USA: Army and Contractor Trade Group Eye Changes for Wartime Environments

Never have so many companies been hired for an effort like the one in Iraq, which encompasses military support, physical reconstruction and a variety of economic and social development programs.
Publisher Name:

The federal government lacks enough skilled and experienced personnel to manage the massive reconstruction and nation-building operations under way in Iraq, which are unprecedented for their reliance on private contractors, according to a new analysis prepared by the Army and a contractor trade association.

The government has engaged in post-conflict rebuilding before, in the Balkans and Somalia in the 1990s, for example. But never have so many federal agencies hired so many companies for an effort like the one in Iraq, which encompasses military support, physical reconstruction and a variety of economic and social development programs.

In Iraq, a shortage of skilled contracting specialists, who are supposed to issue work requirements and monitor companies' performance, has resulted in work sometimes slowing down, the analysis showed. Also, volatile and quickly changing conditions on the ground, coupled with the nature of the Iraqi marketplace, meant that traditional U.S. procurement rules were not always precisely followed.

Despite the size and scope of the Iraq effort, contract specialists weren't deployed to Iraq in large numbers, creating a distance between planners in the United States and contractors in the field. As a result, work has not always been carried out as designed, said Stan Soloway, the president of the Professional Services Council, a trade association representing some of the contractors who, along with four Army agencies, compiled the analysis.

This "disconnect," Soloway said, impeded the government's ability to manage reconstruction contractors, and raised red flags among auditors who found work orders being changed on the fly with a minimal amount of government oversight.

The government "didn't have anywhere near the people with the expertise" needed to manage such a multifaceted operation, Soloway said. Rather than deploying federal contracting personnel, agencies hired companies to oversee other companies.

Soloway noted that contracting problems were not unique to the military, and affected the civilian agencies that have work under way as well.

Reconstruction planners also didn't anticipate that contractors would need so much physical protection from insurgents and foreign terrorists, the analysis found. Today, contractor employees are regularly targeted for kidnapping and execution.

The military protects workers who travel with the armed forces or who work on military projects. But there are likely thousands of contractors working for nonmilitary agencies, such as the U.S. Agency for International Development or the Treasury Department. These agencies must hire their own security forces.

An estimated 20,000 private security personnel are working in Iraq. Now, Soloway said, there is concern that the demands of war have exhausted the supply of security workers.

The large numbers of contractors on the battlefield has led to a logistical and security dilemma for military commanders. Soloway told the story of one commander in Iraq who had requested a fleet of Apache helicopters. The vehicles arrived with a detachment of 70 contractor support workers, who then had to be housed, fed and protected.

Soloway, a deputy undersecretary of Defense in the Clinton administration, said that none of the findings of the study surprised Army officials, who have been grappling for years with how to manage modern wars in which contractors are a constant presence. Their role is likely to increase as more traditionally governmental functions are handed over to the private sector.

The analysis showed that the government suffered from an inordinate amount of confidence in the ability to impose U.S. procurement rules on the Iraqi economic system, which largely ran on a patronage basis under the rule of Saddam Hussein. The concept of bidding for work didn't exist in Iraq, Soloway noted.

Some military officers had to negotiate with tribal leaders to find local workers, because only the tribal leaders knew who the capable workers were and where to find them. The leaders sought out people with whom they had existing relationships, and they paid them in cash, because Iraqi banks had no way to electronically transfer funds among their different branches.

Government auditors later raised concerns about such deals, because there was no competition for the work, as U.S. procurement regulations require. But, Soloway cautioned, "You can't automatically presume that we can apply our rules to a contingent, third-world environment."

Soloway noted that while the military's doctrine for fighting wars is very specific, there is no similar set of guiding principles governing the conduct of contracting operations. The analysis recommended developing a comprehensive and governmentwide set of procurement rules to govern wartime and other contingent environments. It also called for establishing "contingency-ready teams" made up of all the personnel involved in contract planning and execution, including contractor representatives. Similar teams were used in the Balkans, but not in Iraq.

The analysis also urged the military to address contractors' security by establishing a Defense Department-wide contract for security services, a qualified list of companies to bid for those services, or a set of standards for contractor security in the war zone.

AMP Section Name:War & Disaster Profiteering