The Struggle to Police Foreign Subcontractors in Iraq and Afghanistan

Billions at Stake, but U.S. Investigators Stymied by Murky Rules, Enforcement Obstacles

By Nick Schwellenbach – August 29, 2010
To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.

But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:

  • Up to $300 million in subcontracts in Iraq and Kuwait were allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
  • Subcontracted security forces in Afghanistan are suspected of bribing both Taliban and Afghan government officials;
  • U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has allegedly ended up in the pockets of insurgents; and

A former contractor employee alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.
Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor. That prime contractor, usually a large American company like Kellogg, Brown and Root () or International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.

(Read the rest of the story here…)

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DynCorp – Ballhaus resigns

International President and CEO Announces Departure, Successor Named

FALLS CHURCH, Va. (August 20, 2010) – International (DI) today announced that Steve Gaffney will become the company’s chief executive officer and president effective August 25, 2010, the date that current CEO and president, Bill Ballhaus, has announced that he will resign.  Mr. Ballhaus, who joined the company in May 2008, will continue to serve on the company’s Board of Directors as vice chairman and has accepted a position as a strategic advisor to DI’s new parent, L.P.

“Over the past two years the DI team has accomplished great things: we redefined our core values, strengthened our leadership programs, entered new business sectors and expanded our global footprint,” said Mr. Ballhaus. “The company is now in a position of strength and, while I am stepping down from my day-to-day role, I look forward to remaining actively engaged in DI’s future through my involvement on the Board and as a senior advisor to its owners.”

Mr. Gaffney, who already serves as chairman of DI’s Board of Directors and will operate out of the company’s Falls Church headquarters, joins DI from IAP Worldwide Services, Inc. (IAP), where he has served as CEO since January 2009.

“Bill and I have worked closely together over the past several months, discussing the company’s operations, management and future.  I look forward to continuing to work with Bill in his role as a key strategic advisor and on the company’s Board,” said Mr. Gaffney. “He deserves a great deal of credit for expanding the company’s global footprint and establishing a solid foundation of corporate goals and core values that will guide the company’s future success.”

Mr. Gaffney has more than 25 years of leadership experience in the defense industry. In addition to his experience with IAP, he served as senior vice president of ITT Corporation and president of ITT Defense Electronics and Services. Mr. Gaffney was responsible for establishing ITT’s strategic direction as well as financial and operating performances. Under his leadership, the company grew more than 60 percent as Mr. Gaffney executed both organic and acquisition strategies. He also had responsibility for driving Lean Six Sigma and Operational Excellence across all of ITT.

Early in his career, Mr. Gaffney led business segments at Litton Industries, AlliedSignal and Smith Industries.  He earned a Bachelor of Electrical Engineering degree from Lafayette College in Easton, Pennsylvania, and is certified as a Lean Six Sigma Champion and Green Belt.

About International

International is a global government services provider in support of U.S. national security and foreign policy objectives, delivering support solutions for defense, diplomacy, and international development. DI operates major programs in logistics, platform support, contingency operations, and training and mentoring to reinforce security, community stability, and the rule of law. International is headquartered in Falls Church, Va. For more information, visit www.dyn-intl.com. (Click HERE for press release)

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Dyncorp Afghanistan LOGCAP DPM “resigns”?

Former PM/DPM , the one we all the love hate at MsSparky.com is apparently now a “former” DPM.   There is a whole lot of speculation surrounding his sudden “resignation”. Was he forced to “resign”? Did he see the handwriting on the wall and voluntarily resign? Is he going to work for ? If he did go to work for and resigned that would be like the LOGCAP trifecta of “resignations”.

Below is the email announcing his departure and subsequent good bye party.

Please stop by the CSO Admin building downstairs conference room at 1600 today. is heading home after he time here with us. Scott has been here from day one of this contract and has made significant contributions to this project. We will definitely miss Scott and invite you to come and say good bye to our DPM of Operations. We wish him safe travels and a happy life.

POC: Ani Petkovska

My personal opinion on this one…….”Good Riddance”. Maybe now has a slight chance for success in Afghanistan.

If you have any specific information surrounding Scott Mounts sudden “resignation” let us know.

Ms Sparky

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Forecast for LOGCAP Jobs: Continued above average growth

The infrastructure supporting the civilian army now slated to wage a war thought from the beginning to last only a short time, will require a continuation of Civilian Contractor’s on the Battlefield albeit on a smaller scale – initially.  Although then President George W. Bush declared “Mission Accomplished” aboard the aircraft carrier USS Abraham Lincoln on May 1, 2003, the mission continues to this day with no foreseeable end in sight.  With the current draw-down of troops – 20,000 departing by Aug. 31 with a limited presence remaining by the end of the year, and the corresponding mass exodus of civilian contractors supporting them, expect to see a resurgence of ethnic violence in a feudal system dominated society which has been at the core of the Iraqi culture since time immoral.  Power corrupts and absolute power corrupts absolutely – and nowhere does this sage expression apply more aptly than Iraq.

In a country epitomizing the golden rule honed and practiced for millennia, that is, “He who has the gold, rules”, the inevitable and unavoidable ensuing vacuum left by the departure of U.S. troops must and will be filled by thousands of employment-at-will civilians who, driven by the abysmal unemployment rate in the United States will be clamoring for the opportunity of drawing a steady paycheck.

of the Huffington Post in his article appearing June 30, 2010 entitled, The Perils of LOGCAP Job Seeking, observes in part of his assessment regarding my reasoning for the necessity of skilled leadership on LOGCAP, that “Still, his basic point is correct; it is all about the money…”

In the telling article written by Sandra Erwin appearing July 21, 2010 in the National Defense magazine, General Odierno: Iraq Will Be a ‘Civilian-Led Operation’ in 2012, General Odierno is quoted stating, “We are setting the stage from a military-led to a civilian-led operation”.  Erwin further reports “Odierno said that more than one thousand “tasks” will be reassigned. Some will be turned over to the Iraqi government, others to U.S. Central Command and the rest to the State Department.” Continuing, “State officials have asked the Army to extend contractor-support services that companies currently provide to the U.S. military in Iraq under the so-called LOGCAP contract. The Army indicated it wanted State to take over the oversight of the contract.”

The Implication is Clear

If the above bears-out, the current Personnel Alignment and Reduction currently taking place in Iraq as recently announced by ’s John Cusick, Principal Program Manager of LOGCAP III Middle East, and exhaustively discussed here within the viral blog of the irrepressible Ms Sparky, will not change the long-term goals of the Pentagon in terms of a continuing U.S. presence in the region, irrespective of popular opinion or progressive political objectives.

That being said, in the near-term future, expect an unprecedented surge of Contractors on the Battlefield to continue not only in terms of Private Security Contractors taking over the role of the military trigger-pullers, but also in terms of meeting corresponding logistical and supply demands inherent to supporting the enormous strategic objectives of trying to keep a lid on the boiling cauldron of blood-thirsty tribalism and opposing religious ideologies indigenous to the former lower Mesopotamia.

The task of utilizing a civilian-led army will be mind bogglingly complex and it will require leaders of uncompromising moral and ethical principles, but if that is what the Pentagon wants, then rest assured that as sure as God made little green apples, that is what the Pentagon is going to get.

Think tanks, along with inside the beltway MNC’s and military industrial complex defense contractors aligned with the Pentagon’s contingency plans for present and future wars, ensures long-term job security for those willing to take a walk on the wild side for a big fat paycheck.  LOGCAP is as inextricably joined at the hip with war strategists of today in supplying Contractors on the Battlefield as much as it ever has been – only now, it is going to become dramatically apparent and it is going to create an entirely new meaning to the definition of the Privatization of War.  It’s the ultimate model in outsourcing conflict resolution on a global scale, custom made for a brave new world.

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CWC hearing – Subcontracting: Who’s Minding the Store?

On July 26, 2010 the Commission on Wartime Contracting co-chaired by Commissioners Christopher Shays and Michael J. Thibault held a hearing on subcontracting risks in combat zones entitled Subcontracting: Who’s Minding the Store? I think this Commission could be one of the best things that has happened to contractor oversight!

Co-chairs’ opening statement

Panel 1 (click HERE for Panel 1 vide0 02:00)
Edward Harrington, Deputy Assistant Secretary of the Army (Procurement) Office of the Assistant Secretary of the Army (Acquisition, Logistics and Technology)
Patrick Fitzgerald, Director Defense Contract Audit Agency (DCAA)
Cathy Read, Department of State – Office of Acquisition Management
Drew W. Luten III, Bureau for Management, U.S. Agency for International Development (USAID) (Read the rest of the story here…)

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