URL: http://www.nytimes.com/2004/06/15/opinion/15SING.html
The New York Times
June 15, 2004
OP-ED CONTRIBUTOR
Nation Builders and Low Bidders in Iraq
By P. W. SINGER
W ASHINGTON From the abuses at Abu Ghraib prison to the mutilation of
American civilians at Falluja, many of the worst moments of the Iraqi
occupation have involved private military contractors "outsourced" by
the Pentagon. With no public or Congressional oversight, the Pentagon
has paid billions of dollars to companies that now have as many as
20,000 employees carrying out military functions ranging from
logistics and troop training to convoy escort and interrogations. Yet
despite the problems and the widespread accusations of overbilling, it
appears the civilian leadership at the Pentagon has learned absolutely
nothing from the whole experience.
Last month the Pentagon awarded a $293 million contract for
coordination of security support to a British firm called Aegis
Defense Services. The huge contract has two aspects: Aegis will be the
coordination and management hub for the more than 50 other private
security companies in Iraq, and it will provide its own force of up to
75 "close protection teams," each made up of eight armed civilians who
are to protect staff members of the United States Project Management
Office.
The contract is a case study in what not to do. To begin with, a core
problem of the military outsourcing experience has been the lack of
coordination, oversight and management from the government side. So
outsourcing that very problem to another private company has a logic
that would do only Kafka proud. In addition, it moves these companies
further outside the bounds of public oversight.
Moreover, with the handover of Iraqi sovereignty in just weeks, why is
the Pentagon, rather than the Iraqis themselves, making this decision?
Indeed, it seems contrary to the overall American strategic goal of
handing over the responsibilities for security to the Iraqis as a
prelude to getting out of the business ourselves.
The contract also repeats the "cost plus" arrangement that has proved
problematic in the past. In effect, this deal rewards companies with
higher profits the more they spend, and thus is ripe for abuse and
inefficiency (as we have seen with the accusations of overbilling that
have swirled around Halliburton). It has no parallel in the best
practices of the business world, for the very reason that it runs
counter to everything Adam Smith wrote about free markets.
Finally, the usual mechanisms that increase efficiency in contracting
like choosing, rewarding and punishing firms based on their experience
and reputation have again been short-circuited. One would think such a
major contract would go to a company that has a long operating
history, or experience in such roles, or other major activities on the
ground in Iraq. Instead, Aegis has been in existence for little more
than a year, has worked primarily on antipiracy efforts rather than
security coordination, and has never before had a major contract in
Iraq. (Aegis is not even on the State Department's list of recommended
security companies in Iraq.)
The chief executive of Aegis, Tim Spicer, is a former British Army
officer turned private warrior who titled his memoir "An Unorthodox
Soldier." He is infamous in Britain for his role in the Sandline
affair of 1998, in which a company he founded shipped 30 tons of arms
to Sierra Leone in contravention of a United Nations arms embargo. His
client in the case was described by Robin Cook, the British foreign
minister, as "an Indian businessman, traveling on the passport of a
dead Serb, awaiting extradition from Canada for alleged embezzlement
from a bank in Thailand." When Mr. Spicer told the press that the
British government had encouraged his operation, it nearly brought
down Prime Minister Tony Blair.
Mr. Spicer also was a key character in a 1997 army mutiny in Papua New
Guinea. The local army, upset that Mr. Spicer had received a $36
million contract to eradicate a rebellion there, instead toppled the
government and put him in jail.
It seems hard to believe that the people awarding the Iraq contract
had any knowledge of this history. But it may actually be the case,
considering the skewed way in which responsibility for private
military contracts is spread out over the government to some of the
strangest of places. (Recall that the private military interrogators
at Abu Ghraib prison were originally hired through a computer services
contract overseen by an Interior Department office in Arizona.) The
Aegis deal was awarded by the Army transportation command in Fort
Eustis, Va., an office with no apparent experience in dealing with the
private military industry.
The strength of systems of democracy and capitalism are that they are
supposed to be self-correcting and self-improving. When mistakes are
made, lessons are learned so that the errors are not repeated. When it
comes to the private military world, though, our government seems to
be doing its utmost to learn nothing. It repeatedly ignores not just
the basic lessons of better business, but also those of smart public
policy.
P. W. Singer is a fellow at the Brookings Institution and the author
of "Corporate Warriors: The Rise of the Privatized Military Industry."
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