Putting the Contract in Private Security Contractors

Putting the Contract in Private Security Contractors
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Today we look at is another law journal article. It is noteworthy not only for its content and recommendation, but also for its author.

The article is "No More Nisour Squares: Legal Control of Private Security Contractors in Iraq and After,"published last year in the Oregon Law Review (Vol. 88, No. 3) .

The author is Charles Tiefer. In addition to being a professor at the University of Baltimore Law School he is also a commissioner on the Commission on Wartime Contracting in Iraq and Afghanistan.

As you would expect he accepts that the use of private security contractors is here to stay. He is also concerned with "how to control the abuses and injuries of private security contractors" so we do not have more Nisour Squares, when Blackwater guards, some of whom claim they faced a threat, opened fire on civilians, killing seventeen Iraqis.

He notes that the problem of private security abuses and injuries is part of the broader trend toward the privatizing of military effort. In turn, this effort has produced accountability issues reduce support for the U.S. government's efforts both in Iraq and in the world.

The U.S. Congress has attempted to deal with these problems by amending the Uniform Code of Military Justice (UCMJ) to cover private security employees and applying the amended Military Extraterritorial Jurisdictional Act (MEJA). Others see the solution in civil suits under existing statutes such as the Alien Tort Claims Act.

But, to paraphrase social scientists Tiefer thinks that these efforts, while laudable, and perhaps even necessary, are not sufficient. Thus, he advocates what he calls the "contract law" approach.

In the much-expanded form proposed in this Article, the "contract law" approach would use government contract requirements, contracting tools and sanctions, contract-related claims, and distinctive contract-related suits to both control and remedy private security abuses and injuries.

Tiefer reminds us that soon after the Nisour Square killings the Departments of Defense and State implemented reforms, including new and stricter contractual requirements, departmental monitoring of contractor performance, and department-wide regulations in July 2009. But that is just the start:

More could be done to follow up on this contract law approach. Government contracting has impressive tools. Additional contractual requirements for private security firms can serve as "quality control" specifications. The Departments of Defense and State may impose additional contractual requirements besides training and reporting that relate to the selection and assignment of employees, postincident responsibilities, and international licensing and accreditation. The government can treat incidents that cause the inappropriate harming of civilians, in addition to potentially prosecutable actions of individual employees, as both possible failures of "quality control" by the private security firms and occasions for scrutiny by an inspector general.

Among the category of tools for civilians that have been discussed by commentators are different kinds of claims and suits, which already apply to the military in Iraq but apparently not to the contractors. As for civil suits, most interestingly, the civilian victims of security incidents may be able to invoke such contract requirements as third-party beneficiaries under a contract law theory. The intricacies of third-party beneficiaries of government contracts may support an argument that civilians have rights as to security contractors in Iraq.

Before going further let's take a moment to see what Tiefer writes about problems with amendments to the UCMJ and MEJA. These have been pointed out before by other commentators but the fact that they still exist says a lot about how useful he UCMJ and MEJA are in dealing with actual crimes by contractors.

A number of practical problems stand in the way of applying the UCMJ, and the Department of Defense (DOD) has made little or no use of the new provision. The DOD did not seek the amendment. Military courts may find this particular exercise of their jurisdiction somewhat misaligned with the normal exercise. Unlike troops, private security contractors are not under military discipline and are not ordinarily acting under the orders of combat commanders.

Turning to MEJA, Congress enacted this statute in 2000 specifically to bring overseas military contractor employees under the criminal jurisdiction of U.S. courts, after a scandal during the military intervention in the Balkans. After Abu Ghraib, it became apparent that the statute did not apply to contractors that were not technically hired under a DOD contract, even when they performed work with the military and the non-DOD contract was just a technicality. So, Congress amended the law to reach contractors "supporting the mission of the DOD." The Defense Department issued proposed regulations for implementing MEJA as to that department.

Practical problems hinder the pursuit of cases under MEJA also. No department other than the DOD adopted implementing regulations. The Nisour Square incident involved a State Department contractor, not a DOD contractor. On the other hand, the Department of Justice secured an indictment of five Blackwater guards in the Nisour Square incident pursuant to MEJA.

Whatever the technical issues of applying MEJA to non-DOD contractors, criminal indictments under MEJA seem unlikely to become common. It is true that even a small number of successful prosecutions can have a strong deterrent effect, as well as propitiating the local indignation about abuses. Still, there are enormous practical and legal problems with bringing so many criminal prosecutions in federal courts about actions in a war zone that will shape corporate behavior.

Tiefer see contracting law as a way of quality or best value in contractor's work; something I touched on in this past post.

Contract law offers different methods to obtain additional qualities. These methods could be mandated as requirements. For example, to perform the highest level of duties, the rules incorporated in the contract could require particular sets of backgrounds for selected contractors.

Alternatively, the government could evaluate the firm's additional attributes when deciding upon awarding contracts or task orders. Ordinarily, such awards may occur on a basis that does not fully gauge or reward quality, such as a lowest price offer that is technically acceptable. Instead, awards could occur on a basis that does gauge and reward quality. Awards could occur on a "best value" basis with a trade-off that puts the most weight on quality criteria and puts only limited weight on cost. Moreover, as successive awards of such contracts occur, the government could give weight in the later awards to the "past performance" on the early awards. Private security contractors may well argue that it is a hard challenge to avoid casualties to everyone under their protection, while at the same time completely avoiding casualties to local civilians. Counting "past performance" would reward those contractors who perform the best at those double challenges.

Similarly, a contract law approach may deal with postincident responsibilities. For example, the government could require firms to transfer individual employees involved in any incidents to less-demanding duties (e.g., from mobile convoy duty to static perimeter duty, either temporarily or for the duration of the contract). This could occur for individual employees implicated either in dubious judgment significantly below the criminal level or in multiple instances of near-dubious judgment.

The attraction of Tiefer's approach is obvious. It does not require Congress to pass new laws. Instead it encourages government departments and agencies to use their existing power of writing contract specifications to encourage positive performance by contractors.

And Tiefer notes that the government has powerful tools at its disposal to ensure proper auditing of contracts by using Inspector Generals.

Before Nisour Square, and to some extent even after the event, some IGs did not see private contractor incidents as involving contract law issues. IGs could determine that incidents warranted some scrutiny by a criminal investigator but, apart from that, IGs had little or no role. However, the contract law approach lays the foundation for a much larger role for IGs. Now, the DOD would be rendering quality assurance requirements subject to audit. By creating much fuller incident reporting requirements, a contract law approach can establish a paper trail to monitor contractors, simultaneously with interview and other live evidence, to determine the actual quality of the firms' employees. This partly concerns whether IGs see the subject in all its seriousness. They must not leave private security quality control to the DCMA after dangerous incidents have occurred. IG involvement sends a powerful message that is hard to send through other means, much like the message sent within police departments when weapon discharge incidents are investigated seriously. Contractors disinclined to take reporting requirements seriously would view the matter very differently when IGs scrutinize failures to make full disclosures or otherwise cooperate fully in inquiries.

Moreover, IGs should have a degree of independence that others in the particular department may lack. For example, it is common, and perhaps natural, that officials working with a particular security contracting firm come to bond with it. Natural as that bonding is, it does not make for an independent judgment of whether the contractor has fulfilled all requirements, including those relating to sparing local civilians from injury. An independent IG has a better chance of making an independent judgment.

Furthermore, an IG investigation could justify serious legal sanctions, contestable by the contractors if they so choose. These could include nonrenewing contractual option terms or partially or wholly terminating a contract for convenience. That, in itself, would not preclude the contractor from seeking more contracts. However, the sanctions in the most serious cases could go further, starting with adding negative ratings for past performance to the contractor's record and, much more seriously, terminating a contract for default.

These steps do make it harder, sometimes much harder, for the contractor to seek more contracts. The steps may even constitute a substantial threat to a firm's existence if it has nowhere else, other than the U.S. government, to turn to sell its services. But, these tools should be available in case an investigation uncovers a particularly bad problem. Moreover, contract law can reduce the impact on the government of an interruption of the provision of services when the government terminates a contract. Even under existing law, the government can take control of subcontracts and of work in progress during the termination of a contract. It would not be much of an extension for private security in a country like Iraq to provide via contract provisions or applicable orders that, during termination of a contract, the government has full authority to order the shifting of firm employees in the theater of combat to a different contractor (subject to the employees' choice rights), similar to the process when the government shifts subcontracts.

Tiefer concludes that the contract law approach brings distinct advantages over other approaches.

First, it applies to the private military firms, rather than to their employees. The firms have the resources and status, which their individual employees alone do not, to initiate and improve major programs for preventing injuries or abuses - programs such as accreditation, training, and vetting of new hires. Second, the contract law approach uses, and conforms to, the main thrust of government contracting law and its apparatus, which is the system that purchases private military services and oversees the implementation of that purchase

Generalizing further, contract law tools in this context and in related ones may produce a virtuous cycle. Commentators on international law have tended to expect a "top-down" effect - that international agreements or principles on private security will bring about individual state regulation. Top-down international law may work. But, as a supplement, the elaboration of contract law tools by the United States in the context of the conflicts in Iraq and Afghanistan may affect both future U.S. action and action by other nations. For example, when the United States sets accreditation and training standards, both U.S. firms and third-country firms will seek to meet them. It then becomes simpler for other countries, such as those in the European Community, to institute similar standards; once the United States adopts standards, European firms that do business with the United States develop familiarity with, and a record of meeting, those standards.

The role of contract law tools in this context might serve as a model in other contexts.
For example, government contracting firms often play important environmental roles. They may clean up, store, process, or dispose of waste. [KBR burn pits anyone?] Criminal suit, civil suit, administrative action, international law, and other methods for dealing with problems with these firms may well work. Still, as a supplement, government contracting firms should come to comply with contract provisions on such matters and may be part of developing standards as to further provisions and strengthened contract oversight. This approach supplements, without supplanting, the other approaches.

Of course, contract law is only useful if "government departments making the contracts actually taking active oversight roles, rather than depending on neutral bodies like courts or international agencies or on private lawsuits. For many reasons, departments may not rush to do so. In any event, whether from inertia, capture, or sincere views of national interest, departmental officials themselves may not rush to exercise their contract law tools."

Yet, "the significant steps taken after Nisour Square tell a different story. The increasingly used contract law tools, such as provisions requiring training and incident reporting, represented advances. Expanding that use did not require intervention by a neutral body, like a court or an international organization. Rather, the force of the public reaction - from Iraqis, Americans, and people of other countries - sufficed."

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