Rebuilding Iraq
Actions Needed To Improve Use of Private Security Providers Gao ID: GAO-05-737 July 28, 2005The United States is spending billions of dollars to reconstruct Iraq while combating an insurgency that has targeted military and contractor personnel and the Iraqi people. This environment created a need for those rebuilding Iraq to obtain security services. GAO evaluated the extent to which (1) U.S. agencies and contractors acquired security services from private providers, (2) the U.S. military and private security providers developed a working relationship, and (3) U.S. agencies assessed the costs of using private security providers on reconstruction contracts.
The civilian U.S. government agencies and reconstruction contractors in Iraq that GAO evaluated have obtained security services, such as personal and convoy security, from private security providers because providing security to them is not the U.S. military's stated mission. U.S. military forces provide security for those Department of Defense (DOD) civilians and contractors who directly support the combat mission. In Iraq, the Department of State and other federal agencies contract with several private security providers to protect their employees. Under their contracts, contractors rebuilding Iraq are responsible for providing their own security and have done so by awarding subcontracts to private security providers. As of December 2004, the agencies and contractors we reviewed had obligated more than $766 million for private security providers. The contractors' efforts to obtain suitable security providers met with mixed results, as they often found that their security provider could not meet their needs. Overall, GAO found that contractors replaced their initial security providers on more than half the 2003 contracts it reviewed. Contractor officials attributed this turnover to various factors, including the absence of useful agency guidance. While the U.S. military and private security providers have developed a cooperative working relationship, actions should be taken to improve its effectiveness. The relationship between the military and private security providers is one of coordination, not control. Prior to October 2004 coordination was informal, based on personal contacts, and was inconsistent. In October 2004 a Reconstruction Operations Center was opened to share intelligence and coordinate military-contractor interactions. While military and security providers agreed that coordination has improved, two problems remain. First, private security providers continue to report incidents between themselves and the military when approaching military convoys and checkpoints. Second, military units deploying to Iraq are not fully aware of the parties operating on the complex battle space in Iraq and what responsibility they have to those parties. Despite the significant role played by private security providers in enabling reconstruction efforts, neither the Department of State, nor DOD nor the U.S. Agency for International Development (USAID) have complete data on the costs of using private security providers. Even at the contract level, the agencies generally had only limited information readily available, even though agency and contractor officials acknowledged that these costs had diverted a considerable amount of reconstruction resources and led to canceling or reducing the scope of some projects. For example, in March 2005, two task orders for reconstruction worth nearly $15 million were cancelled to help pay for security at a power plant. GAO found that the cost to obtain private security providers and security-related equipment accounted for more than 15 percent of contract costs on 8 of the 15 reconstruction contracts it reviewed.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-737, Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers
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Report to Congressional Committees:
July 2005:
Rebuilding Iraq:
Actions Needed to Improve Use of Private Security Providers:
GAO-05-737:
GAO Highlights:
Highlights of GAO-05-737, a report to congressional committees:
Why GAO Did This Study:
The United States is spending billions of dollars to reconstruct Iraq
while combating an insurgency that has targeted military and contractor
personnel and the Iraqi people. This environment created a need for
those rebuilding Iraq to obtain security services. GAO evaluated the
extent to which (1) U.S. agencies and contractors acquired security
services from private providers, (2) the U.S. military and private
security providers developed a working relationship, and (3) U.S.
agencies assessed the costs of using private security providers on
reconstruction contracts.
What GAO Found:
The civilian U.S. government agencies and reconstruction contractors in
Iraq that GAO evaluated have obtained security services, such as
personal and convoy security, from private security providers because
providing security to them is not the U.S. military‘s stated mission.
U.S. military forces provide security for those Department of Defense
(DOD) civilians and contractors who directly support the combat
mission. In Iraq, the Department of State and other federal agencies
contract with several private security providers to protect their
employees. Under their contracts, contractors rebuilding Iraq are
responsible for providing their own security and have done so by
awarding subcontracts to private security providers. As of December
2004, the agencies and contractors we reviewed had obligated more than
$766 million for private security providers. The contractors‘ efforts
to obtain suitable security providers met with mixed results, as they
often found that their security provider could not meet their needs.
Overall, GAO found that contractors replaced their initial security
providers on more than half the 2003 contracts it reviewed. Contractor
officials attributed this turnover to various factors, including the
absence of useful agency guidance.
While the U.S. military and private security providers have developed a
cooperative working relationship, actions should be taken to improve
its effectiveness. The relationship between the military and private
security providers is one of coordination, not control. Prior to
October 2004 coordination was informal, based on personal contacts, and
was inconsistent. In October 2004 a Reconstruction Operations Center
was opened to share intelligence and coordinate military-contractor
interactions. While military and security providers agreed that
coordination has improved, two problems remain. First, private security
providers continue to report incidents between themselves and the
military when approaching military convoys and checkpoints. Second,
military units deploying to Iraq are not fully aware of the parties
operating on the complex battle space in Iraq and what responsibility
they have to those parties.
Despite the significant role played by private security providers in
enabling reconstruction efforts, neither the Department of State, nor
DOD nor the U.S. Agency for International Development (USAID) have
complete data on the costs of using private security providers. Even at
the contract level, the agencies generally had only limited information
readily available, even though agency and contractor officials
acknowledged that these costs had diverted a considerable amount of
reconstruction resources and led to canceling or reducing the scope of
some projects. For example, in March 2005, two task orders for
reconstruction worth nearly $15 million were cancelled to help pay for
security at a power plant. GAO found that the cost to obtain private
security providers and security-related equipment accounted for more
than 15 percent of contract costs on 8 of the 15 reconstruction
contracts it reviewed.
What GAO Recommends:
GAO is making recommendations to the Secretary of Defense to enhance
military procedures to reduce incidences of the military firing on
security providers and to provide training to U.S. military forces on
the role of security providers. Also, GAO is making recommendations to
the Secretaries of Defense and State and the Administrator, USAID, to
assist contractors in obtaining security services, and to enable
agencies to better plan for security costs in future efforts. The State
Department disagreed with our recommendation to explore options to
assist contractors in obtaining security, citing potential liability
concerns, and did not take a position on our recommendation to account
and plan for security costs. DOD agreed with our recommendations. USAID
did not comment on them.
www.gao.gov/cgi-bin/getrpt?GAO-05-737.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William M. Solis at (202)
512-8365 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Security for Civilians and Contractors in Iraq Is Provided by a Mix of
Military Forces, State Department Security Personnel, and Private
Security Providers:
While the Relationship between Security Providers and the Military Has
Improved, Actions Should Be Taken to Further Improve Effectiveness:
Agencies Have Limited Capabilities to Assess the Cost Impact of Using
Private Security Providers:
Expanded Use of Private Security Providers Does Not Appear to Be
Increasing Attrition among Military Personnel:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: Comments from the Department of State:
Appendix IV: Comments from U.S. Agency for International Development:
Appendix V: GAO Contacts and Staff Acknowledgements:
Table:
Table 1: Occupational Stop Loss Dates for the Military Services:
Figures:
Figure 1: The Complex Battle Space in Iraq:
Figure 2: Incidence of Attacks against Civilians and Infrastructure
Targets between June 2003 and April 2005:
Figure 3: Number of Security Providers Employed on Reconstruction
Contracts Awarded in 2003 and Reviewed by GAO:
Figure 4: National Reconstruction Operations Center, Baghdad, Iraq:
Figure 5: Locations of the Regional Reconstruction Operations Centers
in Iraq:
Figure 6: Process for Requesting Assistance through the ROC:
Figure 7: Percentage of Total Contract Billings Accounted for by
Security Subcontractor Expenses as of December 31, 2004:
Figure 8: Average Attrition Rates for Military Occupational Specialties
Preferred by Private Security Providers which Experienced Increased
Attrition in Fiscal Year 2004:
Figure 9: Army Special Forces Attrition Rates:
Figure 10: Continuation Rates for Army Enlisted Special Operations
Personnel with 14 through 19 Years of Service for Fiscal Years 2000
through 2004:
Letter July 28, 2005:
Congressional Committees:
The United States is spending billions of dollars to reconstruct Iraq
while at the same time is engaged in combating an insurgency that has
targeted military personnel, contractors, and the Iraqi people.
According to the Department of Defense (DOD) and other sources, as of
June 1, 2005, more than 1,600 U.S. and coalition military forces and
200 contractor personnel have been killed since major combat operations
ended in May 2003. This uncertain security environment created a need
for U.S. government agencies and contractors involved in rebuilding
Iraq to obtain substantially more security services than is normally
the case when operating in other countries. Creating a democratic Iraq
and rebuilding its infrastructure is a U.S. national security and
foreign policy priority, and, even without the need for enhanced
security, is a challenging and complex effort.
Prior to the conflict, DOD and the U.S. government agencies responsible
for the reconstruction of Iraq believed that reconstruction would take
place in an environment with little threat from insurgents or
terrorists. By June 2003 the security situation in Iraq began to worsen
and it became clear in August 2003, with the bombing of the United
Nations complex, that insurgents were targeting nonmilitary targets.
The killings of four U.S. citizens working for a U.S. security provider
in Iraq in March 2004 and the allegations of prisoner abuse at Abu
Ghraib prison[Footnote 1] resulted in significant congressional
concern[Footnote 2] over the use of private security providers in Iraq
and raised a number of operational, legal, and contracting questions.
Because of the broad level of interest by Congress in issues dealing
with Iraq, the Comptroller General initiated this review under his
statutory authority. Specifically, we evaluated the extent to which (1)
U.S. government agencies and contractors working in Iraq have acquired
security services from private providers; (2) the U.S. military and
private security providers in Iraq have developed a cooperative working
relationship; and (3) U.S. government agencies assessed the costs
associated with using private security providers on reconstruction
contracts. Additionally, we assessed the impact of the increased use of
private security providers on attrition in key military skills.
To identify the rules and regulations governing and assigning
responsibility for protecting government and contractor personnel
working in Iraq, we reviewed policies, regulations, instructions,
guidance, and orders issued by DOD, the U.S. Central Command
(CENTCOM),[Footnote 3] and other DOD components relating to the use of
contractors during wartime; orders and policies issued by the Coalition
Provisional Authority (CPA) regarding contractor operations in Iraq;
and Department of State policies regarding the protection of U.S.
government employees working abroad, including the Foreign Affairs
Manual. We also interviewed military officials who had been stationed
in Iraq as well as selected private security providers to understand
their responsibilities and collaborative working relationship in Iraq.
To understand the process by which contractors obtained private
security providers, we selected 16 reconstruction contracts using a non-
probabilistic methodology that considered such factors as the awarding
agency; the year awarded; the contract's expected dollar value; and the
type, nature and location of the reconstruction activity. These 16
contracts were awarded by various DOD components, including the U.S.
Army Corps of Engineers; the Department of State; and the U.S. Agency
for International Development (USAID). Nine of these contracts were
awarded in 2003 and 7 were awarded in 2004. As of December 2004, the
agencies had obligated about $8.6 billion on these contracts. We also
obtained and reviewed six contracts that had been awarded the U.S. Army
Corps of Engineers, the Department of State, USAID, and by Army
activities on behalf of the CPA for the protection of their personnel
and facilities in Iraq. We then compared the type of security-related
requirements incorporated within U.S. government contracts with those
incorporated into contracts awarded to prime reconstruction contractors
and, in turn, to subcontracts with security providers. We interviewed
agency and contractor officials, reviewed agency guidance provided to
the contractors, reviewed the reconstruction contracts and security
subcontracts, and analyzed the vouchers and other billing information
submitted by the reconstruction contractors and security providers. To
assess the impact on military attrition caused by the use of private
security providers we obtained and analyzed DOD attrition data and
spoke with private security providers and representatives of the U.S.
Special Operations Command and the military services. We determined
that the information and data discussed in this report were
sufficiently reliable for the purposes of the report. Appendix I
contains more detail on our scope and methodology. We conducted our
review from May 2004 to June 2005 in accordance with generally accepted
government auditing standards.
Results in Brief:
All but one of the civilian U.S. government agencies and reconstruction
contractors we evaluated that are operating in Iraq have obtained
security services from private security providers. As of December 2004,
the agencies and contractors we reviewed had obligated more than $766
million for private security providers. The use of private security
providers reflects the uncertain security environment that was, and is
still being encountered in Iraq, as well as the fact that providing
security for agencies and contractors is not part of the U.S.
military's stated mission. U.S. military forces in Iraq provide
security only for those DOD civilians and contractors who directly
support the military's mission. In Iraq, as elsewhere, the U.S.
Ambassador, as Chief of Mission, has overall responsibility for the
security of U.S. government executive branch employees, except for
those under the force protection of the combatant commander. However,
individual U.S. government agencies have had to arrange for their own
security services. As neither DOD nor the Department of State is
responsible for providing security to reconstruction contractors, the
terms of their contracts require reconstruction contractors to provide
for their own security; and, they typically have done so by awarding
subcontracts to private security providers. The contractors' efforts to
obtain suitable security providers met with mixed results, as many
subsequently found that their initial security providers could not meet
their needs. Overall, we found that contractors replaced their security
providers on five of the eight reconstruction contracts awarded in 2003
that we reviewed.[Footnote 4] Contractor officials attributed this
turnover to various factors, including their lack of knowledge of the
security market and of the potential security providers, and the
absence of useful agency guidance.
Although the U.S. military and private security providers generally
have developed a cooperative working relationship, actions can be taken
to further improve its effectiveness. The relationship between the
military in Iraq and employees of private security providers is one of
coordination and cooperation, not control. Both U.S. Central Command
officials and military personnel previously stationed in Iraq told us
that there is no command and control relationship between the military
and private security provider employees. At the same time, military and
private security provider employees recognize the need to coordinate
their actions. Prior to October 2004, coordination was informal, based
on personal contacts often initiated by the contractors, and it was
inconsistent. In October 2004, the Project and Contracting Office
opened the Reconstruction Operations Center to share intelligence and
coordinate military contractor interactions. While providers and the
military agree that coordination has improved since the advent of the
operations center, some problems remain. First, private security
providers continue to report incidents occurring between themselves and
the military when they approach military convoys and checkpoints.
Second, the military may not have a clear understanding of the role of
contractors, including private security providers, in Iraq and of the
implications of having private security providers on the battle space.
Despite the significant role played by private security providers in
enabling reconstruction efforts to proceed, neither the Department of
State, nor DOD, nor USAID--the principal agencies responsible for Iraq
reconstruction efforts--have complete data on the costs associated with
using private security providers. In turn, the Department of State's
quarterly report to Congress, which describes the status of projects,
initiatives, and funding dedicated to Iraq reconstruction, does not
provide information on the costs associated with using private security
providers. Our discussions with agency officials found that the
financial management and information systems used to prepare the
reports are not set up to track security costs that are incurred under
reconstruction contracts. Even at the contract level, the agencies
generally had only limited information readily available on the costs
associated with private security providers. While agencies do not
specifically track such costs, both agency and contractor officials
acknowledged that security costs had diverted a considerable amount of
reconstruction resources and led to canceling or reducing the scope of
certain reconstruction projects. For example, in March 2005, USAID
cancelled two electrical power generation-related task orders totaling
nearly $15 million to help pay for increased security costs being
incurred at another power generation project in southern Baghdad.
Our review of 16 reconstruction contracts found that the cost to obtain
private security providers and security-related equipment can be
considerable. Overall, these costs accounted for more than 15 percent
on 8 of the 15 reconstruction contracts for which data were available.
On only 4 of those 8 contracts, however, did the agencies receive
security cost information. Agency officials noted that increased costs
or delays in reconstruction projects also reflect non-security-related
factors, such as changes in planned funding levels or higher material
costs.
While both Special Forces and military police officials believe that
attrition is increasing in their military specialties, partially
because of increased employment opportunities with private security
providers, our review of DOD data shows that the attrition levels in
fiscal year 2004 increased compared to fiscal years 2002 and 2003, but
are similar to the levels seen in fiscal years 2000 and 2001, prior to
the establishment of stop loss.[Footnote 5] This similarity indicates
that former military members in the Special Forces and military police
communities are leaving in the same proportions as before the attacks
of September 11, 2001 but, according to Army officials, have a wider
range of employment opportunities today. However, given that stop loss
policies depress attrition rates, we are unable to determine whether
the increase in attrition rates in fiscal year 2004 compared to fiscal
years 2002 and 2003 was due to the end of stop loss or to actual
increases in attrition. Moreover, DOD data does not indicate why
personnel are leaving the military--only the fact that they are doing
so.
We are making recommendations to the Secretary of Defense to enhance
military procedures to reduce incidences of the military firing on
private security providers and provide training to U.S. military forces
on the role of private security providers in Iraq. Additionally, we are
making recommendations to the Secretary of Defense, the Secretary of
State and the Administrator, USAID, which would enable contractors to
obtain adequate security services, as well as enable government
agencies to more efficiently plan for security costs in future
reconstruction efforts.
DOD agreed with each of the recommendations, noting that it welcomed
our assistance in improving how DOD and its contractors can plan for
and effectively execute contracts in a complex and changeable security
environment. DOD's comments appear in appendix II.
The Department of State disagreed with our recommendation to explore
options to assist contractors in obtaining private security services,
citing concerns that the government could be held liable for
performance failures and noting it was unclear that a government-
managed security contractor program would result in enhanced contractor
security. While our work found that contractors had difficulty in
obtaining security providers that met their needs and that they would
have benefited from the agencies' assistance, we did not recommend a
particular course of action nor recommend a government-managed security
program. Rather, we recommended that the Department, working jointly
with DOD and USAID, explore options to assist contractors that are
unfamiliar with obtaining the type of security services needed in Iraq.
Such an effort would necessarily entail a thorough assessment of the
advantages, disadvantages and risk mitigation strategies of the
potential options. The Department did not indicate whether it agreed
with our recommendation to establish a means to account and plan for
security costs. The Department's comments appear in appendix III.
USAID found the report factually correct, but did not comment on the
recommendations. USAID's letter appears in appendix IV.
Background:
The United States, along with its coalition partners and various
international organizations and donors, has continued to support
efforts to rebuild Iraq in the aftermath of the war that replaced
Iraq's previous regime. From April 2003 to June 28, 2004, the CPA
served as Iraq's interim government and was responsible for overseeing,
directing, coordinating, and approving rebuilding efforts. With the
establishment of Iraq's interim government, the CPA ceased to exist and
its responsibilities were transferred to the Iraqi government or to
other U.S. agencies. The Department of State is now responsible for
overseeing U.S. efforts to rebuild Iraq. DOD's Project and Contracting
Office (PCO)[Footnote 6] and the U.S. Army Corps of Engineers have
played a significant role in awarding and managing reconstruction
contracts. USAID has been responsible for various reconstruction and
developmental assistance efforts, including those related to capital
construction projects, local governance, economic development,
education, and public health.
As figure 1 demonstrates, the battle space in Iraq can best be
described as complex. A complex battle space is one where military
forces, civilian U.S. government agencies, international organizations,
contractors, nongovernmental organizations, and the local population
share the same geographical area.
Figure 1: The Complex Battle Space in Iraq:
[See PDF for image]
[End of figure]
Included on the complex battle space are private security providers.
While there is no mechanism in place to track the number of private
security providers doing business in Iraq or the number of people
working as private security employees, DOD estimates that there are at
least 60 private security providers working in Iraq with perhaps as
many as 25,000 employees. The providers may be U.S. or foreign
companies and their staffs are likely to be drawn from various
countries, including the United States, the United Kingdom, South
Africa, Nepal, Sri Lanka, or Fiji, and may include Kurds and Arabs from
Iraq. Generally, private security providers provide the following
services:
* Static security - security for housing areas and work sites.
* Personal security details - security for high-ranking U.S. officials.
* Security escorts - security for government employees, contractor
employees, or others as they move through Iraq.
* Convoy security - security for vehicles and their occupants as they
make their way into Iraq or within Iraq.
* Security advice and planning.
The CPA issued a number of orders or memoranda to regulate private
security providers and their employees working in Iraq. Among these are
CPA Order number 3, (Revised)(Amended) which described the types of
weapons that can be used by private security providers; CPA Order
number 17 (Revised), which stated that contractors (including private
security providers) will generally be immune from the Iraqi legal
process for acts performed in accordance with the terms and conditions
of their contracts; and CPA memorandum number 17, which stated that
private security providers and their employees must be registered and
licensed by the government of Iraq.
According to security industry representatives we contacted, there are
no established U.S. or international standards that identify security
provider qualifications in such areas as training and experience
requirements, weapons qualifications, and similar skills that are
applicable for the type of security needed in Iraq. Some security
industry associations and companies have discussed the need for and
desirability of establishing standards, but as of March 2005 such
efforts are only in the preliminary stages of development.
Security for Civilians and Contractors in Iraq Is Provided by a Mix of
Military Forces, State Department Security Personnel, and Private
Security Providers:
U.S. civilian government agencies and reconstruction contractors have
had to contract with private security providers because it is not part
of the U.S. military's stated mission to provide security to these
organizations. U.S. forces in Iraq provide security to contractors and
DOD civilians who support military operations. The Ambassador is
charged with generally ensuring the security of most executive branch
employees in Iraq. Government agencies have contracted with a number of
private security providers to provide personnel, escort, and site
security. Reconstruction contractors are generally responsible for
providing for their own security according to the terms of their
contracts, and they have generally done so by contracting with private
security providers. The contractors' efforts to obtain suitable
security providers have met with mixed results. More than half of the
contractors awarded contracts in 2003 replaced their security
providers. Contractor officials attributed this turnover to various
factors, including the contractors' need to acquire security services
quickly, their lack of knowledge of the security market and potential
security providers available to provide the type of security services
required in Iraq, and the absence of useful agency guidance. Finally,
while the U.S. military is not responsible for providing security for
civilian agencies and reconstruction contractors, it does provide some
services, such as emergency medical support, to U.S. government-funded
contractors.
The U.S. Military Provides Security for Civilians and Contractors Who
Deploy with the Force:
The stated mission of U.S. military forces in Iraq is to establish and
maintain a secure environment, allow the continuance of relief and
reconstruction efforts, and improve the training and capabilities of
the Iraq Security Forces. As part of this mission, U.S. forces in Iraq
provide security for DOD civilians who deploy with the force, non-DOD
U.S. government employees who are embedded with the combat forces and
contractors who deploy with the combat force. Among the contractors who
deploy with the force are those that provide maintenance for weapon
systems, those who provide linguistic and intelligence support to
combat forces, and those who provide logistics support. Contractors who
deploy with the force generally live with and directly support U.S.
military forces and receive government-furnished support similar to
that provided to DOD civilians.
According to CENTCOM officials, the military uses soldiers rather than
private security providers to provide security to contractors,
civilians, facilities, or convoys which support combat operations
because of concerns regarding the status of security personnel under
the law of international armed conflict. This body of law considers
contractors who deploy with the force generally to be noncombatant
civilians accompanying the force who may not take a direct part in
hostilities. CENTCOM is concerned that using armed private security
employees to protect clearly military activities would risk a change in
status for these contractors from noncombatants to illegal combatants.
Thus, the private security employees could lose the protections
otherwise granted contractors accompanying the force under
international law.
At the time we published our report, DOD was in the process of
establishing its first departmentwide policy on the military's security
responsibilities for contractor personnel. The draft directive and
instruction specify that the military shall develop a security plan for
protection of contractor personnel and the contracting officer shall
include in the contract the level of protection to be provided to
contractor personnel. In appropriate cases, the combatant commander
shall provide security through military means, commensurate with
security provided DOD civilians. In May 2005, DOD also issued a new
standard contract clause in the Defense Federal Acquisition Regulation
Supplement (DFARS), to be included in all DOD contracts involving
support to deployed forces stating that the Combatant Commander (for
example, the CENTCOM Commander) will develop a security plan to provide
protection, through military means, of contractor personnel engaged in
the theater of operations unless the terms of the contract place the
responsibility with another party.[Footnote 7] Prior to the issuance of
the new contract clause, the Army's policy expressly required Army
commanders to provide security for deployed contractors, while the Air
Force's policy gave the Air Force the option of whether or not to
provide force protection to Air Force contractors. It is important to
note, however, that the proposed DOD departmentwide policy, procedures
and standard contract clause do not cover non-DOD government
contractors who may be in a military theater of operations. As
discussed in the following, these contractors are responsible for
providing their own security.[Footnote 8]
Civilian U.S. Government Agencies Provide for Their Own Security in
Iraq:
The State Department is responsible for the security of most of the
executive-branch U.S. Government employees located in Iraq.[Footnote 9]
According to the President's Letter of Instruction, the U.S.
Ambassador, as Chief of Mission, is tasked by the President with full
responsibility for the safety of all United States government personnel
on official duty abroad except those under the security protection of a
combatant commander or on the staff of an international organization.
The embassy's Regional Security Officer is the Chief of Mission's focal
point for security issues and as such establishes specific security
policies and procedures for all executive branch personnel who fall
under the Chief of Mission's security responsibility.
In June 2004, representatives[Footnote 10] from the Department of State
and DOD signed two memoranda of agreement to clarify each department's
security responsibilities in Iraq. Among other things the agreements
specify that:
* In general, the Chief of Mission is responsible for the physical
security, equipment, and personnel protective services for U.S. Mission
Iraq;[Footnote 11]
* The Commander, CENTCOM is responsible for providing for the security
of the International Zone as well as regional embassy branch offices
throughout Iraq;
* Military capabilities may be requested by the Chief of Mission to
provide physical security, equipment, and personal protective services
only when security requirements exceed available Marine Security Guard
Detachment, Department of State Diplomatic Security Service, and
Department of State contracted security support capabilities;
* U.S. forces will provide force protection and Quick Reaction Force
support outside the International Zone, to the extent possible, for
Embassy personnel and activities; and:
* The Ambassador has security responsibility for DOD personnel under
the authority of the Chief of Mission. This includes the Marine
Security Detachment and personnel working for the PCO.
In Iraq, the State Department, USAID, the U.S. Army Corps of Engineers,
and the CPA[Footnote 12] contracted with commercial firms to provide
security. Our review of six agency-awarded security contracts, awarded
between August 2003 and May 2004, showed that as of December 31, 2004,
the agencies had obligated nearly $456 million on these contracts. In
turn, the private security providers had billed the agencies about $315
million by that date for providing various services, including personal
security details; security guards; communications; and security
management. The companies providing security for U.S. government
agencies may be U.S. or foreign. For example, while USAID contracted
with a U.S. firm, the U.S. Army Corps of Engineers and the PCO are
using British companies to meet their security requirements. Security
for the Ambassador is provided by a U.S. company, and only U.S.
citizens are used to provide protection.
Security providers who provide security for executive branch employees
follow the procedures and policies established by the Regional Security
Officer. For example, one security provider told us that the Regional
Security Officer recently increased the number of cars required for
moving people within Iraq. The provider's representative told us that
they were obligated to comply with the Regional Security Officer's
instructions even though the contract was not awarded by the State
Department and the company does not provide security for State
Department personnel.
Contractors Rebuilding Iraq Obtained Their Own Security with Little
Assistance from the Agencies:
Contractors engaged in reconstruction efforts were generally required
to provide for their own security, and they have done so by awarding
subcontracts to private security providers. Contractors did not
anticipate the level of violence eventually encountered in Iraq and
found themselves needing to quickly obtain security for their
personnel, lodgings, and work sites. As of December 31, 2004, our
review of 15 reconstruction contracts for which we had data found that
the contractors had obligated more than $310 million on security
subcontracts, and in turn, the security providers had billed the
contractors more than $287 million. The contractors' efforts to obtain
suitable security providers met with mixed results, as many
subsequently found that their security provider could not meet their
needs. Overall, we found that contractors replaced their security
providers on five of the eight reconstruction contracts awarded in 2003
that we reviewed.[Footnote 13] This was attributable, in part, to the
contractors' need to acquire security services quickly, their lack of
knowledge of the security market and potential security providers
available for the type of security services required for Iraq, and the
absence of useful agency guidance. Information reflected in the
agencies' own contracts for security, such as training and weapons
qualifications requirements, could have assisted the contractors in
identifying potential criteria for evaluating security providers and in
structuring their subcontracts.
Agency officials expected that the post-conflict environment in Iraq
would be relatively benign and would allow for the almost immediate
beginning of reconstruction efforts. During a discussion with DOD we
were told that this expectation was based on determinations made at the
most senior levels of the executive branch and the contracting
officials were bound to reflect that expectation in their requests for
proposals. Consequently, they made few or no plans for any other
condition. Reconstruction contractors shared this perspective, relying
upon the language in the agency requests for proposals and the comments
of agency representatives at pre-proposal and other meetings. Our
discussions with contractor officials found that they anticipated
providing for only a minimal level of security under their contracts,
such as hiring guards to prevent theft and looting at residential and
work sites. In one case, the contractor expected that the military
would provide security for its personnel.
Our review of the agencies' request for proposals and other documents
found that they were consistent with this expectation. For example, our
review of five contracts awarded by late July 2003, including four
awarded by USAID and one awarded by the U.S. Army Corps of Engineers,
found that:
* USAID's requests for proposals instructed the contractors that work
was to begin only when a permissive environment existed. Contractors
were given little guidance concerning security for their personnel and
facilities and were not asked to estimate security costs as part of
their proposals.
* The U.S. Army Corps of Engineers' request for proposal noted that the
military was expected to provide security for the contractor and, thus,
the contractor was not required to propose any security costs.
According to agency and contractor officials, the Iraqi security
environment began to deteriorate by June 2003, although two contractors
noted that the bombing of the United Nations compound in August 2003
made it apparent that the insurgency was beginning to target
nonmilitary targets (see figure 2).
Figure 2: Incidence of Attacks against Civilians and Infrastructure
Targets between June 2003 and April 2005:
[See PDF for image]
[End of figure]
Contractor officials told us that as the security environment worsened
they unexpectedly found themselves in immediate need of enhanced
security services. These officials told us that they received little
guidance from the agencies relative to possible security providers. We
found that the contractors' efforts to obtain security providers often
met with mixed results. For example:
* One contractor, awarded a contract by the U.S. Army Corps of
Engineers, expected that the U.S. military would provide security for
its personnel. That contractor expressed concern, however, that the
military protection being provided was insufficient to ensure its
employees' safety and to allow for the performance of its mission and
subsequently stopped work at one of its locations. In June 2003, the
Army finally told the contractor that it did not have adequate forces
to continue to provide security as promised, and advised the contractor
to acquire its own security. Following a limited competition,[Footnote
14] the contractor awarded a subcontract to a security provider in June
2003. In this case, the contractor has been satisfied with the services
provided and retained the security provider when the contractor was
subsequently awarded another reconstruction contract in June 2004.
* One USAID reconstruction contractor told us it quickly awarded a non-
competitive subcontract to a security provider in July 2003. Within
three months, the security company notified the reconstruction
contractor that it was pulling its employees out of the country. As a
former prisoner-transport service firm trying to expand into the
protective services area, it discovered it lacked sufficient capacity
to fulfill its contract requirements in Iraq. The reconstruction
contractor subsequently conducted a competition among security
providers already operating in Iraq to meet its needs.
* Another reconstruction contractor initially hired a security service
provider in October 2003. A contractor official stated that it soon
became apparent that the security provider did not have the capacity to
meet its security needs. As a result, the contractor awarded another
subcontract, on a sole-source basis, to a security provider to augment
the security services provided to its personnel.
* Three of the reconstruction contractors we reviewed hired a newly
established security provider company that was marketing itself in Iraq
in mid-to late 2003. Officials representing one contractor told us that
the provider was the only known provider capable of meeting their
needs; officials for another contractor told us that they selected the
provider based, in part, on its reputation. Each of the contractors,
however, for various reasons, replaced the security provider.
Subsequently, this security provider has been suspended from receiving
further government contracts due to allegations of fraudulent billing
practices.
Overall, we found that five of the eight reconstruction contractors
that were awarded contracts in 2003 that we reviewed replaced their
initial or second security provider with another company, while in
other cases, the contractors needed to augment the security services
provided by their initial provider. As shown in figure 3, two
contractors have awarded up to four contracts for security services.
Figure 3: Number of Security Providers Employed on Reconstruction
Contracts Awarded in 2003 and Reviewed by GAO:
[See PDF for image]
[End of figure]
Contractor officials attributed this turnover to various factors,
including the urgent need to obtain security, the increasing threat
level, their lack of knowledge of potential sources and the security
market, and the absence of useful agency guidance. In this latter
regard, the detailed standards and requirements in their own agency
security contracts may have provided useful assistance to
reconstruction contractors in identifying potential criteria for
evaluating security providers and in structuring their subcontracts.
For example, the USAID security services contract, awarded in August
2003, contained:
* a detailed and required organization structure to be used by the
contractor, with titles, duties and responsibilities of various levels
of security providers specified;
* requirements for background checks on potential employees and
provisions for agency approval and acceptance of those employees;
* detailed standards of conduct for contractor employees;
* language, health, and training requirements;
* weapons capability requirements; and:
* instructions regarding providing armored vehicles.[Footnote 15]
Our review of five other agency security contracts awarded directly to
private security providers from December 2003 through May 2004 for the
protection of agency personnel in Iraq found that, to varying degrees,
most of the cited areas were addressed. Conversely, our review of the
subcontracts awarded by the reconstruction contractors to their
security providers generally contained far less information.
According to most contractor officials with whom we spoke, information
similar to that included in the agency's contracts would have assisted
them in defining their security needs and structuring their security
subcontracts. Some contractor officials also noted that agency
assistance with identifying and vetting potential security provider
companies would have been very useful or would be useful in future
similar situations. They discussed the possibility of a qualified
vendors list, or, if time permitted, the establishment of a multiple
award schedule of qualified security providers, which contractors could
use to quickly contract for their security needs through competitive
task orders.[Footnote 16]
Agency officials believed that information regarding personnel
qualifications and competent providers could be made available to
contractor personnel in future efforts, especially if the information
was provided for the contractor's consideration, rather than being a
contract requirement. For example, one agency official noted that his
agency's requests for proposals for security services are publicly
available. Some officials believed that making information a
contractual requirement would infringe upon the contractor's privity of
contract with its subcontractors and might pose a potential government
liability should such requirements later prove inadequate. Other
officials believed that it should be the contractor's responsibility to
research and decide for itself its own needs and sources of security
services without assistance from the government.
DOD Provides Emergency Quick Reaction Forces and Other Services to
Contractors in Iraq:
According to U.S. officials and contractor personnel we interviewed,
U.S. military forces in Iraq will provide, when assets are available,
emergency quick reaction forces to assist contractors who are engaged
in hostile fire situations. The military is also providing other
support services to U.S. government-funded contractors, to include
private security providers. For example, U.S. military forces will
assist with the recovery and return of contractor personnel who have
been kidnapped or held hostage. Additionally, the U.S. military also
provides medical services above the primary care level to contractors.
These services include hospitalization, as well as laboratory and
pharmaceutical services, dental services, and evacuation services,
should the patient require them. In addition, the military is providing
medical support to private citizens, third country nationals, and
foreign nationals when necessary to save life, limb, or eye-sight.
Finally, contractors are entitled to receive mortuary affairs services.
DOD is providing these services pursuant to authorities under Title 10,
United States Code, as well as a variety of DOD Directives, a June 2004
support agreement between DOD and the Department of State, National
Security Presidential Directive 36 (which governs the operations of the
U.S. government in Iraq) and specific contract provisions.
While the Relationship between Security Providers and the Military Has
Improved, Actions Should Be Taken to Further Improve Effectiveness:
The military and the private security providers in Iraq have an
evolving relationship based on cooperation and coordination of
activities and the desire to work from a common operating picture.
However, U.S. forces in Iraq do not have a command and control
relationship with private security providers or their employees.
Initially, coordination between the military and private security
providers was informal. However, since the advent of the Reconstruction
Operations Center in October 2004, coordination has evolved into a
structured and formalized process. While contractors and the military
agree that coordination has improved, some problems remain. First,
private security providers continue to report incidents between
themselves and the military when approaching military convoys and
checkpoints. Second, military units may not have a clear understanding
of the role of contractors, including private security providers, in
Iraq or of the implications of having private security providers in the
battle space.
U.S. Forces Do Not Have Command and Control over Private Security
Providers Working In Iraq:
According to CENTCOM officials and military personnel who have been
stationed in Iraq, U.S. military forces in Iraq do not have a command
and control relationship with private security providers or their
employees. According to a DOD report[Footnote 17] on private security
providers working in Iraq, U.S. military forces in Iraq have no command
and control over private security providers because neither the
combatant commander nor his forces have a contractual relationship with
the security providers.[Footnote 18] Instead, military and security
provider personnel who served in Iraq described a relationship of
informal coordination, where the military and private security
providers meet periodically to share information and coordinate and
resolve conflicts in operations.
Despite a lack of command and control over private security providers
and their employees, commanders always have authority over contractor
personnel, including private security provider personnel, when they
enter a U.S. military installation. Commanders are considered to have
inherent authority to protect the health and safety, welfare, and
discipline of their troops and installation.[Footnote 19] This
authority allows the commander to establish the rules and regulations
in effect at each installation. For example, an installation commander
may determine traffic regulations, weapons policies, force protection
procedures, and visitor escort policies. Contractors, including private
security providers, who fail to follow the military's rules and
regulations while they are on the installation can be prohibited from
entering the installation and using its facilities. As an example, one
Army official told us that his unit had barred some private security
employees from using the unit's dining facilities because the private
security employees insisted on carrying loaded weapons into the dining
facility. The unit did not allow loaded weapons in the dining facility
for safety reasons.
Coordination Between the Military and Private Security Providers in
Iraq Has Evolved Since the Beginning of Reconstruction:
Coordination between the military and the private security providers
has evolved from an informal coordination based on personal
relationships to a more structured, although voluntary, mechanism
established by the Project and Contracting Office (PCO). According to
military officials, contractors, and security providers coordination
between the military and security providers was initially done
informally. When a private security provider arrived in a unit's area
of operation, the security provider would try to meet with key
officials of the unit and establish a relationship. A private security
provider we spoke with told us that the results of this informal
coordination varied based on the individual personalities of the
military and provider personnel. According to some security providers,
although many military commanders were very interested in establishing
a relationship with the security providers, others were not.
Additionally, coordination was inconsistent. For example, one officer
who had served with the 4th Infantry Division in Iraq told us that
coordination in his area was mixed. According to the officer, some
security providers, such as the one providing security for the Iraqi
currency exchange program, would always coordinate with the division
before moving through the division's area of operations but another
contractor rarely coordinated with the division. This is similar to
information we obtained from officials of the 2nd Armored Cavalry
Regiment. One officer from one of the regiment's squadrons told us that
contractors that worked within the unit's area of operation generally
coordinated with the regiment while those who were traveling in or
through his unit's area of operation generally did not coordinate with
the regiment. He also told us that on one occasion security providers
escorted the CPA administrator into their area of operation without the
squadron's knowledge and while the squadron was conducting an operation
in Najaf. According to the officer, a fire fight broke out at the CPA
administrator's location and the squadron had to send troops to rescue
the CPA administrator and his party. This had a significant impact on
its operation, according to the officer. Another officer, who served on
the Combined Joint Task Force-7[Footnote 20] staff, told of instances
when contractors died and the division commander did not know that the
contractors were operating in his area of operations until he was
instructed to recover the bodies. Finally, according to a military
officer serving with the PCO at the time of our review, the genesis of
the Reconstruction Operations Center (ROC) (discussed next) was the
need to improve coordination between contractors and the major
subordinate commanders.
The ROC serves as the interface between the military and the
contractors in Iraq and is located within the PCO. In May 2004, the
Army awarded a contract to a private security provider to provide
security for PCO personnel and to operate the ROC, shown in figure 4.
The goal of the ROC, which became operational in October 2004, is to
provide situational awareness, develop a common operating picture for
contractors and the military, and facilitate coordination between the
military and contractors.
Figure 4: National Reconstruction Operations Center, Baghdad, Iraq:
[See PDF for image]
[End of figure]
The national ROC is located in Baghdad and six regional centers are co-
located with the military's major subordinate commands, to enhance
coordination between the military and the private security providers.
Figure 5 shows the locations of the regional centers.
Figure 5: Locations of the Regional Reconstruction Operations Centers
in Iraq:
[See PDF for image]
[End of figure]
Participation in the ROC is voluntary (although some DOD officials told
us that participation should be mandatory) and is open (at no cost) to
all U.S. government agencies, contractors, and nongovernmental
organizations operating in Iraq. The ROC and the regional centers are
staffed with a combination of military, U.S. government civilian, and
contractor personnel who provide a number of services for private
security providers and others. Among the services the ROC provides are:
* Intelligence information. The military provides unclassified
intelligence information to the ROC for dissemination to contractors.
Intelligence information is updated daily and information is available
on a password-protected Web site and through daily intelligence
briefings. In addition, contractors can request specific threat
assessments on future building sites and planned vehicle routes.
Contractors use the ROC to pass on information about incidents and
threats to coalition forces as well.
* Military assistance. The ROC serves as the 911 for contractors who
need military assistance. Contractors who need assistance contact
either the national ROC or the regional ROCs and ROC personnel contact
the closest military unit and ask it to provide assistance. Assistance,
such as a quick reaction force or medical assistance, is provided if
military assets are available. Security providers we spoke with said
that they rarely call for a quick reaction force because incidents with
insurgents are usually over within a matter of minutes but on some
occasions the quick reaction forces have proved to be very helpful. For
example, one after action report described an incident in February 2005
in which a private security team was ambushed by 20 insurgents and
attacked by small arms fire and three rocket-propelled grenades. The
contractors contacted both the regional ROC in Mosul and the national
ROC in Baghdad. The military responded with fixed wing assets within 15
minutes and a rotary wing quick reaction force escorted the team safely
back to Mosul. Contractors more frequently receive medical assistance
from the military and described the assistance they received as
excellent. Figure 6 depicts the process used to request assistance
through the ROC or the regional ROCs.
Figure 6: Process for Requesting Assistance through the ROC:
[See PDF for image]
[End of figure]
* Improved communications. Communications with the military can be
difficult in Iraq because of a lack of radio interoperability between
the military and contractors. The ROC facilitates communications
between the military and contractors. First, the ROC provides contact
numbers for the military to private security providers to use when they
are moving around in Iraq. Second, the ROC will ensure that the
military is aware of contractor movements. Security providers who so
choose can provide the ROC with information on convoy movements, which
the ROC will forward to the appropriate military commands. Third, the
ROC can contact the military to provide assistance to contractors, and
finally, the ROC can track convoys through a real-time tracking system
that uses the global positioning system and includes a communications
link with the ROC if assistance is needed.
Some Coordination Problems Remain between Private Security Providers
and the U.S. Military:
While security providers, reconstruction contractors, and military
representatives of the PCO believe that the ROC has improved
coordination on the complex battle space in Iraq, both the private
security providers and the military believe that several coordination
issues remain to be resolved. Security providers and military officials
expressed continuing concern about incidents between security providers
and the military when approaching military convoys and checkpoints and
the need for a better understanding of the complex battle space by both
private security providers and the military.
Blue on White Incidents Are of Major Concern to the Military and
Private Security Providers:
One of the coordination issues that contractors and the military
continued to be concerned about is blue on white violence. Blue on
white violence is the term used by contractors and the military to
describe situations when the military fires at friendly forces (such as
contractors) or, as happens less frequently, when private security
employees fire at military forces. An analysis of incident reports
completed by the ROC indicates that these incidents happen most
frequently when contractors encounter a military checkpoint or a
military convoy. Private security providers have told us that they are
fired upon by U.S. forces so frequently that incident reports are not
always filed with the ROC. According to some incident reports filed
with the ROC, some contractors believe that U.S. forces have fired on
private security provider vehicles without provocation. For example,
one security company official reported that his convoy was traveling on
a route in Iraq when a U.S. military convoy approached. According to
the report, the security convoy identified itself using generally
recognized identification procedures and pulled off the road to allow
the military convoy to pass. After about half of the 20-vehicle convoy
had passed, a gunner in the military convoy began firing at the
security convoy. According to the after incident report filed with the
ROC, no injuries or damage resulted from this incident. A similar
incident happened on the road from the International Zone to the
Baghdad airport. As in the previous incident, part of a U.S. military
convoy passed the private security convoy without incident when a
gunner in the fourth vehicle of the convoy began to fire at the lead
vehicle in the private security convoy. After this incident, the
private security team leader received an apology from the servicemember
who had fired on the security company vehicle. As a result of this
incident, the company's vehicle was rendered unserviceable.
In another incident report, a private security provider documented an
incident at a U.S. military checkpoint. According to the report, a
security convoy had slowed to approach the checkpoint, and was then
fired on by a U.S. soldier. The report went on to say that no verbal or
hand warnings were given and no reason was given for the shooting.
According to representatives of the security providers and the former
director of security for the PCO, many of these incidents happen
because of the military's concerns over insurgents using vehicle-borne
improvised explosive devices, as well as the inexperience of some U.S.
troops.
Reducing the number of blue on white incidents is a high priority for
the U.S. military, the PCO, private security providers, and the Private
Security Company Association of Iraq, a Baghdad--based association that
works with both the U.S. government and the Iraqi government to resolve
issues related to private security providers. In late December 2004, in
an effort to reduce the number of blue on white incidents, the Multi
National Corps-Iraq (MNC-I) issued an order to major subordinate
commands in Iraq establishing procedures for private security providers
to use when approaching military convoys and military checkpoints. MNC-
I directed the subordinate commanders to implement the procedures
detailed in the order and to educate all private security providers and
military on the procedures. Among the procedures were (1) a prohibition
on nontactical vehicles (such as the vehicles used by private security
providers) passing moving military convoys; (2) a requirement that
warning shots, when fired, be aimed away from a vehicle and demonstrate
a clear intention to do harm if directions are not obeyed; and (3) a
requirement that vehicles should maintain a distance of a least 200
meters from a military convoy.
In early 2005, MNC-I completed an analysis of friendly-fire incidents
that occurred between November 1, 2004 and January 25, 2005 to
determine the top 10 lessons learned from such incidents. Among the top
10 lessons was the need for U.S. forces to comply with the rules of
engagement, which require that U.S. troops determine that a person's
intent is hostile before the military uses deadly force. The other
lessons learned were similar to the procedures included in the order.
According to a PCO official, the top 10 list was provided to the
private security providers.
Despite the MNC-I order, blue on white incidents continue to occur and
security providers remain concerned about the frequency of the attacks.
In the 5 months (January to May 2005) since the order was issued, the
ROC has received reports on 20 blue on white incidents and the number
of actual incidents is likely to be higher since, as we noted
previously, some providers no longer report these types of incidents.
Data on the number of incidents for the 5 months before the order was
issued was not available because the ROC did not start collecting
information on blue on white incidents until November 2004. A ROC
official noted that blue on white incidents had decreased in April
2005. He believed that the reduction was due, in part, to the adoption
of the procedures outlined in the order. However, he also noted that
the number of incidents could increase again as troops rotate in and
out of Iraq or if terrorist attacks increase.
Units Do Not Receive Specific Training or Guidance about Working with
Private Security Providers before Deploying:
Military units that deployed to Iraq received no guidance or training
regarding the relationship between private security providers and the
military prior to deploying. Representatives from the 2nd Armored
Cavalry Regiment, the 82nd Airborne Division, and the 1st Marine
Expeditionary Force all told us that they received no guidance from
either CENTCOM or Combined Joint Task Force-7 and that their units had
not developed any written procedures for dealing with private security
providers. Furthermore, a representative of a unit that is preparing to
deploy, the 101st Airborne Division, told us that it had not received
any guidance on how to work with private security providers nor had it
been directed to include information on private security providers, the
PCO, or the ROC in its pre-deployment training, even though the 101st
will be co-located with a regional ROC. To highlight the lack of
training and guidance, representatives from one unit told us that they
did not know there were private security providers in their battle
space until the providers began calling for assistance. They also noted
that any information about who would be in the battle space and the
support the military should be providing would be useful.
Several private security providers we spoke with told us that they
believed it would be helpful if U.S. forces who deployed to Iraq
received information on private security providers in Iraq. For
example, the providers believed that U.S. troops needed more
information on why private security providers are in Iraq, the impact
of having private security providers there, and the operational styles
of the private security providers. Army officials we spoke with
believed that this type of information would be helpful and suggested
that private security providers could use additional information about
working with the U.S. military as well.
Agencies Have Limited Capabilities to Assess the Cost Impact of Using
Private Security Providers:
Despite the significant role played by private security providers in
enabling reconstruction efforts to proceed, neither the Department of
State, DOD, nor USAID has complete data on the cost associated with
using private security providers. For example, the quarterly report
submitted by the Department of State to Congress on the status of
reconstruction projects and funding does not provide information on
security costs that are incurred under reconstruction contracts. Even
at the contract level, the agencies generally had varying degrees of
information on the costs associated with private security providers. On
15 reconstruction contracts we found that the cost to obtain private
security providers and security-related equipment at the reconstruction
contract level can be considerable, as it accounted for 15 percent or
more on 8 of the 15 contracts we reviewed; on only 4 of those 8
contracts, however, did the agencies formally track security costs
under a separate task order or contract line item. Agency and
contractor officials acknowledged that security costs had diverted
planned reconstruction resources and led to canceling or reducing the
scope of certain reconstruction projects, though they also noted that
other factors have affected reconstruction projects.
Agencies Do Not Comprehensively Track Costs Associated with Private
Security Providers:
The Secretary of State is responsible for submitting a quarterly report
to Congress that outlines the current status of programs, initiatives,
and funds dedicated to the Iraq reconstruction efforts.[Footnote 21]
These quarterly reports provide information at the project and sector
level--such as oil or electricity--and acknowledge the challenges and
costs associated with the security environment in Iraq. For example, in
its April 2005 report, the State Department noted that nearly $1.3
billion in funding has been, or will be, used in part to (1) cover
unanticipated post-battle reconstruction costs, (2) cover indirect cost
increases of contractors operating on cost-plus contracts that allow
them to continue billing even during delays, and (3) account for
increased security costs. The reports, however, do not identify the
magnitude or impact of the costs associated with security providers on
reconstruction efforts or available funding. Discussions with DOD and
USAID personnel found that the financial and management information
systems used to help prepare the report are not able to track costs
incurred by reconstruction contractors for security services. Agency
officials noted that to obtain such information would currently require
the agencies to request such information from the contractors and
manually prepare the information. Agency officials noted they have made
inquiries on an ad hoc basis in the past, but cautioned that such
requests can be burdensome for both the contractors and agency
officials.
Contractor officials acknowledge that the cost of private security
services and security-related equipment, such as armored vehicles, has
exceeded what they originally envisioned. In some cases, increased
security costs resulted in reducing or canceling the scope of some
reconstruction projects. For example:
* Contractor officials noted they were originally tasked to
rehabilitate 23 electrical substations and had conducted site surveys
and procured equipment for all 23 substations. According to contractor
officials, however, the U.S. Army Corps of Engineers concluded that
securing 14 of the substations would not be cost effective, and
therefore reduced the scope to 9 substations. Contractor officials
indicated that the equipment and materials procured for the 14
substations have been or will be turned over to the Iraqi Ministry of
Electricity.
* In February 2004, USAID obligated an additional $33 million on one of
its contracts to pay for unanticipated increases in security costs that
left it short of funds to pay for construction oversight and quality
assurance, as well as fund administrative costs.
* In March 2005, USAID cancelled two electrical power generation-
related task orders totaling nearly $15 million to help pay for
increased security costs being incurred at another power generation
project in southern Baghdad.
Contractor officials noted, however, that other factors also affected
reconstruction progress, such as changes in priorities or higher
material costs. For example, officials at one contractor noted that
security had not been a significant factor delaying their work; rather,
they pointed to delays in reviewing and approving projects and slower
than anticipated release of funding. Similarly, USAID officials noted
that, among other materials, the cost of concrete is significantly
higher than anticipated, driving up the cost of many reconstruction
projects.
We found that at the contract level, agency personnel did not have
consistent insight into security costs and their impact on
reconstruction efforts. For example, agencies often did not require
prospective bidders to propose meaningful security costs as part of
their contract cost proposal nor require contractors to prepare a
baseline security cost estimate at the time of contract award. Many of
the contracts, including those awarded after the security environment
began to deteriorate, were indefinite delivery contracts, in which the
work to be accomplished was often described in general terms, with the
specific work to be accomplished determined as task orders are issued.
In several cases, agency personnel provided prospective contractors a
sample task order to use in preparing their proposals. While the
contractors' cost and technical proposals described how they would
approach security issues and provided an associated cost estimate, such
estimates were only for evaluation purposes and did not reflect
meaningful security costs. Overall, in only 3 of the 16 contracts we
reviewed did contractors prepare an initial security cost estimate for
the entire contract.
Further, we found that in only 7 of the 16 contracts did the
contractors regularly provide security-related cost information in
either monthly progress reports or in separate contract line items or
task orders. The level of information and insight provided varied
greatly depending on the approach taken. For example, on three
contracts, the contractor provided security cost-related information
for each of its projects, but did not provide information at the total
contract level. In one contract, security costs were reported on both
the task order and contract level. In one contract, the security cost
information was reported under a separate contract line item with other
expenses, and visibility was more limited. In the remaining two
contracts, the agency established separate task orders specifically to
track security-related expenses at the contract level.
In 15 of the 16 reconstruction contracts that we reviewed, we were able
to obtain data on the costs of acquiring private security services and
related security equipment[Footnote 22] by reviewing invoices that
private security providers and security equipment providers submitted
to contractors. Our analysis of this data found that at the
reconstruction contract level there was considerable variation in
estimated security costs as a percentage of total contract billings
(see figure 7).[Footnote 23] Eight of the 15 contracts had security
costs that exceeded 15 percent of total contract billings as of
December 31, 2004; on 4 contracts, the percentage of contract billings
accounted for by the cost of security subcontractors was more than 25
percent.[Footnote 24] On only 2 of those 8 contracts in which security
costs exceeded 15 percent did agency personnel require the contractors
to formally track and report security costs under a separate task order
or contract line item. Though not required, one contractor reported
incurred security costs on two contracts on its own initiative.
Figure 7: Percentage of Total Contract Billings Accounted for by
Security Subcontractor Expenses as of December 31, 2004:
[See PDF for image]
[End of figure]
While our analysis indicates that at the reconstruction contract level
the cost of obtaining private security services can account for a
significant percentage of the contract's total cost, it does not
reflect total private security costs. For example, reconstruction
contractors did not always specifically track security-related costs
incurred by their subcontractors or lower tier suppliers. According to
contractor officials, in seven of the sixteen reconstruction contracts
that we reviewed, at least one of their subcontractors provided for
their own private security; in five of those seven contracts, all of
the subcontractors were required to provide for their own
security.[Footnote 25] The cost for a subcontractor to obtain private
security services can be considerable. For example, in one case, the
costs incurred by a major subcontractor amounted to almost $10 million,
or nearly one-third of what the reconstruction contractor was paying
for security. In another case, the costs incurred by a major
subcontractor exceeded $3.5 million, or about 8 percent of what the
reconstruction contractor was paying for security.
Our analysis and discussions with agency and contractor officials
identified several factors that influenced security costs, including
(1) the nature and location of the work; (2) the type of security
required and the security approach taken; and (3) the degree to which
the military provided the contractor security services. For example,
projects that took place in a fixed, static location were generally
less expensive to secure than a project that extended over a large
geographic location, such as electrical transmission lines. In other
cases, contractors relied on former military personnel or other highly-
trained professionals to provide security to their employees.
Conversely, some contractors made more extensive use of local Iraqi
labor and employed less costly Iraqi security guards. Lastly, some
contractors were able to make use of security provided by the U.S.
military or coalition forces. For example, several contractors had
facilities within or near U.S.-controlled locations, such as Baghdad's
International Zone or on military bases, which reduced their need to
obtain private security services. In another case, the contractor was
provided a limited degree of protection by the U.S. Army.
Agency and contractor officials had mixed opinions on the value of
establishing separate reporting or tracking mechanisms. For example,
some agency officials believed that having visibility into security-
related costs enabled them to provide more effective contract
oversight, and identify security cost trends and their impact on the
project. Other officials noted that many factors affect the cost and
progress of reconstruction efforts, including changes in planned
funding or projects, material costs, and the inability to find
qualified workers willing to work in Iraq. Consequently, they indicated
that they generally try to manage the projects at a total project
level, rather than by individual elements, such as security. For
example, they noted that when reviewing project status reports with the
contractors, they will question the contractors on the factors causing
delays or cost increases. They were not certain that having specific
insight into security costs would help them better manage or oversee
their projects. Agency program and financial management officials noted
that from a budgeting perspective, tracking security cost information
could enable staff to provide better estimates of future funding
requirements.
Contractor officials generally indicated that establishing a separate
task order or contract line item for security enabled them to more
efficiently account for and bill security costs and to more accurately
report reconstruction progress. For example, officials at one
contractor noted that they often had several projects under way which
required security. Prior to establishing a separate task order, the
security provider would be required to allocate costs to each of the
projects even though the security was provided for a given location,
often resulting in lengthy and complex vouchers, higher potential for
error, and increased administrative expenses. Once a separate task
order was established, its security provider charged the costs incurred
for providing security to the location, rather than each project,
simplifying the billing and review process. Other contractor officials
noted that the need to obtain security providers and security-related
equipment often occurred during the early stages of the contract when
the agencies had issued only a few task orders for specific
reconstruction projects. Consequently, contractor officials told us
they found themselves incurring considerable security-related expenses
during the mobilization phase that had to be allocated to subsequent
task orders, thereby increasing costs. These officials noted that
allocating security costs to existing task orders would have resulted
in the task's cost exceeding the government's estimate. Contractor
officials indicated that a separate task order for security would have
enabled them to better explain to agency personnel the cost of the
reconstruction effort and the impact of security costs and enable them
to account for and bill security costs more efficiently.
Expanded Use of Private Security Providers Does Not Appear to Be
Increasing Attrition among Military Personnel:
Data from the Defense Manpower Data Center (DMDC)[Footnote 26] show
that in fiscal year 2004, the attrition rates for the occupational
specialties preferred by private security providers returned to the
same or slightly lower levels than those seen prior to the institution
of occupational stop losses[Footnote 27] in September 2001 despite the
increased use of private security providers. Private security providers
working in Iraq are hiring former servicemembers with a variety of
skills, including servicemembers with military police or Special
Operations experience. Military officials told us that they believe
that servicemembers with these skills are separating from the military
earlier than in prior years. We are unable to determine from this data
whether servicemembers are leaving the military for positions with
private security providers as the data can only demonstrate trends in
attrition, not explain why people are leaving the military or what they
intend to do after leaving the military.
Private security providers prefer to hire former military members,
particularly Special Operations forces, for their unique skills and
experience. Servicemembers with Special Operations background are often
hired to fill key positions, such as security advisors and project
managers, and to provide personal security to high ranking government
officials. These positions may pay as much as $33,000 a month. Other
servicemembers may be hired to provide security to civilians in vehicle
convoys with salaries between $12,000 and $13,000 per month, while some
may be hired to provide site security for buildings and construction
projects at somewhat lower salaries. For the most part, employees only
receive these salaries when they are working in Iraq, typically 2 to 3
months at a time. All of the U.S.-based private security providers we
spoke with told us that they do not actively recruit current
servicemembers; however, they do recruit at military-sponsored
transition job fairs, through the Internet, and with advertisements in
military magazines and newspapers.
Officials from the Special Operations Command and Army Military Police
Believe Attrition Is Increasing Due, in Part, to Security-Related Job
Opportunities:
Both Special Forces and military police personnel officials believe
that attrition is increasing in their military specialties. For
example, during a July 2004 hearing before the House Armed Services
Committee, Subcommittee on Terrorism, Unconventional Threats and
Capabilities, representatives from the U.S. Special Operations Command
and the military services' Special Operations commands noted that the
number of Special Forces enlisted personnel retiring at 20 years (the
first time they are eligible) has been increasing due, in part, to the
increased opportunities available in civilian government and with
contractors. In addition, representatives of the Naval Special
Operations Command and the Air Force Special Operations Command also
noted that they were seeing increased attrition rates among those
servicemembers with 8 to 12 years of service. According to these
representatives, servicemembers leaving at this point in their careers
are also leaving for opportunities with contractors.
Army officials have also expressed concerns about attrition in the
military police force. For example, officials from the military police
personnel office at the Army's Human Resources Command told us that
they have seen a significant number of senior noncommissioned officers
leave the military police for positions with private security
providers. These officials also told us they have seen the average
length of service for colonels in the military police branch decrease
from 28 to 25 years. Furthermore, in an e-mail provided by the Army's
Human Resources Command, a senior noncommissioned officer at the 16TH
Military Police Brigade noted that the brigade did not meet its
reenlistment targets in fiscal year 2004. Finally, the Army Central
Command's Provost Marshall in July 2004 told us that he had lost four
of his eight senior noncommissioned officers to higher paying private
security providers within the last year and was expecting to lose two
more senior noncommissioned officers. He also noted that he had lost
more than half of his company grade officers as well.
Efforts are being taken by both the military police and Special Forces
communities to address retention concerns. For example, the Army plans
to double the size of its military police force from 15,500 to 30,000
by 2006 and the Special Operations Command plans to increase its force
size from 13,200 to 15,900 over the next 5 to 6 years. Increasing the
size of the Army military police and Special Operations will decrease
the high operational tempo[Footnote 28] and relieve some of the stress
on military personnel, which these communities believe contributed to
higher attrition. In addition, DOD recently began to offer reenlistment
bonuses to Special Operations personnel with 19 or more years of
experience which range from $8,000 to those who reenlist for one year
to as much as $150,000 for those who reenlist for an additional 6
years.
Attrition Rates for 2004 Returned to Level Seen Prior to Stop Loss
Issuance:
While data from several sources indicate increased attrition in fiscal
year 2004 compared to fiscal years 2002 and 2003 in the military skills
sought by private security providers, these data also showed that
attrition rates in fiscal year 2004 had returned to the levels seen in
fiscal years 2000 and 2001, prior to the majority of the stop loss
policies that have been instituted by the services at various times
since September 2001. Table 1 shows the dates of occupational stop
losses for each of the services.
Table 1: Occupational Stop Loss Dates for the Military Services:
Service: Army;
Stop Loss Began: December 2001;
Stop Loss Ended: November 2003[A].
Service: Navy;
Stop Loss Began: September 2001;
Stop Loss Ended: August 2002.
Service: Air Force;
Stop Loss Began: September 2001;
Stop Loss Ended: June 2003.
Service: Marine Corps;
Stop Loss Began: January 2002;
Stop Loss Ended: May 2003.
Source: GAO from DOD data.
[A] Although the Army terminated its occupational stop loss program, at
the time we issued this report the Army had a unit stop loss program in
effect. The Army's unit stop loss policy applies to soldiers in units
preparing to deploy. It applies to all soldiers in a unit and prevents
soldiers from leaving the Army within 90 days of their unit's
deployment, during the unit's deployment, and 90 days after the unit
has returned from its deployment.
[End of table]
Each of the services added and released occupations from stop loss as
the needs of the service dictated. For example, the Air Force placed
all occupational specialties under a stop loss in September 2001 and
then released a number of occupations from the stop loss in January and
June 2002. As we noted, the Air Force ended all stop loss activities in
June 2003. In the Army, Special Operations forces were placed under
stop loss in December 2001 and were released from the stop loss in June
2003, while enlisted servicemembers who served as military police were
placed under stop loss in February 2002 and were released from the stop
loss in July 2003. Army officers serving as military police were placed
under the stop loss in February 2002 and were released from the stop
loss in June 2003.
Data obtained from DMDC on the military occupational specialties
preferred by private security providers revealed that several of these
specialties show increased attrition in fiscal year 2004 over the
attrition rates in fiscal year 2003. These specialties include:
* Air Force: Officer military police:
* Army: Enlisted and Officer Infantry, military police, and Special
Forces:
* Marine Corps: Enlisted and Officer Infantry and military police:
* Navy: Enlisted military police, Officer Special Forces, and Enlisted
SEALs.
For the specialties listed, the average attrition rates for each fiscal
year are shown in figure 8. As seen in figure 8, the attrition rates
for these specialties decreased in fiscal year 2002 and 2003 from their
2000 and 2001 levels and showed an increase in attrition in fiscal year
2004. These data also show that the levels of attrition seen in fiscal
year 2004 were actually lower than those seen in fiscal years 2000 and
2001.
Figure 8: Average Attrition Rates for Military Occupational Specialties
Preferred by Private Security Providers which Experienced Increased
Attrition in Fiscal Year 2004:
[See PDF for image]
[End of figure]
The decrease in attrition rates seen in fiscal years 2002 and 2003 as
compared to the rates seen in fiscal years 2000 and 2001 reflect
attrition patterns that are seen during stop losses. Service officials
told us that stop loss policies affect attrition rates; they can
temporarily delay separations and artificially decrease attrition rates
for the year of the stop loss. Officials at the Army Human Resources
Command also found that stop loss policies can also increase attrition
rates for the year preceding the stop loss. For example, the Army saw
increased separations in 2002 for military police colonels in
anticipation of their occupation-specific stop loss. Given the impact
of stop loss policies on attrition, data may not accurately convey the
typical personnel losses that would have occurred had the stop loss not
been in effect as people left the military both in anticipation of stop
loss and after stop loss was lifted. Thus, we are unable to determine
whether the increase in attrition rates in fiscal year 2004 was due to
the lifting of the stop loss policy or true increases in military
attrition.
Figure 9 shows a pattern of decline in attrition rates during the stop
loss period followed by a rebound for Army Special Forces in fiscal
year 2004. Attrition rates for enlisted Army Special Forces were almost
identical in fiscal years 2000 and 2001, and declined through 2003
during the Army Special Forces specific stop loss, which was in effect
from December 2001 to June 2003. However, after the stop loss was
lifted, attrition rates for the enlisted Army Special Forces almost
doubled from 6.5 percent in fiscal year 2003 to 12.9 percent in fiscal
year 2004, a level which was about 25 percent higher than the fiscal
year 2000 rate. Attrition rates for Army Special Forces officers also
declined during the stop loss period and returned to just below the
fiscal years 2000 and 2001 levels in fiscal year 2004.
Figure 9: Army Special Forces Attrition Rates:
[See PDF for image]
[End of figure]
The Special Operations Command also provided us with continuation rates
calculated by DMDC for the Army, Navy, and Air Force Special Operations
Commands. Continuation rates were calculated by determining which
personnel remained on active duty from one year to the next and are an
alternative method used to demonstrate retention and attrition. The
continuation rates showed an increase in losses in 2004 for the Army
Special Operations and Navy Special Warfare Commands senior
noncommissioned officers, as well as Army Special Operations warrant
officers. Similar to the DMDC data provided to us, these commands also
saw a decrease in losses (or a decrease in attrition rates) in 2002
after a stop loss was issued and, with the exception of the Navy
Special Warfare warrant officers, an increase in losses (or an increase
in attrition rates) after the stop loss was lifted.
Additionally, as shown in figure 10, the continuation data for Army
Enlisted Special Operations personnel with 14 through 19 years of
service separated at only a slightly higher rate in 2004 than in the
pre-stop loss years --fiscal years 2000 and 2001. In the July 2004
hearing before the House Armed Services Committee, Subcommittee on
Terrorism, Unconventional Threats and Capabilities, the Senior Enlisted
Advisor for the United States Special Operations Command stated that
the loss of these mature, operationally experienced personnel creates
critical operational risk for the Special Forces. According to the
Special Operations Command officials with whom we spoke, because the
command is losing some of its most experienced personnel, younger less
experienced servicemembers are being promoted to leadership positions
more quickly than in the past. This need to rely on less experienced
personnel has created some concerns for the command.
Figure 10: Continuation Rates for Army Enlisted Special Operations
Personnel with 14 through 19 Years of Service for Fiscal Years 2000
through 2004:
[See PDF for image]
Note: Con't = continuation.
[End of figure]
Many Factors Influence the Decision to Separate from the Military:
While available data indicate that attrition, in almost all of the
military specialties favored by private security providers, has
returned to pre-September 11, 2001 levels, the data do not indicate why
personnel are leaving the military and what they are doing after they
leave. Exit surveys conducted with servicemembers leaving the military
do not include questions on the servicemembers' future employment
plans. Officials at the Army Human Resources Command told us that after
September 11, 2001, the opportunities for employment in the security
field became more widespread as government agencies as well as private
companies and organizations recognized the need to improve their
security. These officials as well as officials from the Special
Operations Command noted that they are losing personnel not only to
private security firms operating in Iraq but also to security
management companies operating in the United States, and security
operations in other government agencies. Service officials at these
commands also attributed the attrition rates to other factors, such as
the attraction of a strong civilian economy, high operational tempo,
and concerns about various quality of life conditions.
Conclusions:
The reconstruction effort in Iraq is complex, costly, and challenging,
in part, due to an urgent need to begin and execute reconstruction
projects in an uncertain security environment. The extensive use of
private security providers has raised a number of issues, particularly
regarding how to facilitate methods contractors use to obtain capable
providers. And, once security providers are actively working in an
area, they must determine how best to establish effective coordination
mechanisms with nearby military forces. While the experience in Iraq
was certainly unique relative to historical reconstruction and
assistance efforts, it is far less certain whether or not the future
will find the United States engaged in reconstruction and assistance
efforts in other hostile environments with costs that are likely to be
significant. Much has been learned in Iraq over the past two years on
this subject that can serve the United States and its contractors well
in planning for and executing future reconstruction or assistance
efforts.
Recommendations for Executive Action:
We are making four recommendations to address a number of immediate and
long term issues:
* To assist contractors operating in hostile environments in obtaining
security services required to ensure successful contract execution, we
recommend that the Secretary of State, the Secretary of Defense, and
the Administrator, U.S. Agency for International Development, explore
options that would enable contractors to obtain such services quickly
and efficiently. Such options may include, for example, identifying
minimum standards for private security personnel qualifications,
training requirements and other key performance characteristics that
private security personnel should possess; establishing qualified
vendor lists; and/or establishing contracting vehicles which
contractors could be authorized to use.
* To ensure that MNF-I has a clear understanding of the reasons for
blue on white violence, we recommend that the Secretary of Defense
direct the Combatant Commander, U.S. Central Command, to direct the
Commander, MNF-I, to further assess all of the blue on white incidents
to determine if the procedures outlined in the December 2004 order are
sufficient. Furthermore, if the procedures have not proven to be
effective, we recommend that the Commander, MNF-I, develop additional
procedures to protect both U.S. military forces and private security
providers.
* To ensure that commanders deploying to Iraq have a clear
understanding of the role of private security providers in Iraq and the
support the military provides to them, we recommend that the Secretary
of Defense develop a training package for units deploying to Iraq which
provides information on the Reconstruction Operations Center, typical
private security provider operating procedures, any guidance or
procedures developed by MNF-I or MNC-I applicable to private security
providers (such as procedures outlined in the December 2004 order to
reduce blue on white incidents), and DOD support to private security
provider employees. The training package should be re-evaluated
periodically and updated as necessary to reflect the dynamic nature of
the situation in Iraq.
* To improve agencies' ability to assess the impact of and manage
security costs in future reconstruction efforts, we recommend that the
Secretary of State, the Secretary of Defense, and the Administrator,
U.S. Agency for International Development, establish a means to track
and account for security costs to develop more accurate budget
estimates.
Agency Comments and Our Evaluation:
DOD, the Department of State and USAID provided written comments on a
draft of this report. Their comments are discussed below and are
reprinted in appendixes II, III, and IV, respectively.
DOD concurred with each of our recommendations, noting that it welcomed
our assistance in improving how DOD and its contractors can plan for
and effectively execute contracts in a complex and changeable security
environment. Moreover, DOD described the steps it would take to
implement some of our recommendations.
The Department of State disagreed with our recommendation to explore
options to assist contractors in obtaining private security services,
citing concerns that the government could be held liable for
performance failures. For example, while the Department noted that it
could provide the criteria it utilizes to select its contractors on a
non-mandatory basis, it expressed concern that contractors relying on
government minimum standards could assert that performance failures
were the result of the government establishing poor standards. The
Department also noted it was unclear that a government-managed security
contractor program would result in enhanced contractor security,
compared to a contractor-managed security program. While our work found
that contractors had difficulty in obtaining security providers that
met their needs and that they would have benefited from the agencies'
assistance, we did not recommend a particular course of action nor
recommend a government-managed security program. Rather, we recommended
that the Department, working jointly with DOD and USAID, explore
options to assist contractors that are unfamiliar with obtaining the
type of security services needed in Iraq. Such an effort would
necessarily entail a thorough assessment of the advantages,
disadvantages and risk mitigation strategies of the potential options.
Given the significance of contractors in accomplishing reconstruction
objectives and the mixed results that they encountered when selecting
their security providers, we continue to believe that thoroughly
exploring potential options would be prudent.
The Department of State did not indicate whether it agreed with our
recommendation to establish a means to track and account for security
costs in order to develop more accurate budget estimates. It noted that
it can capture costs associated with direct security providers and work
with prime reconstruction contractors to determine the feasibility of
providing subcontract security costs. It is not clear to us from the
Department's comments how it intends to work with DOD and USAID to
establish a uniform means to track and account for private security
costs, which is essential given that DOD and USAID are the principal
agencies responsible for awarding and managing the majority of
reconstruction contracts.
In written comments on a draft of this report, USAID found the report
factually correct, but did not comment on the recommendations.
We are sending copies of this report to the Chairman and Ranking
Minority Member, House Committee on Government Reform; the Chairman and
Ranking Minority Member, House Committee on Energy and Commerce; the
Chairman and Ranking Minority Member, Senate Committee on Governmental
Affairs; and other interested congressional committees. We are also
sending a copy to the Secretary of Defense; the Secretary of State; the
Administrator, U.S. Agency for International Development; and the
Director, Office of Management and Budget, and will make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions, please contact Bill Solis at
202-512-8365 or by e-mail at [Hyperlink, solisw@gao.gov]. Contact
points for our Offices of Congressional Relations and Public Affairs
are found on the last page of this report. GAO staff who made major
contributions to this report are included in appendix V.
Signed by:
William Solis:
Director, Defense Capabilities and Management:
[See PDF for image]
[End of figure]
David Cooper:
Director, Acquisition and Sourcing Management:
List of Congressional Committees:
The Honorable Richard G. Lugar:
Chairman:
Joseph R. Biden, Jr.:
Ranking Minority Member:
Committee on Foreign Relations:
United States Senate:
The Honorable John Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Henry Hyde:
Chairman:
The Honorable Tom Lantos:
Ranking Minority Member:
Committee on International Relations:
House of Representatives:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To determine the extent to which U.S. government agencies and
contractors working in Iraq at the behest of the U.S. government have
acquired security services from private security providers, we reviewed
a wide array of documents to determine who was responsible for
providing security to those types of organizations, including:
* warning orders and fragmentary orders issued by the U.S. Central
Command (CENTCOM), Combined Joint Task Force-7, Multi National Forces-
Iraq, and Multi National Corps-Iraq to determine if any orders had been
issued regarding providing security to U.S. government employees or
contractors rebuilding Iraq;
* contracting documents such as statements of work, requests for
proposals and contracts and contact modifications;
* Department of Defense (DOD) regulations and instructions that relate
to the management of contractors during contingency operations;
* Departments of State and Defense memoranda of understanding regarding
security and support;
* proposed guidance between the Department of State and the Department
of Defense regarding contractor support;
* guidance to contractors prepared by the Coalition Provisional
Authority (CPA) regarding contractor operations in Iraq; and:
* Department of State rules and regulations, including the Foreign
Affairs Manual.
We also met with officials from CENTCOM to obtain the command's
position on the extent of the military's responsibility to provide
security to civilian government employees and contractors, including
both contractors supporting military forces and those engaged in
rebuilding Iraq. In addition, we met with or obtained information from
Army and Marine Corps units that served in Iraq to discuss their
understanding of the military's responsibility to provide security to
contractors and civilian government employees and interviewed
representatives of the State Department's Office of Diplomatic Security
to discuss the State Department's use of private security providers in
Iraq as well as representatives of other government agencies working in
Iraq who have contracted with private security providers to provide
security to employees and facilities.
To determine how agencies addressed security needs when planning for
and awarding Iraq reconstruction contracts, we interviewed officials at
the CPA; DOD, including the U.S. Army Corps of Engineers and the
Project and Contracting Office (PCO); the Department of State; and the
U.S. Agency for International Development (USAID). We discussed the
guidance and direction they received prior to awarding contracts and
how such information was provided to the contractors. We reviewed
various acquisition documents, including agency acquisition plans,
requests for proposals, price negotiation memoranda, correspondence
between contractors, and other relevant documents. We met with agency
and contractor officials to discuss the nature and type of guidance
provided relative to the expected security environment, the need for
obtaining security services, and requirements and standards for
security personnel or security-related equipment.
We identified how security-related requirements were reflected in
reconstruction contracts by selecting 16 contracts that were awarded to
10 reconstruction contractors. We selected these contracts using a
nonprobabilistic methodology that considered such factors as the
awarding agency; the year awarded; the contract's expected dollar
value; and the type, nature and location of the reconstruction
activity. Nine of these contracts were awarded in 2003 and 7 were
awarded in 2004. For each of these contracts, we obtained the contract
and contract modifications issued as of December 31, 2004, totaling
about $8.6 billion; relevant sections of the contractor's cost and
technical proposal; security plans; security-related subcontracts; and
other pertinent documents. We also obtained and reviewed 6 contracts
that had been awarded by the U.S. Army Corps of Engineers, the
Department of State, USAID and by an Army contracting agency for the
CPA, for the protection of their personnel and facilities in Iraq to
compare the type of security-related requirements incorporated within
U.S. government contracts with those incorporated into contracts
awarded to reconstruction contractors and, in turn, to subcontracts
with security providers.
We identified whether there are existing government or international
standards relative to security providers that were applicable to the
Iraqi security environment. We also spoke with agency security
personnel, including the Department of State's Office of Diplomatic
Security and the Overseas Security Advisory Council. We also contacted
representatives from relevant industry associations, including the
International Peace Operations Association, International Security
Management Association, and the American Society for Industrial
Security. We also researched European security-provider standards and
conducted a literature review of articles relating to the security
provider industry.
To assess the military's relationship with private security providers,
we met with or spoke to representatives of CENTCOM, Army Central
Command, and the PCO (at the Pentagon and in Baghdad) to discuss issues
related to the military's authority over private security providers and
reviewed a Department of Defense report to Congress addresses the use
of private security providers in Iraq. We also met with or contacted
representatives of Army and Marine Corps units that had been stationed
in Iraq to determine if they had been provided guidance on working with
private security providers and discussed issues related to command and
control of private security providers.
To assess the level of cooperation and coordination between the
military and private security providers both before and after the
advent of the Reconstruction Operations Center (ROC), we spoke with 9
private security providers working in Iraq as well as representatives
of military units which had served in Iraq to determine the state of
coordination prior to and after the ROC became operational. We spoke
with representatives of the PCO to discuss the ROC's role in
coordinating the interactions between the military and private security
providers and any actions the PCO was taking to improve coordination
between private security providers and U.S. military forces. We also
discussed coordination issues with the executive director of the
Private Security Company Association of Iraq and several reconstruction
contractors. We also reviewed information posted on the ROC Web site
related to security and reviewed documents developed by the ROC to
explain its operations and functions.
To determine the extent to which government agencies assessed the costs
associated with using private security providers and security-related
costs, we reviewed various contractual documents, including the 16
reconstruction contracts and subsequent modifications, consent to
subcontract requests, and monthly cost and progress reports submitted
by the contractors we reviewed. We also met with agency and contractor
officials to determine the means by which they maintained visibility
over security providers and security-related expenses, as well as their
general experiences in Iraq, the impact of security on reconstruction
efforts, and the process by which they obtained security providers.
We collected data on the costs associated with acquiring and using
private security providers or in-house security teams; and the cost
associated with acquiring security-related equipment, such as armored
vehicles, body armor, communication equipment, and other security-
related costs. We did not attempt to quantify the impact of the
security environment on increased transportation or administrative
expenses, on the pace of reconstruction efforts caused by security-
related work stoppages or delays, or the cost associated with repairing
the damage caused by the insurgency on work previously completed. We
also excluded the cost associated with the training and equipping of
Iraqi security forces, or the costs borne by DOD in maintaining,
equipping, and supporting U.S. troops in Iraq.
For the 16 contracts we reviewed, we identified whether the agencies or
the contractors had initially projected the cost of obtaining private
security services. We reviewed various documents, including agency
acquisition strategy plans and price negotiation memoranda; the
contractor's cost proposals and security plans; and interviewed agency
and contractor officials. We identified the actual costs incurred for
security services and equipment by reviewing various cost
documentation, including invoices, vouchers, and billing logs submitted
by the contractors and their security provider(s) through the period
ending December 31, 2004. We analyzed this information to determine:
* the total amount billed by the contractor to the government;
* the amount billed by security subcontractors to the contractor; and:
* the amount billed for other security-related expenses, such as
armored vehicles, body armor, communication, transportation costs,
lodging, and other security-related equipment.
We estimated the percentage of costs accounted for by private security
providers and for security-related equipment by comparing the combined
amount billed for these activities to the total amount billed by the
reconstruction contractor to the government. We did not attempt to
comprehensively identify costs that may have been incurred by
subcontractors or lower tier contractors. We did, however, request
information from the contractors as to whether their subcontractors
required security above that which would typically be required, and if
so, whether the subcontractor arranged for its own security or relied
on security provided by the reconstruction contractor. We obtained
examples and cost information on selected cases in which subcontractors
provided their own security.
As part of our efforts, we reviewed pertinent sections of the Federal
Acquisition Regulation, and in particular, the subcontractor
competition and notification requirements provided for under Part 44;
and relevant CPA, DOD, State Department, and USAID acquisition
regulations, policy memoranda and guidance. We coordinated our work
with and reviewed reports prepared by the Inspectors General for DOD,
State, and USAID; the Special Inspector General for Iraq
Reconstruction; and the Defense Contract Audit Agency.
To determine whether private security providers were hiring former
military servicemembers, we interviewed three private security
providers from the United States that are working in Iraq and discussed
the skill sets they hire. Additionally, we spoke with officials at the
Marine Corps and Navy human resources commands; the Air Force's Deputy
Chief of Staff, Personnel; the Army's Human Resources Command Military
Police Branch and the Special Operations Command Personnel Division to
ascertain whether certain military occupational specialties and ranks
were seeing increased attrition and if private security providers were
affecting military attrition. We also reviewed a transcript of a
congressional hearing on Special Operations Forces personnel issues
held in July 2004.
To assess the extent to which military occupational specialties
utilized by private security providers in Iraq are seeing increased
attrition we obtained attrition information from the Defense Manpower
Data Center's Active Duty Military Officer and Enlisted Master Files,
which is an inventory of all individuals on active duty in the
services. Our analysis was limited to active duty personnel and did not
include reservists. The Center provided information on personnel
numbers and losses for fiscal years 2000, 2001, 2002, 2003, and 2004.
Attrition for the purposes of this report is an active duty member who
is on active duty at the start of a given fiscal year and is no longer
on active duty in the same service in the same pay category at the end
of that fiscal year. An enlisted member who becomes a warrant or
commissioned officer (or vice versa) or a member who changes services
is considered to be a loss. The fiscal year lasts from October 1st of
the previous year to September 30TH of the named year. For example,
fiscal year 2000 lasted from October 1, 1999 to September 30, 2000.
Personnel numbers were calculated as the total number of members at the
start of the fiscal year (for example, October 1, 1999 for fiscal year
2000). Losses are the endforce members who have attrited during the
fiscal year (For example, for fiscal year 2000, losses would be the
number of personnel attrited from October 1, 1999 to September 30,
2000.)
We received data from the Defense Manpower Data Center on active duty
attrition rates for five military occupational specialties: special
forces, military police, infantry, para-rescue, and combat controller.
These military occupational groupings were selected because they
represented military occupational skills most sought after by private
security providers working in Iraq, as determined through interviews
with officials at the human resources commands and private security
companies. These data were then analyzed to determine whether attrition
rates had increased in the past five years and whether servicemembers
were separating from the military at increasing rates in certain ranks
or number of years of service.
We assessed the reliability of the Defense Manpower Data Center's
Active Duty Military Personnel Master file by (1) reviewing existing
information about the data and the system that produced them, and (2)
interviewing agency officials knowledgeable about the data. We
determined that the data were sufficiently reliable for the purpose of
this report.
We visited or interviewed officials from the following organizations
during our review:
Department of State:
* Bureau of Diplomatic Security, Washington, D.C;
* U.S. Embassy, Amman, Jordan;
* The U.S. Agency for International Development, Washington, D.C.,
Baghdad, Iraq; and Amman, Jordan.
Department of Defense:
* Office of the Under Secretary of Defense, Personnel and Readiness,
Military Personnel Policy, the Pentagon;
* The Defense Contract Audit Agency, Fort Belvoir, Virginia.
Department of the Air Force:
* Office of the Deputy Chief of Staff, Personnel, Force Management
Division.
Department of the Army:
* United States Army Human Resources Command Military Police Branch,
Alexandria, Virginia;
* United States Army Central Command (Rear), Fort McPherson, Georgia;
* Project and Contracting Office (Rear), the Pentagon;
* U.S. Army Corps of Engineers, Washington, D.C;
* Southwestern Division, Dallas, Texas;
* Transatlantic Program Center, Winchester, Virginia;
* Gulf Regional Division, Baghdad, Iraq;
* The Army Contracting Agency, Fort Eustis, Virginia;
* 1st Armored Division, Wiesbaden, Germany;
* 82nd Airborne Division, Fort Bragg, North Carolina;
* 2nd Armored Cavalry Regiment, Fort Polk, Louisiana;
* 1st Cavalry Division, Fort Hood, Texas.
Department of the Navy:
* Naval Personnel Command, Millington, Tennessee;
* Marine Corps Manpower Plans and Policy Division, Washington, D.C;
* 1st Marine Corps Expeditionary Force, Camp Pendleton, California.
Unified Combatant Commanders:
* United States Central Command, MacDill Air Force Base, Florida;
* United States Special Operations Command Personnel Division, MacDill
Air Force Base, Florida.
Contractors:
* Aegis Defence Services, Ltd., London, United Kingdom;
* ArmorGroup, London, United Kingdom;
* BearingPoint Inc., McLean, Virginia;
* Bechtel National, Inc., San Francisco, California;
* Blackwater USA, Moyock, North Carolina;
* CONTRACK International, Inc., Arlington, Virginia;
* Control Risk Group, London, United Kingdom;
* Creative Associates International, Inc., Washington, D.C;
* DynCorp International, Irving, Texas;
* Fluor Intercontinental, Inc., Greenville, South Carolina;
* General Electric, Atlanta, Georgia;
* Global Risk Strategies, London, United Kingdom;
* Kellogg Brown and Root Services, Inc., Houston, Texas;
* Olive Security, London, United Kingdom;
* Parsons Corporation, Pasadena, California;
* Perini Corporation, Framingham, Massachusetts;
* Research Triangle Institute, Research Triangle Park, North Carolina;
* Triple Canopy, Lincolnshire, Illinois;
* The Hart Group, London, United Kingdom; and:
* Washington Group International, Inc., Boise, Idaho; and Princeton,
New Jersey.
Industry Associations:
* American Society for Industrial Security International, Alexandria,
Virginia;
* International Peace Operations Association, Washington, D.C;
* International Security Management Association, Buffalo, Iowa;
* Private Security Company Association of Iraq, Baghdad, Iraq;
* Professional Services Council, Arlington, Virginia.
We conducted our review from May 2004 through June 2005 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3000:
JUL 19 2005:
Mr. William M. Solis:
Director, Defense Capabilities and Management:
U.S. General Accountability Office:
441 G Street, N.W.:
Washington, D.C. 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report, "REBUILDING IRAQ: Actions Needed To Improve Use Of Private
Security Providers," dated June 15, 2005 (GAO Code 350554/GAO-05-737).
We welcome your assistance in improving how the DoD and its contractors
can plan for and effectively execute contracts for reconstruction or
assistance efforts in a complex and changeable security environment.
Enclosed are DoD's detailed comments regarding the recommendations on
pages 45 and 46 of your draft report.
We appreciate the opportunity to review and comment on your findings.
Sincerely,
Signed by:
Deidre A. Lee:
Director, Defense Procurement and Acquisition Policy:
Enclosure: As stated:
GAO DRAFT REPORT - DATED JUNE 15, 2005 GAO CODE 350554/GAO-05-737:
"REBUILDING IRAQ: ACTIONS NEEDED TO IMPROVE USE OF PRIVATE SECURITY
PROVIDERS"
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of State, the
Secretary of Defense, and the Administrator, Agency for International
Development, explore options that would enable contractors to obtain
security services quickly and efficiently. Such options might include
identifying minimum standards for security personnel qualifications,
training requirements and other key performance characteristics that
security personnel should possess. (pages 45 & 46/GAO Draft Report):
DOD RESPONSE: Concur.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Combatant Commander, U.S. Central Command, to direct the
Commander, Multi-National Force-Iraq (MNF-1), to further assess all of
the blue on white incidents to determine if the procedures outlined in
the December 2004 order are sufficient. If the procedures have not
proven to be effective, the GAO recommends that the Commander, MNF-I,
develop additional procedures to protect both U.S. military forces and
private security providers. (p. 46/GAO Draft Report):
DOD RESPONSE: Concur. DoD's current approach, which leverages the
Reconstruction Operations Center (ROC) to improve coordination between
military forces and Private Security Companies (PSC), is proving
effective. There is value in re-evaluating its effectiveness in
reducing blue-on-white engagements after a period of time. The Joint
staff will develop an approach for assessing and improving procedures
for coordination between military forces and PSCs.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
develop a training package for units deploying to Iraq which provides
information on the Reconstruction Operations Center, typical private
security provider operating procedures, any guidance or procedures
developed by MNF-I or MNF-C applicable to private security providers,
and DoD support to private security provider employees. (p. 46/GAO
Draft Report):
DOD RESPONSE: Concur. Training materials would benefit both operational
military forces and PSCs. The Joint Staff will develop an appropriate
training strategy.
RECOMMENDATION 4: The GAO recommended that the Secretary of State, the
Secretary of Defense, and the Administrator, U.S. Agency for
International Development, establish a means to track and account for
security costs in order to develop more accurate budget estimates. (p.
46/GAO Draft Report):
DOD RESPONSE: Concur. The Secretary of State is responsible for
submitting a quarterly report to Congress that outlines the current
status of programs, initiatives and funds dedicated to the Iraq
reconstruction efforts. As such, the Department of Defense will support
the Department of State's efforts to collect security cost data, since
the Department of State is the lead organization responsible for
directing and reporting on U.S. reconstruction efforts in Iraq. The
Department of Defense will collect readily available data on incurred
security costs under existing contracts and will establish procedures
on accounting for security costs under future reconstruction contracts.
Additionally, the Under Secretary of Defense (Comptroller) will work
collaboratively with the Department of State and the Administrator,
U.S. Agency for International Development to establish a uniformed
means to track and account for costs incurred by reconstruction
contractors for private security costs in order to develop more
accurate budget estimates in the future.
[End of section]
Appendix III: Comments from the Department of State:
United States Department of State:
Assistant Secretary and Chief Financial Officer:
Washington, D.C. 20520:
JUL 15 2005:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "REBUILDING
IRAQ: Actions Needed to Improve Use of Private Security Providers," GAO
Job Code 120354 and 350544.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Corey Rindner, Procurement Executive, Bureau of Administration, at
(703) 516-1689.
Sincerely,
Signed by:
Sid Kaplan (Acting):
cc: GAO - Tim DiNapoli;
A - Frank Coulter;
State/OIG - Mark Duda:
Department of State Comments on GAO Draft Report REBUILDING IRAQ:
Actions Needed to Improve Use of Private Security Providers (GAO-OS-
737, GAO Code 120354):
Thank you for the opportunity to comment on your draft report entitled
Rebuilding Iraq: Actions Needed to Improve Use of Private Security
Providers. Where the Department of State has additional comments they
are outlined after the recommendation as noted below.
GAO Draft Recommendation 1: To assist contractors operating in hostile
environments in obtaining security services required to ensure
successful contract execution, we recommend that the Secretary of
State, the Secretary of Defense, and the Administrator, U.S. Agency for
International Development, explore options that would enable
contractors to obtain such services quickly and efficiently. Such
options might include, for example, identifying minimum standards for
[Recommend GAO insert "private"] security personnel qualifications,
training requirements and other key performance characteristics that
[Recommend GAO insert "private"] security personnel should possess,
establishing qualified vendor lists, and/or establishing contracting
vehicles which contractors could be authorized to use.
Department of State Comment: State disagrees with the recommendation:
The Department can make available to contractors the criteria it
utilizes to select its contractors, but would be reluctant to mandate
the use by contractors selecting their own security providers.
Contractors relying on government minimum standards could assert that
performance failures are the result of poor standards established by
the government.
Government established contracts and qualified vendor lists also
subject the government to claims in the event of poor performance. The
government would have to determine that all vendors are responsible and
capable of performance. Failure to perform could be alleged to be the
result of poor government selection.
Furthermore, the Department of State is unclear from GAO's report what
evidence exists that a Government-managed security contractor program
for private contractors would result in enhanced contractor security,
compared to a contractor-managed security program. Yet, the Department
of State does recognize that the additional administrative costs and
potential liability from a Government-managed security contractor
program could be substantial.
GAO Recommendation 4: To improve agencies' ability to assess the impact
of and manage security costs in future reconstruction efforts, we
recommend that the Secretary of State, the Secretary of Defense, and
the Administrator, U.S. Agency for International Development, establish
a means to track and account for security costs in order to develop
more accurate budget estimates.
Department of State Comment: For those contracts that are direct
security providers, State can capture those contract costs. For
contracts that would require a prime contractor to subcontract for
security services, State can work with prime contractors to determine
the feasibility of providing the subcontracting costs for security
services.
[End of section]
Appendix IV: Comments from U.S. Agency for International Development:
USAID:
FROM THE AMERICAN PEOPLE:
July 8, 2005:
Mr. William S. Solis:
Director:
Defense Capabilities and Management:
U.S. Government Accountability Office 441 G Street., N.W.
Washington, D.C. 20548:
Dear Mr. Solis:
I am pleased to provide the U.S. Agency for International Development's
(USAID) formal response on the draft GAO report entitled Rebuilding
Iraq: Actions Needed to Improve Use of Private Security Providers [GAO-
05-737].
USAID has reviewed the report and finds it to be factually correct. We
have no further comments on the report.
Thank you for the opportunity to respond to the GAO draft report and
for the courtesies extended by your staff in the conduct of this
review.
Sincerely,
Signed by:
Steven G. Wisecarver:
Acting Assistant Administrator:
Bureau for Management:
U.S. Agency for International Development:
Office of Iraq Reconstruction:
1300 Pennsylvannia Ave. N.W.:
Washington DC 20523:
Tel: 202-712-0448:
Fax 202-216-3872:
[End of section]
Appendix V: GAO Contacts and Staff Acknowledgements:
GAO Contacts:
William Solis (202) 512-8365:
David Cooper (617) 788-0555:
Acknowledgments:
In addition to the contacts named above, Steve Sternlieb, Timothy
DiNapoli, Carole Coffey, Gary Delaney, John Heere, William Petrick,
Timothy Wilson, Moshe Schwartz, Kate Walker, Robert Ackley, David
Mayfield, and Sylvia Schatz made key contributions to this report.
(350544):
FOOTNOTES
[1] We recently discussed breakdowns in the procurement process when
contracting for interrogators and other services in Iraq. See GAO,
Interagency Contracting: Problems with DOD's and Interior's Orders to
Support Military Operations, GAO-05-201 (Washington, D.C.: Apr. 29,
2005).
[2] These concerns have been expressed in requests from numerous
members of Congress that the Comptroller General review the
operational, legal, and contracting issues involving the use of private
security providers in Iraq. Congress has subsequently included several
provisions in legislation designed to improve the management of and
support and protection provided to contractor personnel who support
deployed forces or who are in a combatant commander's area of
responsibility. See Ronald W. Reagan National Defense Authorization Act
for Fiscal Year 2005, Pub. L. No. 108-375, section 1205 and 1206 (Oct.
28, 2004) and H.R. 1815, 109th Cong. title XVI (2005).
[3] CENTCOM is the U.S. military command responsible for prosecuting
the war in Iraq.
[4] On one additional 2003 contract, the contractor provided its own
security.
[5] Stop loss prevents servicemembers from leaving the service even
though they may have reached the end of their enlistment or service
obligation.
[6] In May 2004, the President signed National Security Presidential
Directive 36, which established the PCO as a temporary organization
within DOD. The PCO provides acquisition and project management support
for the reconstruction effort in Iraq. PCO personnel in Iraq are
permanently or temporarily assigned under the Chief of Mission
authority.
[7] DFARS Subpart 225.74.
[8] In response to public comments on the proposed new DFARS clause for
contractor personnel supporting a force outside the United States, DOD
stated that the new clause does not apply to nation building efforts
such as the reconstruction of Iraq. See 70 Fed. Reg. 23791.
[9] We recently discussed the Department's efforts to protect U.S.
officials working abroad. See GAO, Overseas Security: State Department
Has Not Fully Implemented Key Measures to Protect U.S. Officials from
Terrorist Attacks Outside of Embassies, GAO-05-642 (Washington, D.C.:
May 9, 2005).
[10] One memorandum was signed by the Deputy Secretary of Defense and
the Deputy Secretary of State, the second was signed by the Ambassador
to Iraq and the Combatant Commander, U.S. Central Command. The first
memorandum deals with security assistance, the second with security
responsibilities.
[11] All executive branch agencies in Iraq are part of U.S. Mission
Iraq except those which fall under the command of the CENTCOM
commander.
[12] A U.S. Army contracting activity awarded several security
contracts on behalf of the CPA.
[13] On one additional 2003 contract, the contractor provided its own
security.
[14] Pursuant to FAR Part 44, subcontracts are generally required to be
awarded competitively, to the maximum practicable extent. The
contractor prepared a justification, which was, in turn, approved by
the contracting office.
[15] USAID awarded its security contract on a sole-source basis citing
an urgent and compelling need. In January 2005, the USAID Inspector
General found, however, that in its efforts to award the contract
quickly, USAID failed to adequately document the selection of the
security provider and the purchase of armored vehicles that did not
meet U.S. government standards. USAID generally agreed with the
Inspector General's findings and is taking corrective actions.
[16] For example, the General Services Administration currently
maintains a multiple award schedule that federal agencies can use to
obtain various types of security services within the United States.
[17] DOD report to Congressional Defense Committees as required by the
Ronald W. Reagan National Defense Authorization Act for fiscal year
2005, Pub. L. No. 108-375, section 1206 (Oct. 28, 2004).
[18] Although DOD does not have an explicit command and control
relationship with private security providers, there are sanctions that
can be imposed in response to acts of misconduct. DOD points out in its
report to Congress that private security providers, in the absence of a
formal declaration of war by Congress, are generally not subject to
prosecution under the Uniform Code of Military Justice, but they remain
subject to prosecution by the Department of Justice under applicable
U.S. federal laws, to include the Military Extraterritorial
Jurisdiction Act (18 U.S.C. 3261), the special maritime and territorial
jurisdiction provisions of 18 U.S.C. 7(9), and the War Crimes Act (18
U.S.C. 2441). To date, DOD reports that there have been no disciplinary
actions brought against private security providers for acts of criminal
misconduct.
[19] See Department of Defense Directive 5200.8, Security of DOD
Installations and Resources (Apr. 25, 1991).
[20] Combined Joint Task Force-7 was a subordinate command of CENTCOM
and was responsible for the daily prosecution of the war. It was
succeeded by Multi National Force-Iraq (MNF-I) in May 2004.
[21] Emergency Supplemental Appropriations Act for Defense and for the
Reconstruction of Iraq and Afghanistan for FY 2004, Pub. L. No. 108-
106, section 2207 (Nov. 6, 2004) as amended by Pub. L. No. 108-309,
section 135 (Sep. 30, 2004).
[22] One contractor did not specifically track or report the security
costs it incurred under the contract.
[23] Overall, the costs to obtain private security services and related
security equipment for the 15 reconstruction contracts that we were
able to obtain and review were about $334 million, or about 7 percent
of total contract billings as of December 31, 2004.
[24] Several contractor officials noted the cost of security relative
to total contract costs can vary over time. For example, they noted
that initial security costs, such as for mobilizing and equipping
security personnel and purchasing armored vehicles, can be considerable
in relation to the amount of reconstruction work authorized. As
additional work is authorized, the relative percentage accounted for by
security costs could decrease considerably.
[25] In three other contracts, the contractors indicated that they
provided security for their subcontractors; one contractor did not hire
subcontractors; and in the five remaining contracts, the contractor did
not know about or did not provide information on subcontractor security
needs.
[26] DMDC collects and maintains an archive of DOD's automated
manpower, training, and financial databases.
[27] Stop losses are short-term measures that increase force
availability by retaining active or reserve component members on active
duty beyond the end of their obligated service.
[28] In this report, operational tempo refers to the total days
military personnel spend participating in normal drills, training, and
exercises, as well as domestic and overseas operational missions.
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