The Insider

In response to queries from an Oregon congressman, the Defense Department has released documents indicating that more than 120 of its contracts contain indemnification clauses under which the U.S. government would cover liability costs that contractors could incur related to a variety of work, including some environmental services in the United States and in overseas operations, Defense Environment Alert reports this morning.

Further:

The release of information from a DOD data call in response to the congressional inquiry reveals indemnification clauses for a range of work, including for firms operating hazardous material facilities in the United States and to recover potential radioactive materials during the Iraq invasion, in addition to coverage for the makers of anthrax and smallpox vaccines, according to a Dec. 2 press release from Rep. Earl Blumenauer (D-OR), the congressman who months ago launched an inquiry into DOD's indemnification contract clauses. In the United States, indemnification clauses have been included in contracts to cover chemical weapons storage and destruction activities, according to the documents.

The probe has been driven by Blumenauer's concern that a defense firm -- Kellogg, Brown and Root (KBR) -- could invoke an indemnification clause to require the federal government to absorb the cost of legal claims being made by former National Guard members for exposures to chemical hazards at an Iraq water treatment plant the company oversaw (Defense Environment Alert, Sept. 27). The lawmaker has pressed the Pentagon to declassify the indemnification clause in this contract, which is known as the Restore Iraqi Oil contract, but DOD continues to refuse to do that, he says in the press release. Blumenauer adds that he remains concerned that contracts associated with the Iraq war effort have looser standards of indemnity protection than other DOD contracts.

In response to Blumenauer's inquiry, DOD's acquisition office launched a data call to the military services and other defense agencies to identify indemnification clauses in contracts, any lawsuits that had been filed regarding the contractor's actions, and the amount of money the federal government has paid out in response to the indemnity provisions, according to a Nov. 24 letter from DOD Principal Deputy Under Secretary for Acquisition, Technology & Logistics Frank Kendall. . . .

While the DOD contract summaries "appear to show a diligent, responsible process for work carried out in the United States that protects taxpayers from liability in cases of contractor negligence," it indicates much looser standards for the work done in Iraq, Blumenauer's press release says.

While Blumenauer called the documents release a victory for transparency, he warned that the "documents suggest that contracts associated with our Iraq war efforts may not contain sufficient taxpayer protections in cases of contractor negligence."

"I remain concerned that KBR's contract may be much more loosely drawn, removing incentives for the contractor to behave responsibly and exposing taxpayers to enormous liability and our troops to harm. Why is the Pentagon shielding this contract and protecting KBR?"

Blumenauer vowed to continue to seek declassification.

KBR has previously defended its work done at the Qarmat Ali water treatment plant in Iraq, with a spokeswoman saying that "the record is clear that the Army was to provide a site free of all environmental and war hazards. Once the presence of sodium dichromate was found [at Qarmat Ali], the Army was notified and was fully informed."

Sixteen House Republicans are calling on the Senate to delay a vote to ratify the follow-on START Treaty. In a letter to Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), House Armed Services Committee Ranking Member Buck McKeon (CA), strategic forces subcommittee Ranking Member Mike Turner (OH) and Reps. Roscoe Bartlett (MD), Mac Thornberry (TX), Todd Akin (MO), Joe Wilson (R-SC), Frank LoBiondo (NJ), John Kline (MN), Mike Rogers (AL), Trent Franks (AR), Cathy McMorris Rodgers (WA), Doug Lamborn (CO), Rob Wittman (VA), Duncan Hunter (CA), John Fleming (LA) and Mike Coffman (CO) write that they are "troubled by the administration's push to ratify the New START Treaty amid outstanding concerns regarding Russian intentions, missile defense limitations, and nuclear modernization.

"Given the security implications associated with this treaty and the importance of such a treaty enjoying bipartisan support, we believe the Senate should not be rushed in its deliberations," the letter continues. "Therefore, we urge the Senate not to vote on the New START Treaty in the lame duck congressional session and certainly not until these important security issues are resolved." Further:

There remains a significant divide between Russia and the U.S. on whether New START affects our ability to deploy missiles defenses, particularly long-range missile defenses in Europe. Despite testimony from Administration officials that New START does not limit U.S. missile defenses, Moscow seems to believe it will. Russian officials have declared they would withdraw from the treaty if U.S. missile defense systems are upgraded quantitatively or qualitatively.

Russia also warns that it will build up offensive forces should its 'terms' for a missile defense agreement not be met; all while the Administration seeks to reduce our nuclear forces. We have no insight on what these terms are, nor do we know the exact nature and scope of the missile defense negotiations reportedly occurring between Undersecretary of State Ellen Tauscher and her Russian counterpart, Deputy Foreign Minister Sergei Ryabkov.

We reject the notion that Russia can set terms for our missile defenses.  Iranian and North Korean missile and nuclear programs continue unabated as highlighted by recent events.  Given these threats, upgrades to our homeland missile defense capabilities and funding for missile defenses in Europe will remain top priorities for the House Armed Services Committee.

However, our principal concern is that the Administration might cede to Russian demands and allow Moscow to shape U.S. missile defense plans in exchange for its adherence to New START. This concern is exacerbated by a lack of transparency by the Administration in providing information on the nature of these secretive missile defense discussions. One way to alleviate this concern is for the Administration to provide Congress with the treaty negotiating record -- which Senators have requested on numerous occasions -- so that members can see firsthand how missile defense was discussed within the context of the treaty, as well as documents related to the Tauscher-Ryabkov discussions. In the meantime, we think it unwise to vote on New START until the Congress gains this additional insight and better understands how the impasse on missile defense will affect our long-term security.

We are also deeply concerned about the state of our nation's nuclear enterprise, and whether the Administration will remain committed to nuclear modernization and our nation’s nuclear triad. Reversing the erosion of our nation's nuclear infrastructure -- which the bipartisan U.S. Strategic Posture Commission called 'decrepit' -- will require a comprehensive plan and long-term political and financial support from the Administration and both chambers of Congress.

Our committee recently received an updated '1251 Report' on nuclear modernization.  The report provides glimpses of the Administration’s revised funding requirements based on its Nuclear Posture Review released last spring. However, it is unclear exactly how these additional funds contribute to modernization. For example, over one-third of these funds appear to go towards employee pension plans -- not modernization of the infrastructure or stockpile. Members of the House have yet to be briefed on the updated 1251 Report, and therefore we cannot assess the adequacy of these revised plans and funding requirements. We would hope the Senate would allow for the same due diligence in its oversight of this matter prior to a vote on New START.

As members of the House we will not have the opportunity to vote on the New START Treaty. However, the outcome of the treaty will undoubtedly impact national security policy and investment decisions within our jurisdiction as authorizers of the annual defense bill, and we will be responsible for overseeing its implementation. Because of these roles, we feel compelled to express our concerns.

We are in complete agreement with Senator Kerry who recently told the press, 'The American people want to see Republicans and Democrats working together on behalf of national security.' We believe bipartisanship is possible with good faith and sufficient cooperation among both political parties and the executive and legislative branches of the federal government. The security concerns associated with the New START Treaty are significant and must be addressed. This requires thorough and thoughtful deliberation.  The American people expect this of their government and we owe them nothing less.

Lt. Gen. Michael Vane, the deputy commanding general of Army Training and Doctrine Command and director of the Army Capabilities Integration Center, is responding today to critics at the Lexington Institute who have disparaged the Army's vehicle modernization strategy and, in particular, the new plan for the Ground Combat Vehicle. Lexington COO and defense consultant Loren Thompson has called GCV “doomed” due to what he says are high costs (approximately $10 million per vehicle) and a contract configuration that will disincentive industry.

In a message posted today on the Lexington Institute's blog, Vane argues that the GCV is a “pretty good deal” given the added value of delivering a full squad (nine soldiers) across the full spectrum of operations.

“Affordability arguments are always related to how much money one has and what the effect is on the operation,” Vane wrote. “It is hard to argue that any force other than the Army (which includes Special Forces) does as much engagement with our friends and enemies and makes as much difference. So, $10 million for nine soldiers that actually engage the enemy directly in this conflict and nearly every conceivable conflict in the future is not a pretty good deal? It think it compares very favorably to a joint strike fighter, a littoral combat ship, or a submarine.”

A TRADOC spokeswoman authenticated Vane's blog post today and a link to it was posted on ARCIC's Facebook page.

In the post, Vane also says there should be more optimism about the future of modernization and suggests that industry should “get hungrier” to meet the challenges posed by 21st Century Army modernization.

“Acquisition changes that are occurring will mean more accountability, more real competition, and an increasing awareness of industry's need to change how it operates,” he wrote. “[Industry needs to] get hungrier, perhaps, and pay more attention to global initiatives in other countries that are challenging areas where the United States had held a lead in technology development and innovation.”

Vane also says the Army's vehicle portfolio reviews have resulted in the crafting of a modernization strategy that will assist industry as never before.

“The size of the combat and tactical wheeled vehicle fleets remains fairly constant throughout all this, particularly with the operationalization of the reserve component,” he wrote. “The size of the Army could be an issue in the future, but we are arguing hard to make our 547,000 soldier active-duty component and 1,100,000 soldier total force as effective and efficient as we can, and expect the resulting budget to be fairly flat. This leaves money, increased opportunity for investment, and a more coherent strategy than ever for our industry brethren. That should give rise to a positive view for the industrial base and affordability questions, in my opinion.”

Overall, Vane argues, the Army has a “more coherent modernization strategy today than it had for much of the past decade.”

“The plan has been developed in considerable detail,” he wrote. “It reflects a more or less flat budget and targets for platform costs in quantities driven by best estimates of the available supply of brigade combat teams to meet whatever national strategy evolves. Looking out at possible scenarios and strategies to reflect the range of possible alternate futures and operating environments, we have reversed the flawed approach of trying to optimize for any single possible future and put forth succinctly 'what an Army must do' and how it must do it operationally -- combined arms maneuver and wide area security per our published and widely accepted concepts.”

Vane write that the Army's new combat vehicle and network strategies are “nearly complete, reflecting affordable, integrated plans linked directly to capability gaps in the present force.” He states that the service's tactical wheeled vehicle strategy is “largely complete” and will be finished soon.

The Senate Armed Services Committee late last week voted to advance Air Force Gen. Robert Kehler's nomination to become the chief of U.S. Strategic Command.

If confirmed by the full Senate, Kehler -- who oversees Air Force Space Command -- would replace Gen. Kevin Chilton, who is retiring.

Kehler appeared before the committee on Nov. 18. President Obama nominated Kehler for the STRATCOM post in early September. Sen. James Webb (D-VA) had reportedly threatened to hold up Kehler's confirmation, but has since dropped those threats.

Appearing on a discussion panel with the majority of the service's four-star generals at an Air Force Association-sponsored conference in mid-September, Kehler had a tendency to answer a number of questions from the moderator like this: “I am humbled by the nomination and look forward to the confirmation process. Thank you.”

When asked to reflect on his three years at Air Force Space Command, he joked, “This is a little bit -- you know -- like the report of my demise is a little premature. I'm not dead yet.”

While Senate ratification of the follow-on Strategic Arms Reduction Treaty may still be in limbo, the uncertainty hasn't stopped the Missile Defense Agency from delineating how the winner of the multimillion-dollar Ground-based Midcourse Defense development and sustainment contract should operate under the terms of the pact.

According to the statement of work attached to the final request for proposals for the GMD DSC effort that was released this week:

3.3.4.4 New Strategic Arms Reduction Treaty - Vandenberg Air Force Base (CLIN 300, 301)

The Contractor shall be required to support New Strategic Arms Reduction Treaty (START) requirements for all activity involving GMD program on Vandenberg AFB, CA. The New START treaty would allow one (1) visit per year designated as a "Type II" inspection, and will require access to Bldg 6819 (Bunker #6) Igloo Storage facility. When a Type II inspection is identified, the Contractor shall provide 24-hr per day personnel availability to open and escort inspection personnel into the facility. The Contractor shall be available upon arrival of the inspection team on Vandenberg AFB CA, and be released upon formal declaration of the inspection team that it is complete with the inspection or have released the facility from further inspection, whichever occurs first. The Contractor shall also provide the capability to measure a booster/interceptor in Bldg 6819 (Bunker #6) to be able to provide proof to the inspection team that the booster does not meet measurements of an item of inspection (i.e. Minuteman or Peacekeeper first stage motor). Measurement methods and criteria are provided in the New START Treaty

3.3.4.4.1 Strategic Arms Reduction Treaty Exhibitions; Vandenberg Air Force Base (CLIN 300, 301)

The Contractor shall be required to support Exhibition requirements as outlined by the Seventh Agreed Statement in the New START Treaty. The Contractor shall plan for two (2) exhibition events, the first occurring within the first three years of the treaty entering into force. The second event will occur within the remainder of the 10-year life of the treaty. The Contractor shall also plan for two (2) mock-inspections, one each prior to each exhibition. For actual Exhibitions, the Contractor shall be required to open each of the five (5) GBI interceptor launch facilities, to include opening both silo closure mechanisms (both leafs), and the primary access hatch into the Launcher Equipment Room (LER). The Contractor shall provide appropriate safety equipment and gear to support viewing of the launch facility, both from above-ground view into the silo liner, and below-grade inside the LER and into the silo liner from the LER level. For the mock-inspections, only one (1) launch facility will be opened for access as described above for the exhibitions.

Defense Department agencies and components have failed to submit complete information about non-competitive contract awards to the Pentagon's public affairs office, prompting the defense procurement and acquisition policy shop to conduct periodic checks, according to a Government Accountability Office report released Wednesday.

The five-page GAO report states that acquisition rules require defense contracting officers to submit certain details about contract awards worth more than $5.5 million to the public affairs shop by the close of business the day before the date of the proposed award. The required details concern the contract, the contractor, the funding and the competition.

But GAO found that in August 2010 there was a "pattern of contract award announcements that lacked the information required to be submitted . . . for one or more categories." This incomplete information violates DOD acquisition rules and prevents full transparency, GAO writes.

"President Obama has emphasized transparency and openness in how the government spends taxpayer dollars," GAO writes in its report to Defense Procurement and Acquisition Policy Director Shay Assad. "Every military service and DOD agency that submitted a contract award announcement in August 2010 had at least one submission that did not meet the requirements."

Assad concurred with GAO's recommendation to heed the rules, stating that his office will issue a memo to DOD contracting officers reminding them of their responsibilities to include complete information when notifying the public affairs shop of contract announcements. Assad's office will also conduct "periodic checks" of the information provided to the public affairs shop by DOD departments and agencies, the report notes.

House lawmakers today passed legislation that would allow the continued funding of government operations at 2010 levels for an additional 15 days beyond the current Dec. 3 deadline. Republicans opposed to the bill argue the additional time should give the Democrat-controlled House a chance to pass a massive, trillion-dollar "omnibus" spending package for fiscal year 2011.

House Appropriations Committee Ranking Member Jerry Lewis (R-CA) didn't like the measure. According to a statement he delivered earlier today on the House floor:

As I have made clear time and time again, I am strongly, unequivocally opposed to any potential omnibus spending bill the Democrat leadership may be planning to bring to the House floor before the end of the year. Likewise, I remain adamantly opposed to extending the CR for the balance of the fiscal year at current spending levels which are, frankly, too darn high.

Instead of this last ditch effort by the Democrat majority to give themselves more time to spend taxpayer dollars, Congress should extend the CR until the next Congress. This would allow the new House Republican majority to begin putting our Nation’s fiscal house in order by completing the Fiscal Year 2011 Appropriations bills at 2008 levels, saving taxpayers $100 billion. In addition, we should immediately pass my bill, the "American Recovery and Reinvestment Rescission Act" (HR 6403), to rescind billions of dollars of unspent federal "stimulus" funding and apply it to deficit reduction.

At a time of historic deficits, record debt, and ten percent unemployment, I believe we owe our constituents more than the status quo. The message from the American people is loud and clear -- they want us to stop the explosion of government spending that is hurting our economy and our financial future.