The decision not to renew Blackwater Worldwide's security contract in Iraq when it expires in early May has left the State Department scrambling to fill a protection gap for U.S. diplomats and civilian officials there.
Two other U.S. security contractors with a far smaller presence in Iraq -- DynCorp International and Triple Canopy -- have been asked to replace the ousted company, according to State Department and company officials. To meet time, training and security-clearance pressures, officials said, one or both of the firms are likely to undertake the task by rehiring some personnel now working for Blackwater.
The Iraqi government refused to issue Blackwater a license to perform security services after a 2007 incident in which company guards on a diplomatic protection mission shot and killed 17 civilians in Baghdad. U.S. prosecutors have indicted five of the guards on charges of manslaughter. Blackwater (which recently changed its name to Xe) still has State Department contracts for air transport in Iraq and security for U.S. diplomats in Afghanistan.
Meanwhile, fallout from the shootings -- including a new U.S.-Iraq status-of-forces agreement that places contractors under Iraqi legal jurisdiction for the first time -- has led both the Pentagon and the State Department to create new categories of "full-time, temporary" federal jobs to handle some tasks currently done by contractors.
The Blackwater incident helped fuel a wider debate on the overall cost and conduct of contractors. President Obama last week ordered a government-wide review of federal contracting procedures, saying that his administration "will stop outsourcing services that should be performed by the government."
Nowhere has that outsourcing been larger or more contentious than in Iraq, where contractors have long outnumbered the U.S. military presence, even at its peak of 160,000 troops.
The days of massive U.S. reconstruction contracts in Iraq are over, with little to show for tens of billions of dollars spent, according to government auditors. While the military continues to outsource much of its supply chain, contracts for services such as transport and food will diminish as combat forces begin to draw down.
In a commandwide directive issued Jan. 31, Gen. Ray Odierno, the U.S. commander in Iraq, ordered all military units to start cutting U.S. contractors at a target rate of 5 percent each quarter and to hire more Iraqis to do their jobs. "As we transition more responsibility and control to the government of Iraq, it's time to make this change," he added.
However, some contracted activities, from training Iraqi forces to strategic communications, are likely to increase as troops withdraw, and certain U.S. contractors are seen as irreplaceable. "Human terrain" experts -- civilian social scientists and linguists hired to help the military better understand Iraq and Iraqis -- have been told that they must accept newly created government jobs, at potentially lower salaries, or leave. The highly touted human terrain program, which fields 20 teams of five to nine specialists in Iraq and six in Afghanistan, was begun by Odierno's predecessor, Gen. David H. Petraeus.
Program head Steve Fondacaro said that when hazardous-duty, locality and other government pay benefits are added, total compensation will be competitive with the private sector at $147,000 to $236,000 a year. He estimated that at least 60 of about 100 currently contracted specialists would accept the year-long government jobs, with annual renewal options for up to four years, even though some have complained anonymously on blogs that the new arrangement constitutes an unacceptable pay cut.
Avoiding legal problems in Iraq, Fondacaro said, was more of an impetus for the move than cost-cutting. Although no U.S. contractor has been arrested under the new status-of-forces agreement, which became effective in January, he said the risks were too great in a country whose legal system is "a shambles." He is also putting the same program in place for human terrain specialists in Afghanistan.
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"I had to take action to protect our people and protect our mission," Fondacaro said.
Fondacaro pointed to the Rockville-based contractor BAE Systems, which he said has informed employees that it would no longer accept liability for any legal problems they might have in Iraq and suggested they stay inside U.S. military installations at all times. "So here I am, paying exorbitant contractor wages for people whose company is not going to provide them any legal defense, and is recommending they don't go outside" to make contact with Iraqis, he said. "Which is mission failure."
By making the specialists into government employees, Fondacaro said, "this all goes away in one fell swoop. . . . They are protected under U.S. law and have the same rights and privileges as U.S. troops," including immunity from Iraqi taxes and arrest.
Lucy Fitch, BAE Systems senior vice president for communications, said the "government has told us they wish to convert contractor positions in Iraq and Afghanistan to government positions" when the company's contract expires in August, but she called Fondacaro's description of company instructions "inaccurate."
BAE employees were advised during December and January to stay inside U.S. military installations "until we could figure out . . . the legal implications and personal risk" under the new status-of-forces agreement, Fitch said. In a clarification last month, she said, employees were told that the company would "assist them in finding in-country legal representation" if they were prosecuted or sued for any reason in Iraq. If problems were related to "actions properly undertaken for BAE Systems," she added, "we will provide them counsel at the company's expense."
The State Department has also created new temporary government jobs in Iraq, but for a different purpose. Following the 2007 Blackwater shooting, then-Secretary of State Condoleezza Rice ordered that a federal security agent ride along on each of the contractor-protected convoys that carry U.S. diplomats, aid and other civilians -- including provincial reconstruction team members based in Baghdad neighborhoods and around the country -- outside their official compounds.
State's Bureau of Diplomatic Security not only handles security for embassies and other civilian outposts around the globe but also protects foreign officials visiting the United States. With only 1,600 highly trained special agents in the bureau, the Iraq mandate has severely stretched the service. "You'd need the entire [Diplomatic Security] workforce just to do Iraq," a senior State Department official said, "leaving nothing for Afghanistan, nothing for anywhere else in the world."
In postings on government job sites last month, State solicited "Protective Security Specialists," a new job category offering lower pay -- $52,221 with guaranteed employment for 13 months, renewable for up to five years -- and requiring less training than full-fledged agents.
Riding along on convoys and making sure that security contractors follow the rules, the official said, does not require "all that training and experience. . . . We had a lot of applicants."
Listed qualifications, seemingly designed for former security contractors, included "at least three years of specialized experience conducting overseas protective security operations within the last five years. Experience in Iraq, Afghanistan or Israel is particularly desirable."