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Highlights

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. 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. 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. 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. 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 functions--as opposed to using State Department employees to perform those same functions.

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