The US Military and the Culture of Contracting

 

Blackwater helicopter over Republican Palace, International (Green) Zone -Baghdad, Iraq [image: Wikipedia]

07/14/2011 BY Tom Wein (writes for Defence Dateline Group) -defenceiq.com

The defence industry is often viewed as a classic producer of complex kit, gear and technological gadgetry, all packaged and shipped to foreign warzones. From missiles to bergens to aircraft, the flow of products from the factory floor to the front lines leads many to envision defence contractors as boilersuit-clad engineers steadily working in the wings. Yet, for several years now, these contractors – often working for traditional defence giants such as BAE – have played a huge role in actual warzones, themselves. If Eisenhower once spoke of a military-industrial complex, today we should also speak of a military-services complex. The culture of contracting that has evolved since the coalition invasion of Iraq has produced some remarkable trends – that point to even more remarkable future possibilities.

A booming industry

The market is simply enormous. A recent US Congressional Research Services report on the matter lays out some statistics: in 2011, the Department of Defense, alone, employed 155,000 contractors in Iraq and Afghanistan. This compares to just 145,000 uniformed personnel. In FY2010, the DoD spent $11.8 billion on contracts in Afghanistan, 15% of its total expenditure on the overall war effort. DoD is probably the most profligate, but the Department of State and the intelligence services also contract out vast swathes of their duties. In 2010, the State Department awarded a $10 billion contract to guard its embassies to a consortium of eight leading private security companies.

In fact, there are so many contractors whose business models are dependent on Iraq and Afghanistan that some analysts have warned of mass unemployment - not just in Kabul, but also in places like Maryland and Virginia - as the US withdraws from Central Asia. Hefty spending on contractors is a government-wide issue.

These contractors have sometimes caused considerable controversy. Recently, high profile scandals have damaged the reputations of Blackwater (now Xe Services) and Aegis Defence Services. Both have been accused of killing civilians in Iraq, and Blackwater subsidiary Paravant has now become well know for having issued hundreds of Afghan police rifles under the name ‘Eric Cartman’, a fictional ‘South Park’ cartoon character. Such incidents are only the highlights of a catalogue of reportedly reckless behaviour in Iraq and Afghanistan by armed contractors.

Yet, the world of contracting is more usually mundane. Contractors conduct maintenance and logistics. Very often they prepare the food and wash the floors. They do so in the mainland US, in permanent bases worldwide, and also in the US’ Forward Operating Bases in Afghanistan.

The pros and cons

Contractors present enormous opportunities to the US military. Though expensive in the short run, they can be dispensed with when no longer needed. This adds flexibility and makes them ideal for short conflicts (indeed, for exactly the sort of wars Afghanistan and Iraq were intended to be). Driven by the rigors of the free market, they can often complete their tasks faster and to a higher standard than the equivalent civil servants or uniformed personnel. Once removed from an all-pervading bureaucracy, they offer a ‘can-do’, ‘get-it-done’ approach.

These opportunities are often outweighed by considerable disadvantages, though. In all groups, there is a temptation to act in one’s personal interests even where this does not benefit the group. Ambitious, careerist soldiers have been known to act in untoward ways, to the detriment of their units and their nations. But within the military, this is mitigated by a strong attachment to that group (soldiers feel themselves to be part of the army, and want it to succeed) and a strict honour code inculcated through arduous training and induction activities.

This is not necessarily the case for contractors (though many contractors are veterans, themselves); the temptation to act in their own interests are unalloyed. In the case of contractors from a country other than the US, the incentive of patriotism will be that much reduced. It is for this reason that, as a case in point, contractors working in logistics have been known to pay ‘hasheesh’ (bribe money) to Afghan warlords to ensure their safe passage, even though this is enormously detrimental to NATO objectives in the country.

Similarly, contractors do not accept the day-to-day management of military officers. If their behaviour is detrimental to the interests of their client, they cannot be held to account by UCMJ (Uniformed Code of Military Justice) statutes, nor can they immediately be removed from service, so long as the overriding contract still stands. Though clients can pressure contractors, and contractors want to please clients, the extra layers of management and process mean that oftentimes unsatisfactory contracts run their course to nobody’s benefit. It is this dynamic that allows private military contractors – often drawn from the elite of their respective armies, and supremely disciplined when in uniform – to misbehave.

For instance, ArmorGroup (now G4S) contractors guarding the US Embassy in Kabul are said to have engaged in nude, drunken parties involving coerced sexual activities and repeated hazing and humiliation to earn promotion and preferable shifts. Such behaviour is damaging in itself, in that it weakens the protection of the US Embassy, but it must be considered doubly damaging in a counterinsurgency campaign where the aim is to win over the population. The flexibility contractors offer in the long term is therefore largely offset by inflexibility of management in the short term.

Reading the fine-print

Many of the problems thrown up by contracting can be mitigated – primarily through the contracts, themselves. With carefully written contracts, a proper incentive structure can be put in place, with a full range of fines and bonuses to encourage good behaviour. Careful management and a strong client-contractor relationship can likewise ease the course. Many standing contracts for assistance in Iraq and Afghanistan are not well written, however. Standard templates are generally phrased for the delivery of equipment (and not services), and the proliferation of ‘legalese’ often obscures the ultimate contract objective.

Too many contracting officers do not, themselves, fully comprehend the contracting process. This writer knows of a contract in Afghanistan which was approved by four separate four-star officers over a period of six months. All of the officers agreed that the awarding of this contract could make a significant contribution to the war effort. Those in the know estimated that this meant the contract had a sixty percent chance of escaping the procurement mire. All this was for a contract of less than $2 million, or around 1% of the daily budget for Afghanistan. The benefit to the war effort in this case is arguably negligible.

Once contracts are awarded, contractors are usually left to their own devices. Management of the contractors – unless they are in the same room as the client – is sporadic. Not having much involvement in the project, the client often does not know what questions to ask. Honest contractors can easily misunderstand their jobs; fraudulent ones can easily deliver shoddy work.

The Obama administration has recognised this very problem, and has made a push for greater accountability and less waste. In 2008, the office of Special Inspector General for Afghanistan Reconstruction was created. The equivalent for Iraq has existed since 2004. These efforts to reform have largely been external, though. The appointment of watchdogs and inspectors has not been partnered with a concerted development of the means in which contracts are awarded.

A necessary expense? 

It seems likely that the US will continue to use large numbers of contractors. This is, in part, due to budgetary pressure; Congress will not countenance a large expansion in the permanent manpower of the military of the sort that would be required if all these supporting tasks were to be taken back ‘in house’. Partly, it is due to continuing strategic optimism; since the US rarely goes to war in the expectation that that war will be long and arduous, the flexibility of contractors will usually look like a good option. And partly, it is due to the genuine advantages that contractors can deliver, advantages which should not be forgotten amid the volumes of bad press.

In light of the continued momentum pushing private contracting ever forward, certain reforms are necessary. The US needs to recognise that some cuts are false economies; it will get far more value for money if it contracts carefully, approves quickly and manages well. From both within the military and outside it there now exists an enormous group of people with direct experience of the pitfalls and opportunities of contracting. This experience should be co-opted in the formation of a new tranche of contracting officers. They should be skilled at writing contracts, of course, but also at predicting the potential for error, and at putting the incentives in place to ensure these errors are not prolonged. They should then be trusted to make an appropriate decision about the awarding of that contract.

Finally, these contracting officers should be assigned to manage the projects they have commissioned. This management is a full time job, or very nearly, and they must be given the time to do it right. It seems that this would ensure that contractors can move beyond the stigma of uncontrolled mercenaries, and towards becoming a routine and smooth running part of the defence establishment.