US Paid More than $85 Billion for 190,000 Iraq Contractors

US Paid More than $85 Billion for 190,000 Iraq Contractors/Contractors in Iraq (NSI News Source Info) August 13, 2008: Contractors play a substantial role in supporting the United States’ current military, reconstruction, and diplomatic operations in Iraq, accounting for a significant portion of the manpower and spending for those activities. CBO released a study today, conducted at the request of the Senate Committee on the Budget, on the use of contractors in the Iraq theater to support U.S. activities in Iraq. CBO found: -- From 2003 through 2007, and converting the funding into 2008 dollars, U.S. agencies awarded $85 billion in contracts for work to be principally performed in the Iraq theater, accounting for almost 20 percent of funding for operations in Iraq. Including funding for 2008 itself, the U.S. has likely awarded $100 billion or more for contractors in the Iraq theater. -- More than 70 percent of those obligations were for contracts performed in Iraq itself. The Department of Defense awarded contracts totaling $76 billion, and the U.S. Agency for International Development and the Department of State obligated roughly $5 billion and $4 billion, respectively, over the same period. -- Contractors provide a wide range of products and services in theater. Most contract obligations were for logistics support, construction, petroleum products, or food. -- Although personnel counts are rough approximations, CBO estimates that at least 190,000 contractor personnel, including subcontractors, work on U.S.-funded contracts in the Iraq theater. About 20 percent are U.S. citizens. -- The United States has used contractors during previous military operations, although not to the current extent. According to rough historical data, the ratio of about one contractor employee for every member of the U.S. armed forces in the Iraq theater is at least 2.5 times higher than the ratio during any other major U.S. conflict, although it is roughly comparable with the ratio during operations in the Balkans in the 1990s. Private security contractors have been a particular focus of attention. Our analysis shows: -- Total spending by the U.S. government and other contractors for security provided by contractors in Iraq from 2003 through 2007 was between $6 billion and $10 billion. -- About 10,000 employees of private security contractors work directly for the U.S. government. Another 15,000 to 20,000 work for the Iraqi government, other contractors, and other customers, bringing the total to approximately 25,000 to 30,000 employees of private security contractors operating in Iraq. -- The costs of a private security contract are similar to those of a U.S. military unit performing similar functions. During peacetime, however, the private security contract would not have to be renewed, whereas the military unit would remain in the force structure. Regarding the legal issues associated with contractor personnel, CBO finds that military commanders have less direct authority over the actions of contractor personnel than over their military or civilian government subordinates. In addition, the legal status of contractor personnel in Iraq is uncertain, particularly for those who are armed. Congress Details Massive Use of Private Contractors in Iraq (NSI News Source Info) August 13, 2008: WASHINGTON - At the height of last year's military surge in Iraq, the United States had roughly 168,000 troops deployed in the country. But America's armed forces have been outnumbered by what some see as a private army funded by the federal government: contractors that provide a wide array of services, from security operations to rebuilding projects to logistical support. Peter Orszag heads the Congressional Budget Office, which issued a report on the costs of private contractors in Iraq. "The federal government has awarded $85 billion in contracts for work in [the] Iraq theater through 2007. If you included this year, the total would exceed $100 billion: roughly one of every $5 for the cost of the war in Iraq," he said. Orszag says the use of private contractors in U.S. military engagements is not new. What is new, however, is the extent of the reliance on private firms. The Iraq war marks the first time in which the number of private personnel has equaled or exceeded the number of military personnel. By contrast, the CBO report notes that, during World War II, military personnel outnumbered private contractors by a ratio of seven-to-one. The CBO says most private contracts for Iraq have been awarded through the Department of Defense and the State Department. According to the report, the yearly cost of maintaining a single private contractor in Iraq can approach half a million dollars - far exceeding the annual pay of even the most senior military commanders. But the CBO estimates that, when combat pay, benefits, and troop rotations are factored in, the cost of a private contractor is roughly equivalent to that of a soldier performing the same function. Pentagon officials openly admit that, even with extensive use of private contractors, America's lengthy engagement in Iraq has placed heavy burdens on the military. Peter Orszag says, without the contractors, the strain would be even more severe. "We are really running our military at a much harder rate without the kind of rest and retraining that the military itself says is necessary. Given the level of operations we are engaged in, were it not for the contractors, we would presumably be running an even less-sustainable pace of activity for military personnel," he said. Orszag says one advantage of using private contractors is the ability to rapidly terminate funding when services are no longer required. By contrast, military personnel enlist for years at a time and remain on the payroll for the duration of their service. But the CBO director also noted that private contractors have come under scrutiny for allegations of fraud and abuse in Iraq, and employing them necessitates vigilance and oversight to ensure that funds are not misused.