IRAQ: Civilian Contractors Working for U.S. Make a Bundle to Destroy Munitions

The Army Corps has set aside as much as $1.47 billion for explosives-demolition contracts with 10 private companies. Neither Zapata Engineering nor the Army Corps of Engineers would reveal exact salaries, but the first one-year contract the company recei

Soldiers, diplomats and private contractors in Iraq are all putting their lives on the line.

But should anyone be paid $350,000 a year to work in Iraq?

That's the basic labor rate for a liaison officer under the contract that the U.S. Army Corps of Engineers awarded Charlotte's Zapata Engineering to help dispose of captured munitions. It's 10 times what the average soldier or member of the National Guard earns, even for full combat duty.

The Army Corps has set aside as much as $1.47 billion for explosives-demolition contracts with 10 private companies. Neither Zapata nor the Army Corps of Engineers would reveal exact salaries, but the first one-year contract the company received in September 2003 totaled $3.8 million for five management positions in Iraq.

The single liaison officer cost taxpayers not just the $350,000 in salary, but $850,000 in overhead, insurance and profit costs, according to a Winston-Salem Journal analysis.

Four project managers were budgeted for a total of $2.7 million, which includes $275,000 in annual pay for each and a total of $1.6 million for overhead, insurance and profit.

Those figures do not include security, food and lodging, which were provided under separate contracts. In February 2004, the Army Corps of Engineers awarded Zapata another one-year contract worth $32.5 million to hire as many as 108 technicians and support staffers to oversee a munitions depot in Iraq.

Today, two flags fly over the depot - the Stars and Stripes, and Zapata's blue corporate flag. The Army Corps of Engineers says that Zapata is doing an outstanding job on a dangerous and urgently needed mission, because every destroyed munition is one that can't be used against U.S. troops. Unlike with some Iraq contracts, partisan politics is not an issue. Zapata officials have a history of making contributions to Democrats, if at all.

And people within the explosives demolition community note that many experts who had already gone into private-sector work after putting in their military time are risking their lives to help out the war effort, even though they are under no obligation to do so.

Still, no one seems to have figured out whether outsourcing jobs that traditionally were handled by the military is a smart move for national security or a solution with many hidden costs - political and financial.

"It's something that clearly needs to be looked at," said U.S. Rep. Mel Watt, D-12th. "You can't blame Zapata - he's doing what he's in business to do, make a profit. But if it's a military function, and it can be done more cheaply by the military, it seems to me it should be done by the military. Not doing it with the military leaves the mistaken impression we need less forces than you're actually using."

Unlike soldiers on the battlefield, who are expected to do their jobs and protect themselves, too, private contractors require protection by separate security forces. That concerns U.S. Rep. David Price, D-4th. He has introduced a bill in the House to clarify the issues regarding private contracting. The Government Accountability Office is also studying the issue and is expected to issue a report this year.

"I think there's a lot of misgivings in the military about it," Price said, "and for that matter, a lot of misgivings among the contractors," who aren't sure just where they stand in the entire war effort. The U.S. military is under no obligation to respond to a distress call from a private contractor.

Price said that, beyond the prices being paid to contractors such as Zapata, the pay disparity between private contractors and members of the military can be "ridiculous - it's demoralizing for the military. It's expensive. That's why I want to see some minimal analysis in creating these positions."

In Zapata's $32 million contract extension, security forces accounted for 50 of the 108 positions, but there's no way of telling the exact cost to taxpayers. Firms such as Blackwater Security Consulting of Moyock, N.C., have reportedly offered as much as $1,000 a day for former special-operations personnel to provide private security, compared with about $150 a day that the Pentagon pays a Green Beret with 20 years of experience.

Changing policy

The need for the work Zapata is doing is obvious.

"The military doesn't have enough trained personnel to clear out all of these old munitions in Iraq," said Troy Darr, a spokesman for the Army Corps of Engineers in Huntsville, Ala.

Darr said that the private contractors manage six depots, where 92,000 tons of munitions are stored, waiting to be destroyed. The contractors have already destroyed 215,000 tons. The Army Corps of Engineers has 16 people in Iraq overseeing the work of the contractors. Altogether, there are 700 employees working for the private contractors, assisted by 900 Iraqi employees.

In addition to cleaning out the depots, the private contractors are working in the field collecting, destroying and transporting weapons and ammunition.

For Zapata, a small company that had never worked in a war zone before, that has translated into soaring revenues, a new office in Charlotte, and pride in doing a tough job.

The company's employees in Iraq and North Carolina "firmly believe we're doing an important mission to dispose of those weapons and keep them from the hands of people who maybe should not have them," said Marty Ray, Zapata's vice president for client services.

Lt. Col. Jacob Hansen will be heading to Iraq in July to lead the Army's Defense Contract Management Agency, where his job will include oversight of about $9 billion in civilian contracts. He said that the shift toward private contractors is no accident.

"We have now consciously included contractors on the battlefield to provide a variety of support services. It wasn't a short-term plan or a knee-jerk reaction. This was planned," said Hansen, currently a contract-management specialist at the Army War College in Carlisle, Pa.

"Could we recruit and train more soldiers?" for explosives demolition, he asked. "Sure we could. But when the war in Iraq is over, the contractors go home and the costs to the taxpayer end."

Recruiting people to the military for a unit, and then maintaining the unit, could represent a longer-term cost, he and others said.

Pressure on military

Zapata and other private companies doing munitions disposal are being paid handsomely for a job that has traditionally been done by members of the military.

"There's sort of a vicious cycle here," said Rick Stark, who served 24 years in the Army and is now at the Center for Strategic and International Studies in Washington. "The problem that arises is that these very high-paid jobs can attract military people."

The Army Times, the military's weekly newspaper, recently noted a shortage of technicians who can get rid of munitions. In part because people are leaving the military for high-paying private jobs, the U.S. Special Operations Command in Tampa announced a program that will pay bonuses of as much as $150,000 for experienced commandos who re-enlist.

"It will, in some cases, make the difference between someone staying in or leaving," said Dick Couch, a retired Navy SEAL and author of several books about special operations.

Hansen said he is not worried about the pay disparities between members of the military and the private sector.

"I personally make less than $100,000 per year, and I'm sure the taxpayer is getting a good value at that price," he said. "Those of us who choose to serve in the military do so for a variety of reasons," including a sense of patriotism, honor and tradition.

Hansen said he believes that the mix between private sector and the military in Iraq "would have to strengthen our posture on the battlefield."

He also defended the profits that contractors make. "We're kidding ourselves (if we say) that profitability is not a strong motivator" for private companies to risk working in Iraq.

And federal auditors, he noted, review the contracts to guard against fraud.

Complicated questions

"Nowadays, what's the battlefield? It's driven by the market - who's willing to take that risk?" asked Marybeth Ulrich, a professor at the Army War College who specializes in civilian-military relations.

Zapata and other firms are doing munitions disposal. Blackwater is hiring members of the Special Forces and even has its own air force of small, armed helicopters in Iraq. Private contractors supplied guards to the Abu Ghraib prison, and Hansen said that contractors are used to operate and maintain high-tech weapons systems on the battlefield.

But the shift to private contractors has raised complicated questions about accountability. Ulrich said that the military is beginning to question whether limits should be set on privatization. What happens, for example, if a private contractor kills a civilian or refuses to follow orders?

"What would be the difference in accountability if something had to be investigated? What recourse is there? You're sort of trusting that these people are going to keep operating as if they were still in the military. You're dependent on self-policing," he said.

The families of four security workers who were killed and mutilated in Fallujah last year are looking to the North Carolina courts for accountability. Last month, they sued Blackwater, alleging that the security company put profits above the safety of its employees.

Whatever the policy questions, private contracting has been healthy for the companies in Iraq.

In December, Zapata officials told the Charlotte Business Journal that 2004 revenue had more than tripled over the previous year.

But such good news in the private sector comes back around to the military, said Couch, the former Navy SEAL.

"You're no longer going to get good military talent on the cheap," he said.

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