COORDINATION
OUSD(A T &L)DP AP/POLICY
RM 5E621 PENTAGON
Please Reply NLT, COB, Monday, September 25, 2006
SUBJECf: Reply to Latest Lessons Learned Initiative Report,
Lessons in Contracting and Procurement
"Iraq Reconstruction:
COORDINATION
Dffi(ARA) __ ~~====~------------DATE
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DUSD(W) ________________________ DATE
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DATE
DGC(A&L) --------------
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JCS(J-4) ------------------------ DATE--------------
DASA(P&P) ----------------------- DATE-------------
COMMENTS:
Action Officer: LTQ(b)(6) I Acting Deputy Director, DPAP/Policy,l(b)(6)

OFFICE OF THE UNDER SECRETARY OF DEFENSE
3000 DEFENSE PENTAGON
WASHINGTON. DC 20301·3000
ACQUISITION
TECHNOLOGY
ANO L OGISTICS
ACTION MEMO
September 15, 2006, 1 :00 PM
FOR: UNDER SECRETARY OF DEFENSE (AT&L)
FROM: Shay Assad, Director, Defense Procurement and Acquisition Policy
SUBJECT: Reply to Latest Lessons Learned Initiative Report,
"Iraq
Reconstruction: Lessons in Contracting and Procurement"
• You directed a coordinated response to the six recommendations in the SIGIR
report at TAB B.
• Of the six recommendations we take exception with recommendation 4, which
states that the deployable contracting reserve corps be organized under the
Office of the Coordinator for Reconstruction and Stabilization (S/CRS). Our
position is that this Corps should be under DoD. Army has expressed concerns
that this Corps must be additive to the current force structure and not from the
current force structure.
• We have delineated a response to each recommendation and a plan of action
where necessary.
RECOMMENDATION: Sign the memo at TAB A.
COORDINATION: DIR(ARA), DUSD(BTA), DUSD(JP), DGC(A&L), JCS(J4),
DASA(P&P), at TAB C.
Attachments:
As stated
Prepared by: L TC._j<b_)(_6) __ .....~tnPAP -Polic y~._ (b _ )( _6 ) __ ____,
G

A

THE UNDER SECRETARY OF DEFENSE
3010 DEFENSE PENTAGON
WASHINGTON, DC 20301-3010
ACQUISITION,
TECHNOLOGY
AND LOGISTICS
MEMORANDUM FOR SPECIAL INSPECTOR GENERAL FOR IRAQ
RECONSTRUCTION
SUBJECT: Reply to Latest Lessons Learned Initiative Report, "Iraq
Reconstruction: Lessons in Contracting and Procurement"
This is in response to your August 02, 2006, memorandum that outlines your six
primary recommendations:
Recommendation 1: Explore the creation of an enhanced Contingency FAR
(CFAR). When the (Special Inspector General for Iraq Reconstruction) SIGIR met with
the Commanding General of the Multi-National Forces-Iraq and told him of the
contracting Lessons Learned Initiative, he observed that there was a compelling need for
a single, simplified, and uniform contracting process for use during contingency
operations. Although the existing Federal Acquisition Regulation (FAR) provides
avenues for rapid contracting activity, the Iraq reconstruction experience suggests that the
FAR lacks ease of use. Moreover, promoting greater uniformity through a single
interagency CF AR could improve contracting and procurement practices in multi-agency
contingency operations. An interagency working group led by DoD should explore
developing a single set of simple and accessible contracting procedures for universal use
in post-conflict reconstruction situations. Congress should take appropriate legislative
action to implement the CF AR, once it is developed by the interagency working group.
DoD Response:
Concur. The FAR Council has issued an interim rule (in effect) that consolidates in a
new FAR Part 18, information about flexibilities provided for in current law and policy
that can be used in a contingency situation. DoD is in the process of identifying like
flexibilities for the DoD FAR Supplement (DF ARS). Those flexibilities shall be
published in late September as an interim rule. DoD wi11 also issue Procedures Guidance
and Information (PGI) that will greatly assist in the interpretation and execution of the
regulations_ DoD will also create a standing Contingency Contracting DF ARS
committee. This committee will continuously update the DF ARS section 218 and also
create the various waiver and deviations that could be activated by a commander during a
contingency or emergency.

Recommendation 2: Pursue the institutionalization of special contracting programs.
In Iraq, smaller scale contracting programs, like the Commander's Emergency Response
Program ( CERP) and the Commanders Humanitarian Relief and Reconstruction Program
(CHRRP), achieved great success. Commanders used these programs to accomplish
projects that immediately met the needs of a post-war population in distress. Given the
positive performance of CERP and CHRRP in Iraq, the Congress should legislatively
institutionalize such programs for easy implementation in future contingency operations.
DoD Response:
Discussion: DoD supports institutionalizing programs similar to the existing CERP
authority. CERP and CHRRP programs currently are authorized annually and are tied to
yearly Appropriation Acts. Each year the amount of funding differs. Funding by this
approach results in short planning horizons for commanders to effectively and efficiently
execute the program. Institutionalizing these programs with a known trigger, such as a
contingency declaration, would increase the effectiveness of planning for the execution of
funds by the commanders. The Senate included authority for continuous CERP
capability in its Fiscal Year 2007 Defense Bill but restricted the amount per country. The
legislation in its current form is little help to DoD in future contingencies. The
Department provided an appeal to the proposed legislation requesting that the ceiling of
$200K per country be removed so that DoD has maximum flexibility to use this
important capability in the future.
Plan of Action: The Joint Contingency Contracting Task Force will monitor the current
legislation and appeal if necessary. Should the requested authority fail in this year's
cycle the task force will pursue a legislative proposal to create a mechanism to
institutionalize the programs and funding calculations. This mechanism would give the
commander a planning figure from year-to-year to be able to more effectively take
advantage of these types of programs.
Recommendation 3: IncJude contracting staff at all phases of planning for
contingency operations. Contracting plays a central role in the execution of
contingency operations, and thus it must be part of the pre-deployment planning process.
Whether for stabilization or reconstruction operations, contracting officials help provide
an accurate picture ofthe resources necessary to carry out the mission.
DoD Response:
Concur. The requirement for contracting staff involvement in planning will be addressed
in the new joint publication 4-series on Joint Contracting and Contractor Management.
The expedited development process has begun and should be complete by November
2007.

Recommendation 4: Create a deployable reserve corps of contracting personnel
who are trained to execute rapid relief and reconstruction contracting during
contingency operations. This contracting reserve corps could be coordinated by the
DoS Office of the Coordinator for Reconstruction and Stabilization as part of its civilian
ready reserve corps. An existing contingent of contracting professionals, trained in the
use of the CF AR and other aspects of contingency contracting, could maximize
contracting efficiency in a contingency environment.
DoD Response:
We concur with the recommendation to create a deployable cadre of experienced
personnel, including a reserve component, trained in contingency contracting operations.
However, the cadre should include program management and financial management
personnel in addition to contracting officers. This team, patterned after a program
management office, would have the resources, training and experience to define
contingency contraction and stability operations (Stability, Security, Transition and
Reconstruction (SSTR)) requirements, rapidly award the appropriate contract, administer
the contract, and effectively manage the resulting projects or services to completion.
We do not concur, however, with the suggestion that the deployable contracting reserve
corps be organized under the Office of the Coordinator for Reconstruction and
Stabilization (S/CRS) as part of the proposed civilian reserve. Contingency contracting
plays a critical role in achieving the commander's tactical, operational and strategic goals
and should therefore be under the direct operational control of the combatant commander
working in close coordination and supporting the DoS led country team concerned. The
Office of the Under Secretary of Defense (Acquisition, Technology & Logistics) is
developing a proposal for a contracting reserve corps that is one aspect of a larger effort
to establish a contingency contracting/stability operations support office within Joint
Forces Command. Part of the organizational concept would create a new )(joint reserve
unit attached to the office and assign the office as a direct reporting element of Joint
Forces Command.
The concept and implementing strategy for a contingency contracting/stability operations
support office is being developed in response to the Deputy Secretary's January 22, 2006,
memo on institutionalizing stability operations within DoD. As a total force
organization, manning for the office would include active duty military, government
civilians, and a joint reserve corps component as well as contractor support. The active
duty and government civilian personnel, augmented with contractor support, would form
the permanent, full-time core of the contingency contracting/stability operations support
office. In addition to planning functions (in coordination with COCOM staffs and the
interagency) and contract administration activities for pre-awarded contracts, the core
group would deploy a team of contracting officers and program managers with other
Joint Force Headquarters Core Elements for those contingency/stability operations
requiring a robust, in-theater contracting capability. Once in theater, this team would

form the nucleus of the Joint Contracting Command (JCC) supporting the Combatant,
Multi-National Force or JTF commander, using established contingency contracting
procedures. The joint reserve unit assigned to the office would consist primarily of
contracting officer and program management teams and would be activated to supply the
required expert manning for a JCC and sustain it through potentially long-term
operations.
Plan of Action: The Office of the Under Secretary of Defense (Acquisition, Technology
& Logistics) will develop and refine the concept for a contingency contracting/stability
operations support office. The implementation strategy includes briefing key DoD and
interagency stakeholders before presenting the plan to the Deputy Secretary of Defense
for approval and execution.
Recommendation 5: Develop and implement information systems for managing
contracting and procurement in contingency operations. The interagency working
group that explores the CF AR should also review current contracting and procurement
information systems and develop guidelines and processes for enhancing these existing
systems or, if necessary, creating new ones to meet unique contingency operational
needs.
DoD Response:
Discussion: The Task Force to Support Improved DoD Contracting and Stability
Operations in Iraq is working to develop and deploy a simple solution to provide
visibility to contracting actions in theater, create a medium to solicit and receive
proposals from Iraqi businesses, and develop a common Iraqi supplier database so that
contracting offices can find competent local suppliers of goods and services. The first
spiral of this capability will be delivered in October 2006 to the Joint Contracting
Command Iraq/ Afghanistan. Functionality will be added after this first delivery that
provides automatic data feeds to reduce errors and increase worker efficiency by
eliminating manual reporting. This increased visibility will allow contracting offices
operating in theater to execute contracts with synergy and provide strategic effects
through integrated sourcing.
Plan of Action: The Joint Contingency Contracting Task Force wi11 monitor and
facilitate development of this capability and explore opportunities to institutionalize this
concept for future use. Lessons learned and processes used will be documented for
doctrinal development.
Recommendation 6: Pre-compete and pre-qualify a diverse pool of contractors with
expertise in specialized reconstruction areas. These contractors should receive initial
reconstruction contracts during the start-up phase of a post-conflict reconstruction event.

DoD Response:
We concur with the SIGIR recommendation, however pre-qualifying contractors and pre-
competing contracts should be extended beyond reconstruction activities and include
other stability, contingency or emergency operations. The concept of operations for a
contingency contracting/stability operations support office includes pre-competing and
awarding contracts for the common goods and services required during stability
operations and other contingencies.
Pre-awarded contracts would be reserved for the subset of common tasks for which there
is an urgent and immediate need during the opening phases of a contingency or stability
operation. These would included essential human services such as restoration of power,
water and sanitation systems, refugee relief and emergency medical services, and
transportation, but could also include common requirements with longer lead times such
as establishing a communications infrastructure as a key enabler for reconstruction.
These contracts would be constructed with contract line items (CLINs) which could be
rapidly funded and activated to provide an immediate response. Other contrac~ CLINs
would allow for contractor participation in planning and exercises.
For other requirements which are uniquely scenario dependent or for which there is time
to fol1ow a more traditional contracting approach, contractors could be pre-qualified,
reducing the time required for market research prior to initiating a call for proposals for a
competitive contract. In addition, the concept of a contingency contracting/stability
operations support office includes maintaining a data base of US-based and regional
contractors with capabilities relevant to contingency and SSTR operations.
Plan of Action: This activity will be conducted by the contingency contracting/stability
operations support office once established.
Please contact L Tq(b)(6) l at l(b)(6) I, or via e-mail at
lr::::(b-:-X-:-:6.,....) ---.@osd.mil if additional information is required.
Kenneth J Krieg

B

I
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
2,2006
Mr. Kenneth J. Krieg
Under Secretary of Defense
(Acquisition, Technology and Logistics)
3010 Defense Pentagon
Washington, D.C. 20301-3010
Dear Mr. Krieg:
Knowing your interest in the ongoingst'abihzatlohimd f~dnsttrlcti'Orl efforts in Iraq, l wanted to
provide you SlGIR's latest Lessons Learned Initiative report, "Iraq Reconstruction: Lessons in
Contracting and Procurement. "
The report's findings strongly support our six primary recoinmendations:
Recommendation 1: Explore tbe creation of an enhanced Contingency FAR (CFAR). When
the SlGIR met with the Commanding General of the Multi-National Forces-Iraq and told him of
the contracting Lessons Learned Initiative, he observed that there was a compelling need for a
single, simplified, and uniform contracting process for use during contingency operations.
Although the existing FAR provides avenues for rapid contracting activity, the Iraq
reconstruction experience suggests that the FAR lacks ease of use. Moreover, promoting greater I
uniformity through a single interagency CF AR could improve contracting and procurement -
practices in multi-agency contingency operations. An interagency working group led by DoD
should explore developing a single set of simple and accessible contracting procedures for
universal use in post-conflict reconstruction situations. Congress should take appropriate
legislative action to implement the CF AR, once it is developed by the interagency working
group.
Recommendation 2: Pursue the institutionalization of special contracting programs. In Iraq,
smaller scale contracting programs, like the Commander's Emergency Response Program
(CERP) and the Commanders Humanitarian Relief and Reconstruction Program (CHRRP),
achieved great success. Commanders used these programs to accomplish projects that
immediately met the needs of a post-war population in distress. Given the positive performance
of CERP and CHRRP in Iraq, the Congress should legislatively institutionalize such programs
for easy implementation in future contingency operations.
Recommendation .3: Include contracting staff at all phases of planning for contingency
operations. Contracting plays a central role in the execution of contingency operations, and thus
it must be part of the pre-deployment planning process. Whether for stabilization or
reconstruction operations, contracting officials heip provide an accurate picture of the resources
necessary to carry out the mission.
400 Army Nev~· Drive 'Ariingtor,, Vir£ir.ie :2:2202

Recommendation 4: Create a deployable reserve corps of contracting personnel who are
trained to execute rapid relief and reconstruction contracting during contingency
operations. This contracting reserve corps could be coordinated by the DoS Office of the
Coordinator for Reconstruction and Stabilization as part of its civilian ready reserve corps. An
existing contingent of contracting professionals, trained in the use of the CF AR and other aspects
of contingency contracting, could maximize contracting efficiency in a contingency
environment.
Recommendation 5: Develop and implement information systems for managing (!ODtra(!tiDg
and procurement in contingency operations. The interagency working group that explores the
CF AR should also review current contracting and procurement information systems and develop
guidelines and processes for enhancing these existing systems or, if necessary, creating new ones
to meet unique contingency operational needs.
Recommendation 6: Pre-compete and pre-qualify a diverse pool of contractors with
expertise in specialized reconstruction areas. These contractors should receive initial
reconstruction contracts during the start-up phase of a post-conflict reconstruction event.
The full report is also available on the SIGIR Web site: www.SIGIR.mil. Should you have any
questions abou this re ort its recommendations, or SIGIR 's ongoing audits and investigations,
ruease contact (b)(6) Assistant Inspector General for Congressional and Public Affairs, at
I lt6) l o 6 ir.mil, and we will arrange for a briefing.
Sincerely,
~· ~ ·
Stuart W. Bowen, Jr.
Inspector General