one of the things we are trying to understand is what sort of visibility is possible, and what sort of disability do you need. there are implications other than cost. thank you. my time is up. >> mr. irvin. >> i just have a couple of questions. going back to the november 20th, 2009 letter from kbr dcaa. you both reference it in the last round of questioning. . . >> these were briefings that were taken to the third expeditionary support command and discussed. >> so it was discussed at a lower level and never elevated to the attention of higher authorities? >> it was discussed at the right level because the third esc is the group that makes the decision or provides the data to other personnel on exactly what they need to do their mission. so it was at the right level. the discussion was that the right level, and as i explained , there were four opportunities where these discussions occurred. >> it is your legal position that irrespective of whether there was ever a response to your bringing this to the government's attention that you did not have the legal, lateral right to descope. is that your legal position? >> i don't know if that is a legal position. i think it is from our understanding of our contract and our ability to do what we have got to do. we must have direction from the government' to take it off. >> bringing processing to the government's attention is a criterion. >> it is, sir. >> how much in the way a board feet has kvr gotten on the basis of that criterion, cost savings, approximately? >> sir, i do not know that. at my level, i do not see that. >> all have to get you that information. >> have you gotten any? >> yes, sir. >> can you hazard a guess? >> i prefer to not hazard a guess, but i will be happy to give you the exact details and forward them todato you. i am not going to make a guess, because i will be held accountable for that gas until the cows come home. >> how much has kvr been awarded over the contract life. >> once again, i will get you the specific number. bixby have a ballpark -- do you have a ballpark figure for that? >> i just want to seek clarification on what i think i heard. we asked for those four examples. are we talking apples and apples? you are now saying there were probably done at the local level informally. >> before examples -- >> you said you had gone back and communicated foretime, and you are now saying -- lower level to me, the request still stands. if it was informal, tell us is informal, because that way you are not going to leave what was to me in notification. we all talk about communication between the government and the company. notification is at a minimum an e-mail or some kind of attachment to a report. if it is this someone saying by the way -- >> no sir, that is not the case. just let me explain the structure that went on. >> very nice. >> at the site level, you have a site manager and a deputy project manager. i know that two of these were the deputy project manager for support, who went to the third esc, in some cases to the support ops officer, and other personnel in that organization. the people that were notified were the proper people to be notified, other than the commander. >> that is all neatly laid out. what was said, who was notified. >> what is your testimony that there was not a direct from management of your company to the higher ups in dod? >> not to my knowledge. >> first of all, to go backs to the subject which i think if you no pain at all, which is assuming you'd do win as you hope to, the basic life-support for half of iraq, if i rephrase my previous question, you expect a lot of turmoil in behalf of iraq would win if you were transitioning to yourself. it would not expect a lot of turmoil in that, would you? >> no, sir. >> we would not expect a lot of turmoil. we would have to -- >> and understand there is property and so forth. i understand the project on government oversight is sending a letter to the department of defense on this issue, the potential canceling of competition. earlier there was a mention of protests, as if that was a big problem in what has strung out the length of it going ahead. am i correct that in the competitions that are occurring, there were no protests in kuwait, there are no protests in afghanistan, and on the ctp part in iraq, there was a protest but it has been withdrawn. in the task order of competition, there have been no sustained, continue protests, have there? >> mr. commissioner, that is correct. there have been no sustained protests. >> earlier you discussing and 11% under utilization figure. you discussed whether you had raised it, whether you had an opportunity to deal with the underutilization. there is a link the discussion between you and dcaa and the statement of condition and report which closely parallels the order. that is what commissioners were reading from earlier. if i understand the dialogue between you and dcaa, after they had their three months -- after they had their six months figure for the 11% underutilization, they, the government, ask you to put forth a proposal for dealing with underutilization, and you descoped as they instructed you, and it did not have much effect on the underutilization. >> could i just correct the gentleman? it is 89% to underutilization, 11% utilization. >> thanks, i am sorry i am not being clear on that. in english we call that idleness, charging while no work is being done. the response that dcaa says is, while the contractor maintains that it took the initiative, that is the july 2008 step youtube, our order determined that the contractor could have been more proactive. based on discussions, the contractors lack of transparency an initiative resulted in missed opportunities for cross savings. then there is some more discussion of that. in addition, it could have proposed cost savings initiatives as soon as it became apparent that so much idle time was being charged to government. this audit is forward-looking, and the contractor now has the opportunity to achieve significant savings by working with the government to right size the clss function. wasn't it within your power in august 2009 not only to do if you put forward the proposal that matched what the government asked you to, but to put forward a proposal for larger savings? and now you have the statement of condition, which you have had for some time, will you make a proposal that would substantially cut the level of underutilization? and when would you hope to do so by? >> first, mr. commissioner, in may of that year, the third esc was developing a change to the method of operation for its maintenance support teams. that proposal was provided us of believe in june, where we began then, based on their change to the organization and the low utilization, in an effort to get higher utilization, and this process was called maintenance support teams. these maintenance support teams reduced, as you pointed out earlier, a certain number of mechanics and positions that were there. that operation went into effect in july of 2009, and that is the system we are working under. but to the larger question, if that system or that reorganization as they directed is not working and we continue to see underutilization, then yes, we will. >> i want to follow up. the commissioner of brought up that when she and i were in iraq, there was dialogue between mr. warner and us -- between mr. horn and us about the people who had not been counted. in your description, you left out today that this was originally brought to your attention. it was not self discovered, it was brought to your attention by the defense contract audit agency. i see by going back to our written notes that you did yourself know that and you brought it up at your time. i just want to check with you. i understand that you did not put the 7100 in a report before the dca caught you, but after that, you were willing to put them in. it reminds me of the old story about the man who said yes it was true, i was speaking before the officer comic, but i am certainly willing to stop speaking out. -- before the officer caught me. would you comment if it is true that the dca down this before you did? >> on the day that this happened, my deputy program manager for support -- we prepare a report every saturday. we basically do the work on friday and saturday, and on sunday we finalized and presented to the government on monday at 9:00. saturday or sunday, he brought in to me and said basically, we have got a problem. i said ok, what is the problem? looking at a camp that was closing, we saw that the number of people that we were accounting for as they support the contract functions -- i do not want to get too deep into this. there was an additional number that was there that we had not seen before, which, in essence, was the subcontractor's administrative people that provide him the overhead to run his camps. so the decision was to me, what do you want to do? i said, have reworked the numbers? have we looked at the numbers? do we know this is accurate? the bottom line was, on that day at that time, i said report it, because that is the proper thing to do. now in hindsight, i did not have the time, or did not go back and do the detailed analysis that i should have done, ok? and so that is how the 7100 -- >> excuse me, i still have not figured out. did there dca communicate to you are not? >> no. texted to tell us that they had? >> i don't believe i did. >> my notes of what you said to us and what the dcaa told us must be wrong. we believe this. it is a small point. >> i thought it was a trifecta. i thought it was a contractor oversight of the work force. it is not a criticism, because it is going to lead to the issue i am most interested. i thought the second thing was the failure of the government's to accurately analyze and negotiate and contract the work force and the failure of the government to oversee it. it really starts before that. i guess it is a superfecta. first off, the government comes to you and says this is what we would like -- the service we would like you to provide. i am talking about the maintenance facility. my understanding is you then work of what you think those needs are, then dod, the army, the third part is going to look a your work and say fine, go with that, and then four, now you are operating, and is their proper oversight? do i have those four points pretty accurate? >> yes, sir. >> my question is, basically, working around 10% to victim% of utilization around instead of 85%, what should be the mechanism to deal with it? i am struck that it should not be you all contacting the folks just in the field. it seems to me your folks should say we are not being used well at all. this is a waste of our time and the government's money. so what would you be suggesting that we as a commission that our boys to in trying to deal with this issue? -- add our voices to? >> the mechanism was there. it was not functioning. the things that were wrong, from my perspective -- the mechanism is that dcaa oversight for the administration of the contract, and the second thing is teh cors they talked about earlier. whether they were there, i do not know. >> let's just say they saw the underutilization pretty early. would that be coming back to you and saying we need to renegotiate the contract? or is there a mechanism to say that you need half the people or one-third of the folks? >> yes, sir. there was another issue with this whole process where there was not specific requirements to report to the customer the utilization rate, and it was going to dcma. in one case it was going to the marine expeditionary force. so the customer who should of been watching this probably did not know it, and as a result of that, i am unsure how dcma was working with it. i don't know if they were telling the customer are not telling them. we had a statement of work as we had it, it was emphasized as it relates to tell me about what you are doing, and here is the data i wish to see every month or every week by the functional areas. >> so is your statement basically that nothing new needs to happen, we just need to do a better job of doing it. tell me, would it make sense for there to be requirements >> let me make sure of this one. first off. you are being asked to determine the basic utilization rate. is that in the contract, or is that just a goal that is not in the contract? >> to my knowledge, it is not in the contract. what is in is the army department goal -- is 85%. we would expect ideally to see a usage rate of 85%. >> see you are merely saying we should figure this number at an 85% utilization rate. let me just ask both of you to answer any question you wish was asked and make any comments you wish to make about whatever has taken place at this hearing. >> we want to thank the commission for asking us to come here today. a couple of key points i want to stress. the first is the and predicted it -- the unpredictability in the nature of the war. there is difficulty in applying a standard government contrasting approach in a war zone, because of the inherent lack of predictability in the day-to-day operations. we strongly believe, speaking with one voice within the government is important. we think it assists in the efficient operations of these types of contracts, and while we have stated in today's hearing that we need better oversight, i mean better insight and more details to the military's plans for the brought down, we fully understand what we have not gotten that level of detail to this date, and we do feel that when we absolutely need the information, we will get the information. and that is really the main points i would like to summarize with. >> i just got reminded, i said dcaa. dcma has the order. i apologize. just so you know, my approach to what i am trying to do out there, and what i am doing, is to improve the efficiency and effectiveness of logcap iii operation. it is tough. it is a big operation. has been there a wall. we have done a number of things to improve our quality program and to begin a new beginning which is helping us do what you are asking us to do. we have proposed to the army, and you will see in the briefings you have already been given, a number of proposals that we think they should consider as a part of the drawdown process that we can begin now to cut back. we can reduce the number of those who are there and we have made those proposals. we can reduce other areas which we have put forward to the army, and i must say they are embracing a good number of these. they are in the process of looking at all that in an effort to reduce the cost of this contract to the american taxpayer. i am driven by getting it done as efficiently and as effectively as we can. i instituted the personnel reduction and realignment program in an effort to take a look at the layering and the number of people we had on the contract, and apply some efficiency factors to look at reducing the size of this contract. in all of this discussion, we have not had a chance to really get into those things within reasons of the time. but what i want you to know is, kbr is, in fact, doing the work to improve the efficiency of our operation and as you asked us to do, come back and tell me, are there other areas i need to be looking at? we are doing that with the right now. >> thank you. i think that is really important. when you put that documentation package together, those areas that you have provided to your customer, and who that is, then we will come over and sit down and be sure we understand it. >> thank you both for coming. i think the commission knows it is impossible to be perfect. we tend to be more responsible to those -- thank you both very, very much. this hearing has adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this week on america and the courts, a moot court on a hypothetical case on whether non u.s. citizens can be denied a life-saving vaccine. judge pratt cavanaugh of the d.c. circuit court of appeals and ken starr will take part. that is today at 7:00 p.m. eastern here on c-span. coming up sunday on "washington journal," a look at the health care law with jonathan strong of "the daily collar." later, stephen lane of georgetown university on how presidents learn the job of a presidency. "washington journal," live at 7:00 a.m. eastern here on c- span. >> c-span, our public appears content is available on television, radio, and on line. you can also connect with us on twitter, facebook, and youtube. and sign up for our schedule alert e-mail's at c-span.org. >> the congressional budget office report indicates the potential rise in the federal debt to 90% of the nation's gdp by 2020. a discussion on the report from today's "washington journal." >> "washington journal" continues. host: we're going to be talking about that. current federal spending projections indicate a rise in the federal debt to 90% of the nation's gdp by the year 2020. talking to us about that is andrew biggs of the american enterprise institute and christian weller. andrew biggs, for the sake of this discussion, tell us the difference between the deficit and debt and how they're related. guest: the deficit is the shortfall of the federal government on an annual basis. the cbo says that we're going to run a deficit of about $1.50 trillion. that means we're spending $1.50 trillion more than we're taking in in taxes. the-you see accumulated deficits from all prior years plus interest, including fisher. when you looked -- including this year. it will give a scale of the ratio of the two and the country's capacity to carry that debt. host: christian weller, your thoughts about the relationship between the debt and the deficit? guest: at this point, the numbers are theory. we do not really have to run for the exit at this point. there clearly is a message here underlying what we get from the congressional budget office that we ultimately have to get a handle on the situation. we're looking only 22020, 10 years out. the picture does not get all that much better beyond that. health care reform helps a little bit. we have massive amounts of debt piling off and that puts the country before some hard choices. do we pay for the baby boomers' retirement or do we pay the debts in interest payments to the people web lead us the money?
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