Commentary

Will the Last Contractor to Leave Iraq Remember to please Turn Out the Lights?

Just as private contractors were part of the buildup of forces in Iraq, from the very beginning of the war to today, they are also figuring to be a prominent part of the eventual withdrawal.

A recent report finds that the success of the eventual withdrawal from Iraq — or “reposturing effort,” as it is called — will depend on having clearer guidance and plans for reposturing of contractors from Iraq, and accountability and disposition of contractor-managed, government-owned property.

According to a U.S. Government Accountability Office report released last month, from late 2007 through July 2008 planning for the reposturing of U.S. forces in Iraq did not include a theater-wide plan for the reposturing of contractors.

This is a rather glaring omission, considering that as of April 26 there were approximately 149,400 Department of Defense contractors and as of July 1 approximately 147,400 U.S. troops deployed in support of Operation Iraqi Freedom. Thus, there are now more DoD contractors than regular active forces.

According to a May 2008 Multi-National Force-Iraq order, logistics planners were to coordinate with the Defense Contracting Management Agency to identify contractual issues associated with reposturing operations. But as of June 2008 DCMA officials stated they were not aware of a theater-wide plan for the reposturing of contractors. In fact, according to DoD officials, CENTCOM contracting planners did not begin participating in planning for reposturing operations until July 2008.

The news, however, may not be as bad as it seems. While there is no theater-wide plan, since May 2008 Army Logistics Civil Augmentation Program officials have been participating in reposturing planning. As LOGCAP is the largest logistical support contract in Iraq, such planning is significant.

Examples include LOGCAP personnel attending a series of logistics conferences held at Camp Arifjan, Kuwait, in May 2008, working with reposture planning teams in both MNF-I and Multi-National Corps-Iraq I, and participating in the Logistics Reposture Working Group.

Still, many challenges remain in the planning for the reposturing of LOGCAP contractor personnel. For example, according to the GAO report, decisions about reposturing of these contractors often are made before requirements have been clearly identified, and DoD officials do not receive timely and accurate information from the customers or units using these contracts.

Another big challenge is maintaining accountability for and managing the disposition of U.S. government property under the control of contractors. According to DCMA officials, there is at least $3.5 billion worth of contractor-managed, government-owned property in Iraq.

Again, as one would expect, the largest portion of all contractor-managed property in Iraq, $3.37 billion, falls under LOGCAP. Examples include laundry and bath facilities, food service, sanitation, housing, maintenance, transportation, construction, and power generation and distribution.

Non-LOGCAP contractor-managed, government-owned property falls into four main categories. These are the Air Force Contract Augmentation Program, selective programs under DoD’s Joint Contracting Command-Iraq/Afghanistan, programs run by the Gulf Region Division of the Army Corps of Engineers, and hundreds of smaller programs run by individual U.S. government agencies.

Fortunately, several DoD organizations already have begun planning for the disposition of excess contractor-managed, government-owned property from Iraq. In October 2007 the deputy undersecretary of defense for logistics and materiel readiness increased the donation threshold for all excess U.S.-owned personal property in Iraq from $5,000 to $10,000 and delegated this donation authority to MNF-I.

In June 2008 the deputy undersecretary increased the authority to transfer for all U.S.-owned excess personal property in Iraq from $10,000 to $15,000. In addition, in 2007 the Army published guidelines for the retrograde of contractor-acquired, government-owned property from the U.S. Central Command’s area of responsibility. The Army followed this up in December 2007 with a business-case analysis of the effective disposition of contractor-acquired, government-owned property. The Army’s analysis indicates that approximately 85 percent of all contractor-acquired, government-owned property in Iraq should be transferred, sold or scrapped in Iraq once it is declared excess, while the remaining 15 percent can be sold or reused elsewhere.

Yet problems remain. First is determining the original or fair-market value of contractor-managed, government-owned property and determining any security restrictions on its disposition. According to MNF-I, the failure to sort and identify U.S. government materiel in Iraq has already resulted in the retrograding of items that are unserviceable, are still needed in theater, or are uneconomical to retrograde.

Moreover, according to the Army’s business-case analysis, the LOGCAP property book kept by the prime contractor had numerous omissions, and many items were not properly listed, creating doubt about the inventory’s accuracy. Without accurate accountability, the U.S. government may fail to realize all possible financial and practical gains from this property.

Second is the time-consuming and labor-intensive task of accounting for and determining the disposition of contractor-managed, government-owned property. According to MNF-I, before contractor-managed property can be disposed of, it must be transferred from the contractor’s records to a military unit’s property book. However, officials from the DCMA stated that contractors and government officials must perform a joint inventory of all property before it is transferred.

Officials assert that completing this inventory will require planning, travel to storage locations and the physical staging of property for easier counting, all of which are time-consuming. Moreover, the same officials stated that security concerns previously have hindered their ability to travel to all inventory locations.

If the security situation inhibits contractors from moving equipment, the contractors can abandon the equipment to U.S. forces who then will be responsible for its disposition. DCMA officials stated that without adequate time and resources to plan and execute a thorough inventory of contractor-managed, government-owned property in Iraq, the risks of losing accountability over this property will increase.

The final challenge is that the Defense Logistics Agency may not have sufficient data to adequately plan capacity needs at the Defense Reutilization and Marketing Offices in theater. MNF-I policy states that contractor-managed property that is excess to government requirements, and is not donated to the Iraqi government, will be disposed of at DLA facilities.

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 forthcoming book, Shadow Force: Private Security Contractors in Iraq