06/30/2010 05:12 am ET Updated May 25, 2011

SIGIR's Latest on PMCs

The Special Inspector General for Iraq Reconstruction has just released its latest Quarterly Report.

The last report released in January, noted "For the quarter ending December 31, 2009, the Department of Labor (DoL) received reports of 13 new deaths of civilian contractors working in Iraq. DoL also received reports that 669 civilian contractors suffered injuries requiring them to miss at least four days of work. Since September 2001, the DoL has received reports of 1,459 deaths of civilian contractors."

Contractor casualties nearly doubled in the latest quarter. SIGIR reports that in the first quarter of 2010, 25 deaths were reported to the Department of Labor (DoL),and 740 injuries were reported to the DOL as causing more than 3 days of lost work. Asof March 31, 2010, the number of deaths reported in Iraq is 1,471 since the DOL began compiling this data in March 2003.

The level of contracting services needed to support the drawdown of troops and equipment from Iraq has yet to be fully identied. Contractors will continue to provide a wide range of tasks essential for operations and for reconstruction programs, but DoD announced plans for a 30% reduction in overall contractor support (to a force of 75,000) by the end of FY 2010.

As of January 22, 2010, USF-I reported 100,035 DoD contractors working in Iraq:

51,990 third-country nationals
27,843 U.S. citizens
20,202 Iraqi nationals

As of March 31 there were approximately 102,000 DoD contractors working in Iraq, more than half of whom were providing life-support services to the U.S. military. DoD estimates that fewer than 75,000 contractors (excluding those working on the LOGCAP contract) will be operating in Iraq by August 2010, with more reductions anticipated after the U.S. military's footprint shrinks. However, as the number of DoD contractors drops, there will be a concomitant increase in the number of contractors supporting DoS. For example, the advisors who will serve as the focal point for INL's police-training program will need to be supported by about 1,500 other contractor personnel, including a significant number of security contractors.

This represents a significant decline in the absolute number of DoD contractors, from a high of more than 160,000 in September 2008. However, as a ratio of contractors to troops, the projection for August 2010 increases from roughly 1:1 to 3:2.

As of March 31, there were 2,795 DoS and USAID private security contractors (PSCs) working in Iraq. The report says that even today, it is difficult to estimate the total cost of providing security for reconstruction projects and personnel. DoD, DoS, and USAID have not been required to systematically identify financial data for PSCs. As the reconstruction effort evolves from large-scale infrastructure projects to capacity building, physical security could become a larger portion of total contract cost. In addition, requirements for PSC services for DoS and US AID are set to increase to compensate for support previously provided by the U.S. military. Services provided by the military, such as quick-reaction forces and medical evacuation, are difficult to quantify.

Despite years of effort to improve oversight corruption still occurs in the awarding of contracts. The report notes several indictments and plea agreements, including:

• An ongoing joint investigation by SIGIR, British investigators, and the Defense Criminal Investigative Service led to the arrest of two British citizens. The investigation involves an $8.48 million contract awarded by the Coalition Provisional Authority to provide armored vehicles to Iraq's Ministry of the Interior (MOI). It is alleged that the contractor personnel provided false documentation in order to receive full payment for the contract and failed to deliver any vehicles to the MOI.

• On January 27, 2010, Theresa Russell, a former staff sergeant in the U.S. Army, pled guilty to a one-count criminal information charging her with money laundering arising from a scheme involving the fraudulent awarding and administration of U.S. government contracts in Iraq. Her sentencing is scheduled for May 21, 2010.

• In February, former DoD contractor Terry Hall pled guilty to conspiring to pay more than $3 million in bribes to U.S. Army contracting officials stationed at Camp Arijan, Kuwait. Hall owned and operated several companies that provided goods and services to the Department of Defense. The case against Hall arose out of a wide-ranging investigation of corruption at the Camp Arijan contracting office. To date, eight individuals, including Hall, have pled guilty for their roles in the bribery scheme.

• On February 26, 2010, the Department of Justice (DOJ) filed a criminal information charging a former U.S. Army lieutenant colonel with three counts of accepting illegal gratuities involving the award of a one-year, $8.2 million warehouse contract in Iraq.

• That same day, DOJ filed a criminal information charging a U.S. Army captain with one count of accepting a gratuity involving a DoD contract at Camp Arijan. The information was filed as a result of the captain's alleged acceptance of $15,000 in cash from a government contractor for preparing a contract performance survey and recommending an overall rating of excellent.

• In early March, a captain in the United States Marine Corps was charged with conspiring with his wife to skim approximately $1.75 million from government contracts awarded under the Iraqi First Program while he was acting as a COR in Iraq. Moreover, because they allegedly failed to report any of these illegal payments on their tax return for 2008, they substantially understated their income to the Internal Revenue Service. During the course of this investigation, government agents also seized from the couple two properties in California, two automobiles, and approximately $40,000 in cash.

The military is trying to improve the quality of its acquisition workforce. On March 2, 2010, General Peter Chiarelli, Vice Chief of Staff of the U.S. Army, issued a memo that established new standards for the selection and training of contracting officer's representatives (CORs), who are responsible for contractor oversight. Among the reforms are pre-deployment selection and training and improved training materials for deployed CORs. In addition, commanders and supervisors are required to nominate personnel with experience in the type of contract support required, to ensure they receive contract-specific training, and to consider their effectiveness as CORs when preparing performance evaluations.