Private Contracting Industry Set for Regulation

Efforts are under way to regulate the private-contracting industry used by the U.S. government in Iraq and elsewhere.

The government's plan to create rules and decide a legal framework is expected to be a slow but necessary process for the industry because of its explosive growth.

The move comes after gross mismanagement of contractors for DynCorp., which was hired to train Iraqi police, and private-security contractor Blackwater USA.

Blackwater has been the most high-profile of the contractors, coming under fire for killing more than a dozen Iraqi civilians while guarding State Department diplomats in Iraq. The Iraqi government is calling for the U.S. to expel Blackwater.

But armed-security personnel are just a fraction of the contractors in Iraq; and Iraq accounts for a small portion of the jobs once handled by U.S. government workers.

Thousands of jobs — for services as mundane as gardening — are contracted worldwide, creating a multibillion-dollar business.

In Afghanistan, armed bodyguards from a private U.S. security firm protect President Hamad Karzai. In neighboring Uzbekistan, pilots and aircraft contracted by the U.S. government shuttle cargo and passengers. In North Africa, the U.S. uses private military companies to train local armed forces.

"If it weren't for contractors, the federal government just may as well at this point turn off the light switch and call it quits," said William Golden, president of IntelCareers.com, a clearinghouse for jobs requiring federal security clearances.

He said he has a variety of contracting positions available on every continent.

"I've been looking for gardeners for the CIA. I've been looking for a top-secret chaplain for a while. I'm looking for software developers that know how to trouble shoot satellites. I'm looking for interrogators, linguists, intel analysts, program managers, psychologists," Golden adds.

Technology Propels Federal Contracts

Federal contracts have soared to $415 billion as of last year from about $200 billion in 2000.

But the reliance on contractors has been steadily building since the 1990s, when the focus was on creating a leaner government — primarily by outsourcing and privatization.

Allison Stanger, professor of political economy and director of the Rohatyn Center for International Affairs at Middlebury College, said contractors are flexible and can move quickly.

"Contractors provide wonderful surge capacity. If you need them for a little bit of time, you hire them, they do the job and they're out of there," Stanger said.

And contractors from private industry often are much further ahead of the technology curve, according to Richard Friedman, president of the National Strategy Forum in Chicago.

"Government people traditionally are not keeping apace with the technological issues, therefore, government have to outsource with people who have these technical skills," he said.

Contractors can also provide political cover. There are now more contractors in Iraq than soldiers, which helps hide the real number of people it takes to wage the war and occupy the country.

Federal Contracts Easier, Not Better

Golden said the reliance on contractors isn't healthy. The U.S. government has a responsibility to groom people in fields such as intelligence, interrogation and communication, which can take years of training and nurturing, he said.

"Industry doesn't work that way. Industry can be very mercenary in its viewpoint of: 'We charge by the hour for what's getting done.' Training — if you want education — is on your own time, which often means it never gets done."

Supervision Lacking

What has not kept pace with the swell of contractors is people to manage them. These managers have expertise in choosing, negotiating, writing and managing contracts. But as the federal government increased outsourcing in the 1990s, it also started to slash the numbers of contract managers.

When the Iraq war began, government agencies were tasked with contracting massive rebuilding projects in Iraq. Analysts charge that the drastically reduced contracting staff were overwhelmed, leading to disastrous results, such as waste, fraud and faulty workmanship.

Friedman said the industry has grown with very little oversight.

"The overall problem is nobody is minding the store. There is no specific standard, and there's no overall agreed-upon policy," he said.

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