U.S. Has Spent at Least $6 Billion in Iraq on Private Security Contractors

By Matthew Harwood

The United States has spent at least $6 billion on private security contractors (PSCs), like Blackwater USA, in Iraq since the war began in April 2003, according to a report released today by the Special Inspector General for Iraq Reconstruction (SIGIR).

PSCs in Iraq provide various security services such as protecting diplomats, guarding U.S. convoys and military installations, and defending other contractors and subcontractors helping the U.S. mission in Iraq.

According to the report:

The role of private security contractors in Iraq remains controversial. A new SIGIR review lists more than 300 companies that have provided security services in Iraq at a cost of about $6 billion. The difficulty SIGIR encountered in accomplishing this review underscores the need to implement better systems for tracking security costs.

SIGIR's audit discovered that most of the money, about $5.3 billion, went to 77 firms.

Because SIGIR does not have adequate systems to track security costs, Special Inspector General Stuart Bowen told the Associated Press that the $6 billion figure is almost certainly higher as SIGIR didn't account for every PSC providing security to American assets.

For example, 191 companies that hold security contracts identified by SIGIR in government databases had no financial information attached to their file.

The AP reports that the U.S. government doesn't mandate tracking private security contracting costs. To complete the review, SIGIR had to cobble together records from across the American government, including the State Department, the Defense Department, the U.S. Agency for International Development, among others. Nevertheless, these records are incomplete as none of the these agencies tracks how contractors that receive reconstruction funds outsource their security services, according to the report.

The SIGIR report says more comprehensive accounting of security costs will help provide a better cost-benefit analysis for deciding which reconstruction projects to fund.

"[A]s the reconstruction effort evolves from large-scale infrastructure projects to capacity building, physical security could become a larger portion of total contract cost," says the report. "Such an increase could make it more important to weigh the potential value of a project outcome against the potentially larger security costs."

The report also suggests that as the U.S. military withdraws, the State Department and USAID will likely rely on PSCs even more to protect "civilian technical assistance missions." Another unintended consequence relates to improved security throughout Iraq. With violence falling, more personnel trips outside U.S.-secured areas are likely, which could increase PSC requirements, according to the SIGIR.

The audit of private security company contracts carries three recommendations for Congress: develop a way to accurately capture the cost of all private security company contracts and subcontracts, advise program managers to weigh the costs of security to the expected benefits of any new project, and account for subcontractor security costs on all new projects.

The audit notes that no one anticipated how expensive private security contracting would be. The AP reports that it accounts for 12 percent of reconstruction costs.

"As a result," the report concludes, "SIGIR believes that an important lesson learned from the experience in Iraq is the need to include security costs in decision-making when engaging in and contracting for reconstruction activities in any contingency operation including Afghanistan."


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