By David Isenberg

In the aftermath of the report by the Project on Government Oversight regarding drunken antics by ArmorGroup contractors in Kabul, who had the responsibility of guarding the American embassy, the Commission on Wartime Contracting held a hearing on Sep. 14 focused on the U.S. State Department’s selection, management, and oversight of security and other contractors in support of the Kabul Embassy.

One of the witnesses at the hearing was Doug Brooks, founder and head of IPOA, the Association of the Stability Operations Industry, formerly known as the International Peace Operations Association, which is a leading trade group for private military and security contractors.

During the course of the hearing Mr. Brooks had this exchange with Mr. Henke, one of the commissioners.

Commissioner Henke.  Okay.  I am trying to understand if your organization is really, my sense is, a Good Housekeeping Stamp of Approval without the good housekeeping, and I am not being facetious there.  I really want to understand what teeth are in your code of conduct. You go to great lengths in your statement to talk about your standards of conduct committee and how anyone can file a complaint.  That is anyone, right?  Any member company?  Any journalist?  Any NGO?

Mr. Brooks.  You can file a complaint based on our code of the conduct.

Commissioner Henke.  Has anyone yet?  Since September 1st, since POGO went public with this gross misconduct, has any complaint been filed against ArmorGroup, WSI or Wackenhut?

Mr. Brooks.  At this point, we do not reveal those complaints until later in the process.

Commissioner Henke.  You will not tell us here today if anyone has filed a complaint?

Mr. Brooks.  I would rather not.  Yes.

Commissioner Henke.  You will not tell us or you would rather not?

Mr. Brooks.  I would rather not, to be quite frank.  We try and keep the system–

Commissioner Henke.  Have you filed a complaint as the head of the organization?

Mr. Brooks.  I do not file complaints.  As the head of the organization, I will not.

Commissioner Henke.  Okay.  I am filing a complaint now.

Mr. Brooks.  Okay.  I will send you information on filing, on the filing process.

Commissioner Henke.  Now I am in your system, and I want to see what happens with this code of conduct.

Mr. Brooks.  When you are in the system, you will be informed as the complaint moves forward.

Commissioner Henke.  I am filing a complaint against ArmorGroup for their gross misconduct and the violation of your organization’s code of conduct.

Commissioner Ervin.  Bob, can I just interject just quickly? I would like you to answer the question for the record.  I understand if you do not want to do it.  I would like you to answer whether there is presently on file a complaint against either ArmorGroup, WSI or Wackenhut.

Mr. Brooks.  To be honest, I would have to actually check the policy on that, but I would prefer–

Commissioner Ervin.  Check the policy on whether there is a complaint?

Mr. Brooks.  No, no, on the revealing of the complaint if there is a complaint because–

Commissioner Ervin.  I would like for you to just take a minute before we end this hearing, check the policy and get back to us.

Mr. Brooks.  No.  You know what? I will tell you right now at the risk of annoying my membership, but there has been no complaint to date on ArmorGroup or Wackenhut.

Commissioner Henke.  No complaint to date at all?

Mr. Brooks.  No, but these complaints usually take some time before they actually do come in.  On our side, it is an ethics complaint rather than–

Commissioner Henke.  It has been 13 days, and no one, much less a member company, has said, there is something wrong here, I am going to complain?

Mr. Brooks.  That is correct, sir.

Commissioner Henke.  How many members do you have?

Mr. Brooks.  We have 64 members, sir.

Commissioner Henke.  Sixty-four member companies, no one has said a word?

Mr. Brooks.  Well, they have said a word.  There have been lots of discussions about it.

Commissioner Henke.  Well, I am sure they are talking about it.

Mr. Brooks.  Nobody has filed a formal complaint.

Commissioner Henke.  Nobody has filed a complaint.  I just think that is egregious.  I mean this distinction of–

Mr. Brooks.  Keep in mind, most of the complaints come from outside the association.

Commissioner Henke.  As mine just did.

Mr. Brooks.  Yes.

Commissioner Henke.  Thank you.

Mr. Brooks.  And, I am going to send you information so you can make a formal filing, and we will address that as we would any other complaint.

It is now nearly three months since Mr. Henke filed his complaint. What has IPOA done to address it? Not much apparently. In response to my query Clark Irwin, Director of Communications at the Commission, replied via email on Dec. 8 that “Commissioner Henke says he has had no contact from IPOA except for an acknowledgment that they had received his complaint.”

In the second of a 3-part series David Isenberg, columnist, analyst, researcher and author of Shadow Force: Private Security Contractors in Iraq provides analysis and commentary on the transcripts of testimony from the recent hearings by the Commission on Wartime Contracting which took place on the 14th of September in Washington.

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By David Isenberg

Like my previous posts, what I have done below is to copy various excerpts from the hearing. Each excerpt is italicized and indented. Each excerpt is usually followed by my comment in bold. Sometimes I make observations. Sometimes I ask questions. In some cases I feel the excerpt is so fascinating in its own right that it stands on its own and I make no comment.

PANEL II OF A HEARING OF THE COMMISSION ON WARTIME CONTRACTING SUBJECT: THE DEPARTMENT OF STATE AND SECURITY CONTRACTOR MISCONDUCT CHAIRED BY: CHRISTOPHER SHAYS AND MICHAEL THIBAULT WITNESSES: DANIELLE BRIAN, EXECUTIVE DIRECTOR, THE PROJECT ON GOVERNMENT OVERSIGHT (POGO); TERRY PEARSON, FORMER OPERATIONS SUPERVISOR IN KABUL, RA INTERNATIONAL LOCATION: 2247 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C. TIME: 11:53 A.M. EDT DATE: MONDAY, SEPTEMBER 14, 2009

MS. BRIAN:

The issue here is really not about obscene pictures and drunken men. It’s about a contractor that has been entrusted with a profoundly important mission — protecting our diplomats and embassy in an increasingly violent war zone — and a federal agency that has utterly failed to oversee that contractor.

What is truly obscene is that ArmorGroup knowingly under- performed in its mission in order to maximize its profits, endangering the diplomats and its own employees in the process, and the Department of State knew about it.

We now know that, as far back as 2007, an earlier generation of ArmorGroup whistleblowers vigorously pressed management to address all the concerns that have been raised today. When these concerns were dismissed by ArmorGroup, the whistleblowers reported the misconduct to a State Department official. They were fired the next day. This may answer some of the questions you have about why other whistleblowers later didn’t go to the State Department. Not only were those people fired, but the State Department never followed up to interview any of those claims that were being made back in 2007.

AG to employees: The truth will only get you fired.

Fast-forward to August 2009, when POGO started hearing from ArmorGroup guards. We discovered a demoralized workforce in crisis because they feared they were incapable of properly carrying out their mission. Because ArmorGroup failed to hire an adequate number of guards, leave was often revoked and the guards were working 14-hour-a- day work cycles for as many as eight weeks in a row. The guard force commander himself described the entire guard force as sleep-deprived.

Indeed, as any military officer would tell you, putting aside whether an attack happens or not, having guards work a 14 hour shift is inherently a security risk.

I have to say I am disturbed that so far in this hearing, as Commissioner Ervin noted, the State Department kept trying to limit the issue to two or three parties. The down side to having those photos is it makes it easy to focus just on those parties, overshadowing what we think are equally significant issues. But I also find it amusing, because we actually have photos of other parties of other dates, and we’re happy to share whatever is of interest to the commission.

Yes, please do share.

But for the past two years, the State Department’s response has consisted mainly of written reprimands and the renewal of ArmorGroup’s contract. Weak government oversight creates festering sores that breeds misconduct, as we see in this case.

Frankly, infuriatingly in response to the recent revelations, the State Department continues to repeat baseless statements that at no time was security jeopardized. Based on what facts can they possibly make those assurances?

To answer Ms. Brian’s question I think we previously established they can’t.

As some of the commissioners have noted, four times between June 7th and March 29th, the State Department itself told ArmorGroup that the inadequate number of guards, quote, “put security in jeopardy,” quote, “negatively impacted the security posture,” caused, quote, “serious and grave concerns” and, quote, “gravely endangers the performance of guard services.”

Nothing has changed since those statements were made. Yet the State Department is now assuring the Congress and the Wartime Commission that security at the embassy is sound.

I have last week’s shift schedule. I know they are still operating on a schedule that their own commander described as unsustainable. These public assurances by State are not supported in fact and make clear the department has not yet recognized its own role in this public-policy failure.

What can one say? Just freaking incredible!

And with regards to the hazing, let me quote one of the guards himself. He wrote to us, “I’m convinced the greatest threat to the security of the embassy is the erosion of the guard forces’s trust in its leadership and ultimately the Department of State.

The drain on morale, along with the systemic retaliation against guards, who did not participate in the unprofessional activities, has resulted in a near 100 percent annual turnover rate. This turnover rate feeds back into the guard shortage that causes the excessive overtime.

And now the guard force has to trust the State Department to fix the problem? Can we say Catch-22?

So these other issues do in fact have a direct impact on security. Furthermore Undersecretary Kennedy’s statement to the media that most of these problems were identified, in State Department correspondence with ArmorGroup, and therefore, quote, “there was oversight present,” makes a mockery of oversight, unless what he meant was the other meaning of oversight, which is meaning to overlook.

Simply documenting a problem and even imposing a fine is not effective oversight, if the problems continue to occur.

Oversight is no sight. No doubt Orwell is laughing.

The failed oversight also extends to the State Department’s inspector general, whose office, we now know, was contacted two years ago by Senator Lieberman’s staff, yet they never interviewed the whistleblowers to determine the extent of the problems.

Oops, never mind what I wrote earlier regarding using the State Department IG hotline.

Additionally, in testimony before the Senate in June, ArmorGroup parent company Wackenhut Vice President Sam Brinkley provided testimony that was also inconsistent with the facts. He asserted that the guard force for the U.S. embassy had been fully staffed since January. However, that March, nearly 50 guards stood before him at Camp Sullivan to point out the guard shortages that required them to be overworked and have their leave revoked. And now Wackenhut is taking some of their guards from our U.S. nuclear weapons facilities to try to patch up this guard shortage.

Ah well, why bother guarding a nuclear power plant?

At that hearing, State Department Deputy Assistant Secretary Moser echoed Wackenhut’s false assurances. Who will hold these officials accountable?

To paraphrase King Henry II on Thomas Beckett, will nobody rid me of these incompetent overseer’s?

And finally, it may be necessary to bring the military in to oversee the performance of the security.

Yes, I’m sure they will be happy to, just as soon as they can take a break from training the Afghan army and national police.

On a final note, I would like to thank the more than 20 whistleblowers, who came forward at great personal risk. The risk they took, and continue to take, is breathtaking. In return for their bravery, they have been called rats by some of their colleagues, woken up to posters on their doors with threats to their jobs and families, all while working 14-hour shifts and literally having bombs explode outside the gates of their compound.

Is the Commission talking to these people? One can only hope so.

In response to the scandal, the State Department did ask ArmorGroup to remove all the supervisors on this contract. However, incredibly, those supervisors, after being fired, were not actually removed for days, and continued to act in their official capacity; creating an untenable work environment for the many whistleblowers still on the guard force.

It just gets better and better.

As of today, not all the bad actors have been removed, and retaliation continues. State has issued warnings that retaliation won’t be tolerated, but what will they actually do to protect the whistleblowers? I continue to lose sleep worrying about them. But from their public comments, however, I sense the State Department is perhaps losing sleep focusing more on their own reputation.

Just how bad is it?

MR. THIBAULT: Well, the reason that’s important is, so often in whistleblower cases, there’ll be one or two individuals that bring the whistle and allege wrongdoing, and they’re kind of — the history says sometimes they’re summarily dismissed as disgruntled employees, or about-ready-to-be-fired employees. And in this case, it’s not everyone, but it’s — you know, have you experienced that kind of referral in your past?

MS. BRIAN: That’s a great question. I’ve been doing this for 20 years, and there has not been a circumstance that I can point to where such an enormous percentage of individuals have come forward essentially as whistleblowers. It’s — it’s — out of 150 English- speaking guards, we’re speaking to 20 of them. I mean, it’s really quite extraordinary. So it’s unlike anything I’ve ever experienced, and it’s a testament to the magnitude of the problem.

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David Isenberg is an independent, Washington-D.C. based analyst and writer on military, foreign policy, national and international security issues and the author of Shadow Force: Private Security Contractors in Iraq.  In addition to his contributions to the Private Military Herald, Isenberg also blogs regularly at the Partnership For A Secure America.

By David Isenberg

A United States government report released last week is a classic good news, bad news story on private security contractors (PSCs) operating in Iraq.

The audit report, by the Special Inspector General for Iraq (SIGIR), looked at five Theater-Wide Internal Services (TWIIS) contracts awarded to five PSCs for static, or fixed security, services, in Iraq, at a maximum value of US$450 million. The TWISS contract was created to streamline the contracting process for static security around bases and other installations in anticipation of an increased need for those services in Iraq.

The winning PSCs were Aegis Defense Services Ltd; EOD Technology Inc; Sabre International Security; Special Operations Consulting-Security Management Group; and Triple Canopy Inc. These five are among the seven largest PSC providers in Iraq.

The audit showed that most awards were conducted under full and open competition, and the decision-making process was well supported. The five contracts, and 47 of the 50 task orders, were competitively awarded. Three non-competitively awarded task orders, worth $15.1 million, were appropriately justified as sole-source awards.

Forty of the task orders were justified on the need to replace troops, that is, to substitute PSCs for soldiers who were needed elsewhere or to incorporate an existing PSC contract into TWISS. In 19 of the 40, PSCs replaced soldiers performing static security at an installation. The other 21 task orders involved using contractor personnel in lieu of soldiers to meet increased security requirements or to incorporate an existing PSC contract into TWISS.

At forward operating base Hussaniyah, additional static security personnel were required when the installation size quadrupled. Without PSCs to fill this additional requirement, the base would have had to provide military personnel, jeopardizing its mission to train and develop the Iraqi Army

It is also clear that the military will be increasing its dependence on contractors in the future in Iraq. The Multi-National Force – Iraq plans to add installations in Iraq to future TWIIS new contracts, including Victory Base Camp, which has a requirement for about 2,600 security personnel.

But the report “Need To Enhance Oversight of Theater-Wide Internal Security Services Contracts” released on April 24 also identified vulnerabilities in the government’s oversight.

The most significant was that the experience and training of the contracting officer representatives (COR) were limited, and the time they will have available to devote to their oversight responsibilities for these contracts was insufficient.

For example, of 27 CORs responding to SIGIR questions, only four said that they had previous contracting experience, 11 said that their training was insufficient to meet their job requirements, and six said that other duties prevented them from conducting adequate oversight.

The SIGIR report found that the US military lacks the capacity to manage its contractors in a contingency environment. Selecting CORs with limited or no direct contract management experience, providing them on the job training and then assigning them other principal duties, increases the government’s vulnerability.

CORs are critical for oversight. They provide day-to-day oversight of the contractors’ performance and compliance with contract requirements. They are “the eyes and ears of the installation commander and the contracting officer”. They have significant responsibilities. They must monitor the contractor’s performance and compliance with contractual requirements, including compliance with all applicable laws, regulations, orders, and directives. Furthermore, the COR is responsible for validating invoices for payment submitted by the contractor.

In addition to the above COR duties, TWISS CORs are also responsible for ensuring that PSCs adhere to arming requirements, personnel reporting systems, serious incident reporting systems, badging (identification tasks), and compliance with MNF-I fragmentary orders (brief oral or written orders that provide timely changes to existing orders).

SIGIR provided questions to all 50 TWISS CORs and received responses from 27. Based on the 27 responses:

Prior experience: Four had previous contracting experience. Twenty-seven CORs received their training on COR duties after they arrived in Iraq.

Training: Eleven stated that the training provided did not fully prepare them for their responsibilities in overseeing PSCs. Eight CORs stated that training specific to private security contractors would be helpful. Fifteen CORs stated that they learned their duties from on the job training from their predecessor when available, the Defense Contract Management Agency quality assurance representative, or even the contractor that they are overseeing.

Additional duties: Six CORs assigned to oversee the task orders have additional duties and contracts that prevent them from conducting adequate oversight of the TWISS contractors. While MNF-I requires that CORs have contract oversight as their primary function, this is not necessarily the case. For example, one COR noted that his primary duty is that of a platoon leader. In addition, he is responsible for overseeing other contracts.

As a result, he is able to devote about 40% of his time to overseeing the TWISS task order. Another COR, who is in charge of one of the largest TWISS task orders, stated that he spends about 50% of his time on TWISS and six other services’ contracts. In both cases, the CORs felt that their additional duties prevented them from dedicating the necessary time to oversee the PSCs.

Three of the TWISS contractors stated that CORs are often ill-prepared for their tasks. For example, one contractor stated that in the majority of cases, CORs’ knowledge of contracting and responsibilities has been limited. In addition, two contractors noted that CORs are often late in signing the invoices or filled them out incorrectly, leading to up to three-months delay in payment to the contractor.

Considering that the inadequate performance of CORs was identified as a significant failure in the report of the independent Commission on Army Acquisition and Program Management in Expeditionary Operations released in November 2007, the SIGIR report confirms how difficult it is to get adequately trained and resourced government personnel into the field to monitor private contractors.

It found that the situation might well get worse in the future as difficulties in managing these contracts could easily be exacerbated as the US military draws down its presence in Iraq and this affects its pool of experienced personnel.

With the addition of the upcoming TWISS II, the TWISS contracts will grow in size to a potential $935 million. Such a situation would make these contracts even more vulnerable to fraud, waste, and abuse.

There was also information in the report that called into doubt some of the PSC industry’s claims of cost effectiveness. One of the gospels of the industry is that it is cheaper to hire them than having a regular soldier doing the same job, such as guarding bases, when the soldiers have more important priorities, such as actual combat. The reasoning is that it makes no sense for a highly trained soldier to be manning a checkpoint when a civilian could do the same thing.

While the priority part makes sense, the audit report contained some numbers that makes one wonder how cheap it is to replace soldiers with civilians. It is not the expense of the civilians but their numbers which drive costs up.

For example, at Camp Bucca it took 417 PSC to free up approximately 350 soldiers for combat operations. At Camp Taji, the Department of Defense (DoD) issued a task order for over 900 personnel to replace 400 soldiers and to address deficiencies in existing site security. At forward operating base Hammer, the DoD issued a task order for 124 personnel to free up 102 soldiers for combat operations. At Camp Taji, the DoD issued a task order for over 900 personnel to replace 400 soldiers as well as to address deficiencies in existing site security.

Overall, the number of estimated personnel in the TWIIS contracts totaled 8,580. The vast majority, 7,399, or 86.2%, were guards. Another 885, 10.3%, were supervisors and management personnel. The rest were handlers of explosive ordnance detection dogs and screeners and interpreters. That means there was one management official for every 8.6 workers. That is a lot of management for an industry that often claims that its success is due to its lean and flat organizational structure.

Another interesting point made in the audit is that the actual cost of the contracts is higher than the stated cost. This is because in most cases, life-support costs for contractor personnel such as food, water and shelter are not included in contract costs and are paid by the DoD. SIGIR estimates these costs for the current five contracts at more than $250 million per year.

The industry also claims that the costs of contractor personnel, especially the salaries paid to contractors, have been exaggerated in past news coverage, While it is true that much of the news reporting has been exaggerated, and doesn’t take into account benefits and compensation regular military personnel receive which contractors do not, it is obvious that someone is being paid well as personnel costs account for 81% of $252.7 million obligated to date on contract task orders.

But it is not expatriate guards or supervisors on whom lots of money is being spent. The SIGIR audit noted that the use of competition has helped drive down the costs of security services. It found that the rates for expatriate guards and expatriate supervisors have been reduced over time and that average costs have been significantly reduced over the course of the contracts, especially when compared to the rates agreed upon at contract award.

For example, the average rate for an expatriate security guard decreased 26% between the time the contract was awarded and the award of the first task order. In the most recent task order, the rate decreased an additional 29% for a total decrease of 55%. How much the expatriate guards and supervisors are paid can’t be determined as the companies consider that proprietary information.

Perhaps the most interesting fact in the audit, which is also pertinent to the cost effectiveness debate, dealt with how contract proposals were evaluated. As the industry, if not the public, has long understood when it comes to winning an award, the price of their bid is not the most important factor.

The audit noted, “According to the Request for Proposal, past performance and past experience were approximately equal in weight and significantly more important than technical capability and Iraqi participation, which were equal in weight. The four factors combined were significantly more important than price.”

In other words, when the military is considering awarding a contract it is as much concerned whether the services it is looking for will absolutely, positively be there as it is about the cost.

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David Isenberg is a researcher at the International Peace Research Institute, Oslo. He is an adjunct scholar with the Cato Institute, a research fellow at the Independent Institute, a US Navy veteran, and the author of a new book, Shadow Force: Private Security Contractors in Iraq. The views expressed are his own. His e-mail is sento@earthlink.net.

By DAVID ISENBERG

WASHINGTON, April 10 (UPI) — This is my final Dogs of War column. Since starting in January 2008, I have covered many different aspects of private military and security contracting, but they have been only a small portion of the total number of issues worth examining.

Like any other issue, there is good and bad news when it comes to contractors doing work that once upon a time people could only conceive of the government doing. (more…)