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At long last! IPOA is Right

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Doug Brooks, founder and head of IPOA, a trade group for private military and security contractors, has long claimed that using such contractors is more effective than their public sector counterparts. Indeed, search online for "Doug Brooks and cost effectiveness" and you get 33,500 results.

Now, it appears that he is right, at least mostly, in his view, according to a report released today by the Government Accountability Office.

The report "Warfighter Support: A Cost Comparison of Using State Department Employees versus Contractors for Security Services in Iraq" focused on determining the costs to the Department of Defense and the State Department of using private security contractors for security services versus using federal employees to provide the same services.

The report reviewed four task orders of the Worldwide Personal Protective Services (WPPS) II contracts and one contract for Baghdad embassy security. WPPS is the way the State Department hires private security firms to protect its personnel around the world.

GAO based its review on assumptions provided by the State Department. These included that the State Department would have to recruit, hire, and train new employees who would all be U.S. citizens; the employees would serve 1 year in Iraq and then return to the United States; and the State Department would use the same number of employees the contractors use to provide security.

What the GAO found was:

Our comparison of likely State Department costs versus contractor costs for four task orders and one contract awarded by the State Department for security services in Iraq showed that for three of the task orders and the contract, the cost of using State Department employees would be greater than using contractors, while the State Department's estimated cost to use federal employees was less for the other task order. For example, using State Department employees to provide static security for the embassy in Baghdad would have cost the department approximately $858 million for 1 year compared to the approximately $78 million charged by the contractor for the same time period.

In regard to the remaining task order, the result was only slightly less favorable.

In contrast, our cost comparison of the task order for providing personal security for State Department employees while in the Baghdad region--which required personnel that have security clearances--showed that for this task order, the State Department's estimated annual cost would have been about $240 million, whereas the contractor charged approximately $380 million for 1 year. However, because the State Department does not currently have a sufficient number of trained personnel to provide security in Iraq, the department would need to recruit, hire, and train additional employees at an additional cost of $162 million.

Overall, the difference between the contractors' cost and the estimated State Department cost ranged from about $3 million for one task order to over $785 million for the contract.

See Table 1 on page 6 for a cost comparison for one contract and four task orders using a one-to-one ratio of deployed to stateside employees.

GAO did note that contract requirements are a major factor in determining whether contractors or government personnel are less expensive--especially factors such as whether personnel need security clearances.

For instance, unless the State Department specifies a need for personnel with security clearances--which are generally not available to non-U.S. citizens--contractors typically choose to employ a large percentage of third-country nationals and local nationals to lower contract cost. For example, the contractor providing embassy security in Baghdad employed a large percentage of third-country nationals and local nationals (about 89 percent), whose lower wages contributed to the lower cost of the contract. In contrast, our comparison of the task order for providing personal security for State Department employees while in the Baghdad region--which required personnel that have security clearances--showed that for this task order, the State Department's estimated annual cost would have been about $240 million, whereas the contractor charged approximately $380 million for 1 year.

And when using contractors, the department also incurs administrative costs for awarding the task orders and contract and providing oversight; however, the State Department was unable to estimate these costs. These costs can vary depending on the complexity and sensitivity of the contract. For example, according to State Department officials, the Baghdad Embassy contract provides static security at a fixed site which requires less oversight than the Worldwide Personal Protective Services II contracts which provide for the protective security of U.S. government officials and other individuals traveling in unsecured areas in theatre.

This does not definitively settle the debate as there were some things GAO did not look at such as whether the quality of the services provided by the contractors or whether better services could be provided by the State Department. It also did not evaluate the policy implications of using contractors to perform security functions.

Yet when you look at the availability of bodies for security functions it becomes clear why the State Department will continue to rely on private security contractors. GAO notes:

That in order for the State Department to perform these security missions with its own employees it would cost the State Department approximately $162 million to recruit, hire, and train 6,330 employees. When determining total costs for the department to provide security services, these recruitment and training costs would be in addition to the State Department's estimated annual cost. Overall, for these four task orders and one contract, the State Department is using 3,165 contractors for security in Iraq. However, the State Department only has about 1,500 security agents who are already performing other missions and according to State Department officials, these agents would not be available to perform the security missions provided by the contractors. According to State Department officials, based upon recent experience in establishing a new skill specialty, it would take about a year to have the first security personnel on-board; however, they would not be in sufficient numbers to completely replace the contractors. They said it could easily take them 3 years or longer to hire, train, and fully staff all positions necessary to accomplish the mission. As an example of the length of time it would take to hire and mobilize more employees, State Department officials informed us that after the attacks on September 11, 2001, under their current hiring process it took the State Department 2 years to hire 327 employees using existing career fields (to include recruitment, training, and completing the security clearance process).

But, compared to past efforts, such as this 2005 report and 2008 report by the Congressional Budget Office the GAO report is as close as we have yet seen in comparing apples to apples.

 
 
 

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