Resourcing operation Iraqi freedom: magnitude and complexity: operation Iraqi military comptrollers face a multitude of unique funding challenges.

Operation Iraqi Freedom (OIF) is undoubtedly the most complex and challenging fiscal environment in our nation's military history. As a full-spectrum, contingency operation it concurrently transcends both the kinetic fights (that is, those involving use of destructive force) and the non-kinetic fights and ranges from the tactical to the strategic level of war. By its very nature, it is one of the most dynamic international security endeavors the U.S. government has ever had to resource. To have a full appreciation for the magnitude and complexity of resourcing OIF from a "boots on the ground" perspective, it is instructive first to consider the challenges with regard to the magnitude and distribution of funding at the national level and then to consider issues unique to war and the Iraqi conflict.

Major Challenge: Magnitude and Distribution of Funding

In the twentieth century, the survival of the United States rested upon its ability to defeat its enemy in a conventional force-on-force conflict and then, later, to counter Soviet threats of a nuclear showdown. The distribution of federal spending was appropriate for the security threat that we faced in the post-World War II bipolar world. The superpower with the most lethal armed forces would prevail ... and did.

The end product of our twentieth-century federal spending is a disproportionate distribution of the discretionary budget into the military element of national power. This spending far exceeds any investments the U.S. government makes in the diplomatic, informational, and economic elements of national power. In 2006, for example, the budget for the State Department and other international programs was less than one-tenth the size of the Defense budget. With such a resourcing construct, which persisted throughout much of the prior century, the U.S. government is neither organized nor resourced to conduct full-spectrum operations and nation-building to the magnitude required in Iraq. So the challenge becomes one of making a military-centric distribution of resources work in such a way that there is a more equal distribution across the other three elements of national power.

This is not to suggest that the U.S. government should redirect some of the Defense budget to the other lesser-resourced owners of the other three elements of power. Rather, separate investment in them is needed so that when they are called upon, these institutions are fully able to contribute to the mission. In that way, the government will achieve a better balance of security funding.

While spending distribution remains an issue, the United States government has already partially reengineered itself by attempting to reorganize in order to confront twenty-first century threats through actions such as the creation of the Department of Homeland Security. However, changes of this magnitude take years--if not decades--in order to realize their full benefits. Over time, given the correct distribution of federal spending, with focused investment in the lesser-resourced owners of the elements of national power, the United States well could become more effective and better prepared to address the full-spectrum nature of the twenty-first century threat.

For now, however, this national-level resource distribution construct, firmly embedded in years of Cold War geopolitics and superpower posturing, creates a resourcing challenge for OIF. This challenge adds to an abundance of unique resourcing challenges that characterize the everyday comptroller operations of the Multi-National Corps-Iraq (MNC-I).

Shifts in Requirements Add to Challenges

Requirements Generation--Ebb and Flow

Even though the United States is in its fourth year of OIF, the belief that there is a normalized, steady-state environment that would allow for the warfighter to articulate his total annual requirements could not be further from the truth. Daily, the OIF operations and sustainment requirements change. Commanders must make resource decisions based upon a variety of factors--many of them outside their span of control. And the enemy gets a vote!

The fluidity of requirements does not obviate the need to try to generate an annual budgetary projection. It should, however, provide one with an appreciation for how frequently and unpredictably the operational requirements can and do change. This manifests itself into an ebb and flow of budgetary requirements that can change the program's requirements by hundreds of millions of dollars with one or a series of operational decisions.

Case in point: The recent decision to extend a Stryker brigade's deployment is projected to increase the command's annual budget by $60 million to $100 million. Operation Iraqi Freedom is replete with examples of how the rapidly changing threat environment and those full-spectrum capability voids drive the commander to make resource-intensive decisions across all lines of operations to source operations for which he had no visibility when the command submitted its annual command operating budget.

New System Fielding

Operation Iraqi Freedom has seen the fielding of hundreds of new systems--from add-on armor for wheeled vehicles and several unmanned aerial vehicles and intelligence, surveillance, and reconnaissance platforms to the advanced combat helmets/modular integrated communications helmets and enhanced small arms protective inserts plates. Many of these systems were made available through a rapid fielding initiative. They were fielded with partial testing and without any clear and mature idea as to what it would cost to sustain them. These unknowns equate to budgetary unpredictability at all levels. The lack of any historical data by which to cost out the operation and maintenance of these systems leaves program managers--and the field--with some vast unknowns on how to forecast accurately the annual cost of operating these systems in combat.

Monthly Budgeting a Way of Life

Rapidly shifting requirements demand a monthly budgeting cycle. Under this approach, units submit their requirements on a spend plan, and funds then are distributed and executed every 30 days. This requirement affects virtually every military command located in Iraq because in OIF, MNC-I is the Title X headquarters for the theater. As such, it budgets for all military units using Army operation and maintenance (OMA) funding to conduct their operations. While monthly budgeting is manpower-intensive, it is necessary to ensure that a unit is resourced for immediate needs that often are not foreseeable even 20 to 30 days prior.

OIF Realities Create Additional Challenges

Personnel and Organizational Turbulence

Personnel and unit turnovers in OIF have a significant impact on the command's resourcing operations. "TOA (Transition of Authority) Season" is a highly turbulent time for a command at every level and from every angle. Because of the technical nature of resource management and most people's unfamiliarity with resourcing contingency operations in OIF and sourcing nontraditional military capabilities, comptroller personnel turnover is especially challenging. Comptrollers must conduct deliberate planning and coordinating to facilitate a smooth handover of responsibilities while concurrently supporting the ongoing combat operations. A unit's TOA and/or frequent Worldwide Individual Augmentee System personnel turnover manifests itself in a continuous, steep learning curve, unlike anything a comptroller would experience at home station.

Cash or No Deal

The Iraqi banking industry is hamstrung with a history of distrust and oppression, adding an element of complexity to already complex business practices on the ground. Business transactions in Iraq are conducted on a cash basis with non-U.S. vendors. There is no check-cashing, use of a credit card, or electronic transfer of funds when purchasing something from an Iraqi vendor. Either you have U.S. dollars or Iraqi dinar, or you don't conduct business on the local economy; and for an Iraqi to have U.S. dollars in his shirt pocket could put him at great risk.

There is no central banking system per se. The Iraqi banking system was maintained by the Saddam Hussein regime to be this way as a mechanism of control over its people. This manifests itself not only in an incredibly inefficient way of doing business and providing for ample opportunities to receive backsheesh (a culturally expected, small monetary gift or business kickback) but also ultimately in a lack of international commerce. International businessmen wanting to do business with Iraqis must find innovative ways to exchange payments, often through other countries' banks. This renders problematic many fiscal initiatives that the U.S. considers routine in their implementation. For our soldiers on the ground, it has a host of implications, most evident in the requirement to transport large sums of cash around the battlefield.

Daily Business Very Different from Home

Resource managers at the division level and below face a completely different problem set than what they experience back at home station. Field ordering officers, project purchasing officers, pay agents, warranted contracting officers, interpreters, and cultural advisors are only a part of the daily challenges. All acquisitions and projects valued at greater than $200,000 must be first staffed through one of MNC-I's Requirements Validation boards and then approved at the Corps headquarters before they can be funded.

Comptrollers primarily use OMA funding for their daily needs, but several unique authorities and sources of funds (Rewards, Commander's Emergency Response Program, bulk funds, detainee release payments, Transition Team Integration Funds (TTIF), Iraqi Security Force (Quick Reaction Force) funds, etc.) also are used daily and add a complexity at the tactical level that cannot be experienced elsewhere. Tactical comptrollers will quickly need to master the intricacies of the "fiscal triad" (resource managers, finance officers, and contracting officers) to be effective in this maze of authorities and funding streams. The magnitude and complexity of this resourcing equation at the tactical level are unprecedented and are partially by-products of full-spectrum capability shortfalls replete across OIF. To mitigate this, up-front and in-depth training and study before deploying to OIF are imperative.

Heavy Dependence on Contractors

The size and complexity of OIF contracts add yet another complication to this war. It is an understatement to say that OIF is a heavily contracted operation. Well over half of what the command spends from its OMA account goes to pay contractors for goods provided and services performed.

The largest contract by far, the Army's LOGCAP (Logistics Civil Augmentation Program) contract, provides for the life support of over 130,000 U.S., coalition, and civilian personnel serving in OIF and a variety of Corps Logistics Services Support and Troop Transportation Mission functions throughout Iraq. The magnitude and complexity of this contract alone require a full complement of managers, accountants, auditors, etc., to ensure that it provides the warfighter with the support he requires in the most effective and efficient manner. The U.S. Army, however, by design chose to depend on this large life support contract because it would prove to be less expensive when spread over a longer period of time when the operational tempo of the Army would ebb and flow between peace and small isolated conflicts to a full-spectrum ground campaign.

Other heavily contracted areas include new equipment fielding, sustainment, and maintenance. Virtually every new system fielded by the US. Army is operated, serviced, and maintained by a contracted workforce. Much of the counter-IED (improvised explosive device) fight and force protection operations today are sourced with a contractor-based workforce. While these can be considered military-centric, several other heavily contracted efforts are clearly to compensate for the full-spectrum capability voids resulting from years of Defense-centric federal budgeting. This is most evident in the areas of information operations, cultural advisors, and C41 (command, control, communications, computers, and intelligence) operations, all sourced through a series of contracts that compensate for the absence of this capability in the uniformed ranks, civil service, and the interagency.

Bottom Line

In sum, OIF comptrollers should first understand how the historic distribution of the federal budget complicates their resourcing efforts on the ground in Iraq. Comptrollers then can focus on learning the wealth of information that they will need to know to handle the complexities and challenges of OIF.

Yet despite the challenges and complexities, the basic process of funding military operations remains relatively constant no matter where you go--formulate the warfighter's requirements; prioritize and defend them; fund and execute them; and, in a contingency environment, do all this simultaneously. The keys to success also do not change: Stick to the fundamentals; keep it simple; fully integrate the fiscal activities into everyday business processes; and keep the fiscal law team within earshot.

If a deployed comptroller can do these things, he can overcome the magnitude and complexity of the challenges that await him in Iraq and do what he was sent to do: Resource the warfighter for full-spectrum operations.

The points of view found within this article are solely attributable to the author and not to any organization or institution with which he is associated.

Colonel Thomas A. Horlander, CDFM