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Department Employees versus Contractors for Security Services in Iraq' 
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GAO-10-266R: 

United States Government Accountability Office: 
Washington, DC 20548: 

March 4, 2010: 

Congressional Committees: 

Warfighter Support: A Cost Comparison of Using State Department 
Employees versus Contractors for Security Services in Iraq: 

The U.S. government's reliance on contractors, including the State 
Department's and Department of Defense's (DOD) use of private security 
contractors in Iraq, has been well documented. We and others have 
examined many of the challenges the government faces using contractors 
in Iraq, including issues related to the scope of private security 
contractors' activities, the challenges in providing sufficient 
oversight, the appropriate accountability processes, and difficulties 
in conducting background screenings of foreign national contractor 
employees.[Footnote 1] (A list of related GAO products can be found at 
the end of this report.) What has not been so well examined is the 
comparative cost of using civilian employees or military members 
versus the cost of using contractors, particularly private security 
contractors, during contingency operations such as Operation Iraqi 
Freedom. Generally, when costs have been discussed, the focus has been 
on the daily rate paid to contractor employees, rather than on the 
total costs of using State Department or DOD personnel. However, in 
October 2005, the Congressional Budget Office (CBO) issued a study 
that compared the cost of using military personnel, federal civilians, 
or contractors to provide logistic support for overseas operations. 
[Footnote 2] The study concluded that over a 20-year period, using 
Army military units would cost roughly 90 percent more than using the 
contractor. Also, in an August 2008 report on contractor support in 
Iraq, the Congressional Budget Office conducted a comparison of one 
contractor's costs to provide private security services in Iraq versus 
estimated military costs.[Footnote 3] The report concluded that for 
the 1-year period beginning June 11, 2004, the costs of the private 
contractor did not differ greatly from the costs of having a 
comparable military unit performing similar functions. Because of the 
broad level of interest by Congress in issues dealing with Iraq, the 
Comptroller General performed this review under his authority to 
conduct evaluations on his own initiative. For this engagement, 
congressional interest specifically focused on determining the costs 
to the Department of Defense and the State Department of using private 
security contractors for security services versus using federal 
employees to provide the same services. However, DOD was unable to 
provide us with the information necessary to address our engagement 
objective. Although DOD provided some data on military personnel 
costs,[Footnote 4] DOD officials told us they could not provide other 
data necessary to complete a cost comparison. For example, DOD could 
not provide information regarding the number and rank of military 
personnel that would be needed to meet contract requirements. Also, 
DOD could not provide information on the cost to train personnel to 
perform the security functions. DOD officials told us that in order to 
provide data for a cost comparison they would have to form a team from 
several DOD organizations which would need to analyze each specific 
contract's requirements to determine the number and rank of personnel 
needed to meet the requirements. Therefore, we focused our review on 
the comparison of the State Department's costs to use private security 
contractors--to perform both personal and static security[Footnote 5] 
functions--as opposed to using State Department employees to perform 
those same functions. 

To address our objective, we reviewed the task orders and contract 
which provided security in Iraq and that were current when we began 
our review--four task orders of the Worldwide Personal Protective 
Services (WPPS) II contracts[Footnote 6] and one contract for Baghdad 
embassy security. We reviewed and analyzed relevant documents to 
obtain the cost and services provided under each task order and 
contract. The task orders and contract covered the primary security 
services provided in Iraq for the State Department. We interviewed 
officials from the State Department to obtain specific contract 
information, their estimated cost for providing security services with 
State Department employees, and any cost comparisons conducted related 
to private security services.[Footnote 7] We met with a private 
security contractor to discuss their contract cost information and to 
obtain a detailed contract cost breakdown. We compared the base year 
obligated amounts for the four task orders and one security contract 
to total annual costs that the State Department said it would likely 
incur if the department were to provide the services--based on State 
Department's assumptions. These assumptions included (1) the State 
Department would have to recruit, hire, and train new employees who 
would all be U.S. citizens; (2) the employees would serve 1 year in 
Iraq and then return to the United States; and (3) the State 
Department would use the same number of employees the contractors use 
to provide security. We focused our analysis on the major quantifiable 
cost components such as salary, benefits, overseas costs, training, 
recruitment, background screenings, and support. The costs that the 
State Department provided were in fiscal year 2008 dollars and the 
costs of the four task orders and the security contract were for 
earlier time periods. In order to make a similar comparison, we 
converted the private security costs into fiscal year 2008 dollars so 
that they could be compared to the fiscal year 2008 costs of the State 
Department. The State Department also provided the number of 
contractor personnel performing the security missions for each task 
order and contract in Iraq. To determine the total average annual cost 
for the department, the total of each cost component was multiplied by 
the number of personnel the contractor used to provide the services 
required under the task orders and contract. Given the State 
Department's 1-year rotation policy, we added additional costs for 
stateside employees who would be needed to replace the deployed 
employees after 1 year. We did not evaluate the quality of the 
services provided by the contractors or whether better services could 
be provided by the State Department. We also did not evaluate the 
policy implications of using contractors to perform security 
functions. In addition, we did not include the cost of government-
furnished equipment provided to the contractor because we believe 
similar equipment would be needed if the government provided the 
services. When using contractors, the department also incurs 
administrative costs for awarding the task orders and contract and 
providing oversight; however, we also did not include these costs in 
our analysis because the State Department was unable to provide an 
estimate of these costs. A detailed discussion of our scope and 
methodology can be found in appendix I. We conducted our review from 
October 2008 through October 2009 in accordance with generally 
accepted government auditing standards. Those standards require that 
we plan and perform the audit to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings based on our 
audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings based on our audit objective. 

Results in Brief: 

Our comparison of likely State Department costs versus contractor 
costs for four task orders and one contract awarded by the State 
Department for security services in Iraq showed that for three of the 
task orders and the contract, the cost of using State Department 
employees would be greater than using contractors, while the State 
Department's estimated cost to use federal employees was less for the 
other task order. For example, using State Department employees to 
provide static security for the embassy in Baghdad would have cost the 
department approximately $858 million for 1 year compared to the 
approximately $78 million charged by the contractor for the same time 
period. In contrast, our cost comparison of the task order for 
providing personal security for State Department employees while in 
the Baghdad region--which required personnel that have security 
clearances--showed that for this task order, the State Department's 
estimated annual cost would have been about $240 million, whereas the 
contractor charged approximately $380 million for 1 year. However, 
because the State Department does not currently have a sufficient 
number of trained personnel to provide security in Iraq, the 
department would need to recruit, hire, and train additional employees 
at an additional cost of $162 million. Contract requirements are a 
major factor in determining whether contractors or government 
personnel are less expensive--especially factors such as whether 
personnel need security clearances. However, there are other factors 
that may play a role in the decision of whether to perform security 
services with federal employees or contractors. For example, it 
generally takes more time to recruit, hire, and train enough federal 
employees than to acquire contractors. Additionally, the government 
could potentially be faced with incurring some administrative costs 
from having to take actions to reduce government personnel if they are 
no longer needed. When using contractors, the department also incurs 
administrative costs for awarding the task orders and contract and 
providing oversight; however, the State Department was unable to 
estimate these costs. Finally, some costs associated with providing 
Iraq security services using federal employees--such as developing new 
career fields, providing additional overhead, and building new 
housing--are difficult to quantify. 

Background: 

The State Department--under the authority of the Secretary of State--
is responsible for the security of most U.S. civilian agency personnel 
and agency contractors on official duty overseas. Its Bureau of 
Diplomatic Security (Bureau) is a unique organization that plays an 
essential role within the department. The Bureau's personnel work 
together as a team to ensure that the State Department can carry out 
its foreign policy missions safely and securely around the world. The 
Bureau of Diplomatic Security has a broad scope of global 
responsibilities, with protection of people, information, and property 
as its top priority. Overseas, the Bureau develops and implements 
security programs to safeguard all personnel who work in every U.S. 
diplomatic mission around the world. Over the years, the State 
Department has been unable to provide long-term personal protective 
services solely from its pool of special agents and it has turned to 
contractual support. Private security contractors provide a number of 
security-related functions such as: 

* personal security: the protective security for high-ranking U.S. 
government officials and U.S. federal civilian personnel, and other 
individuals traveling in unsecured areas; 

* convoy security: the protection of convoys traveling in unsecured 
areas; and: 

* static security: the protection of fixed or static sites, such as 
military bases, housing areas, and reconstruction work sites. 

In June 2005, the State Department awarded a Worldwide Personal 
Protective Services II contract to three contractors.[Footnote 8] For 
the purposes of this review, we focused on four task orders associated 
with this contract which are for security services in Iraq. The four 
separate task orders--with a 1-year base period and four 1-year 
options--were awarded to the contractors to provide personal 
protective services in four regions[Footnote 9] of Iraq and for static 
guard services at the Baghdad WPPS camp. We also examined the Baghdad 
Embassy Security Forces contract awarded in 2005, which provides 24-
hour security of the embassy and its personnel while on the embassy 
grounds. 

Using Contractors in Iraq Is Less Costly than the Estimated Cost for 
Using State Department Employees for Four of the Five Cases We 
Reviewed: 

Our comparison of likely State Department costs versus contractor 
costs for four task orders and one contract awarded by the State 
Department for security services in Iraq showed that for three of the 
task orders and the contract, the cost of using State Department 
employees would be greater than using contractors, while the State 
Department's estimated cost to use federal employees was less for the 
other task order. For the remaining task order related to providing 
protective services in the Baghdad region, the State Department's 
estimated annual cost would have been about $141 million less than the 
contractor's cost. Overall, the difference between the contractors' 
cost and the estimated State Department cost ranged from about $3 
million for one task order to over $785 million for the contract. For 
example, using State Department employees to provide static security 
for the embassy in Baghdad would have cost the department 
approximately $858 million for 1 year compared to the approximately 
$78 million charged by the contractor for the same time period. 
Although the State Department had not performed a cost comparison for 
security services, for our cost comparison, the State Department said 
it would use 100 percent U.S. citizen employees[Footnote 10] and would 
use the same number of personnel the contractor provided to perform 
the services as a start point for the comparison. However, because the 
State Department lacks a sufficient number of personnel to provide 
security in Iraq it would need to hire thousands of new security 
personnel. Furthermore, under State's rotation policy, U.S. citizen 
employees typically only serve 1 year in Iraq and then are reassigned 
to a position in the United States. As such, in order to provide more 
than 1 year of deployed security services, State Department officials 
stated they would need to hire additional employees to meet a one-to-
one ratio of stateside and deployed employees, which will double some 
of State's estimated costs to provide security services. These 
additional employees would need to be hired about 1 year prior to 
being deployed to allow sufficient time for completing the State 
Department's training program for Foreign Service agents, which is 
approximately 1 year.[Footnote 11] The costs to recruit, hire, and 
train new security personnel are not included in the State 
Department's cost in table 1; however, these costs are detailed in 
table 3. Table 1 shows our cost comparison for one contract and four 
task orders using a one-to-one ratio of deployed to stateside 
employees. 

Table 1: State Department versus Private Security Contractor Cost 
Comparison: 

Contract/task orders: Baghdad Embassy Static Security; 
Number of contractor personnel: 1,982; 
Contractor[A] annual cost: $77.6 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Deployed: $681.9 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Stateside: $176.5 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Total: $858.4 million; 
Cost difference: ($785.1 million). 

Contract/task orders: Baghdad Region Personal Protective Services Task 
Order; 
Number of contractor personnel: 553; 
Contractor[A] annual cost: $380.4 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Deployed: $190.3 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Stateside: $49. million2; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Total: $239.5 million; 
Cost difference: $140.9 million. 

Contract/task orders: Basrah Region Personal Protective Services Task 
Order; 
Number of contractor personnel: 243; 
Contractor[A] annual cost: $61.6 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Deployed: $83.6 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Stateside: $21.6 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Total: $105.2 million; 
Cost difference: ($43.7 million). 

Contract/task orders: Al-Hillah Region Personal Protective Services 
Task Order; 
Number of contractor personnel: 259; 
Contractor[A] annual cost: $71.9 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Deployed: $89.1 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Stateside: $23.1 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Total: $112.2 million; 
Cost difference: ($40.3 million). 

Contract/task orders: Erbil Region Personal Protective Services Task 
Order; 
Number of contractor personnel: 128; 
Contractor[A] annual cost: $52.1 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Deployed: $44.0 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Stateside: $11.4 million; 
State Department annual estimated cost[B] (in fiscal year 2008 
dollars): Total: $55.4 million; 
Cost difference: ($3.3 million). 

Source: GAO analysis of State Department data. 

[A] The contractor annual costs have been converted into fiscal year 
2008 dollars. 

[B] The costs to recruit, hire, and train new employees are not 
included because the State Department would incur costs to acquire new 
employees before it would incur the additional estimated annual costs 
in this table. 

[End of table] 

In addition to the actual cost of the contract and task orders, the 
State Department would also incur some administrative costs associated 
with using contractors such as the costs of awarding the task orders 
and contract and providing oversight. The State Department was unable 
to provide an estimated cost for the awarding and oversight of 
contracts. These costs can vary depending on the complexity and 
sensitivity of the contract. For example, according to State 
Department officials, the Baghdad Embassy contract provides static 
security at a fixed site which requires less oversight than the 
Worldwide Personal Protective Services II contracts which provide for 
the protective security of U.S. government officials and other 
individuals traveling in unsecured areas in theatre. As we noted in 
July 2008,[Footnote 12] the State Department took steps in Iraq to 
provide increased oversight for the Worldwide Personal Protective 
Services II contract after the Nisour Square incident.[Footnote 13] 
For example, the department added 45 special agent positions--allowing 
a Diplomatic Security agent to accompany most protection movements--
and installed cameras and video equipment in security vehicles for 
improved oversight of security contractors. 

Costs to Deploy and Sustain Federal Employees Overseas Account for 
Over One-Half of the State Department's Estimated Costs: 

Our analysis showed that over one-half of the State Department's 
estimated costs for deployed employees were to cover costs required to 
sustain the employees overseas. The State Department's estimated cost 
to provide security included components such as salaries, benefits, 
cost of living allowances and overtime, overseas costs, and other 
support costs associated with deploying and sustaining U.S. citizen 
employees overseas. Overseas costs included things such as furniture, 
furnishings and equipment for office spaces and residences, 
maintenance and repair of living quarters, and travel cost for rest 
and relaxation for deployed personnel. Estimated costs for State 
Department employees were calculated by multiplying the State 
Department's average annual cost for two middle grade Foreign Service 
agents, one to be deployed and one to be stateside for rotation 
purposes by the number of personnel needed to perform the mission. As 
shown in table 2, almost 55 percent of the State Department's deployed 
employee cost was for overseas related costs, while salaries, 
benefits, and overtime/cost of living allowances/awards accounted for 
about 37 percent. Salaries and benefits accounted for all of State 
Department's estimated stateside employee costs. 

Table 2: State Department's per Person Cost Components[A]: 

Cost component: Salary; 
Deployed employee: Cost: $65,000; 
Deployed employee: Percentage: 18.9%; 
Stateside employee: Cost: $65,000; 
Stateside employee: Percentage: 73.0%; 
Total: Cost: $130,000; 
Total: Percentage: 30.0%. 

Cost component: Benefits[B]; 
Deployed employee: Cost: $24,050; 
Deployed employee: Percentage: 7.0%; 
Stateside employee: Cost: $24,050; 
Stateside employee: Percentage: 27.0%; 
Total: Cost: $48,100; 
Total: Percentage: 11.1%. 

Cost component: Overtime/cost of living 
allowances/differential/awards[C]; 
Deployed employee: Cost: $38,000; 
Deployed employee: Percentage: 11.0%; 
Stateside employee: Cost: $0; 
Stateside employee: Percentage: 0.0%; 
Total: Cost: $38,000; 
Total: Percentage: 8.8%. 

Cost component: Overseas costs; 
Deployed employee: Cost: $189,000; 
Deployed employee: Percentage: 54.9%; 
Stateside employee: Cost: $0; 
Stateside employee: Percentage: 0.0%; 
Total: Cost: $189,000; 
Total: Percentage: 43.6%. 

Cost component: Support; 
Deployed employee: Cost: $28,000; 
Deployed employee: Percentage: 8.1%; 
Stateside employee: Cost: $0; 
Stateside employee: Percentage: 0.0%; 
Total: Cost: $28,000; 
Total: Percentage: 6.5%. 

Cost component: Total; 
Deployed employee: Cost: $344,050; 
Deployed employee: Percentage: 100%; 
Stateside employee: Cost: $89,050; 
Stateside employee: Percentage: 100%; 
Total: Cost: $433,100; 
Total: Percentage: 100%. 

Source: GAO analysis of State Department data. 

[A] Approximate contractor cost per person was $39,000 for the Baghdad 
Embassy Static Security contract; $688,000 for the Baghdad Region 
Personal protective Services Task Order; $253,000 for the Basrah 
Region Personal Protective Services Task Order; $278,000 for the Al-
Hillah Region Personal Protective Services Task Order; and $407,000 
for the Erbil Region Personal Protective Services Task Order. 

[B] About 37 percent of salary, according to the State Department. 

[C] Cost of living allowance. 

[End of table] 

The State Department Would Incur Costs to Hire the Number of Personnel 
Needed to Provide Security Services: 

In order for the State Department to perform these security missions 
with its own employees, as shown in table 3, it would cost the State 
Department approximately $162 million to recruit, hire, and train 
6,330 employees. When determining total costs for the department to 
provide security services, these recruitment and training costs would 
be in addition to the State Department's estimated annual cost. 
Overall, for these four task orders and one contract, the State 
Department is using 3,165 contractors for security in Iraq. However, 
the State Department only has about 1,500 security agents who are 
already performing other missions and according to State Department 
officials, these agents would not be available to perform the security 
missions provided by the contractors. According to State Department 
officials, based upon recent experience in establishing a new skill 
specialty, it would take about a year to have the first security 
personnel on-board; however, they would not be in sufficient numbers 
to completely replace the contractors. They said it could easily take 
them 3 years or longer to hire, train, and fully staff all positions 
necessary to accomplish the mission. As an example of the length of 
time it would take to hire and mobilize more employees, State 
Department officials informed us that after the attacks on September 
11, 2001, under their current hiring process it took the State 
Department 2 years to hire 327 employees using existing career fields 
(to include recruitment, training, and completing the security 
clearance process). 

Table 3: State Department Estimated Cost to Recruit, Hire, and Train 
Employees: 

Cost component: Recruiting; 
Cost per person: $6,575; 
Number of people: 6,330; 
Total: $41.6 million. 

Cost component: Training; 
Cost per person: $15,000; 
Number of people: 6,330; 
Total: $95.0 million. 

Cost component: Background investigations; 
Cost per person: $4,000; 
Number of people: 6,330; 
Total: $25.3 million. 

Cost component: Total; 
Cost per person: $25,575; 
Number of people: 6,330; 
Total: $161.9 million. 

Source: GAO analysis of State Department data. 

[End of table] 

In response to the Nisour Square incident of September 2007 the State 
Department recently created a new Security Specialist series to serve 
up to 5 consecutive years in deployed locations to accompany 
contractor personnel performing security missions. State Department 
officials said that hiring employees under this series could be an 
option for providing security services in Iraq; however, given their 
recent experience with filling these positions and the number of 
employees that would be needed, it could be several years before 
enough employees were hired and trained to perform the security 
mission, as such, making this an unlikely option. On February 9, 2009, 
the State Department issued vacancy announcements for Security 
Protective Specialist and Supervisory Security Protective Specialist 
positions, which were open until February 17, 2009. As stated in the 
vacancy announcement, the initial appointment would be for 13 months 
and may be renewed annually up to 5 years, and the appointment may be 
terminated by the government at any time upon at least 30 days notice. 
[Footnote 14] According to the State Department, the open period was 
limited to 9 days in an effort to meet senior management's goal to get 
the individuals hired, trained, and on the ground by the end of 
summer. Based on their past experience with the Special Agent 
announcements, the department assumed that the 9-day open period would 
provide them with more than enough candidates to fill the 25 
positions. According to the State Department, while a total of 586 
applications were received, after analyses and screening only 92 were 
found to meet the basic qualifications and 10 have been hired to go to 
Afghanistan. Nine additional candidates have been cleared for 
employment or are in the hiring process. Based on the department's 
experience with the first announcement and feedback from the 
candidates, the State Department revamped the vacancy announcements to 
highlight some of the key benefits of the program, such as rest and 
relaxation travel, separate maintenance allowance, danger pay, and 
post differential.[Footnote 15] In addition, the department amended 
the experience requirement to more accurately reflect the minimum 
level of specialized experience required to qualify for the positions. 
On September 9, 2009, the department opened the revamped vacancy 
announcements for these positions for 30 days. According to the State 
Department, a total of 993 applications were received; analyses and 
screening of the applications began immediately after the 
announcements closed and interviews will be scheduled with those 
candidates found to meet the basic qualifications. State Department 
officials said they would not need to hire additional personnel 
stateside for rotation of these personnel and this may be an option 
for providing the security services; however, they said it could take 
a significant amount of time to fill enough positions needed to 
provide the security services. To acquire these employees, the State 
Department would incur a minimum cost of approximately $81 million for 
recruiting, hiring, and training 3,165 employees and an additional 
cost of over $5 billion--over 5 years--for other costs such as 
salaries, benefits, awards, overseas costs, and cost of living 
allowances. For example, for the Baghdad Embassy Security Forces 
contract, State Department's estimated cost to recruit, hire, and 
train 1,982 employees in this series would be about $51 million and 
the deployment cost for these employees for 5 years is over $3 
billion. The contractor's total cost for the Baghdad Embassy Security 
Forces contract was approximately $356 million. The State Department's 
cost estimates do not include the cost of developing new career 
fields, as discussed below. Assuming the State Department had enough 
of these term employees to meet the protective security requirements 
and using the quantifiable estimated cost, based on our analysis, it 
would be less costly for the State Department to perform the security 
mission for two of the four task orders we reviewed. 

Contract Requirements Can Influence the Cost of Security Services: 

Contract requirements are a major factor in determining whether 
contractors or government personnel are less expensive--especially 
factors such as whether personnel need security clearances. For 
instance, unless the State Department specifies a need for personnel 
with security clearances--which are generally not available to non-
U.S. citizens--contractors typically choose to employ a large 
percentage of third-country nationals and local nationals to lower 
contract cost. For example, the contractor providing embassy security 
in Baghdad employed a large percentage of third-country nationals and 
local nationals (about 89 percent), whose lower wages contributed to 
the lower cost of the contract. In contrast, our comparison of the 
task order for providing personal security for State Department 
employees while in the Baghdad region--which required personnel that 
have security clearances--showed that for this task order, the State 
Department's estimated annual cost would have been about $240 million, 
whereas the contractor charged approximately $380 million for 1 year. 
Table 4 shows the breakdown of the contractor workforce for the 
contract and four task orders we reviewed. 

Table 4: Nationality of Contractor Workforce: 

Contract/task order: Baghdad Embassy Static Security; 
Total contract/task order personnel: 1,982; 
U.S. citizens: Number: 166; 
U.S. citizens: Percent: 8%; 
Third-country nationals: Number: 1,623; 
Third-country nationals: Percent: 82%; 
Local nationals: Number: 148; 
Local nationals: Percent: 7%. 

Contract/task order: Baghdad Region Personal Protective Services Task 
Order; 
Total contract/task order personnel: 553; 
U.S. citizens: Number: 553; 
U.S. citizens: Percent: 100%; 
Third-country nationals: Number: 0; 
Third-country nationals: Percent: 0; 
Local nationals: Number: 0; 
Local nationals: Percent: 0. 

Contract/task order: Basrah Region Personal Protective Services Task 
Order; 
Total contract/task order personnel: 243; 
U.S. citizens: Number: 116; 
U.S. citizens: Percent: 48%; 
Third-country nationals: Number: 127; 
Third-country nationals: Percent: 52%; 
Local nationals: Number: 0; 
Local nationals: Percent: 0. 

Contract/task order: Al-Hillah Region Personal Protective Services 
Task Order; 
Total contract/task order personnel: 259; 
U.S. citizens: Number: 118; 
U.S. citizens: Percent: 46%; 
Third-country nationals: Number: 141; 
Third-country nationals: Percent: 54%; 
Local nationals: Number: 0; 
Local nationals: Percent: 0. 

Contract/task order: Erbil Region Personal Protective Services Task 
Order; 
Total contract/task order personnel: 128; 
U.S. citizens: Number: 102; 
U.S. citizens: Percent: 80%; 
Third-country nationals: Number: 18; 
Third-country nationals: Percent: 14%; 
Local nationals: Number: 8; 
Local nationals: Percent: 6%. 

Contract/task order: Total; 
Total contract/task order personnel: 3,165; 
U.S. citizens: Number: 1,055; 
U.S. citizens: Percent: 33%; 
Third-country nationals: Number: 1,909; 
Third-country nationals: Percent: 60%; 
Local nationals: Number: 156; 
Local nationals: Percent: 5%. 

Source: GAO analysis of State Department data. 

[End of table] 

* For the Baghdad Embassy Security Force contract for static security, 
State Department's estimated annual cost would be over $785 million 
more than the contractor's cost if the decision was made to have the 
State Department provide these services rather than using a 
contractor. The State Department awarded the contract to provide 24-
hour deterrent against unauthorized, illegal, or potentially life-
threatening activities directed toward the embassy's employees, 
visitors, sensitive information, and properties. Under this contract, 
the contractor was required to recruit, train, and manage the armed 
professional security personnel and the supervisory employees utilized 
in this effort. The contractor used 1,982 personnel at a cost of about 
$78 million. State Department's estimated cost was about $858 million 
($682 million for deployed employees and $176 million for stateside 
employees to replace the deployed personnel at the end of 1 year). The 
contractor used 8 percent U.S. citizen employees, 82 percent third-
country nationals, and 7 percent local nationals. 

* The contractor's cost for the Basrah region task order was less than 
the State Department's estimated cost. The State Department's 
estimated cost to provide the security services would be approximately 
$44 million more than the contractor's cost if a decision were made to 
have the State Department provide the service rather than using a 
contractor. The contractor provided protective security and used 243 
personnel at a cost of approximately $62 million, whereas the State 
Department's estimated cost would be about $105 million ($83 million 
for deployed personnel and $22 million for stateside employees to 
replace the deployed employees). For this task order, the contractor 
used 48 percent U.S. citizen employees and 52 percent third-country 
nationals. 

* The contractor's cost for security in the Al-Hillah region was less 
than the State Department's estimated cost for proving the security 
using federal employees. The contractor's cost was approximately $40 
million less than the State Department's estimated cost. The 
contractor provided protective security using 259 personnel at a cost 
of approximately $72 million. The State Department's estimated cost 
for the same services was $112 million ($89 million for deployed 
personnel and $23 million for stateside employees to replace the 
deployed personnel). The contractor used 46 percent U.S. citizen 
employees and 54 percent third-country national employees. 

* The contractor's cost for security in the Erbil region was also 
approximately $3 million less than the State Department's estimated 
cost for providing the service with federal employees. The contractor 
provided security services using 128 personnel at a cost of 
approximately $52 million. The State Department's estimate to perform 
the same security would be approximately $55 million ($44 million for 
deployed personnel and $11 million for stateside employees to replace 
the deployed personnel.) The nationality of the contractor's workforce 
was 80 percent U.S. citizen employees, 14 percent third-country 
nationals, and 6 percent local national employees. 

There are other factors that may play a role in the decision of 
whether to perform security services with federal employees or 
contractors. For example, it generally takes more time to hire and 
train enough federal employees than to acquire contractors. 
Additionally, the government could potentially be faced with having to 
take actions to reduce the number of government personnel hired if 
they are no longer needed. In contrast, if the need for the contract 
no longer existed, the government could terminate the contract. 

Some Costs Associated with Providing Iraq Security Services with 
Federal Employees Are Difficult to Quantify: 

Some costs associated with providing Iraq security services using 
federal employees--such as developing new career fields, providing 
additional overhead, and building new housing--are difficult to 
quantify. State Department officials said they do not have personnel 
with some of the skills required to provide security, such as guards, 
screeners, explosive ordnance detection dog handlers, or armorers. 
Both overseas and domestically, these services are currently provided 
by contractors. Therefore, the State Department would incur costs for 
developing new career fields for these positions. For example, the 
department would incur the cost for developing a new training 
curriculum for each of these positions as well as the cost for 
training facilities and equipment. 

A significant increase in the number of State Department diplomatic 
security personnel would require more administration and oversight 
from the department because of the increased number of employees to 
support and supervise. According to State Department officials, if 
they used State Department employees to provide the security services 
in Iraq, they would have to build new housing at the embassy for these 
employees. The officials said that Foreign Service agents are not 
allowed to live with contractors and the housing currently used by the 
contractors at the embassy would not be sufficient for the agents. 
Additionally, the officials stated that currently there is not enough 
space on the embassy compound for additional housing. As such, there 
could be an additional cost for more space--if available--to build 
housing. Although the State Department recognizes it would incur 
additional cost for these components, the department was unable to 
quantify these costs. 

Agency Comments and Our Evaluation: 

We provided both the State Department and DOD with a draft of this 
report and requested that they provide comments. Both the State 
Department and DOD advised us that they had no comments on the report. 
The State Department and DOD provided technical comments which were 
incorporated as appropriate. 

We are sending copies of this report to the Secretary of Defense, the 
Secretary of State, and the appropriate congressional committees. In 
addition, the report will be available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-7686 or solisw@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Key contributors to this report were 
Carole F. Coffey, Assistant Director; Charles W. Perdue, Assistant 
Director, Applied Research and Methods; Connie W. Sawyer, Jr.; Clarine 
S. Allen; Alyssa B. Weir; and Chaneé L. Gaskin. 

Signed by: 

William M. Solis:
Director, Defense Capabilities and Management: 

List of Committees: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate: 

The Honorable John F. Kerry:
Chairman:
The Honorable Richard G. Lugar:
Ranking Member:
Committee on Foreign Relations:
United States Senate: 

The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate: 

The Honorable Patrick Leahy:
Chairman:
The Honorable Judd Gregg:
Ranking Member:
Subcommittee on State, Foreign Operations, and Related Programs:
Committee on Appropriations:
United States Senate: 

The Honorable Claire McCaskill:
Chairman:
The Honorable Robert F Bennett:
Ranking Member:
Ad Hoc Subcommittee on Contracting Oversight:
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

The Honorable Norm Dicks:
Acting Chairman:
The Honorable C.W. "Bill" Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives: 

The Honorable Nita Lowey:
Chairman:
The Honorable Kay Granger:
Ranking Member:
Subcommittee on State, Foreign Operations, and Related Programs:
Committee on Appropriations:
House of Representatives: 

The Honorable Ike Skelton:
Chairman:
The Honorable Howard P. "Buck" McKeon:
Ranking Member:
Committee on Armed Services:
House of Representatives: 

The Honorable Howard L. Berman:
Chairman:
The Honorable Ileana Ros-Lehtinen:
Ranking Member:
Committee on Foreign Affairs:
House of Representatives: 

The Honorable Tom Coburn:
United States Senate: 

[End of section] 

Appendix I: Scope and Methodology: 

To address our objective, we reviewed the task orders and contract 
which provided security in Iraq and were current when we began our 
review--four task orders of the Worldwide Personal Protective Services 
II contracts and one contract for Baghdad embassy security. We 
reviewed and analyzed relevant documents--including performance 
statements of work and contract modifications--to identify the cost 
and services provided under each task order and contract. One task 
order was awarded to one of the three Worldwide Personal Protective 
Services (WPPS) II contractors to provide personal protective services 
in Baghdad and Ramadi and for static guard services at the Baghdad 
WPPS camp. This task order was awarded for a 1-year base period from 
May 8, 2006, to May 7, 2007, and four 1-year options. The three other 
task orders were awarded to the three contractors to provide 
protective security services in different locations in Iraq for a 1-
year base period from August 5, 2006, to August 4, 2007, and four 1-
year options. One contractor was responsible for the Basrah region, 
another for the Al-Hillah region and the other was responsible for the 
Erbil region.[Footnote 16] We also reviewed the Baghdad Embassy 
Security Forces contract which was awarded to the contractor 
performing security in the Basrah region. The contractor was to 
provide a 24-hour deterrent against unauthorized, illegal, or 
potentially life-threatening activities directed toward the embassy's 
employees, visitors, sensitive information, and properties. Also, the 
contractor was required to recruit, train, and manage the armed 
professional security personnel and the supervisory employees utilized 
in this effort. We discussed with State Department officials their 
roles and responsibilities related to security contracts that support 
the department's missions in Iraq. We asked the officials to identify 
the various cost components within the task orders and contract and to 
provide specific task order and contract information, including cost 
and the number of contractor personnel. We also asked if they had 
performed any cost comparisons related to providing similar security 
services as the contractors. Although the State Department had not 
performed a cost comparison for security services, for our cost 
comparison, the State Department's assumptions included (1) the State 
Department would have to recruit, hire, and train new employees who 
would all be U.S. citizens; (2) the employees would serve 1 year in 
Iraq and then return to the United States; and (3) the State 
Department would use the same number of employees the contractors use 
to provide security. We asked officials to provide us with their 
annual estimated per person costs to perform security services in 
deployed locations. The officials pulled information from the 
department's accounting system and provided us with the average annual 
cost--by various components--for current Foreign Service agents 
providing security services in deployed locations. The State 
Department's estimated cost to provide security included components 
such as salaries, benefits, cost of living allowances and overtime, 
overseas cost, recruitment, training, and other support costs. For our 
cost comparison of contractor cost versus State Department estimated 
annual cost, we focused our analysis on major quantifiable cost 
components such as salary, benefits, overseas costs, and support. We 
also computed additional cost to recruit, hire, and train new security 
employees. 

The State Department provided the number of contractor personnel 
performing the security missions for each task order and contract in 
Iraq and said this would be the number of personnel they would need to 
perform the mission. To determine the total average annual cost for 
the department, we multiplied the number of personnel by the average 
per person cost for a deployed State Department Foreign Service agent. 
Given the State Department's rotation policy, we added additional 
costs for stateside agents to replace the deployed agents. We compared 
the obligated amounts for the four task orders and one security 
contract to the total costs that the State Department said it would 
likely incur if the department were to provide the services--based on 
the previously discussed assumptions. The costs that the State 
Department provided were in fiscal year 2008 dollars and the costs of 
the four task orders and the security contract were for earlier time 
periods. In order to make similar comparison, we converted the private 
security costs into fiscal year 2008 dollars so that they could be 
compared to the fiscal year 2008 costs of the State Department. 

We identified other cost components which impact the total cost of the 
State Department providing security services, such as creating new 
career fields, cost of additional overhead, and cost for building new 
housing. However, these cost components were not easily quantifiable 
because the department was unable to estimate the future long-term 
costs of these components. As such we were unable to include these 
costs in our review. 

To understand contractor cost components, we reviewed and analyzed the 
Iraq contract and task orders to obtain the cost for services provided 
under each contract and task order and we held discussions with one of 
the private security contractors to better understand their cost for 
providing private security services, as well as the different cost 
components included in their contract. Some of the major cost 
components identified by the contractor include labor, training, life 
support (housing, laundry, meals), basic individual items (uniforms, 
body armor, boots), mobilization, rotation travel (for rest & 
relaxation), weapons & ammunition, vehicle & transportation (armored/ 
unarmored vehicles), equipment transport costs (shipment of basic 
individual items), direct insurance costs, and other equipment 
(medical supplies, radios/communications, internet access, night 
vision goggles, security/surveillance equipment). According to the 
contractor, these cost components are the primary cost drivers in 
their offer to the government when submitting a proposal. 

We did not evaluate the quality of the services provided by the 
contractors or whether better services could be provided by the State 
Department. We also did not evaluate the policy implications of using 
contractors to perform security functions. In addition, we did not 
include the cost of government-furnished equipment provided to the 
contractor because we believe similar equipment would be needed if the 
government provided the services. 

We conducted our review from October 2008 through October 2009 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings based on our 
audit objective. 

Related GAO Products: 

Contingency Contract Management: DOD Needs to Develop and Finalize 
Background Screening and Other Standards for Private Security 
Contractors. [hyperlink, http://www.gao.gov/products/GAO-09-351]. 
Washington, D.C.: July 31, 2009. 

Rebuilding Iraq: DOD and State Department Have Improved Oversight and 
Coordination of Private Security Contractors in Iraq, But Further 
Actions are Needed to Sustain Improvements. [hyperlink, 
http://www.gao.gov/products/GAO-08-966]. Washington, D.C.: July 31, 
2008. 

Defense Contracting: Army Case Study Delineates Concerns with the Use 
of Contractors as Contract Specialists. [hyperlink, 
http://www.gao.gov/products/GAO-08-360]. Washington, D.C.: March 26, 
2008. 

Military Operations: Implementation of Existing Guidance and Other 
Actions Needed to Improve DOD's Oversight and Management of 
Contractors in Future Operations. [hyperlink, 
http://www.gao.gov/products/GAO-08-436T]. Washington, D.C.: January 
24, 2008. 

Military Personnel: DOD Needs to Establish a Strategy to Improve 
Transparency over Reserve and National Guard Compensation to Manage 
Significant Growth in Cost. [hyperlink, 
http://www.gao.gov/products/GAO-07-828]. Washington, D.C.: June 20, 
2007. 

Rebuilding Iraq: Actions Still Needed to Improve the Use of Private 
Security Providers. [hyperlink, 
http://www.gao.gov/products/GAO-06-865T]. Washington, D.C.: June 13, 
2006. 

Peacekeeping: Cost Comparison of Actual UN and Hypothetical U.S. 
Operations in Haiti. [hyperlink, 
http://www.gao.gov/products/GAO-06-331]. Washington, D.C.: February 
21, 2006. 

Rebuilding Iraq: Actions Needed to Improve Use of Private Security 
Providers. [hyperlink, http://www.gao.gov/products/GAO-05-737]. 
Washington, D.C.: July 28, 2005. 

Military Personnel: DOD Needs to Improve the Transparency and Reassess 
the Reasonableness, Appropriateness, Affordability, and Sustainability 
of Its Military Compensation System. [hyperlink, 
http://www.gao.gov/products/GAO-05-798]. Washington, D.C.: July 19, 
2005. 

[End of section] 

Footnotes: 

[1] [1] Rebuilding Iraq: Actions Needed to Improve Use of Private 
Security Providers, [hyperlink, 
http://www.gao.gov/products/GAO-05-737] (Washington, D.C.: July 2005); 
Military Operations: Background Screenings of Contractor Employees 
Supporting Deployed Forces May Lack Critical Information, but U.S. 
Forces Take Steps to Mitigate the Risk Contractors May Pose, 
[hyperlink, 
http://www.gao.gov/products/GAO-06-999R] (Washington, D.C.: September 
2006). 

[2] CBO, Logistics Support for Deployed Military Forces (October 2005). 

[3] CBO, Contractors' Support of U.S. Operations in Iraq Pub. No. 3053 
(August 2008). 

[4] In July 2005, we reported on DOD's inability to identify the 
government's total cost to provide compensation to active duty service 
members because no single source exists to show the total cost of 
military compensation. See Military Personnel: DOD Needs to Improve 
the Transparency and Reassess the Reasonableness, Appropriateness, 
Affordability, and Sustainability of Its Military Compensation System, 
[hyperlink, http://www.gao.gov/products/GAO-05-798] (Washington, D.C.: 
July 2005). 

[5] Personal security refers to the protective security for high- 
ranking U.S. government officials, U.S. federal civilian personnel, 
and other individuals traveling in unsecured areas. Static security 
refers to the protection of fixed or static sites, such as military 
bases, housing areas, and reconstruction work sites. 

[6] FAR 16.504 (a) defines the WPPS II contracts as indefinite 
delivery/indefinite quantity contracts. An indefinite delivery/ 
indefinite quantity contract provides for an indefinite quantity 
within stated limits, of supplies or services during a fixed period. 
When services are required the State Department issues a task order 
which defines the specific requirements and services to be provided by 
the contractor. 

[7] According to State Department officials, they had not performed an 
A-76 study or any other cost comparison for these services. 

[8] In March 2000, the State Department awarded the first WPPS 
contract to provide protective services in areas of the former 
Yugoslavia, the Palestinian Territories (July 2002), and Afghanistan 
(November 2002). In 2004, task orders under the WPPS contract were 
issued to provide personal protective services in Iraq. 

[9] The regions were Baghdad, Basrah, Al-Hillah, and Erbil. Four 
additional task orders provided security services in Jerusalem, Haiti, 
Kabul, and Bosnia and another task order provided aerial security 
support in Iraq, which we did not include in our review. 

[10] According to State Department officials, they would be reluctant 
to hire third-country foreign nationals to provide security in Iraq 
because the department does not want to be perceived as hiring 
mercenaries. Additionally, because of security concerns they would be 
reluctant to hire local nationals to provide security. 

[11] Training for Diplomatic Security Special Agents (who are federal 
law enforcement personnel) includes 12 weeks of training at the 
Federal Law Enforcement Training Center and 13 weeks of training 
provided by the Bureau of Diplomatic Security which includes driver 
and firearms training, interrogation techniques, emergency medical 
training, and training on protective security operations. 
Additionally, in preparation for their initial overseas assignment, 
all Diplomatic Security Special Agents attend the 12-week Basic 
Regional Security Officer Course. The focus of this training is 
largely on management of Diplomatic Security programs and security 
operations overseas and includes training in emergency action 
planning, detecting passport fraud, counterintelligence 
investigations, and international parental child abductions. Also, an 
additional 7-week High Threat Tactical Training course is required for 
those assigned to high-threat posts, such as Iraq and Afghanistan. 
This course provides training on advanced protective security 
operations, close quarters battle, small unit tactics, and the 
management and leadership of protective operations. 

The State Department requires its contractors provide 164 hours of 
training to its employees. The training curriculum is approved by the 
Department of State and teaches basic personal protective security for 
a high-threat environment including organization of personal 
protective service details, motorcade operations, protective security 
route and site advances, radio procedures, emergency medical training, 
defensive tactics, and driver training, etc. 

[12] Rebuilding Iraq: DOD and State Department Have Improved Oversight 
and Coordination of Private Security Contractors in Iraq, But Further 
Actions are Needed to Sustain Improvements, [hyperlink, 
http://www.gao.gov/products/GAO-08-966] (Washington, D.C.: July 2008). 

[13] On September 16, 2007, at Nisour Square, contractor employees 
protecting a diplomatic convoy allegedly fired upon and killed 17 
Iraqis. 

[14] This would provide the State Department flexibility similar to 
what it has with contractors. However, the State Department would 
incur other costs such as providing federal employee health insurance, 
federal employee retirement, and life insurance. 

[15] Post differential provides additional compensation to employees 
for service in foreign areas where environmental conditions differ 
substantially from environmental conditions in the continental United 
States and warrant additional pay as a recruitment and retention 
incentive. 

[16] Task orders 2-5 provide security services in Jerusalem, Haiti, 
Kabul, and Bosnia, respectively, while task order 10 provides aerial 
security support in Iraq, which we did not include in our review. 

[End of section] 

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