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Getting Our Money’s Worth in Iraq

Is contracting out services in Iraq really such a waste of tax dollars?

by
Greyhawk

Bio

August 15, 2008 - 12:23 am
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The AP reports that the Congressional Budget Office is worried about the cost of the war in Iraq; more specifically, they don’t think our government is getting a good deal for our money. They inform us:

Military contracts in the Iraq theater have cost taxpayers at least $85 billion, and when it comes to providing security, they might not be any cheaper than using military personnel, according to a report released Tuesday.

While much of the discussion (and the accompanying photos) in the article centers on security contractors, those who make it through to paragraph 12 will discover additional details:

The CBO estimated Tuesday that $6 billion to $10 billion has been spent on security work, and that the prices paid are comparable to a U.S. military unit doing that work.

Confused? Fortunately, one can find some clarity in the actual report:

  • “Military contracts”: DoD’s piece is actually $76 billion (and of that “only” 54 billion is spent in Iraq); the Department of State and US Aid spend the remaining $9 billion. That figure may seem comparably small, but
  • About 40 percent of DoS contractors in Iraq are security providers. So there’s another element of confusion in that opening paragraph — the total government expenditure is $6-10 billion, and a good number of those security folks are working for State.
  • Why the ambiguous “$6 billion to $10 billion” range? Direct government spending on security contracts is “between $500 million and $1.2 billion annually” for a total of “between $3 billion and $4 billion” (a bit down from that $85 billion now, aren’t we?). But non-security contractors also sub contract for security, and acceding to the CBO report that represents the balance of their $6 to $10 billion estimate.
  • Would it be cheaper just to have the Army provide the security? According to the CBO report — no. The perhaps widely held contrary belief is at least partly based on comparisons of the cost of a contractor to the pay of a low-ranking soldier. When one compares the costs of each, the results are similar:

    CBO performed such an analysis, comparing the costs of a private security contractor with those of a military alternative. That analysis indicates that the costs of the private contractor did not differ greatly from the costs of having a comparable military unit performing similar functions.

And once the war is over, the report explains, the contract isn’t renewed, and the government is under no further obligation (continued employment, pension, VA benefits, etc.) to the contractor.

So now we know that according to the CBO report security contractors — about whom the Washington Post dedicated so much article space they ran out of room to tell us where our money is actually spent — make up a small percentage of the total contractors in Iraq and represent a savings of taxpayer dollars. (We could have saved much time if only the WaPo hadn’t been so confusing in that opening paragraph.)

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