Quadrennial reviews expected from the Defense and State departments might offer insights into the role contractors will play in helping the departments fulfill their missions.
The Defense Department’s 2010 Quadrennial Defense Review (QDR) is slated to be released in early February. It will be a critical document that offers real insight into the department’s vision and direction, and it will affect nearly all of its internal and external stakeholders. Similarly, Secretary of State Hillary Clinton has launched a first-ever Quadrennial Diplomacy and Development Review (QDDR), for the State Department and U.S. Agency for International Development, which will set forth the administration’s vision for diplomacy and development assistance.
Given the evolving “3-D” strategy — defense, diplomacy and development — including but not limited to Defense Secretary Robert Gates’ recent proposal for funds to be jointly administered by DOD and State, the combination of the QDR and QDDR could have particularly significant and unique cross-cutting impacts on companies and nongovernmental organizations that support those missions. Agreement and alignment on planning, coordination, decision-making, control and other key issues are central to the successful implementation of the strategies set forth in those related reports.
The reports also might address the role of contractors. DOD already has embarked on an effort to rebuild critical in-house skills and enhance its acquisition capacity at home and abroad. Whether the QDDR will propose a wide-ranging restructuring of USAID and its strategic missions remains an open question, although Clinton often has stated her desire to rebuild the development capacity within USAID. Some have interpreted this to mean that the agency will embark on wholesale insourcing, even though USAID, the world’s pre-eminent source of development assistance, has long executed the delivery of development assistance through a combination of grants and contracts with companies and NGOs.
The secretary also has said that contractors are inherently more expensive than government employees, even though contractor labor scales under USAID development contracts are capped at rates tied to government salaries for the same or similar work and most of the remaining incurred costs — benefits, equipment, travel and pay premiums for deployment to a hostile zone — are applicable to government and nongovernment performance. And there is always the issue of the agility of companies and NGOs to quickly shift and adjust to meet exigent requirements in various countries.
It is also possible that the QDDR will address the relative balance of work to be performed by companies, via contracts, as opposed to NGOs, via grants. Although the secretary will appropriately demand increased accountability and transparency for all contracts and grants, one key question is how the relatively lower levels of accountability and transparency associated with grants will be measured against the more significant levels of accountability and transparency found in contracts.
Another critical question that must be addressed is how the transparency, accountability and effectiveness of grants and contracts are measured against providing assistance funding directly to host nations' federal and local governments and entities, as has been proposed for Pakistan, where U.S. standards for transparency and accountability are almost nonexistent.
The QDR and QDDR will outline long-term strategies for U.S. military, diplomatic and development activities. At the direction of Congress, the Homeland Security Department also is conducting a quadrennial review, the QHSR, which will play a similar role in establishing the strategic groundwork for DHS initiatives and missions. Some argue that history has shown that, despite the energy and resources that go into its creation, the QDR generally has a relatively short shelf life. But however long its shelf life or that of the new QDDR or QHSR, the impacts could be felt far and wide. As such, it is critically important that all stakeholders be fully engaged throughout their execution.