Contracting out national security: connecting the dots of the media surge

Wow, the media is surging on the contractor front again. From T. Christian Miller's Los Angeles Times article comparing the number of US-paid contractors in Iraq to American military forces to James Risen's New York Times article telling us <gasp!> contractors get PTSD as well to Glenn Kessler's Washington Post article on shoddy contractor work on our biggest monument to public diplomacy to, finally (as of this writing), Renae Merle's Washington Post article on the government's failure to keep pace with managing and overseeing contracts. It makes NPR / American Public Radio's Marketplace query on private contracting seem all that more timely, doesn't it? (Not commented on here but also recently available is the CRS report on private security contractors, courtesy FAS.)

Sadly, the only new data here is T's story shedding light on the expanding reliance on the private sector to support the mission in Iraq. It's important to keep in mind T's focus on US-paid contractors because if you go beyond that select group, the number, according to the PSCAI itself (the Iraqi-trade association) sky rockets. At one time, the PSCAI acknowledged that for every private security guard they knew about, they were sure there was another they didn't. (By the way, T. Christian Miller is the author of Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq.)

Some quick highlights that caught my eye.

First, from T's article, the 180,000 breaks down to 23% Americans, 23% "foreign" contractors (mix of UK, Fijian, Colombia, Peruvian, Pakistani, etc., except for UK and other "First World" countries, these are your Third Country Nationals, or TCNs), and 66% Iraqi (or Host Country Nationals, or HCNs). But the number is incomplete, as noted above:

But there are also signs that even those mounting numbers may not capture the full picture. Private security contractors, who are hired to protect government officials and buildings, were not fully counted in the survey, according to industry and government officials.

The reliability question of outsourcing supply lines has always been a question dodged by supporters who (often rightly) say the drivers and frontline people will lay down their lives for the mission (see Schumacher's A Bloody Business for more on contract truckers). The problem is when management intervenes. This is the (alleged) issue behind the series of events that led to the take-down and mutilation of the four Blackwater contractors in Fallujah three years ago.

James Risen's article on contractors reminds us that contractors get PTSD just like the military does. Beyond the clearly stated issues of the civilian medical community being unprepared for treating combat-related issues, implied is the Wal-Mart cost-shifting model of business. Wal-Mart pays wages assuming the local and state governments will picks up the tab of a significant percentage of its employees (which they do, effectively subsidizing the low prices). In the case of contractors, they don't get insurance and while some are paid handsomely, many others are paid modestly. This becomes an increasing burden on a healthcare system that seemingly more frequently involves lawyers than doctors. (see related post on memorials to fallen contractors)

Not mentioned but implied by the numbers and important to keep in mind when considering PTSD, but more Americans are likely to know a contractor, security or not, than a current or former soldier, Marine, or sailor.

Back to T's article and criticism from the retired General William Nash captures some of the problem with the trend of outsourcing

"We don't have control of all the coalition guns in Iraq. That's dangerous for our country," said William Nash, a retired Army general and reconstruction expert. The Pentagon "is hiring guns. You can rationalize it all you want, but that's obscene."

While a little over the top, the fundamental is correct, as I've noted before.

One of the reasons often given for outsourcing is, as T quotes military officials, to "cut costs while allowing troops to focus on fighting rather than on other tasks." This is perhaps the biggest crock of bull. The cost-savings argument stem from the private sector's ability to provide "surge capacity" and to provide high-skill jobs. Only a small percentage of the 180,000 go over these two bars. The fact we're in a long war (capitalize it if you wish) and have been in Iraq now for four years hints at the real reason behind outsourcing: political costs of upsizing the military and fully involving the whole of government to stand behind its commitment (which starts from the top down).

Perhaps one of the more valid arguments for their use, not mentioned in the articles is their flexibility that is inherent in their ability to operate outside of the bureaucracy. Speaking with a senior member of the Bremer team when the Ambassador first landed in Iraq, I was told Blackwater was brought on because Bremer's team wanted more security without lapses caused by dinner breaks.

But critics worry that troops and their missions could be jeopardized if contractors, functioning outside the military's command and control, refuse to make deliveries of vital supplies under fire...At one point in 2004, for example, U.S. forces were put on food rations when drivers balked at taking supplies into a combat zone.

I wish T went into more detail on his example of food not being delivered. One important aspect is why the food conveys were so large: bases that resembled mini-Americas in large part because contractors made more money creating Hiltons instead of Motel 6's. More expansive offerings and increasing luxury not only requires bigger walls to protect and isolate yourself from the people, but bigger conveys to be targeted.

T could have mentioned the more important issue of the treasonous behavior of Custer Battles. At least the truckers were fearing for life and limb, Custer Battles jeopardized an important mission and the lives of soldiers for pure profit. (more on fraud here

Many people simply think DOD is using contractor, but State uses contractors as well, and for more than security.

"There are very few of us, and we're way undermanned," said one State Department official who spoke on condition of anonymity. "We have significant shortages of people. It's been that way since before [the war], and it's still that way."

(Undermanned? Hmm, really?) A problem of not having your own resources and going with contractors may not actually give you the flexibility you desire, as was the case with Bremer's security detail above. H.R. McMaster gave a vivid example of quality problems with the private contractor translators forced upon his unit and the inability to work around this deficiency last year.

There are multiple issues here. One is the nature of the contracts that permit companies to stay outside of the public oversight of their bidding, payments to them, and their operations.

The other is the failure of government to keep pace with the outsourcing. In the Custer Battles case, there was a telling moment when the general in charge of the money conversion project called Mike Battles into his office to have Battles explain why the contracted trucks weren't operational, among other significant apparent failures to perform. Tell me, why is the general spending his time doing this? Why doesn't he get on the horn and have the contract officer deal with the issue so the general can do more important work? I'll tell you why. It's the same reason base commanders have no idea how many contractors are working on their base nor any real substantive means to deal with them. The contract officers are virtually non-existent, without representation in the field or points of contact available to local commanders.

This basic failure to provide oversight is the core message of Renae Merle's Washington Post article, Government Short of Contracting Officers. The Coast Guard is lucky to have Cathy Martindale doing what she does and a leadership that eventually listened to her. Notable are these numbers:

The Defense Department's civilian acquisition workforce has shrunk by about 40 percent since the early 1990s and now has about 270,000 employees, according to Pentagon statistics and Government Accountability Office reports. Yet defense spending on service contracts increased 78 percent, to $151 billion, from 1996 to 2006, the reports said.

Contractors are de facto project managers in the absenc e of adequate controls by the government.

Coast Guard officials found that Lockheed and Northrop were making too many decisions on their own, with little government input. In addition, the Department of Homeland Security's inspector general noted in a report last year, the Coast Guard struggled to review documents within the 30 days the contractors allowed. Sometimes, when the service missed the deadline, Lockheed and Northrop may have moved ahead with their plans, leaving the Coast Guard to accept the work or try to change it at additional cost, the report said.

embassy Glenn Kessler's article on Construction Woes Add to Fears at Embassy in Iraq hammers this point without mentioning oversight. Well, actually he does when State's Overseas Buildings Operations (OBO) unit gets involved and defends what is shoddy work by somebody, but that's another story that will likely come out when somebody retires from being a public servant.

The main builder of the sprawling, 21-building embassy is First Kuwaiti General Trade and Contracting Co., a Middle Eastern firm that is already under Justice Department scrutiny over alleged labor abuses. First Kuwaiti also erected the guard base, prompting some State Department officials in Washington and Baghdad to worry that the problems exposed in the camp suggest trouble lurking ahead for the rest of the embassy complex.

The first signs of trouble, according to the cable, emerged when the kitchen staff tried to cook the inaugural meal in the new guard base on May 15. Some appliances did not work. Workers began to get electric shocks. Then a burning smell enveloped the kitchen as the wiring began to melt.

Failure to oversee the Embassy project, as Cathy Martindale did, has made the latest Crusader Castle to become an even greater joke and waste of money.

Hopefully, since the US Government is the client, more will be done than when another contractor, a Texas company, stiffed the Iraqi government, as the Wall Street Journal reported back in May (sub required, available here w/out subscription req'd).

In this case, Southeast Texas Industrial Services Inc. won a $283 million contract to build a 500-megawatt plant, plus an adjacent refinery that would process much-needed fuel for other nearby electricity plants. Southeast, with 2003 revenue of $250 million an no experience overseas or in a war zone, landed the contract with only a few days of negotiation. Did this receive news coverage? Not so much because the client is Iraqi.

The reality is, however, the client is still the United States because we're doing the rebuilding and it's our national security and our image at stake here. Failure to be as efficient as possible, to satisfactorily complete the construction and make usable schools, police stations, power plants, and every other element of infrastructure is essential. All of the articles go to the same point: America's resources are not properly being marshaled. Our last "last three feet" of engagement is too often haphazard with the agent focused more on profit than the core mission of the principal.