Commentary

Contractors Fulfilling a Contract: Imagine That

Is it possible that a private security contractor can actually do a good job — do what it contracted to do without waste, fraud or abuse? Of course, the answer is yes. And the vast majority of security contractors do just that. Yet to read and watch much of the media coverage of their work, it would be easy to get a different impression.

As an example, consider Aegis Defense, a British private security firm. In March 2004, in a move to make the U.S. military presence less visible after the handover of sovereignty back to Iraq, the Coalition Provisional Authority awarded Aegis a $100 million contract to protect the Green Zone.

Subsequently Aegis won another contract, valued at a maximum of $293 million over the next three years, to provide anti-terrorism support and analysis and to serve as a clearinghouse for information between coalition forces in Iraq and security contractors.

Before Aegis was awarded that contract, coordination between the U.S. military and civilian contractors was handled through the Regional Operations Center. In June 2005 the Pentagon extended the contract for a second year and expanded it. The new deal was worth about $145 million.

To date Aegis has completed two contracts and has five ongoing. Make no mistake: Collectively these are the mother of all security contracts in Iraq. The Pentagon had obligated $679.7 million and spent $612.8 million on the contracts as of last November.

For its money Aegis initially had to pay a staff of 500 based all over the country, organize the coordination of intelligence from all the security firms and the military, and also provide a central emergency hotline, so that if contractors are ambushed on the road, there is one number (or radio frequency) they can contact for help.

It operates one national and six regional command centers in cities across Iraq. Staff acts as a link between coalition forces and civilian contractors on security issues, passing on information on the activity of insurgents. Aegis provides a daily intelligence service to contractors and tracks the position of their vehicles.

Aegis has received much criticism over the years — not so much for anything it has done but because of its founder, Tim Spicer, who had founded one of the earlier private military firms, Sandline, back in the early 1990s. It was involved in conflicts in Papua New Guinea in 1997 and in Sierra Leone in 1998.

Life for Aegis since first winning the contract has not been without controversy. In 2005 the Office of the Special Inspector General for Iraq Reconstruction criticized Aegis for its work, saying the British firm had failed to verify that employees were properly qualified for the job. Among problems cited in the audit were that Aegis could not provide the correct documents to show that its employees were qualified to use weapons and that many Iraqi employees were not properly vetted to ensure they were not a security threat.

But that was then. And now Aegis is considered to be a model contractor. Consider a report released Jan. 14 by SIGIR. It found “well-supported contract awards to Aegis; appropriate governmental oversight of Aegis’ bills, inventories, performance and operations; and contract performance assessed as satisfactory to outstanding.”

With regard to the security contracts, formally known as Reconstruction Security Support Services, SIGIR found that the two largest were competitively awarded and that the bridge contract between the two, although non-competitively awarded, was appropriately justified as a sole-source award.

An assessment of Aegis’ performance for the period June 1, 2004, through May 31, 2006, showed it had received ratings of either satisfactory or very good in the five areas for which it was rated: quality of product or service, schedule, cost control, business relations, and management of key personnel.

This is not to say that Aegis has reached perfection. SIGIR found that contract administration could be improved. The report found there was “no central location for the contract-related electronic records that provide a history of Aegis’ performance and the government’s actions to oversee the contractor.”

The report also found that communications between U.S. agencies and the U.K. agency auditing Aegis’ invoices have broken down, and that Aegis has not shared in the cost of replacing government-provided vehicles lost because of the negligence of Aegis personnel, because this cost-sharing is not required by the contract.

Still, overall, Aegis is doing what it is supposed to, and by so doing, it is improving control and accountability of all contractors operating in Iraq. The report notes that as part of DoD’s new process to coordinate private security operations with military units — meaning after the September 2007 Nisoor Square shootings — Aegis personnel assisted in tracking more than 55,000 private security operations since February 2008. And it has reported about 80 of the 380 serious incidents reported by all security contractors since February 2008.

What is noteworthy about the SIGIR report is not that Aegis is acting in a professional fashion — that is what we expect them to do when they are awarded the contract. Rather, the report shows that the oversight and monitoring process can and (in this case) does work.

Precisely why is the question that should be asked, so the answers can be applied to other contractors.

U.S. Navy veteran David Isenberg is a military affairs analyst. He is an adjunct scholar with the Cato Institute and the author of a new book, Shadow Force: Private Security Contractors in Iraq