program (LOGCAP). Four broad areas will be discussed, including (1) contract administration; (2) contract costs, the development of contract requirements, and the use of no-bid, sole-source contracts, and costs-reimbursement contracts; (3) transparency; and (4) the acquisition workforce.

The 110th Congress has announced plans to hold hearings on Iraq contracting activities. Congress is concerned over Iraq contracting for several reasons, including (1) logistical support contracts in Iraq are expensive and difficult to manage; (2) many public agencies and private organizations cite instances of contract waste, fraud, abuse, and financial mismanagement; and, (3) DOD has announced that it will replace the current LOGCAP III contract with new a LOGCAP IV contract, and competitively award the contract to multiple contractors. Also, concerns over Iraq contracting has led Congress to extend the tenure of the Office of the Special Inspector General for Iraq Reconstruction (SIGIR), through passage of the Iraq Reconstruction and Accountability Act, P.L. 109-440.

Many questions have been raised as to whether the sole-source contracts in Iraq were improperly awarded. Some have offered evidence to suggest that efforts may have been made to circumvent the DOD contracting regulations and guidance provided by professionally-trained, senior DOD contracting officials. Others note that the very nature of the types of contracts employed in Iraq, combined with the challenges in contract administration, serve as major factors which make contract administration difficult. Given the size and scope of the contracts in Iraq, and the challenge of managing billions of DOD-appropriated dollars, many have suggested it appropriate to inquire whether these types of contracts can be managed better.

This report will be updated as warranted.