US has Thrown DoD Contractors 'Under the Bus,' IPOA says

The United States government has thrown its contractors in Iraq "under the bus" by caving into Iraqi demands that they be subject to the country's dysfunctional and corrupt judicial system.

That's what the main trade association of security contractors, the International Peace Operations Association (IPOA), is saying about the new arrangement.

The main companies involved - Blackwater, Fluor Corp., KBR and DynCorp, wouldn't tell Bloomberg News what they think of the arrangement.

But IPOA President Doug Brooks says flat-out: "This agreement throws DoD contractors under the bus." And State Department contractors as well, one presumes.

Iraq's judicial and corrections systems are "way below" global standards, says Brooks.

According to Bloomberg, "The Defense Department and State Department briefed their private contractors today on a provision of the so-called status- of-forces accord that eliminates contractors' immunity from prosecution under Iraqi law. While the agreement applies to U.S. military operations, the State Department told its contractors today that Iraq will make them subject to the same rules.

"The provision is part of an agreement that would govern U.S. military operations in Iraq after a United Nations Security Council resolution expires on Dec. 31. About 28,000 of the 163,500 people employed as Pentagon contractors in Iraq are U.S. citizens," and about 1,000 or so reportedly work for Blackwater as personal security detail professionals.

The deal is likely to increase financial and political costs for the incoming Obama administration. "This is going to create costs for contractors because every contractor will need additional insurance coverage'' to protect against the risk of prosecutions, a Virginia lawyer who has represented US private security contractors in Iraq tells Bloomberg. "There's an increased likelihood of civil litigation costs for companies in the U.S. every time an investigation is opened in Iraq.'"

The Pentagon doesn't seem worried. "I would imagine that no matter what the legal protections are for contractors" serving in Iraq, Iraq "will remain a profitable enough business that you will see a number of contractors willing to do this," a Pentagon spokesman says.

That means that DoD will have to build untold millions of dollars a year into its contractor budgeting to cover the costs of defense against prosecution, and the huge costs of litigation and any payouts awarded by courts.

MidEast Times Explains Economics of Contracting

When Blackwater recently announced that it was pulling back from the personal protection business, many people were (wrongly) surprised. What else do contractors do, they wonder, if not pull triggers? Well, it turns out there's a great deal more to contracting. The Middle East Times explains:

It has long been a myth, albeit a popular one, that the majority of private military contractors are gun shooters. In fact, the reverse is true, as has been pointed out, largely in vain, by trade groups such as the Professional Services Council and the International Peace Operations Association.

According to estimates from the IPOA, the total value of what it calls the global peace and stability operations industry is about $20 billion for all companies providing services in the field. Of that number, private security contractors make up only about 5 percent to 10 percent, or a maximum of $2 billion annually. The normal peacetime number would be closer to 5 percent for PSCs, but Iraq has driven it up.

Moreover, contrary to popular perception, the Middle East Times reports that security does not pay better than other forms of contracting:

To understand the difference, one has only to follow the money. For example, compare two major contracts in Iraq, the World Wide Personal Protective Services and the Logistics Civil Augmentation Program. The current WPPS contract, the second, was awarded in July 2005. The State Department utilizes it as an umbrella contract under which it issues task orders to the three contracting companies -- Blackwater USA, DynCorp and Triple Canopy. The bulk of the personnel come from Blackwater. The contract has a ceiling of $1.2 billion per contractor over five years -- one base year and four option years. That works out to $240 million per contractor per year.

LOGCAP, an Army program first established in 1985, is an initiative for the use of civilian contractors in wartime and other contingencies. It includes all pre-planned logistics and engineering/construction-oriented contingency contracts. It does everything from fixing trucks to warehousing ammunition to doing the laundry, running mess halls and building whole bases abroad. When the Army announced the awarding of the fourth and latest LOGCAP contract back in April to DynCorp International LLC; Fluor Intercontinental Inc.; and Kellogg, Brown and Root Services, the total annual maximum value was $15 billion and the lifetime maximum value was $150 billion. That works out to $5 billion per contractor per year.

You don't need a Ph.D. to figure out which is the market segment with the greatest profit-making opportunities.

PSCs Praised for Dangerous Work

The Buffalo News recently ran an editorial explaining the particular dangers encountered by private security contractors. Here are some of the highlights from the piece:

These security guards by no means operate as the men in uniform do. Soldiers work under the protection of tanks, helicopters and their fellow soldiers, and soldiers can aggressively attack someone who is a potential threat to their safety, [Douglas] Brooks, [president of the International Peace Operations Association] said.

“The private security contractors work under regulations that prevent them from being the aggressor. They can only take aggressive action to protect themselves or the people they’re guarding,” Brooks said. “If they come under attack, they can call for help from the military, but that help doesn’t always arrive right away.”

According to Michael Skora, an Army veteran who worked closely with [abducted contractor Jonathon] Cote in both the Army and Crescent Security, he and Cote faced sniper attacks and “dozens” of encounters with improvised explosive devices that blew up near convoys that the two former soldiers were escorting, Skora said. “It was as bad or worse than anything we saw in the Army.”

In Brooks’ view, the private contractors don’t get nearly enough credit for the jobs they do and the extreme dangers they face while working in Iraq. Peter W. Singer, a national security expert at the Brookings Institution in Washington, agreed. Singer has done extensive research on the subject…. “There has been much discussion of how the US recently passed the 4,000 death mark,” Singer told The Buffalo News. “The fact is, we already passed that long ago, if you count contractors…. And yet, they aren’t counted in official tolls, and largely not known by the media and the public.”