THE BLOG
09/24/2010 01:35 pm ET | Updated May 25, 2011

The State Department Takes Charge: Be Afraid, Be Very Afraid

Yesterday the House Committee on Oversight and Government Reform held an important and under covered hearing entitled ""Transition in Iraq: Is the State Department Prepared to Take the Lead?"

The question is simply whether the State Department is up to the job as duties formerly performed by the U.S. military are transferred to the State Department.

As Committee Chairman Edolphus Towns asked in his opening statement.

The State Department will take over many functions that are inherently military and for which State has little or no expertise. This raises important, practical questions.

Who will provide security for State Department employees? Who will recover personnel who are wounded or killed? Who will provide convoy security? Who will provide counter-fire in rocket, artillery, and mortar attacks? Who will recover damaged vehicles and downed aircraft? Who will provide explosives disposal?

Indeed, Iraq has not stopped being a dangerous place. IED are still going off. Firefights still happen. Just this past Sunday six car bombings in Baghdad and a suicide bombing in Fallujah killed 37 people and wounded more than 100 others.

Is there reason to be concerned ? Yes, according to the witnesses. Consider what Michael Thibault, Co-Chairman and Grant Green, Commissioner, of the Commission on Wartime Contracting in Iraq and Afghanistan, said in their statement:

Commissioner Green's concern for the Defense-to-State transition in Iraq was validated by our June 21, 2010, Capitol Hill hearing, "Private Security Contractors in Iraq: Where are we going?"

Among the troubling testimony we heard that day were these data points:
(1) The Department of State estimated that, without U.S. military support, it would need to raise its private-security contractor force in Iraq from 2,700 to between 6,000 and 7,000 people; (2) Under Secretary of State Patrick Kennedy had written to the Department of Defense on April 7, 2010, to request a substantial amount of military equipment, plus continued access to the Army's LOGCAP logistics contract and continued food-and-fuel supply through the Defense Logistics Agency; and (3) DoD's Joint Staff had not yet forwarded that request with a recommendation to the Office of the Secretary of Defense.

These facts troubled us for several reasons. First, even if State could obtain the funds for more than doubling its private-security force, it is not clear that it has the trained personnel to manage and oversee contract performance of a kind that has already shown the potential for creating tragic incidents and frayed relations with host countries. Second, Ambassador Kennedy's request highlighted the enormous reliance that State was obliged to place on the U.S. military in a wartime setting--14 critical security-related functions, logistical support, food and fuel, and about 1,000 other detailed tasks. Third, any DoD delay in processing State's request could prolong uncertainties, promote reliance on contractors for work previously performed by the U.S. military and DoD, and potentially create unacceptable safety risks to American government and contractor personnel as military capabilities disappear in the drawdown process.

As we reviewed the results of our hearing and the supplemental information that flowed in afterwards, our concerns rose. On July 12, 2010, the Commission released a unanimous, bipartisan Special Report #3, "Better planning for Defense-to-State transition in Iraq needed to avoid mistakes and waste." We submitted the report to Congress, distributed it widely to interested parties within and outside of government, discussed its findings with print and broadcast media, and posted it on the Commission's Internet site, www.wartimecontracting.gov. We have included a copy of the report with this statement, and we respectfully request that it be made part of the record of today's hearing.

Unfortunately, the advent of autumn has not eased the concerns we reported in the summer. We appreciate that the transition issues in Iraq are vast, complicated, and not amenable to quick and easy fixes. We are aware of and assured that working groups have been busy here and in theater discussing these issues. Lieutenant General Kathleen Gainey, the Director for Logistics, J4 of the Joint Staff, tells us that a decision package has been forwarded to the Office of the Secretary of Defense through the Under Secretary for Policy.

Nonetheless, it is now nearly six months since Ambassador Kennedy's formal request for assistance to the Department of Defense. When we checked earlier this week, no decision had yet been communicated. Specifically, State Department leadership informed us two days ago that their request for DoD support remained outstanding and that they have been compelled to pursue two separate contracting strategies simultaneously -- one that assumes the requested DoD support, while the other develops a separate and greatly expanded contractor workforce to replace functions previously performed by DoD. The need to develop two separate plans is simply the result of the Department of Defense's reluctance to articulate where and how they can best support the Defense-to-State transition in Iraq.

What are the implications for private military and security contractors?

This transition limbo has other deep implications. It raises the serious risk that State will be required to undertake a very large, hurried, expensive, and unprecedented exercise in contracting unless some change is negotiated in the Security Agreement or unless the Government of Iraq demonstrates serious capability and intent to provide the normal array of host-nation security and commercial services. Further, even if State meets the resource and funding challenge of greatly enlarging its security contractor forces, it still risks the policy and political consequences of having private companies performing potentially inherently governmental functions that have been previously performed by the U.S. military.

Another significant implication is that the great, lingering uncertainty about the Defense-to-State transition indicates a failure to take a "whole-of-government approach" to contingency operations. Activities in Iraq and Afghanistan involve hundreds of thousands of U.S. military and federal civilian employees from Defense, State, the Agency for International Development, Treasury, Justice, Agriculture, and other departments; American, host-country, and third-country contractors; and a variety of non-governmental and international organizations. But as we and other organizations have observed, a lack of transparency, visibility, and basic data--not to mention the lack of a lead coordinating agency for contingency operations--has caused or contributed to duplication, gaps, and cross-purposes, and has permitted unnecessary incidents of waste, fraud, and abuse.

Perhaps the other witness had a more optimistic view? Alas, only in our dreams. Here is an excerpt from the testimony of Stuart W. Bowen, Jr., Inspector General, Office of the Special Inspector General for Iraq Reconstruction

My office's previous reporting on State's management practices in large Iraq programs raises concerns about whether State will be able to effectively manage both the very significant life support and security tasks (many of which have been provided by the Department of Defense (Defense)) and the diverse ongoing assistance programs, without risking the loss of taxpayer dollars to waste.

I do not have in mind simply the potential losses that could arise from weak program, contract, or grant management, which SIGIR audits previously uncovered. It may prove wasteful to keep civilian employees in Iraq and fund assistance programs simply because, if security conditions prevent civilian travel, then oversight of assistance programs could become impossible.

We recognize that State is relatively new to large-scale program, contract, and grant management. The projects it has undertaken in Iraq - and the projects it will inherit from other agencies, as they leave - are many times greater than those it has traditionally managed. It takes time to nurture an organizational culture that respects the need for planning and to develop a workforce with appropriate skills. State needs to promptly address this issue. It does seem clear that a relatively modest adjustment of State's budget priorities could make an enormous difference in the quality of State's project, contract, and grant administration. That is, spend more on oversight.

...
As discussed by the Commission [on Wartime Contracting} in its report, the U.S. Embassy in Iraq has been relying on the Defense Logistics Civil Augmentation Program (LOGCAP) contract to provide its employees necessary life support. The contract is a U.S. Department of the Army (Army) program that preplans for the use of private resources in support of worldwide contingency operations. In the event that U.S. forces deploy, contractor support is available to commanders on a cost-plus-award-fee basis.

As SIGIR reported in October 2007, LOGCAP is a contingency contract and thus is considered "a contract of last resort" for customers (because of the potential additional costs arising from its noncompetitive aspects). We noted that contingency contracts are primarily designed for areas where emerging requirements are the norm, rapid response is required, and/or conditions are such that normal sustainment contracts are not competitively available. We noted that, once conditions stabilize and a reasonable determination can be made as to the quantity and type of contract work that will be required to support a mission, customers should transition from contingency contracts to a more normal, cost-effective contract.

We recommended that, when security conditions in Iraq allow, the Department should consider transitioning from the Army's LOGCAP contract for life support of the U.S. Embassy-Iraq mission to a State-managed life support contract. Such a change would allow for more competitive contracting in the longer term and may be desirable from the standpoint of cost effectiveness.

We believe that when security conditions permit, State should take the step we recommended. However, at this time, for the reasons that the Commission recommends, State and Defense should continue to employ the LOGCAP contract to support State in Iraq; if Congressional action is needed to facilitate this eventuality, it should be taken.

We have not analyzed the question of how State would acquire the range of security services the Commission believes may be necessary for Iraq, but our review of other aspects of State's business practices raises concerns about capacity. In broad terms, State's contract administration and enforcement efforts need strengthening. State should plan to expand its efforts by employing the most qualified contracting professionals in government for help on these acquisition projects, at least in the near term.

We may be waiting a long time before security conditions allow what Mr. Bowen recommends. At my request I asked Robert Young Pelton, author of Licensed To Kill, one of the better books on security contracting in Iraq, his thoughts. He emailed me back that:

The chatter behind the scenes is that Baghdad is not the place you want to be posted to next year. Triple Canopy is allegedly 30 percent undermanned and DynCorp according to scuttlebutt has yet to get anything in the air. The current push to double hired guns also comes after Blackwater was dropped and others were asked to fill the gap. The turmoil in protection services began not because Blackwater gunned down 17 Iraqis, but because the State Dept was frozen by the Iraqi government. Condi thought it would be cute to flush BW down the drain but was wise enough to keep them in place under different names. But Hillary nuked them ten days after the inauguration.

The irony in all this is that HIllary Clinton who once sponsored legislation to ban PMC's and specifically Blackwater finds herself at the head of the largest mercenary army in America's history. We have yet to actually see if the U.S. government can operate in Baghdad without Erik Prince and Blackwater. Triple Canopy tried and failed before, resulting in a massive influx of BW in April of 2005 until 2009. We know from Leon Panetta the CIA can't operate without Blackwater, I doubt the State Department is going to magically double their protection overnight without some serious teething problems.

Now that Erik has packed up and taken his toys with him. My advice to HIllary....don't go to Baghdad.