The Truth About Contractor Profits

The Federal Times has brought some interesting statistics to light. Conventional wisdom has it that private contractors in Iraq are bleeding the American taxpayer dry and making money hand over fist in the process. But in fact, the numbers tell a different story:

Sixty-nine percent of government contractors generated profit rates of less than 10 percent from their government business and 7 percent generated no profits at all.

Indeed, government contracts are hardly considered a guaranteed cash stream:

Most contractors said they view government contracting as a greater business risk than most commercial ventures.

Just further evidence that maybe these guys risk their lives because they're patriots, not money-grubbers.

Waxman's committee shows how Blackwater saves taxpayer $100 millon per year

Great news for taxpayers: Blackwater is saving about $100 million of their hard-earned tax money, according to a Federal Times account of documents from Congressman Henry Waxman's probe of the company and to State Department figures.

At Waxman's October 2 hearing, the Federal Times reports, "Richard Griffin, assistant secretary for diplomatic security, told the committee it would cost at least $500,000 a year to field one security employee [in Iraq]. Griffin said the work was outsourced because the surge in security work was temporary and did not warrant the long-term costs of creating new federal positions."

"According to the committee, the average Blackwater employee costs the government $400,000 a year," the Federal Times says.

That means that Blackwater is saving the American taxpayer $100,000 per year per private diplomatic security contractor it puts in the field in Iraq. Blackwater fills about 1,000 private security contractor slots in Iraq. The math is simple: $100,000 in savings per guard times 1,000 guards equals $100,000,000 in savings per year.

But Waxman isn't interested in how much Blackwater saves the taxpayer. He insists on knowing how much profit Blackwater makes.

The cost-saving figures are a big story. So why did Federal Times reporter Elise Castelli bury this news at the bottom of her article? Here's her email address to get the answer: ecastelli@federaltimes.com.