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REP. SOLOMON P. ORTIZ (D-TX): Thank you, Mr. Chairman.

Thank you both -- Admiral, good to see you -- for being with us today. I hope that maybe you can elaborate on my question a little bit.

But recently a memorandum of agreement was agreed between the Department of Defense and the Department of State regarding civilian contractors on the battlefield. And can you discuss which of your agencies are the lead element, how the guidance is being implemented, and an update on overall execution of the agreement? And I go back to your statement that you made, Mr. Secretary Gates, where you say that, on page 2, the Department of Defense would no more outsource these substantial and costly security requirements to a civilian agency than it would any other key military mission.

But going back to the contractors, I don't think that the contractors, when we have 200,000 contractors in Iraq and 140,000 soldiers -- I think that they have left a bad taste in the mouth of many people. But maybe going back, maybe you can elaborate as to the memorandum of agreement between both departments.

SEC. GATES: Let me start. First of all, the memorandum was worked out principally by Gordon England and John Negroponte, our respective deputies, and it was worked out to the complete satisfaction, I think, certainly of General Petraeus, and, I believe, also of Ambassador Crocker. And we fundamentally changed the way we do business with respect to security contractors in Iraq.

The MNF-I now has representatives in the operations center where the security details are deployed, or where assignments are made for them to be deployed. We have full visibility into where the -- when the convoys are leaving, where they're going, who they're carrying. General Petraeus and his people have the authority to stop one of those to deconflict it if there's something going on that they know about someplace else.

And so I would say that while State is still doing their own contracting in an operational sense, the lack of visibility that was part of the problem before the Blackwater incident, as far as General Petraeus is concerned that problem has been solved and he's quite satisfied with the arrangement that exists today.

REP. ORTIZ: Madame Secretary.

SEC. RICE: I would agree with the comments that Bob has just made.

I would also say that in terms -- we have some technical fixes, as well, so that we can monitor and have a record of what has gone on, for instance, in an incident. We have improved the capability of our own diplomatic security agents to be a part of the teams in these complex security operations.

I think it's fair to say we could not do our work without the security contractors. We would never be able to have enough diplomatic security agents. And I don't think this is really something the military wants to take on, which would be guarding civilians going -- diplomatic personnel going from place to place. But I do think we've come to a good modus vivendi for working through the problems, and to my knowledge, at this point it is a system that is much better.

But I will be -- I must say we're going to have to monitor and we're going to have to get a report back as to how it's working, because there were significant problems with it.

And I myself hope that the changes that we made have fully addressed those problems. But I await the first full reports, after several months, to be certain that that is the case.

SEC. GATES: I would just add, Mr. Ortiz, that I in fact had asked General Petraeus to give me a report after 30 or 60 days. And I have that first report, and he was quite content with the way things were working.

REP. ORTIZ: Thank you. Just another short question now.

You mention about the necessity of engaging some of the countries, the surrounding countries. Have we started working on that?

And what signals -- you say that we need to do some engagement, but when do you begin to these engagements? I mean, what signals are you waiting for, for us to go in there and to engage these countries?

SEC. RICE: Sorry, I didn't -- do you mean in regards to Iraq? Or --

REP. ORTIZ: We're talking about countries like Syria, Jordan and the surrounding --

SEC. RICE: Oh, I see. The neighbors in effect.

REP. ORTIZ: Yes.

Are we doing something now? And what signals are we expecting if another conflict arises before we get involved, before we enter negotiations or contact with those countries?

SEC. RICE: Well, we have in fact engaged and continued to engage Iraq's neighbors through a neighbors conference. We believe it's best to do this in a multilateral setting where Iraq can represent itself.

I will in fact go to one of these meetings next week. That's being held in Kuwait. And it has a plan of action in terms of borders, refugees, security concerns. It now has a small steering or secretariat that works on these concerns.

So I think Iraq's neighbors are engaged. But we have thought it better to do it in a multilateral setting rather than just bilaterally with the United States.

REP. ORTIZ: Thank you, Mr. Chairman.

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