Iraq Inc.

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In old days, when the Army's potatoes needed peeling, an unfortunate private or two would be assigned kitchen police chores on top of his regular duties. KP got the potatoes peeled for free.

Nowadays, with privates hard to come by, the Army wants them pulling triggers, not peeling potatoes. Instead, the Army hires private contractors to handle the potatoes who often turn them over to subcontractors who outsource food preparation to local workers, and bill the Army on a cost-per-plate basis.

In 2004, a PBS documentary estimated the cost per meal to feed U.S. troops in Iraq at about $28. What percentage of that is potatoes is impossible to tell, but clearly, potatoes no longer are peeled for free.



What's true for potatoes is true for all sorts of things that the military used to do for itself, everything from laundry to ammunition deliveries to barracks construction. Ever since then-Defense Secretary Dick Cheney awarded the first military logistics contract in 1991 - to Halliburton Inc., the firm that later hired him as CEO - it has become an article of faith that private enterprise can do almost any job faster and better, if not cheaper, than the military can do itself. Sometimes, this even includes pulling triggers.

Last month, the Army awarded a 10-year, $150 billion contract for logistics services to three firms: DynCorp. Inc. of Fort Worth, Texas, Fluor Corp. of South Carolina and KBR Inc. of Houston. KBR, having been spun off from its former parent company, Halliburton, used to have the logistics deal exclusively - and overcharged the Pentagon significantly in the process - but now it has to share. No matter. When it comes to military support contracts, there's plenty for everybody.

The Los Angeles Times last week reported that U.S. taxpayers now are paying 180,000 civilians to work under U.S. contracts in Iraq. About 118,000 of the 180,000 civilian employees are Iraqis. Most of them work for the Pentagon, but more than 50,000 contract employees work for the U.S. Agency for International Development and the State Department. This is on top of the 160,000 soldiers and Marines that U.S. taxpayers are paying to work in Iraq.

The numbers, obtained by The Times through the Freedom of Information Act, are stunning - double previous estimates. It helps explain why the cost for the four-plus years of the Iraq war now exceeds $440 billion. On the fascinating Web site www.costofwar.com, the running total is climbing faster than the eye can follow. Brookings Institute scholar Peter Singer, who has written extensively on privatized warfare, jokes that the war has become "the coalition of the billing."

Singer and other critics see many problems with the outsourcing of America's military obligations. Among them:
  • The potential for profiteering. "The incentives of a private company do not always align with its client's interest - or the public good," he wrote in the March 2005 edition of Foreign Affairs.

  • Loss of control. If a contractor thinks a job or a mission is too dangerous - delivering ammunition to a hot spot,
    for example - he can walk away from it.

  • Lack of regulation. There's very little screening done of contractor employees. The potential for espionage and terrorism is extremely high.

  • Lack of political accountability. "It becomes easier to go to war when the support work that used to be done by soldiers is outsourced to private employers," Singer wrote.

  • Lack of oversight. The Washington Post reported last week that the number of Defense Department procurement officers charged with overseeing defense service contracts has shrunk by 40% since the early 1990s. Yet the amount spent on those contracts has increased by 78% over the same period.

  • Legal issues. The Times estimated that some 10,800 private security workers are employed in Iraq; other sources have estimated the number at 30,000. They are soldiers in everything but name and accountable not to the U.S. military command but to their employers. Further, as The New York Times reported this week, many of these contract employees have returned home with the same kind of stress-related trauma that soldiers have. Who picks up the tab for treatment?
Finally, there is significant doubt that the efficiencies of cost and services claimed for private enterprise are real. "Unfortunately the Pentagon's current, supposedly business-minded leadership seems to have forgotten Economics 101," Singer wrote. "All too often, it outsources first and never bothers to ask questions later."

Clemenceau once famously observed that "war is too important to be left to the generals. Absent oversight and accountability, Singer says, "the same holds true for CEOs."

Reprinted from the St. Louis Post-Dispatch.
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