PCN 5193
Discussion Paper Number Fourteen

MANAGING THE PRIVATE SPIES: 

THE USE OF COMMERCIAL AUGMENTATI

FOR INTELLIGENCE OPERATIONS

By Glenn James Voelz, Major, U.S. Army

WASHINGTON, DC

June 2006

The views expressed in this work are those of the author 

 and do not refl ect the offi cial policy or position of the 

 Department of Defense or the U.S. Government

JMIC PRESS

Joint Military Intelligence College

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CONTENTS

Acknowledgment ......................................................................................

Foreword ...................................................................................................

Intelligence Commercialization: Private Sector Augmentation for

Operational Support ..................................................................................

Historical Precedents for Commercialized Intelligence ...........................

Justifying Intelligence Outsourcing ...................................................

Overcoming Force Structure Challenges ...................................

Dealing with a Complex Threat Environment, ..........................

Integrating Advanced Technological and Analytical Tools ........

The Legal and Regulatory Environment for Commercialized Intelligence

Augmentation ............................................................................................

Inherently Governmental Functions ...................................................

Personal Services Contracting ............................................................

Legal Oversight ..................................................................................

Other Legal Considerations ................................................................

Evaluative Framework for Commercialized Intelligence Augmentatio

Evaluating Public-Private Intelligence Partnerships: Selected Examples 

Privatized Personnel Security Investigations .....................................

Applying the Evaluative Criteria ........................................................

Commercial Remote Sensing .............................................................

Applying the Evaluative Criteria ........................................................

Commercialized Intelligence Support to the GWOT ................................

The Contract Award Process ..............................................................

Developing Contract Language ...........................................................

Management of Contract Personnel ...................................................

Contractor Training and Integration ...................................................

Contract Offi cer Representative Training and Responsibilities .........
iv

The Future of Commercialized Intelligence Augmentation .............................

Considerations for Reform .........................................................................

 Option One: A Conservative Approach ......................................

 Option Two: Incremental Reform ..............................................

 Option Three: Radical Change ...................................................

Conclusion .....................................................................................................

Appendix: Evaluative Criteria: Consolidated Case Study Overview ...............

Bibliography ....................................................................................................

About the Author ..............................................................................................
v

The author thanks Mr. William Halpin and Mr. Tom Van Wa

their assistance during the research for this paper and their helpful 

through several draft versions. Additionally, Admiral Tom Brooks p

invaluable perspective and numerous suggestions. These were base

extensive professional experience in the Intelligence Community, w

culminated his career as the Director of Naval Intelligence, and on h

of private sector work with government contracting.

vii

ppg

to perform functions normally associated with military personnel, an

contracting, control, discipline, and training issues associated therew

sometimes-overheated rhetoric of the press created an impression tha

of contractor personnel to perform functions traditionally consider

the realm of uniformed personnel was something new and extraord

is neither, though the number of intelligence-related functions perfo

contractors during combat operations in Iraq and Afghanistan may

be unprecedented.

The extensive use of contractor personnel to augment military inte

operations is now an established fact of life and, occasional con

“scandals” notwithstanding, any effective and effi cient design for inte

support to operating forces must provide for their use. The civilia

can respond to rapidly changing requirements of the Global War o

with fl exibility and speed that the government sector does not posse

in a number of cases, the civilian sector possesses technology, equ

and technological know-how that the government sector could not 

in any reasonable amount of time. Add to this the problem of end-

limitations and recruiting and retention problems, and it is appa

contractors are a permanent part of the intelligence landscape.

But this dependence on contractors comes with its own set of p

most of which stem from inadequate planning and from lack of 

of deployed uniformed personnel in the intricacies of contracting 

administering contractor personnel. The author points out certain s

must be taken to provide for effective management of contractor p

in the fi eld, and, indeed, the Army even has a Field Manual de

contractor administration which brings out many of the same poi

3-100.26, “Contractors on the Battlefi eld”). Yet uniformed inte

personnel continue to be deployed without adequate training and pre

to handle contractors who will be supporting them.

The author suggests evaluation standards for the use of contrac

possible long-term initiatives to reduce dependence on traditional “

contractors. His suggestions are worthy of serious consideration. B

meantime, contractors will continue to be a part of the Table of Orga

and Equipment (TO&E) of deploying intelligence personnel eng

counterterrorism operations. We have a responsibility to train our un

personnel in the use of contractors just as we would prepare and tr

to use any other item on their deploying TO&E.

Thomas A. Brooks

Rear Admiral, U.S. Navy (ret)

Former Director of Naval Intelligence 

1

OPERATIONAL SUPPORT

The end of the Cold War presented a paradoxical dilemma for the 

Community (IC). The demise of the Soviet Union brought about 

downsizing of the nation’s intelligence apparatus while concurrently 

a major reallocation of intelligence resources to cover a more comp

trans-national threats such as counter-proliferation, terrorism, organized 

traffi cking, and ethno-political confl ict.1 The combination of shrinking 

expanding analytical requirements placed enormous demands on the 

Among the most pressing challenges was the need for an on-dem

intelligence capability for coverage over a diverse range of operational r

A key recommendation of a 1996 House Permanent Select Committee 

of the nation’s intelligence capabilities called for the creation of a dy

capacity for crisis response. The Committee concluded that such res

not be self-contained within the IC,” but must be quickly marshaled “w

concerns about who owns the assets.”2 Several other independent refo

the time proposed initiatives to satisfy surged collection demands by lev

governmental resources.3

Despite these recommendations, during the 1990s there was little ef

such a surge capacity. Bureaucratic inertia and lack of clear consensus on a

reform agenda made major initiatives impossible. With the enormous 

demands of the Global War on Terrorism (GWOT) the issue of surge 

reemerged as a critical issue for community leaders. Collection manage

sensing, linguistic support, document exploitation, interrogation, a

analysis are just some intelligence support functions currently being p

private contractors.

1 Total military end strength from 1989-1999 fell from approximately 2.1 to 1.4 million

House Permanent Select Committee on Intelligence, IC21: Intelligence Community in th

104th Cong., 1996, chapter 13 “The Cost of Intelligence,” URL: <http://www.gpoacces

html>, accessed 6 March 2006. Cited hereafter as IC21. Military manpower estimates are 

Bruner, Military Forces: What is the Appropriate Size for the United States (Washington, DC

Research Service, May 2004), 1.

2 IC21, 10.

3 Several notable reports from the period proposed various public-private partnershi

capabilities. Examples include: The Commission on the Roles and Capabilities of the U

Community, Preparing for the 21st Century: An Appraisal of U.S. Intelligence (Washi

Government Printing Offi ce, 1996), xxi, URL: <http://www.access.gpo.gov/int/report.

11 August 2004; The Council on Foreign Relations. Making Intelligence Smarter: The 

Intelligence, Report of an Independent Task Force (1996) 3, URL: <http://www.copi.com/

cfr.html>, accessed 10 Aug 2004; Allan Goodman and others, In from the Cold: The Report 

Century Fund Task Force on the Future of U.S. Intelligence (New York: The Twentieth Cen

1996), 65.
2

operational commanders.4 Conversely, a key fi nding of the Army Inspector G

report on OIF detainee operations in Iraq clearly identifi ed poor training and m

contract interrogators as a contributing factor in detainee abuse.5

These examples speak to both the promise and the liability of utilizing com

augmentation for intelligence surge capacity. Given the current mismatch 

operational requirements and intelligence force structure, there will be co

reliance on commercial augmentation. As critical intelligence requirem

increasingly resourced through commercial augmentation, IC leaders must d

the appropriate roles for private sector fi rms and provide effective plans 

oversight, operational integration, and management of contracted support.

To date, few studies have adequately considered the policy implica

integrating non-governmental providers into the operational intelligence 

GWOT operations have required signifi cant reliance on private sector resou

intelligence collection and analysis but have done so without suffi cient mea

effective acquisition, management and accountability over commercial provi

This study assesses the value of current commercial activities used wit

elements of the Intelligence Community, particularly dealing with operational f

such as analysis, collection management, document exploitation, inter

production, and linguistic support. These functions were selected due to the e

use of commercial augmentation in these areas during recent GWOT operatio

The author conducted data collection and interviewed personnel assigne

DoD agencies, Combined Command, and Joint Task Force intelligence staffs. A 

evaluation of current contract management practices was conducted using 

from several recent government studies and critiques of ongoing commerci

initiatives. The evaluation focused primarily on the effi cacy of the contract deve

process, management procedures, and how commercial services were integr

the operational intelligence cycle.

4 Joint Forces Command, “Joint Lessons Learned: Operation IRAQI FREEDOM Maj

Operations,” unpublished coordinating draft report, 1 March 2004. 

5 Department of the Army, Offi ce of the Inspector General, Detainee Operations Inspectio

2004, URL: <http://www4.army.mil/ocpa/reports/ArmyIGDetaineeAbuse>, accessed 16 August 

6 A notable exception is a 2000 monograph that examined the growth of commercialized c

intelligence and its impact on the government monopoly over sensitive information. This study 

the expanding role of private corporations in the collection, analysis and dissemination of in

related information and how this phenomenon challenges traditional government prerogatives 

notions of public privacy. James R. Sutton, Subversion of a Government Monopoly: The Priva

Intelligence Services (Erie, PA: Research Intelligence Consortium, Inc, February 2000).
3

7 Data collection was conducted through face-to-face interviews when possible, otherw

interview and written research questionnaires. A complete listing of all organizations 

queried for this research is found in Glenn J. Voelz, MAJ, USA, Managing the Private 

of Commercial Augmentation for Intelligence Operations. MSSI Thesis (Washington, DC

Intelligence College, 2005). The thesis bibliography contains a complete list of intervie

sample of the written research questionnaire.

 Army G2 Plans and Operations 

 Linguist/interrogation support

 INSCOM Contracting authority offi ce

 SOUTHCOM JTF-170/JTF Guantanamo

 CENTCOM CJTF-180/CFC Afghanistan

 CJTF-7/MNF-MNC Iraq

 EUCOM EUCOM, G2

 JTF-Eagle (Bosnia-Herzegovina)

 JTF-Falcon (Kosovo)

 JAC (Molesworth)

 Army G2 Plans and Operations 

 Linguist/interrogation support

 INSCOM Contracting authority offi ce

 SOUTHCOM JTF-170/JTF Guantanamo

 CENTCOM CJTF-180/CFC Afghanistan

 CJTF-7/MNF-MNC Iraq

 EUCOM EUCOM, G2

 JTF-Eagle (Bosnia-Herzegovina)

 JTF-Falcon (Kosovo)

 JAC (Molesworth)

5

In all countries engaged in war, experience has sooner or later po

contracts with private men of substance and understanding are nece

subsistence, covering, clothing, and moving 

— Robert Morris, Superintendent of F

Despite increased public attention focused on the practice of “

intelligence support functions, this phenomenon is certainly not unprecede

it was not until the early 20th century that the United States possessed a p

trained, organic intelligence capability within the government. Prior 

military intelligence was largely an improvised affair, conducted by c

and managed by line offi cers with no formal intelligence training.9 Due 

dedicated personnel, the collection and analysis of intelligence informat

delegated to civilian auxiliaries employed on short-term assignments 

tasks. In many respects, the current system of ad hoc commercial aug

similar to the earliest practices used by the military to satisfy short-term 

needs.

During the American Revolution the absence of a professional inte

required augmentation by civilian spy networks to supplement military rec

It is estimated that General Washington spent more than 10 percent of 

expenditures on intelligence related activities, much of this funding to su

agents collecting critical information on British operations.10 Among the 

examples was Washington’s use of the Culper spy ring in British-occupi

City. This spy network was managed by offi cers under Washington’s c

most of the actual collectors were civilian auxiliaries who were paid fo

required.

Following the war most of the army’s intelligence functions wer

delegated to topographic engineers, signal offi cers, or cavalry scouts, bu

8 Quote reprinted from preface of the U.S. Army, Pamphlet 715-16 (Procureme

Deployment Guide (27 February 1998), URL: <http://www.army.mil/usapa/epubs/pd

accessed 5 November 2004.

9 The formation of the Division of Military Information in 1885 was the fi rst perma

organization established by the U.S. Army. This organization eventually comprised a smal

attaches, topographical experts, and engineering and technical specialists. Despite the g

intelligence during the Spanish-American War and WWI, the Military Information Di

a backwater assignment on the War Department’s General Staff. The establishment 

Intelligence Division during WWII was the fi rst permanent, professionalized organization d

matters. A useful account is provided in John Patrick Finnegan, Army Lineage Series: Mili

(Washington, DC: Center of Military History, 1998), URL: <http://www.army.mil/cmh-pg

mi/mi-fm.html>, accessed 21 October 2004.

10 P. K. Rose, The Founding Fathers of American Intelligence (Washington DC: CIA Cen

of Intelligence, 1999), URL: <http://www.cia.gov/csi/books/940299/art-1.html>, acces

2004.
6

contracted by American commanders to provide local intelligence, counter-e

services, surveillance, and route reconnaissance in support of U.S. forces.11

When military operations began in Mexico there was virtually no knowledg

American offi cers of the political intentions of the Mexican government or mo

and capabilities of the enemy army. Lieutenant George G. Meade reported tha

the 4,000 American troops serving in Northern Mexico at the time, none cou

Spanish.12 Locally hired augmentation was critical for providing intelligence 

to military commanders and for effective counter-intelligence and counter-e

operations. During U.S. military operations between Veracruz and Mexico Ci

200 civilian augmentees were drawn from ranks of local bandits and Mexic

deserters. These contract collectors were organized into several operational co

under the direct command of Major General Winfi eld Scott.13 During the cour

campaign over $15,000 was distributed by local commanders for the hire of 

augmentees to satisfy a wide range of intelligence functions and linguistic su

During the Civil War intelligence support remained mostly a non-sp

discipline. The army’s reliance on contracted civilian augmentation rem

common practice, perhaps mostly famously with General George McClell

of Allen Pinkerton’s detective agency.15 Pinkerton’s agency was a strictly 

enterprise but served a quasi-governmental role as one of McClellan’s 

intelligence gathering tools for the Union Army. Pinkerton’s private agents co

a wide range of intelligence functions including surveillance operation

Confederate capital, counter-espionage investigations behind Union lines, exp

of captured documents and fi eld reports, and interrogations of Confederate p

and deserters.

Pinkerton’s efforts were supplemented by another intelligence entrepreneu

Lafayette Baker who operated a private company conducting counter-e

investigations and military police work for the Union army.16 Baker worked 

for the War Department and focused his efforts primarily on intercepting co

mail and merchandise moving into Confederate territory, as well as exposing 

Union businessmen engaging in illicit trade across enemy lines.

The exploits of these private intelligence services have been romanti

11 Finnegan, 8.

12 Brook A. Caruso, The Mexican Spy Company: United States Covert Operations in Mexico, 

(Jefferson, NC: McFarland and Company Inc., 1991), 84.

13 Caruso, 153.

14 Caruso, 157.

15 Perhaps the single best monograph on intelligence during the Civil War is Edwin C. Fishel, 

War for the Union: The Untold Story of Military Intelligence in the Civil War (Boston: Hought

1996). This text provides an exhaustive description of the war’s intelligence operations, both c

and governmental.

16 Fishel, 55.
7

campaign of 1862. Furthermore, these contract spies were generally weak 

timely and accurate intelligence on Confederate military intentions altho

enjoy limited success with counter-intelligence and counter-espionage o

In the post-Civil War era the Pinkerton Detective Agency expanded 

to become a prototype for modern corporate intelligence and securi

protective and investigative service for industry, railroads, and local law 

Pinkerton’s men revolutionized the use of “mug shots” and developed 

criminal database used by local law enforcement organizations. The 

performed operational functions such as surveillance, as well as severa

“manhunts” like the legendary pursuit of Butch Cassidy and the “Sundan

Despite these successes, the agency’s activities attracted signifi cant pu

after a violent confrontation in 1892 with striking workers at the Carneg

in Homestead, Pennsylvania. In the aftermath of the bloody tragedy, pub

labor organizations led Congress to enact a law restricting governmen

with “Pinkerton Detective Agencies or similar organizations.”18 This st

a part of the Federal Acquisition Regulation to this day and prohibits the 

contracting with “quasi-military armed forces.”19

Despite the mixed results from the employment of commercial 

augmentation, the practice continued throughout the remainder of the 

During the army’s frontier operations, military commanders frequent

civilian scouts, interpreters, and local informants when operating in unkn

These individuals provided military commanders with a base of local e

well as specialized linguistic and cultural knowledge that was invaluabl

17 Fishel, 100.

18 5 U.S.C. § 3108 (Employment of detective agencies; restrictions). Also see the Fed

Regulation (FAR) 37.109 Services of Quasi-Military Armed Forces: “Contracts with Pin

Agencies or similar organizations are prohibited by 5 U.S.C. 3108. This prohibition applies 

with organizations that offer quasi-military armed forces for hire, or with their employees, 

contract’s character. An organization providing guard or protective services does not thereby 

military armed force, even though the guards are armed or the organization provides genera

detective services.”

19 FAR, Chapter 37.109. The “Anti-Pinkerton Act” resurfaced again in a 1977 case Weinb

Inc., challenging the government’s use of a private corporation for data collection on ind

In this case, the plaintiff argued that Equifax used “detective-like investigative techniqu

the government. Although the court ruled that the defendant’s actions were not illegal, it 

what actions or characteristics might constitute a “quasi-military armed force.” Given th

interpretation of the Pinkerton Act, the statute has not yet resurfaced to challenge any of t

recent contracting for intelligence-related services. Under existing legal interpretations the 

has not placed a signifi cant limitation on the government’s authority to contract for int

services. Additional legal issues concerning intelligence contracting are discussed in 

additional information on the legislative history and interpretations of the Pinkerton Act, s

L. Bowman, USA, “Transforming Installation Security: Where Do We Go from Here,” Mili

178 (Winter 2003), 50-93.
8

Department and generally classifi ed as “laborers,” without any formal rank or 

of direct authority over troops.21

In 1866 Congress formally authorized the hiring of Native American aug

for scouting and intelligence related services. The Indian scouts primarily co

reconnaissance operations, “locating the enemy and determining his 

determining the tribal affi liations of unknown Indians, and all other duties c

with Military Intelligence.”22 Indian scouts were not considered regular enli

were hired at the discretion of local commanders for short-term operational ne

rationale for this approach was economical as well as tactical. In his work on th

scouts, historian Thomas Dunlay noted that, after the post-Civil War demob

“the employment of Indian scouts may have seemed an economical measu

it would increase the effectiveness of the small regular force, and Indian en

could be terminated in case of need, unlike the fi xed fi ve-year enlistments of w

black soldiers.”23

Much like modern contractors, the Indian scouts were not organized 

Army’s regimental system and were generally used only for short periods 

based upon operational needs. The statute governing their employment stipul

“they shall be discharged when the necessity for their service shall cease, 

discretion of the department commander.”24 Acknowledging their irregula

Congress established that the temporary scouts would “furnish their own ho

horse-equipment, [and] shall be entitled to forty cents per day for their use an

long as thus employed.”25

The Indian scouts provided intelligence, reconnaissance, and translation 

supporting frontier campaigns into the 1890s and were used again during th

Punitive Expedition against Mexico in 1916.26 The policies for short-term co

of Indian scouts were modifi ed somewhat during the First World War, 

legislation revised to enlist Indian scouts for 7-year tours like other army sold

ending their irregular status.

20 Finnegan, 3.

21 Thomas E. Dowling, Intelligence in the Final Indian Wars, 1866-1887, MSSI Thesis (W

DC: Joint Military Intelligence College, 1996), 135.

22 Thomas W. Dunlay, Wolves for the Blue Soldiers: Indian Scouts and Auxiliaries with the Un

Army, 1860-90 (Lincoln: University of Nebraska Press), 1982, 8.

23 Dunlay, 44.

24 U.S. Congress, Permanent General Laws Relating to Indian Affairs, Revised Statues, 44th 

sess., 1876, Title XIV, Chapter 3, Sec. 1112 Indian Scouts. URL: <http://digital.library.okstate.ed

Vol1/HTML_fi les/p1_22img.html>, accessed 29 October 2004.

25 Permanent General Laws Relating to Indian Affairs.

26 James P. Finley, “Apache Scouts in the Punitive Expedition,” Huachuca Illustrated 1, 199

<http://www.lib.byu.edu/~rdh/wwi/comment/huachuca/HI1-23.htm>, accessed 28 October 2004
9

During this same period, Arthur L. Wagner, an offi cer with extensive s

western frontier, wrote one of the army’s fi rst doctrinal works on military 

Wagner made special note of the utility of temporary augmentation, spec

the use of private spies and Indian scouts as invaluable tools for intelligen

Despite the advantages of using non-governmental augmentation, W

particular mention of the liabilities of employing those motivated by pro

“driven by patriotism or a sense of military duty.”28 Based upon his experi

cautioned that “the services of a spy permanently attached to a command a

much more valuable than those of one who is employed only for the single 

whose efforts are not stimulated by a hope of profi table employment in the 

By the beginning of the 20th century, several factors lessened the army

non-governmental augmentation for intelligence-related tasks. Following 

American War the military’s new expeditionary orientation awakened l

necessity of a permanent and specialized corps of intelligence offi cers. A

this new strategic focus the War Department and Army General Staff fi na

a permanent, organic intelligence staff section.30 This change led to an exp

army’s foreign attaché program and the creation of the Military Informatio

This movement toward greater professionalization of intelligence conti

World War Two and rapidly expanded during the Cold War era. By the po

intelligence had become primarily a governmental affair, dominated by tra

managed by guarded bureaucracies, and highly dependent upon techni

capabilities. Large Cold War intelligence budgets and a narrowly defi ned co

on the Soviet Union fed the growth of an expansive federal infrastructure 

27 Dowling, Intelligence in the Final Indian Wars.

28 Arthur L. Wagner, The Service of Security and Information (Washington, DC: Jam

1893), 200.

29 Wagner, 202.

30 Finnegan, 6.

Thomas Dowlings Intelligence in the Final Indian Wars, 1866

addresses the U.S. government’s ability to hire Indian Scouts a

this was done. 

Dowling’s research focused on intelligence during the Final In

Wars, and in one chapter gives an interesting accounting o

Army’s challenge in the hiring of Indian Scouts and other con

employees. Unlike the British and French in their colonial emp

where they hired native troops and formed them into units

Americans hired the Indians only for selected campaigns, 

for six months at a time. Dowling explains the reasons for 

differences.

Thomas Dowlings Intelligence in the Final Indian Wars, 1866

addresses the U.S. government’s ability to hire Indian Scouts a

this was done. 

Dowling’s research focused on intelligence during the Final In

Wars, and in one chapter gives an interesting accounting o

Army’s challenge in the hiring of Indian Scouts and other con

employees. Unlike the British and French in their colonial emp

where they hired native troops and formed them into units

Americans hired the Indians only for selected campaigns, 

for six months at a time. Dowling explains the reasons for 

differences.
10

This government-centric approach to intelligence persisted until the mid-199

several factors fueled the reentry of commercial providers into fi elds previously 

for military and permanent civil service employees. The fi rst event was the dram

of intelligence emphasis away the Soviet Union following the end of the Cold 

1990s brought about a broad diversifi cation of national security concerns wit

succession of contingency operations falling outside the traditional areas of int

focus. Supporting such diverse operational tasks, particularly for intelligence f

such as translation, debriefi ng, and document exploitation in target languages w

military did not maintain suffi cient levels of trained personnel, presented ch

The use of private sector linguist support was critical for operations in Somal

Bosnia, and Kosovo.31 This only increased in the wake of 9/11. At present 

over 6,000 private contract linguists supporting various operations in the Globa

Terrorism at a total annual cost exceeding $250 million.32

A second major catalyst was the Clinton administration’s 1994 National Perf

Review (NPR), an initiative intended to “radically change the way government op

to shift from top down bureaucracy to entrepreneurial government.”33 The Clinto

agenda emphasized competition, privatization, and commercial outsourcing as 

for improving public sector effi ciency and performance. Congress actively s

this process through a broad liberalization of the Federal Acquisition Regula

streamlining of contracting procedures, and legislation designed to promote 

based management strategies in governance.34

31 During the two-year U.S. involvement in Somalia many contract linguists were employed 

point of ground operations, at a cost of $8 million. Over 100 contract linguists were used during 

in Haiti, at a cost of $4.6 million. In FY99, over 450 linguists supported operations in Bosnia, whi

were employed in Kosovo at an annual cost of $36 million. Of these contract linguists, only U.S. ci

current security clearances were used for intelligence-related functions. Department of the Army

the Deputy Chief of Staff for Intelligence, Army Language Master Plan, 3 January 2000, 75.

32 This number includes all three categories of contract linguists. AT 1: local national hires w

screening but no clearance. CAT 2: U.S. citizen hires with Secret level clearance. CAT 3: U

hires with TS/SCI clearance. Only CAT 2 and CAT 3 hires are permitted to work on sensitive i

functions. Lynn McCann, Army Language Support Contracting Offi cer, Army G2, Intelligence 

Operations Directorate, interview by the author, 22 October 2004. Budget fi gures for GWO

language operations are cited in LTG Keith B. Alexander, USA, Army Deputy Chief of Staff for I

(Army G-2), Statement before the Committee on Armed Services Subcommittee on Strategic Fo

Cong., 2d sess., 7 April 2004. URL: <http://armed-services.senate.gov/statemnt/2004/April/

pdf>, accessed 2 May 2005.

33 A useful overview of the NPR and its implications is provided in George Nestercznk, “Rev

National Performance Review,” Regulation 19, no. 3 (1996), URL: <http://www.cato.org/pubs/

reg19n3b.html>, accessed 10 November 2004.

34 Most notable among these initiatives was the 1994 Federal Acquisitions Streamlining 

legislation eliminated or revised hundreds of statutes dealing with government acquisition and c

These changes were complemented by the 1996 Federal Acquisition Reform Act (Clinger-C

Together, these reforms dramatically transformed the government’s relationship with the private 

encouraged a wide variety of public-private partnerships for product and service acquisition.
11

a 16 percent decrease in total personnel, with DoD reductions representin

of the overall federal government drawdown during the period.35 As a 

all of the agencies within the Intelligence Community experienced sha

declines throughout the decade.36

With signifi cant reductions in personnel authorizations, combined wi

“reinventing government” through entrepreneurial initiatives, DoD and o

aggressively sought to “outsource” many support functions to private sec

Initially, much of the commercial augmentation established after the NP

at administrative functions, clerical work, basic maintenance, and la

However, privatization efforts soon widened to include highly techni

such as budgetary analysis, procurement, personnel services, and logistic

This trend toward greater reliance on market-based management strateg

today. The most recent guidance provided in the Quadrennial Defense R

that “only those functions that must be performed by DoD should be k

Any function that can be provided by the private sector is not a core 

function.”37 The Bush administration has continued aggressive comm

initiatives and actively pursued opportunities to privatize many Do

traditionally performed by military and civil service personnel. Consis

overall trend, in recent years DoD intelligence organizations have grea

use of commercial resources to augment a wide range of operational req

JUSTIFYING INTELLIGENCE OUTSOURCING

By some accounts the logistical support, security, and intelligence-rela

have essentially become an “organic” element of combat power. Indeed, 

decade the growth of commercial support to military operations has be

The market for privatized military support is now nearly half of the D

Defense total annual expenditures.38 Equally dramatic has been the m

Pentagon acquisition away from product procurement toward services c

the mid-1980s approximately two-thirds of the Pentagon’s contracting bu

the purchase of goods and infrastructure. Today, over half of all DoD co

35 Nestercznk. Table 2. Source: OPM Employment Trend reports and the OMB budget 

36 Personnel levels for NSA, DIA, and CIA declined throughout the 1990s. The singl

a small increase in DIA personnel levels in 1992 and 1996 due to an inter-governm

functions. Actual personnel numbers are classifi ed but percentage changes are availab

for the 21st Century: An Appraisal of U.S. Intelligence, Figure 9-2, “Cumulative Cha

Personnel Since 1980.”

37 U.S. Department of Defense, Quadrennial Defense Review: America’s Security in 

(Washington, DC: Government Printing Offi ce), 2001, 53.

38 Mahlon Apgar and John Keane, “New Business with the New Military,” Harvard B

(September 2004), 45.
12

According to a Government Accountability Offi ce (GAO) report, overall 

on service contracts with military support providers amounted to $118 billion i

It is estimated that nearly half of the entire 2004 U.S. intelligence budget was 

the procurement of commercial systems and operational support services.42

Although greatly expanded in recent years, this trend toward increasing priv

of intelligence support predates GWOT operations. Throughout the 1990

sector intelligence and security fi rms provided signifi cant support to the Pen

the war on drugs in Colombia and for surveillance activities along the U.S. 

More recently, the Army’s Intelligence and Security Command (INSCOM) an

a new $209 million contract for intelligence support services including inf

technology and force management, administrative support, and “intelligence, 

and information operations.” This contract provides support for a wide 

intelligence operations in DoD’s major regional commands.44 Given recen

commercial augmentation for intelligence functions is likely to remain a sign

not expanding, element of the nation’s operational capability. 

There are three primary reasons for the government’s expanding dependen

private sector resources for intelligence augmentation. First, commercial augm

has been used primarily as an ad hoc measure to mitigate critical int

39 Larry Makinson, “Outsourcing the Pentagon,” Center for Public Integrity, 29 September 2

<http://www.publicintegrity.org/pns/>, accessed 30 September 2004.

40 Mary H. Cooper, “Privatizing the Military,” CQ Researcher 14, No. 24, 25 (June 2004), 

1992-1999, DoD expenditures on service procurement increased from $39.9 billion to $51.8 billi

fi rst time in 1999, the total dollars spent on services equaled the amount spent on goods and infr

This trend has only increased since 2001 with the enormous manpower and service support needs 

with the Global War on Terrorism. J. S. Gansler, Under Secretary of Defense for Acquisition and T

“Guidebook for Performance-Based Services Acquisition (PBSA) in the Department of Defense,

2001, URL: <http://www.acq.osd.mil/dpap/Docs/pbsaguide010201.pdf>, accessed 2 May 2005

41 Government Accountability Offi ce, Contract Management: Opportunities to Improve S

on the Department of Defense Service Contracts, Report Abstract, Contract GAO-05-274, Marc

URL: <http:www.gao.gov/docdblite/summary.php?rptno=GAO-05-274&accno=A19596>, a

March 2006.

42 This fi gure marked a signifi cant increase from pre-9/11 estimates of approximately $

Michael J. Grinfeld, “War Incorporated,” California Lawyer (May 2005), 24. Estimate for the 2

from Tim Shorrock, “The Spy who Billed Me,” Mother Jones (January-February 2005), URL: <h

motherjones.com/news/outfront/2005/01/12_400.html>, accessed 8 March 2005.

43 Fortune reported several companies under contract with DoD and the State Department for s

and intelligence-related activities in support of counter-drug operations in Colombia. Contracto

Airscan, Northrop Grumman and DynCorp. Nelson D. Schwartz and Noshua Watson, “The 

Private Army,” Fortune, 17 March 2003, 101.

44 The INSCOM contract includes a team led by ManTech International, L-3 Communicat

SAIC, and Systex. The companies will provide intelligence support services for Pacifi c 

European Command, Central Command, Southern Command, U.S. Forces Korea, and Northern 

Tim Starks, “ManTech Wins a Seat on Defense Intelligence and Security Contract,” CQ.com 

Security, 25 January 2005, URL: <http://www.cqhls.com/hs/display.do?dockey/cqonline/prod/

html>, accessed 17 March 2005.
13

underrepresented within the intelligence civil service. Third, the inform

needed to combat trans-national terrorism have required exploitation of no

intelligence methodologies and an increasing dependence on commercia

and analytical systems. The following section addresses each of these iss

Overcoming Force Structure Challenges

The most fundamental reason for using contract support during recen

operations has been to mitigate acute shortages of military and civil servic

personnel. Since the beginning of GWOT operations there have been num

of personnel shortfalls among forward-deployed intelligence organiza

manpower shortages have had a detrimental impact on the collection a

capability of intelligence organizations.

A major after-action review of Operation ENDURING FREEDOM 

that the “demands on intelligence were never greater. Limitations on th

personnel restricted the ability of organizations to analyze information 

products using the processes and tools practiced in our training cent

intelligence manning shortfalls in Afghanistan “considerably raised 

operations...by forcing intelligence staff to operate on the margin betwee

failure.” Early in OEF, the intelligence Analysis and Control Element for 

forces command “functioned at less that 30 percent strength.” 46 In partic

leaders cited signifi cant shortfalls in high-demand intelligence skills suc

interrogators, and linguistic support. Commercial contracting was the 

available to acquire the needed manpower for support to these military o

45 U.S. Army Central Command, Combined Arms Assessment Team, “OPERATIO

FREEDOM: CAAT Initial Impressions Report,” (Leavenworth: Center for Army Lessons 

44, URL: <https://www.//call2.army.mil/products/iir/asp/BOSNIA/BHCAAT2/html/appc.a

September 2004.

46 “OPERATION ENDURING FREEDOM: CAAT Initial Impressions Report,” 45.
14

 Such manpower problems were not limited to the Afghanistan campa

after-action review for 3rd Infantry Division during the initial stages of O

IRAQI FREEDOM (OIF) noted critical shortages of intelligence personnel, o

that units “did not have suffi cient capability to man an enemy prisoner of w

to surge collection, or conduct general support operations, or provide exp

and comprehensive analysis and guidance to operational teams.”48 These m

shortages caused signifi cant delays in the tactical screening and interrog

detainees during the early stages of the occupation. A separate OEF stud

similarly observed that the “demand for linguists (interrogators, interprete

intercepts, document exploiters) continues to signifi cantly exceeded [sic] s

Additionally, investigations of the Abu Ghraib abuse incidents made specifi c 

of acute shortages of personnel trained for human intelligence collection and 

47 Scott Strohecker, Peacekeeping for Hire? The Potential Role of Private Military Companie

Operations, unpublished MSSI Thesis, Washington, DC: Joint Military Intelligence College, 19

48 U.S. Army Third Infantry Division, “OPERATION IRAQI FREEDOM Lessons Learned,” 

Leavenworth: Center for Army Lessons Learned, URL: <https://www.//call2.army.mil/product

asp/>, accessed 14 November 2004.

49 OPERATION IRAQI FREEDOM Study Group, Intelligence Battlefi eld Operating Sys

Observations, (Leavenworth: Center for Army Lessons Learned, 19 June 2003), URL: <https://w

army.mil/products/on-point/asp/>, accessed 13 November 2004.

In his Peacekeeping for Hire? The Potential Role of Private Mil

Companies in Peace Operations, Scott Strohecker discusses whether pr

military companies (PMCs) are upscale mercenaries or the latest ste

outsourcing, and whether they can be effective as peacekeepers. 

Strohecker wrote prior to American involvement in Afghanistan and Iraq

his focus was particularly on the use of private armies and mercenaries in A

and in the Balkans. Sometimes the line separating mercenary from mil

has been tenuous. In the Balkans the Americans supported contractors, o

retired military, working for the U.S. Government to train the new milit

as new nations split off from the former Yugoslavia, and internal strife spr

In Africa, private concerns were hired by beleaguered governments to s

up their fragile control. Some of these mercenaries were considered th

and some were considered military professionals, hiring themselves out m

as the contractors were in the Balkans. 

This study evaluates PMCs to determine their potential effectiveness 

peacekeeping role. Three industry leaders are examined: Executive Outco

(EO) of South Africa, Sandline International of Britain, and Mil

Professional Resources Inc. (MPRI) from the United States. Study re

indicate that although PMCs maintain several unique and useful capabil

their role in peacekeeping/peace enforcement operations will be limited.

In his Peacekeeping for Hire? The Potential Role of Private Mil

Companies in Peace Operations, Scott Strohecker discusses whether pr

military companies (PMCs) are upscale mercenaries or the latest ste

outsourcing, and whether they can be effective as peacekeepers. 

Strohecker wrote prior to American involvement in Afghanistan and Iraq

his focus was particularly on the use of private armies and mercenaries in A

and in the Balkans. Sometimes the line separating mercenary from mil

has been tenuous. In the Balkans the Americans supported contractors, o

retired military, working for the U.S. Government to train the new milit

as new nations split off from the former Yugoslavia, and internal strife spr

In Africa, private concerns were hired by beleaguered governments to s

up their fragile control. Some of these mercenaries were considered th

and some were considered military professionals, hiring themselves out m

as the contractors were in the Balkans. 

This study evaluates PMCs to determine their potential effectiveness 

peacekeeping role. Three industry leaders are examined: Executive Outco

(EO) of South Africa, Sandline International of Britain, and Mil

Professional Resources Inc. (MPRI) from the United States. Study re

indicate that although PMCs maintain several unique and useful capabil

their role in peacekeeping/peace enforcement operations will be limited.
15

Outside of the OEF and OIF theaters, soon after detainees began a

Joint Detention Facility in Guantanamo Bay, several contracts were 

supplement intelligence operations, including linguist support, interrogati

exploitation, and analytical functions. An on-site linguist contract mana

that, “the military just did not have enough personnel and couldn’t kee

long enough to take advantage of their experience, so contractors had t

supplement the shortages.”51

Although GWOT operations have exacerbated intelligence personn

even routine, non-contingency operations have made extensive use of con

in recent years. A 2003 General Accounting Offi ce report on DoD 

procedures evaluated the use of contractors for analytical and linguist

intelligence operations in the Balkans and found that missions such as 

Eagle in Bosnia relies on contracted linguistic and intelligence analy

[and] if the contracted services were lost, it would mean an immediate 

would occur for the military because DoD does not have service personn

skills.”52 A U.S. Army Europe Contracting Offi cer Representative concu

fi nding, stating that “for watch jobs and other tactical-MI type jobs, we ju

the soldiers we need to fi ll all the vacancies and had to contract the posit

While DoD has used commercial contracting primarily to mitigate criti

shortages, there are other considerations that make private sector a

operationally advantageous in certain circumstances. One issue is the 

active duty “force caps” in some operational environments. In the Balkans 

NATO-imposed force structure limitations required that DoD supplemen

forces with signifi cant numbers of civilian contract personnel to avoid 

legal restrictions on external military forces. Generally speaking, contr

do not count against the force structure caps imposed against active du

The use of commercial contracting has enabled DoD to effectively “outso

lower priority intelligence missions such as the Balkans while reservi

duty force for more pressing contingency operations.

50 MG George R. Fay, USA., AR 15-6 Investigation of the Abu Ghraib Detenti

205th Military Intelligence Brigade, 2004, 21, URL: <http://www.globalsecurity.o

reports/2004/800-mp-bde.htm>, accessed 2 May 2005.

51 All general conclusions drawn from analysis of questionnaire responses will be h

Operational Questionnaire. Identifi cation of individual respondents is cited as necessary. Th

questionnaire respondents have been withheld upon request. A sample of the operational q

be found in the appendix from Voelz, Managing the Private Spies.

52 Government Accountability Offi ce, Military Operations: Contractors Provide V

Deployed Forces but are Not Adequately Addressed in DOD Plans, GAO-03-695 (June 

<http://www.gao.gov/highlights/d03695high.pdf>, accessed 13 October 2004.

53 This comment was provided for non-attribution by an army offi cer who served fo

Contracting Offi cer Representative for the U.S. Army Europe G2. Operational questionna

author, November 2004.

54 Michael J. Grinfeld, “War Incorporated,” California Lawyer (May 2005), 25.
16

similar intelligence functions as their uniformed and civil service counterpa

fact makes intelligence contracting unique as compared to other types of 

outsourcing. Over the past decade much of the commercial privatization of lo

transportation, and support functions was intended to entirely divest the act

structure of certain sustainment activities. Rather than serving as a supple

active force capability, support contractors have fully taken over functions co

non-core war-fi ghting tasks such as meal preparation, laundry services, and 

logistics. Conversely, most intelligence-related contracting has been used to 

personnel shortfalls in core-skill area tasks, including some of the most missio

collection and analytical functions. 

Dealing with a Complex Threat Environment

A second factor encouraging the use of commercial augmentation has been th

demand for highly-specialized skills for collection and analysis against unconv

threats in peripheral regions. The dilemma of managing intelligence assets for 

and unpredictable range of contingencies has been a subject of concern for so

The 2001 Quadrennial Defense Review articulated this challenge, noting that “th

States cannot predict with a high degree of confi dence the identity of the cou

the actors that may threaten its interests or security.”56 Emerging threat sce

the past decade have extended far beyond the traditional intelligence focus 

based confl ict and now encompass a diverse range of issues such as terrorism, 

proliferation, trans-national crime, piracy, genocide, ethnic confl ict, environm

resource disputes, and threats from pandemic disease and bio-warfare. As one int

community reform advocate explained, “in the age of constant surprise and im

to-anticipate mutations of the threat, no bureaucracy can be effective.”57

An important advantage of commercial augmentation is that it can 

bureaucratic organizations with the fl exibility to rapidly transform static 

capabilities by providing unique skills-sets for unanticipated requi

Intelligence reform advocates Bruce Berkowitz and Allan Goodman have s

that such market-based approaches are a preferred solution for satisfying unpr

operational needs, noting that

The intelligence community needs at least as much fl exibility as priv

corporations. Many of its requirements for specialized information 

likely to change quickly. Traditional civil service tenure is probably suit

only for employees with the most general, long-term skills....Intelligen

organizations still need to be able to “surge” and add additional personn

on short-notice, but now the requirement has changed greatly. Tod

55 Operational Questionnaire.

56 Quadrennial Defense Review: America’s Security in the 21st Century, 3.

57 Robert David Steele, The New Craft of Intelligence: Personal, Public and Politica

Virginia: OSS International Press, 2002), 155, URL: <http://www.oss.net/dynamaster/fi le_archi

7e44d06d4268c8b030d47d58c01fca03/chapter15.doc>, accessed 8 August 2004.
17

Berkowitz and Goodman suggest that a modernized intelligence pers

must have capability to rapidly augment permanent staff with outside e

can be bought “by the pound” to help satisfy specifi c, short-term require

Several intelligence reform studies during the 1990s also urged the 

of personnel management systems designed for rapid, ad hoc integra

governmental resources for response to unanticipated crises. The 1996 

Foreign Relations task force on intelligence reform noted that “analy

improved by increasing the fl ow of talented people into the intelligenc

from outside the government.”59 Such programs would provide a fl ex

of non-governmental professional, academic, and subject-matter exper

provide threat-focused expertise for short-term need. A key fi nding of the 

Brown commission on intelligence reform called for a greater use of 

experts outside the Intelligence Community” as a tool for improving t

analytical products.60

To implement such a strategy, Robert David Steele, a noted open-sourc

advocate, has called for the creation of a network of “intelligence minu

outside the government bureaucracy — individuals mobilized for work 

intelligence projects or in response to unique operational requiremen

the best tools for intelligence analysis, Steele suggests that “the center 

both national security and national prosperity lie now in the private s

intellectual property.”61

In recent years, commercial contracting has been the primary to

intelligence organizations have developed this ad hoc adaptation capabil

leverage specifi c skills or expertise. The clearest articulation of this appr

in the Army Language Master Plan, which explicitly states that “traini

do not permit preparing military staff for a wide variety of unknown 

forecast small-scale confl icts. With limited resources ... the balance o

small-scale confl ict needs could be met with contract translators and in

In the GWOT, short-term contracting has clearly become the primary 

by which intelligence organizations have built strategic fl exibility fo

collection and analytical requirements.

58 Bruce Berkowitz and Allan Goodman, Best Truth: Intelligence in the Information A

Yale University Press, 2000), 56.

59 Making Intelligence Smarter, 3.

60 Preparing for the 21st Century: An Appraisal of U.S. Intelligence, xxi.

61 Robert David Steele, The New Craft of Intelligence: Personal, Public and Po

Virginia: OSS International Press, 2002), 155, URL: <http://www.oss.net/dynamaster/fi le_

7e44d06d4268c8b030d47d58c01fca03/chapter15.doc>, accessed 8 August 2004.

62 Government Accountability Offi ce, Foreign Languages: Human Capital Approach N

Staffi ng and Profi ciency Shortfalls, GAO-02-375 (January 2002), URL: <http://www.ga

d02375.pdf>, accessed 13 October 2004.
18

collection and order of battle analysis, counter-insurgency operations in 

Afghanistan have placed a premium on human intelligence, counter-inte

interrogation, and language specialists. But a 2002 GAO report on gov

foreign language resources noted signifi cant shortfalls in Army linguists qu

translators, interpreters, cryptologic specialists, and human intelligence col

The Intelligence Community has been critically short of these “cultural intel

skill-sets since the beginning of GWOT operations. The U.S. Army Central C

after-action review of OEF operations noted that “unconventional, di

warfare placed higher than normal demand on Human Intelligence, whic

resourced at the tactical level.”64 The report found that “the mission of scree

interrogating large numbers of important detainees demanded native-pro

level linguists in order to perceive cultural nuance, understand a variety of 

and accurately understand acquired information. The most effective m

acquiring native linguists was through contracting.”65

Shortages of these critical-skill personnel have introduced signifi cant op

risk for U.S. operations in the GWOT. A recent Army investigation of oper

Abu Ghraib noted that “as commanders at all levels sought operational inte

it became apparent that the intelligence structure was undermanned, under-e

and inappropriately organized for counter-insurgency operations....T

intelligence collection means alone were insuffi cient in providing the 

information on an enemy that had adapted to the environment and to a h

opponent.”66

The rigidity of the Cold War era force structure has created a bureauc

equipped to rapidly adapt to changing intelligence requirements. As Steele s

“intelligence community leadership is going to have to come to grips with th

that most of the experts are going to be in the private sector and only avail

the task’ rather than as full-time employees.”67 Until the intelligence bur

is reformed to permit more fl exible market-based management, the ad ho

contract support will continue to be the primary mechanism for acquiring sh

augmentation of highly needed skills.

Integrating Advanced Technical and Analytical Tools

A less-mentioned but increasingly important factor encouraging the use 

governmental augmentation is the fact of disproportionately rapid adv

63 GAO, Foreign Languages.

64 “OPERATION ENDURING FREEDOM: CAAT Initial Impressions Report,” 56.

65 “OPERATION ENDURING FREEDOM: CAAT Initial Impressions Report,” 55.

66 U.S. Department of the Army, Offi ce of the Inspector General, AR 15-6 Investigation of the A

Detention Facility and 205th Military Intelligence Brigade (2004), 11, URL: <http://www.glob

org/intell/library/reports/2004/800-mp-bde.htm>, accessed 2 May 2005.

67 The New Craft of Intelligence: Personal, Public and Political, 161.
19

decade this advantage has largely eroded and — according to some 

vanished. This disparity is particularly true for high-end technical serv

communications networks, processing tools, automated population o

and distributed web-based dissemination — all areas where the p

has considerably more capability than the legacy systems currently u

intelligence organizations. As Berkowitz and Goodman have noted in t

intelligence reform, “the commercial sector will frequently have techno

to that of government-bound intelligence organizations, and it will almo

better in developing products and services, and delivering them quickl

some cases, the commercial sector will also have better information.”6

Several recent examples demonstrate the extent to which private corp

acquired advanced analytical tools that now exceed the capability of 

systems. ChoicePoint Inc. is one such innovator in the fi eld of data pr

analysis that has found considerable work supporting government inte

security operations. As company vice president James A. Zimbardi ex

do act as an intelligence agency, gathering data, applying analytics.”69 G

private sector is far ahead of government in developing tools for parsing 

records, conducting automated database population, using identity ver

advanced biometrics tools, computational linguistics and translation, an

mapping techniques. Additionally, companies such as LexisNexis Grou

a niche in providing powerful public records processing technology to 

analysis of voluminous amounts of non-classifi ed data.70

Steele also notes that in recent years the Intelligence Community h

“failed to keep up with private sector advances in data visualization and o

memory systems or in advances in collaborative work tools, 

communication, and automated monitoring of online and internal infor

order to maintain the most up-to-date technology, the government mu

become a “customer” of private sector providers. But generally, 

organizations have been slow to exploit the best commercial technolog

exception of quasi-governmental organizations such as In-Q-Tel, the 

68 Best Truth: Intelligence in the Information Age, 23.

69 Robert O’Harrow, “In Age of Security, Firm Mines Wealth of Personal Data,” Washin

ed., 20 January 2005, 1, URL: <http://www.washingtonpost.com/wp-dyn/articles/A22

html>, accessed 20 January 2005.

70 Both ChoicePoint and LexisNexis Group have negotiated government contracts with 

organizations for data management work. It should be noted that both companies ha

experienced high-profi le security breaches of their corporate databases. Concern over d

major unresolved issue that must be addressed as the government pursues public-private 

intelligence. Certainly there are numerous, legitimate counterintelligence concerns as go

more and more on private sector collection and analytical tools.

71 Robert David Steele, “Relevant Information: A New Approach to Collection, Sharin

Unpublished white paper by the OSS Academy, 15 March 1999, 11. URL: <http://downloa

com/library/infowar/papers/ISDoctrine.doc>, accessed 11 May 2005.
20

Given current trends, it is unlikely that governmental intelligence orga

will ever regain a monopoly on the development of the most advanced techni

but Steele suggests that these resources may be exploited by developing “a 

for leveraging private sector commercial fee-for-service offerings.”73 In fa

commercialization advocates assert that certain “open source” functions may 

performed by the private sector than by government agencies. This might incl

functions as wide-area surveillance, remote sensing, foreign broadcast tran

and translation, document exploitation, and Internet database exploitation. 

cases the technological capabilities and organizational structure of priva

providers are far better suited for performing these highly technical tasks 

governmental intelligence organizations. 

Particularly in the area of open source (OSINT) collection and proces

government’s best option may be to rely entirely on commercial providers wh

dedicated organic resources only for the most diffi cult or sensitive tasks. O

used statistic is that 80 percent of useful intelligence information comes fro

sources.”74 OSINT advocates have long asserted that private enterprise sho

a larger role in collection and analysis of these data. The thrust of their arg

that private enterprise is far better equipped with cutting-edge technology to 

manage, and interpret large amounts of unformatted data. A recent article on 

processing argued that the “Intelligence Community must organize its own 

resources and tap those of the private sector to exploit the latest technology fo

collection, analysis, production, and dissemination... [in order to] benefi t from 

search engines, enhanced machine-assisted translation software, and better 

incorporating audio and video streams into intelligence reports.”75

Likewise, many privatization advocates claim that the commercial sector is 

equipped to deal with the challenges of the new threat paradigm. Traditional 

intelligence methodologies, with their focus on order of battle analysis, indica

warnings, and threat-based technical measures, are unable to gather the inf

needed to fi ght trans-national terrorism and other unconventional threats. For 

terrorism intelligence analysis much of the most useful information is likely 

from collection on fi nancial transactions, web-based communications, and 

72 To remedy this situation, the WMD Commission fi ndings recommended that the new D

more active role in identifying and acquiring commercial technologies that could be effectively 

into collection and analytical processes. Commission on the Intelligence Capabilities of the Un

Regarding Weapons of Mass Destruction, Washington DC: GPO (31 March 2005), 326. URL: < h

state.gov/t/np/rls/fs/29153.htm>. accessed 15 March 2005.

73 “Relevant Information: A New Approach to Collection, Sharing and Analysis,” 11.

74 The exact origin of this estimate is uncertain. The fi gure fi rst appeared in the 1996, “In from 

The Report of the Twentieth Century Fund Task Force on the Future of U.S. Intelligence,” but t

source was not cited. The fi gure is so frequently mentioned in OSINT texts that is has come to b

as “fact” but many intelligence experts remain skeptical of this estimate.

75 Stephen C. Mercado, “Sailing the Sea of OSINT in the Information Age,” Studies in In

Journal of the American Intelligence Professional 48, no. 3 (2004): 55.
21

Don Goldstein, a technology researcher at the Institute for Defen

notes that commercial enterprise is generally far ahead of government in 

automated, data processing techniques needed for counter-terrorism an

fi nancial community in particular is better equipped to use analytical te

parsing large amounts of unformatted data, using automated informati

methods, and conducting advanced link analysis. Private enterprise 

the development of new techniques for computational linguistics 

automated translation that will be critical for cataloging and analyzing va

unformatted data from written and digital records. Very few governmenta

organizations will be capable of capitalizing on these specialized t

the signifi cant integration of commercial support. Looking to the futu

edge analytical and processing tools, Goldstein notes, “Google is the b

there.” In order to meet the critical information needs of policymakers 

commanders, the Intelligence Community will increasingly need to ex

tools, technology, and services of private providers.

76 Don Goldstein, Institute for Defense Analysis, Science and Technology Division, tele

by the author, 5 November 2004.

23

AUGMENTATION

Since the Revolutionary War era the U.S. government has made e

of private interests for the purpose of gathering and analyzing intellige

governmental transformations of the last decade have brought a signifi ca

of the role that private enterprise plays in the collection, analysis, an

of intelligence information. This process has been encouraged by le

regulatory changes that have signifi cantly liberalized acquisition and pro

and facilitated the entry of private enterprise into intelligence fi elds.

The legal precedents for contracting intelligence support service

outlined in existing statutes and regulations. Executive Order 123

intelligence agencies with broad authority to “enter into contracts or 

for the provision of goods or services with private companies or insti

to conceal the sponsorship of these contracts for security purposes.77 T

contracting powers extend to military commanders by Title 10 of the U

provide the Secretary of Defense with the authority to engage in commer

for support of intelligence-related collection activities abroad.78

Despite these clear authorities, acquisition law and regulation remai

vague on how such commercial enterprises should be employed and mo

the signifi cant expansion of commercial intelligence augmentation in supp

operations, several key elements of contract law have recently come un

scrutiny. Legal issues relating to the performance of inherently governme

the use of personal services contracts, and legal oversight of contract pe

all come into question as the IC has rapidly expanded private sector augm

INHERENTLY GOVERNMENTAL FUNCTIONS

Although the basic authority for the government to contract for intellig

is clear, ambiguities in government acquisition policy leave many spec

broad interpretation. One of the most debated issues concerning intelligenc

has been the policy regarding defi nitions of “inherently governmental fu

general government contracting, the statutory reference for commercia

Offi ce of Management and Budget (OMB) Circular A-76. This docum

guidelines for determining “inherently governmental functions” that must 

only by federal employees. In general, those activities related to “the act o

77 U.S. President, Executive Order 12333, “United States Intelligence Activities,” 4 Dec

78 10 U.S.C. § 431. Intelligence Commercial Activities.
24

management of Government programs requiring value judgments, 

in direction of the national defense; management and direction of t

Armed Services; activities performed exclusively by military personn

who are subject to deployment in a combat support or combat serv

support role...[and the] direction of intelligence and counter-intelligen

operations.80

Though seemingly clear, the interpretation of this statute has been a matter 

debate within Congress, DoD, and among intelligence professionals.

In August of 2000, the Assistant Secretary of the Army attempted to cla

restriction. At that time a determination was made to draw legal distinc

different levels of war, fi nding that “at the tactical level, the intelligence f

and the operational control of the Army performed by military in the operatin

is an inherently governmental function barred from private sector perform

But the memorandum stipulated that “at the operational and strategic le

intelligence function performed by military personnel and federal civilian em

is a non-inherently governmental function that should be exempted from priva

performance on the basis of risk to national security from relying on contr

perform this function.”82

This decision left open the possibility of the use of contract employees 

tactical functions but cited legal and security concerns, noting that the

contract administration oversight exerted over contractors is ve

different from the command and control exerted over military and civili

employees. Therefore, reliance on private contractors poses risks 

maintaining adequate civilian oversight of intelligence operations. Civili

oversight over intelligence operations and technologies is essential 

assure intelligence operations are conducted with adequate secur

safeguards, and within the scope of law and direction of the authoriz

chain of command and offi cials.83

The equivocal wording of the policy ultimately left open the possibility o

sector providers “to be used to facilitate the gathering or interpretation of int

information, in circumstances where contractors are the sole source of a p

capability.”84

79 Offi ce of Management and Budget, “Federal Acquisition Regulation, Circular No. A-76,

1983 (revised 1999), URL: <http://www.whitehouse.gov/omb/circulars/a076/a076.html>, ac

August 2004.

80 Circular No., A-76, 3.

81 Patrick T. Henry, Assistant Secretary of the Army, “Intelligence Exemption Memorand

Assistant Deputy Chief of Staff for Intelligence,” 26 December 2000, 1

82 Henry, 2.

83 Henry, 2.

84 Henry, 2
25

use of contract employees for intelligence operations in Bosnia, Afgh

and Guantanamo Bay. Compounding this policy dilemma, many contra

are operating in environments where the distinctions between levels of w

vague or entirely irrelevant. A clear example of the blurring of these line

the much-publicized use of contract interrogators at the Abu Ghraib dete

in Iraq. In that setting, contract employees were performing similar 

interrogation tasks as their uniformed counterparts. The subsequent Army 

noted that “the general policy of not contracting for intelligence functions 

was designed in part to avoid many of the problems that eventually deve

Ghraib.”85

The fallout from the incidents at Abu Ghraib has led to some reconsid

defi nitions of “inherently governmental” operational intelligence functi

memorandum from the Army G-2 (Deputy Chief of Staff for Intellige

this distinction for the conduct of counter-intelligence operations.86 

policy clearly defi nes the “direction and control” of CI operations as 

governmental function but leaves open several potential activities to 

providers, including translation/interpretation, analysis, data input, and th

of CI related products.

In the aftermath of the Abu Ghraib revelations, the issue of contractor

critical security and intelligence functions also gained attention in 

April 2004, Senator Christopher Dodd (D-CT) was joined by several 

Democrats expressing concern that private military fi rms were performi

related functions” but that “these companies remain largely unregulated.

an open letter to the U.S. Comptroller requesting a GAO report on the us

oversight, and accountability of contract personnel performing operationa

and security-related tasks in forward-deployed combat locations.

Later in June Dodd proposed an amendment to bar the use of civilia

as military interrogators.88 The Senate voted against the amendment 

lines (54-43) but even some Republicans voting against the measure ex

concern over the increasing role of private contractors working in sensitiv

related operations. Senator John McCain (R-AZ), stated “ultimately, I 

interrogations and other functions should be conducted by uniforme

85 AR 15-6 Investigation of the Abu Ghraib Detention Facility and 205th Military Intelligen

86 LTG Keith B. Alexander, Army G-2 (Deputy Chief of Staff for Intelligence), 

Contractor Support to Army Counterintelligence,” 10 June 2004.

87 Christopher Dodd, Russell Feingold, Jack Reed, Patrick Leahy, and Jon Corzine, le

Walker, Comptroller General of the United States, subject: “Dodd Requests GAO Report on 

Firms in Iraq, 29 April 2004” URL: <http://dodd.senate.gov/press/Releases/04/0429.htm

March 2005.

88 “Measure Banning Private Sector Interrogations fails in Senate.” GOVEXEC.com 

online ed., 16 June 2004, URL: <http://www.govexec.com/dailyfed/0604/061604cdpm4.ht

October 2004.
26

The issue reemerged in the 2005 Defense Authorization Act. The fi nal le

included language requiring the Secretary of Defense to report on DoD man

practices for contractor personnel supporting deployed forces. Among the 

items addressed in the amendment was the establishment of categories of int

functions considered inherently governmental and those that “although not in

governmental functions, should not ordinarily be performed by contractors.”

determination of DoD policy on these activities is forthcoming. One positiv

of the recent controversy will presumably be some clarifi cation of the op

boundaries for deployed contractors performing these intelligence related act

PERSONAL SERVICES CONTRACTING

Another area of concern relating to contract law and intelligence suppo

expanding use of personal services contracting.91 Functions considered “

services” are those contracts that create an employer-employee type rela

between the contractor personnel and government supervisor. They often 

services that are applied directly in support of an organization’s integral fu

any services requiring direct supervision to ensure adequate protection of gov

interest, or the performance of services directly comparable to that of perman

service personnel.92 Under most circumstances there are strict statutory restric

the government’s use of these contract types.

An analysis of the intelligence support functions currently performed by many co

providers suggests that most of these contracts are in fact providing “personal s

but various exceptions to acquisition law have permitted their use. The Federal Ac

Regulation provides for the case-by-case short-term contracting of “individual e

consultants” in place of civil servants.93 Furthermore, many of the contracts for int

89 Elaine M. Grossman, “Possible Interrogation Contractor Infl uence Cited in Senate Vote,” 

Pentagon, online edition, 24 June 2004, URL: <http://www.d-n-i.net/grossman/contractor_infl u

htm>, accessed 22 October 2004.

90 U.S. Congress, House, Ronald W. Reagan National Defense Authorization Act for Fiscal 

108th Cong., 2nd sess., 20 January 2004, H.R. 4200, URL: <http://www.wifcon.com/dodau

accessed 11 November 2004.

91 Between 1986 and 2001 the percentage of federal procurement funds going toward service 

rose from 31 to 51 percent. Steven L. Schooner, “Contractor Atrocities at Abu Ghraib: Co

Accountability in a Streamlined, Outsourced Government” Stanford Law and Policy Review 16, n

Abstract available at URL: <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=605367>, a

November 2004.

92 For the case of DoD, this refers to civilian personnel governed under U.S. Code Title 10.

93 FAR, Chapter 37.104 (f) states, that “Personal services contracts for the services of individ

or consultants are limited by the Classifi cation Act. In addition, the Offi ce of Personnel Manag

established requirements which apply in acquiring the personal services of experts or consult

manner.”
27

contracts to be performed outside the United States or that directly support th

DoD intelligence or counter-intelligence organization.”94

Legislative changes in acquisition law have come about in part to help 

with critical shortages of intelligence personnel. The Senate Intelligenc

report on the 2004 Intelligence Authorization bill specifi cally cited 

greater liberalization of contract authority in order for DoD to meet the 

intelligence demands of the Global War on Terror, noting that

Intelligence Community elements of DoD frequently have a tem

need for additional personnel with specifi c expertise to meet unantic

yet signifi cant, operational requirements that necessitate a bolste

organizational and personnel efforts created by world events. C

examples include experts on al-Qa’ida, the countries of the Midd

chemical and biological warfare, and Islamic militant personalities

with linguists to support interrogation of detainees and review of c

documents. Under current law, U.S. Government agencies general

choose between hiring additional personnel as government emp

or contracting for their services under the restrictive provisions 

temporary or intermittent employment of experts and consultant

section 3109 of title 5, United States Code. The Committee p

relief from these more restrictive authorities by granting autho

Intelligence Community elements of DoD to award personal s

contracts notwithstanding any other provision of law....This provisi

optimize the capabilities of Intelligence Community elements of D

the performance of their roles in the global war on terrorism and 

execution of future national security missions.95

While this liberalization of contract authority certainly helps to b

term capabilities beyond resources available within the permanent civil 

type of contracting vehicle does present added challenges for contract 

As commercial providers increasingly fulfi ll an employee-like relatio

government there is a much greater burden for close contract manage

operational chain of command. Even with personal services contra

signifi cant limitations governing the manner in which contract personnel 

and supervised. Intelligence leaders are increasingly challenged by 

environments in which employees are subject to varying standards 

accountability, and legal responsibility. This is particularly true si

commanders may possess far different legal authority in dealing w

94 “Interim Rule to the Defense Federal Acquisition Regulation Supplement (DFARS): P

Contracts,” Federal Register 69, no. 180 (17 September 2004): 55991. URL: <http://w

dpap/dars/dfars/changenotice/>, accessed 3 November 2004.

95 U.S. Congress, Senate, Conference Committee Comments on Fiscal Year 20

Authorization Bill and Other Matters, S. 108-044, 108th Cong., 2nd sess., 8 May 2003, UR

fas.org/irp/congress/2003_rpt/srpt108-44.html>, accessed 17 March 2005.
28

LEGAL OVERSIGHT

In addition to questions over inherently governmental functions and th

personnel services contracts, there are important considerations regarding 

oversight and jurisdiction over contract intelligence support. Previous legal d

have challenged UCMJ jurisdiction over civilians in peacetime overseas enviro

Generally these exceptions have been extended to government contractors 

restricting the use of disciplinary trials by courts-martial and use of other non

punishment.96

Theoretically, the Military Extraterritorial Jurisdiction Act (MEJA) places 

contractors operating overseas under clear U.S. legal jurisdiction, but the inc

Abu Ghraib have highlighted some important limitations of this law. Sever

contracts for intelligence support in Iraq were not awarded under DoD co

authority and therefore not be subject to the MEJA.97 Furthermore, the ME

applies to U.S. citizens and at least two of the linguist contractors implicat

abuse incidents at Abu Ghraib were non-U.S. citizens and therefore exem

prosecution under the law. In the case of Iraq, the Coalition Provisional A

also has an agreement with the interim Iraq government granting immunity t

contractors from prosecution under local law.

The combination of overlapping authorities has highlighted several defi 

in the MEJA recently raised in congressional debate over private contract su

coalition forces in Iraq. Responding to these concerns in May of 2004, Cong

Marty Meehan (D-MA) introduced the Contractor Accountability Act 

to tighten the government’s jurisdiction over contractors working for 

government overseas.98 Meehan, a member of both the House Armed Serv

the Judiciary Committees, has been a vocal critic of the Iraq war and repeated

for strengthening accountability of DoD contractors and improving inter

policies in light of the Abu Ghraib incidents. Although the exact language of M

amendment was not included as part of the 2005 Defense Authorization Act

additional provisions on contractor oversight were included in the fi nal leg

The revised bill appears to have corrected the previous defi ciencies and now 

96 For a discussion of case law establishing this precedent, see MAJ Joseph R. Perlak, U

Military Extraterritorial Jurisdiction Act of 2000: Implications for Contractor Personnel,” Mi

Review 169 (September 2001), 92-140.

97 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 50.

98 Marty Meehan, “Meehan Introduces Legislation to Increase Private Contractor Accountab

House of Representatives Press Release, 18 May 2004. URL: <http://www.house.gov/apps/list/pr

meehan/NR040518IraqContractors.html>, accessed 11 March 2005.
29

Although a strengthened MEJA should resolve clear-cut cases of crim

with contract employees, there still is some concern over what powers a 

may utilize for corrective punishment and matters of non-criminal order a

Contract employees are generally subject only to the terms and cond

contract language. In most cases this excludes contractors from UCMJ and 

punishments that military commanders regularly apply to active duty 

some deployed civil service employees. This exercise of command prerog

more critical for leaders directing combat operations or dealing with the 

of sensitive intelligence functions. The Army investigation of Abu Ghrai

cited the liability associated with limitations of such traditional comman

Performing the interrogation function in-house with government emp

has several tangible benefi ts. It enables the Army more readily to m

the function if all personnel are directly and clearly subject to th

of command, and other administrative and/or criminal sanctions

allows the function to be directly accessible by the commander/sup

without going through a Contracting Offi cer Representative.100

The circumstances at Abu Ghraib are not unique. Several individual

for this study noted similar examples of ambiguities in legal status for d

governmental employees and frequent uncertainty as to the authority 

of command over contractors. A 2003 GAO report on DoD contract 

procedures reinforced this fi nding. This review of overseas support co

signifi cant inconsistencies in contract language pertaining to the general 

contractor personnel, adherence to force protection requirements, and 

of published General Orders.101 These fi ndings highlight the pressing n

legal authority over contractors serving intelligence support missions

legal guidelines in contract language could be a particular liability fo

support personnel who may be subject to unique security, counter-inte

force protection requirements.

Recent rules changes in the applicable Defense Federal Acquisitio

(DFAR) have attempted to clarify some of these authorities, stipulating 

employees are required to comply with U.S. and host-country law, as well 

treaties and international agreements. Likewise, a DFAR revision exp

that contractors must comply with all “orders, directives, and instructio

the Combatant Commander relating to force protection, security, hea

99 U.S. Congress, House. Ronald W. Reagan National Defense Authorization Act for F

108th Cong., 2nd sess., 20 January 2004. H.R. 4200, SEC. 1088. URL: < http://www.wifcon

htm >, accessed 11 November 2004.

100 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 49.

101 Government Accountability Offi ce, Military Operations: Contractors Provide V

Deployed Forces but are Not Adequately Addressed in DOD Plans, GAO-03-695 (Ju

<http://www.gao.gov/highlights/d03695high.pdf>, accessed 13 October 2004, 28.
30

was established by previous regulation, several commanders involved with 

of contractor misconduct at Abu Ghraib were apparently unaware of such au

for dealing with violations by contract employees.

OTHER LEGAL CONSIDERATIONS

The previous discussion described just a few of the important legal issues re

the management of commercial intelligence augmentation but several other 

concerns have not yet been suffi ciently addressed. As private corporations 

provide support to intelligence and security operations there remain signifi cant q

concerning the control, retention, use, and proliferation of proprietary int

information that contractors may acquire while working for government organ

The Law of Armed Confl ict clearly establishes the concept of state monopo

application of deadly force but is less clear on how the government can ext

authority over the control of sensitive intelligence information. Of particular 

is how unmonitored subcontractors might potentially take their acquired know

other commercial ventures or even to foreign employment. For many intelligenc

contracts there appear to be few mechanisms for monitoring the use of proprie

and knowledge after contract termination. These concerns also extend to the 

collection and retention of sensitive data on U.S. persons and foreign citizens b

fi rms. As Sen. Patrick Leahy (D-VT) observed in a recent public statement on 

for improved regulation of intelligence service providers, “new technolog

private-pubic domestic security partnerships, and the rapid rise of giant inf

brokers...have all combined to produce powerful new threats to privacy.”104 Lea

that under current contract law and regulation “very little is known about the 

and handling of this information, and there are insuffi cient rules and oversight t

public privacy.”105

Another issue of potential legal concern is the status of intelligence contracto

international law. Commercial contractors are now involved in nearly every 

the intelligence cycle, including critical collection management and technical 

functions, yet the status of non-uniformed contract personnel remains somewha

under international law.

102 “Defense Federal Acquisition Regulation Supplement; Contractor Personnel Supportin

Deployed Outside the United States,” 48 CFR Part 252.225-7040 (d), Federal Register 70, no. 

2005). URL: <http://frwebgate1.access.gpo.gov/cgibin/waisgate.cgi?WAISdocID=0020581983

&WAISaction=retrieve>, accessed 11 May 2005.

103 “Defense Federal Acquisition Regulation Supplement; Contractor Personnel Supportin

Deployed Outside the United States,” 48 CFR Part 252.225-7040 (h).

104 Roman Kupchinsky, “Information Revolution Feeds Alternative Intelligence Market,’’ R

Europe/Radio Liberty, 23 May 2005, URL: <http://www.rferl.org/featuresarticle/2005/05/e1dc6

4abb-a61f-008f7167bfab.html>, accessed 3 June 2005.

105 Kupchinsky.
31

be held liable under international law for participation in acts later determi

crimes. The DFAR stipulates that contract personnel “shall not undertake 

would jeopardize their status [as a non-combatant]” and “shall not use force 

directly participate in acts likely to cause actual harm to enemy armed fo

restriction may be clear enough for functions such as logistics but is som

ambiguous for private contractors supporting operational intelligence fu

ambiguity leaves open signifi cant questions regarding the personal liability 

performing intelligence functions that directly support interrogations, securi

or offensive targeting decisions.107

There also remains some question as to the potential liability of the fi rm

contract workers accused of criminal misconduct. There are currently two c

on behalf of several Iraqi detainees against Titan Corporation and CACI, fi r

contract interrogators at Abu Ghraib.108 One of the cases was fi led by th

detainee who died in custody following an interrogation by a contract em

detention facility. The outcome of these cases may have signifi cant impact o

in which civilian contractors may be employed for future intelligence supp

A fi nal concern is the matter of values. Certainly, great public trust an

are granted to intelligence professionals serving the public interest an

the nation’s critical security operations. It is reasonable to consider wh

entrepreneurs may be expected to adhere to similar systems of values an

“duty concept” cannot easily be codifi ed into contract language, nor ca

ethical system be easily enforced through acquisition law. A basic question 

considered by policymakers is whether the institutional values guiding th

profession are consistent with the profi t motives of private corporations w

necessarily refl ect those of private shareholders. This inquiry does not pres

of dedication or values on the part of individual contractors but it does 

inherent risks associated with relying upon private corporations for critica

functions.

These issues suggest that many critical questions regarding the us

intelligence support remain unanswered. Complex legal, regulatory, and 

have yet to be suffi ciently addressed by policymakers, particularly as 

activities become even more integrated into all aspects of intelligence ope

106 “Defense Federal Acquisition Regulation Supplement; Contractor Personnel Sup

Deployed Outside the United States,” 48 CFR Part 252.225-7040(b).

107 For a brief discussion of contractor status under international law, see Jennifer Elsea

of Prisoners in Iraq: Selected Legal Issues, CRS Report for Congress, 24 May 2004.

108 Al Rawi v. Titan Corp., No. 04 CV 1143 (S.D. Cal. June 9, 2004) and Ibrahim v 

1:04 CV 01248 (D.C.D July 27, 2004). Michael J. Grinfeld, “War Incorporated,” Californ

2005), 25.
32

In order for Community leaders to make appropriate determinations conce

use of commercial augmentation for intelligence support functions, careful cons

must be given to the suitability of private sector involvement. For operation

to be satisfi ed and public interest adequately protected there must be assura

certain baseline performance criteria can be met within the terms of the 

partnership. The following framework is offered to assist Intelligence Co

leaders in decisions regarding the applicability of integrating commercial serv

an organization’s operational functions. These evaluative criteria are not intend

a defi nitive guideline for determining the suitability of commercial integration 

to highlight some fundamental elements that are necessary for the effective in

and management of commercial augmentation programs.

This framework offers some baseline evaluative criteria in three gener

the acceptability of private sector involvement, the suitability of vendor serv

accountability of contract management procedures. Each of these criteria 

satisfi ed to ensure the effective use of commercial augmentation. As demonstra

following case studies, shortfalls in any aspect of this framework can lead to in

integration of commercial services, poor contract administration, and compr

government interest. Careful consideration of these criteria is necessary to est

effective partnership between government and private sector providers.
33

Intelligence Augmentation

Acceptability of Private Sector Involvement

Contract service does not perform inherently governmental func

Contract administration adheres to proper solicitation and award 

procedures.

Contract service does not undermine operational security.

Vendor offers a best value alternative (including price and perfo

standards).

Suitability of Vendor Services

Vendor offers unique services or products unavailable in the pub

sector.

Vendor offers scalability of service and fl exible output to meet m

requirements.

Contract is negotiated in a mature market environment with in-s

competition.

Bidder offers past performance record and known reliability.

Accountability of Contract Management Procedures

Contract language offers clear legal oversight and accountabilit

measures.

Contract offers clear Statement of Work (SOW) and evaluation 

procedures.

Contract provides effective integration plan and clear performan

measures.

Government possesses suffi ciently trained, on-site contract man

personnel.

●

●

●

●

●

●

●

●

●

●

●

●

Acceptability of Private Sector Involvement

Contract service does not perform inherently governmental func

Contract administration adheres to proper solicitation and award 

procedures.

Contract service does not undermine operational security.

Vendor offers a best value alternative (including price and perfo

standards).

Suitability of Vendor Services

Vendor offers unique services or products unavailable in the pub

sector.

Vendor offers scalability of service and fl exible output to meet m

requirements.

Contract is negotiated in a mature market environment with in-s

competition.

Bidder offers past performance record and known reliability.

Accountability of Contract Management Procedures

Contract language offers clear legal oversight and accountabilit

measures.

Contract offers clear Statement of Work (SOW) and evaluation 

procedures.

Contract provides effective integration plan and clear performan

measures.

Government possesses suffi ciently trained, on-site contract man

personnel.

●

●

●

●

●

●

●

●

●

●

●

●
34

The following case studies refl ect recent experiments with public

intelligence support partnerships. These examples demonstrate a broad 

commercialization initiatives currently used within the Intelligence Com

These examples are by no means an exhaustive list of intelligence priv

programs. They offer a broad overview of various commercialization efforts 

the utility of the evaluative framework by demonstrating the challenges as

with developing and administering effective contractual relationships with 

sector providers.109

PRIVATIZED PERSONNEL SECURITY INVESTIGATIONS

One of the most important elements of the nation’s counterintelligence eff

investigation and screening of government employees and contractors. Trad

these investigative services have been performed by trained governmen

employed by the Offi ce of Personnel Management (OPM) and the Defense 

Service (DSS). The DSS conducts the majority of the clearance investiga

Department of Defense civilian employees, military service members, and P

contractors.

Like other DoD organizations during the 1990s, the DSS experienced si

staffi ng reductions amounting to a 40 percent overall cut in personnel 

the decade after 1989.110 This personnel drawdown led to increasing bac

security investigations and growing concerns over the effectiveness of the 

counterintelligence program in the wake of several high-profi le espiona

during the 1990s. Responding to this crisis in 1996, the Deputy Secretary of 

directed the use of commercial augmentation to improve effi ciency and q

investigations and reduce backlogged caseload. As part of this program, OPM 

a privatization initiative through the establishment of the U.S. Investigation 

(USIS), an Employee Stock Ownership Corporation chartered to conduct p

security investigations on behalf of the government.

This privatization effort was intended to infuse greater fl exibility 

investigative labor pool, achieve savings through reductions in civil service 

and bring greater effi ciency through commercial automation.111 The fi nal c

adjudication process was retained as a strictly governmental function within 

109 See Appendix for a consolidated overview of the case study evaluations based upon select

110 U.S. Department of Defense, Offi ce of the Inspector General, Statement of Donald Mancu

Inspector General Department of Defense before the Senate Armed Services Committee, Hearin

procedures and standards for the granting of security clearances at the Department of Defen

2000). URL: <http://www.fas.org/sgp/congress/2000/mancuso.html.>, accessed 2 May 2005.

111 For a brief review of the initial cost analysis of OPM privatization, see Government Acc

Offi ce, Cost Analysis: Privatizing OPM Investigations, (5 July 1996) GAO/66D-96-121R. 
35

based upon variable demand for service, a task diffi cult to achieve und

civil service employment regulations.

Thus far this transition to partial privatization has not produced all of 

results. Several years into the privatization effort a 1999 GAO repo

signifi cant numbers of personnel security investigations remained in

were not adjudicated in a timely manner.112 A subsequent Joint Military 

College study on the privatization program cited security concerns w

investigative support, suggesting that the system of commercial augmen

suffi cient measures to ensure “accountability, integrity and confi dentiali

counterintelligence functions.113 A concurrent GAO study of DSS i

revealed repeated lapses in the thoroughness of background screening

the “vast majority” of examined investigations failed to comply with fe

control standards. The GAO report concluded that “in an effort to streamli

and improve effi ciency [DSS] relaxed its investigative guidance, eli

quality control mechanisms, [and] inadequately trained its investigators.”

determined that these defi ciencies resulted from “ineffective managem

undertaken as reinvention efforts ostensibly based on the National 

Review, which called for improving government at less cost. However, D

did not achieve this result.”115

112 Government Accountability Offi ce. DOD Personnel: Inadequate Personnel Securi

Pose National Security Risks, GAO/NSIAD-00-12 (October 1999). URL: <http

archive/2000/ns00065t.pdf>, accessed 13 November 2004.

113 CPT William Colligan, USA, The Privatization of Personnel Security: The Effects 

Performance Review on the Intelligence Community, MSSI Thesis, Washington, DC

Intelligence College, 2000.

114 Government Accountability Offi ce, Inadequate Personnel Security Investigations 

Security Risks, Statement of Carol R. Schuster, Associate Director, National Security Prep

National Security and International Affairs Division, Testimony before the Subcommi

Security, Veterans Affairs, and International Relations, GAO/T-NSIAD-00-65, 16 Febru

<http://www.gao.gov/archive/2000/ns00065t.pdf>, accessed 9 March 2005.

115 Schuster statement.
36

In a case study about the NPR, The Privatization of Personnel Security: The 

of the National Performance Review on the Intelligence Community, Wil

Colligan identifi es the arguments for and against the privatization of pe

security functions through the eyes of both the entrepreneurs and the 

administrators. He analyzes action by the Clinton administration to privat

Offi ce of Federal Investigations, an arm of the Offi ce of Personnel Mana

(OPM), which handled about 30 percent of all background investigations 

U.S. Government. The key point addressed: Should the government cont

privatize its personnel security functions and responsibilities? 

Colligan established a formula to consider a personnel security system, eva

accountability, integrity, and confi dentiality. The specifi c example used i

study of the operation of the newly created U.S. Investigative Services (U

assess the feasibility and desirability of the government’s efforts at personnel s

privatization. Colligan found USIS weak in all these elements, and recomm

against using private enterprise to conduct background investigations. 

Since that time, the outsourcing of investigations has signifi cantly increased

2004 OPM awarded a multi-million dollar blanket purchase agreement to fi ve 

private companies for investigative services.117 DSS also signifi cantly expa

commercial augmentation program by shifting much of its excess caseload t

private sector providers.118 Yet this transition to privatized investigations has not 

the persistent problem of caseload backlog. A recent 2004 GAO report on DSS o

estimated the current backlog of clearance applications to be approximately 18

Additionally, OPM and DSS earned repeated criticism for questionable inve

standards, processing ineffi ciency, and poor management oversight.120

Ironically, the GAO determined that the federal and private sector w

itself was a primary factor causing investigative backlogs - precisely the pro

116 Colligan, Privatization of Personnel Security.

117 Calvin Biesecker, “OMP Selects Five Contractors to Expand Capacity for Background 

Defense Daily, online ed., 28 July 2004, URL: <http://web.lexis-nexis.com/universe/document>

21 September 2004. The BPA contract was awarded to CACI International, Marsh and McLen

Government Services, ManTech-MSM, Omniplex World Services Corp., and Systems Appli

Technology.

118 Defense Security Service (DSS) Augmentation Programs, Web-only document, URL: 

mil/aboutdss/augmentation>, accessed 17 September 2004. In January 2003 DSS awarded three 

investigation contracts to Dyncorp-CSC, ManTech-ISJV, and Omniplex World Services.

119 Shane Harris, “Defense Department Lacks Staff to Tackle Security Clearance Backlog,” G

com, online ed., 27 May 2004, URL: <http://www.govexec.com/dailyfed/0504/052704h1.htm>, a

September 2004.

120 A sampling of recent GAO reports provides some idea of the ongoing issues. “DOD Needs to 

Impediments to Eliminating Backlog and Determining Its Size,” February 2004; “More Consisten

in Determining Eligibility for Top Secret Security Clearances,” April 2001; “More Accurate E

Overdue Security Clearance Reinvestigations Is Needed,” September 2000; “More Actions 

Address Backlog of Security Clearance Reinvestigations,” August 2000; “Inadequate Personn

Investigations Pose National Security Risks,” February 2000.
37

of nearly 100 investigators per month to address increased caseload 

admitted a turnover in personnel amounting to 70 employees per month

DSS’s contract partners recently expressed reluctance to hire more per

stating “that they would incur additional fi nancial risk if they were to 

investigators,”122 in place of part-time labor.

Although privatization was intended to infuse greater fl exibility into th

the government is now facing the unintended consequence of not havin

resource base of trained investigators to meet unanticipated increases i

recent report noted that “DSS has fallen so far behind because its investi

accurately project the size of future workload, making it almost impos

accurately for future budget and workforce size requirements.”123

These persistent investigative delays and quality control issues were ad

2004 Intelligence Reform Act, which requires the selection of a single exec

to direct the “day to day oversight of investigations and adjudication 

security clearances.”124 The new legislation stipulated a goal of 120 d

determination of 80 percent of all clearance applications, as well as the e

of uniform investigative standards and requirements for all governmen

investigations. The effectiveness of these measures remains to be s

several years of experimentation with various privatization programs th

signifi cant backlog of investigations and a persistent shortage of investiga

also remain questions about the accountability, training, management, and 

contract personnel conducting background investigations.

APPLYING THE EVALUATIVE CRITERIA

This mixed record of commercial outsourcing for personnel security i

indicates that privatization is not always a panacea for government ineffi 

far private vendors have fallen short in providing suffi cient scalability o

121 Government Accountability Offi ce. DoD Needs to Overcome Impediments to Elimina

Determining Its Size, GAO-04-344 (February 2004). URL: < http://www.gao.gov/highlig

pdf >, accessed 10 November 2004.

122 DoD Needs to Overcome Impediments to Eliminating Backlog and Determining Its S

123 Caitlin Harrington, “Backlog of Pentagon Security Clearances Nearing 200,000,” CQ

Security, 26 May 2004, URL: <http://www.cqhls.com/hs/dislay.do?dockey/cqonline/prod

hsnews/108>, accessed 17 March 2005.

124 U.S. Congress, House, Intelligence Reform and Terrorism Prevention Act of 2004. 

sess., 7 December 2004, section 3001, URL <http://www.c-span.org/pdf/2004IntelAct.p

March 2005.

125 DoD Needs to Overcome Impediments to Eliminating Backlog and Determining I

recent report noted that adjudication time of DSS investigation for Pentagon contract emplo

increased from 319 days in 2001 to 375 days in 2004. Caitlin Harrington, “Backlog of Pe

Clearances Nearing 200,000.”
38

have received adequate training to satisfy government standards for quality 

and operational security.

The government bears responsibility for generally poor integration of com

services by not providing adequate oversight and contract management proced

this case suggests, effective commercial augmentation programs require clear 

contract surveillance, defi ned standards for performance and delivery, and 

considered evaluation metrics to protect government interests and adequatel

all operational needs.

COMMERCIAL REMOTE SENSING

Privatization of personnel security investigations evolved as a means for 

greater fl exibility into the government’s labor pool. Conversely, a privatization 

for remote sensing came about primarily from rapid technological advan

in private sector imaging technology.126 For most of the Cold War the gov

held a tight monopoly on viable technology for operational-quality remote 

platforms, but in recent years there has been a signifi cant erosion of this qu

advantage. As private technology reached near-parity capability with some 

collection platforms, there was much greater incentive for government exp

of commercial products. The operational utility of private sector collectors 

clear when commercial satellites recently achieved half-meter resolution for 

optical imaging.127 This technical achievement opened the door for experim

with various outsourcing initiatives to satisfy many intelligence-related requi

As a result of these technical advancements, in 2000 an independent commi

the National Imagery and Mapping Agency (now the National Geospatial-Int

Agency or NGA) called for greater governmental exploitation of commercial 

technology. Citing NIMA’s laggardly movement on commercial integra

commission called for “a policy review and coherent strategic direction fo

of (and reliance upon) commercial products.”128 The commission challen

traditional notion that the production of visual overhead collection and 

126 “Remote sensing” is a generic term used to describe a wide range of technical disciplines fo

and measuring terrestrial objects. This term encompasses diverse functions such as electro-optic

Global Positioning System navigation, terrestrial mapping, RADAR, aerial photography, and Lan

spectral imaging.

127 Among others, the Space Imaging Ikonos 2 satellite has produced 1-meter resolution, 

DigitalGlobe owned QuickBird has 0.6-meter resolution. Marcia S. Smith, U.S. Space Program

Military, and Commercial, CRS Report IB92011 (Washington, DC: Library of Congress, Con

Research Service, 2003), 5.

128 The Information Edge: Imagery Intelligence and Geospatial Information in an Evolvin

Security Environment, Report of the Independent Commission on the National Imagery and 

Agency (December 2000), URL: <http://www.fas.org/irp/agency/nima/commission/artic

accessed 16 September 2004.
39

Responding to these recommendations, in 2003 the President’s Exe

of Science and Technology Policy established a directive for the use o

remote sensing products. The directive committed the government to 

maximum practical extent on U.S. commercial remote sensing space ca

fi lling imagery and geospatial needs for military, intelligence, foreign poli

security, and civil users.”130 Refl ecting this new approach, the most recent 

Defense Review cited the use of commercial imagery as one of fi ve k

technologies that the DoD would exploit “to signifi cantly increase U.S. 

intelligence collection, analysis, and security.”131

This presidential policy initiative directed the development of an exp

for integrating commercial products into military and intelligence appl

strategy directed that the government determine what operational ne

reliably met through commercial resources and then communicate t

and projected requirements to industry providers. The directive ce

acquisition and dissemination process to make NGA the primary agenc

for managing commercial support. Finally, the initiative encouraged the 

of commercial products in order to create “a long-term, sustainable 

between the government and private sector providers.132 Thus, rathe

to restrict or limit the proliferation of advanced commercial remote 

government became its primary consumer.

With this mandate, the NGA went from being an ad hoc user of 

resources to a primary consumer. In 2003 the NGA awarded a $500 mi

under its NextView program to Digital Globe for their next generat

resolution imaging system.133 Another NGA contract program, Projec

recently awarded a 5-year agreement with several commercial provid

$500 million of imagery purchases.134

The value of this commercial integration was clearly demonstrate

major combat operation phase of OIF. A Joint Lessons Learned study f

“synergy gained by skillfully combining intelligence from US with comm

129 The Information Edge, 52.

130 “U.S. Commercial Remote Sensing Policy Fact Sheet,” Offi ce of Science a

Policy, Executive Offi ce of the President, 25 April 2003. URL: <http://www.white

releases/2003/05/20030513-8.html>, accessed 2 May 2005.

131 U.S. Department of Defense, Quadrennial Defense Review: America’s Security in 

(Washington, DC: Government Printing Offi ce, 2001), 38.

132 “Remote Sensing Policy Fact Sheet,” 2.

133 “NGA Taps ORBIMAGE for Clearview,” GEO World, Government Connection, M

<http://www.geoplace.com/uploads/georeport/040407.htm>, accessed 16 November 2004

134 Frank Sietzen, “A Clearview of NIMA’s Commercial Imagery Use,” Geospatial Solu

1 March 2003, URL: <http://www.geospatial-online.com/geospatialsolutions/content/jps?

16 September 2004.
40

the military’s collection management process. The report concluded that “com

high-resolution, multi-spectral and radar satellite imagery proved to be a valu

still under-exploited, resource.”136

From the government’s perspective there several distinct advantages of in

commercial products into the intelligence planning cycle. The director of N

Gen James Clapper (USAF, Ret.), noted that commercial resources are par

useful as a “gap mitigator” when national technical measures are over-

lack suffi cient coverage of a particular area of interest.137 Clapper explai

commercial augmentation can be used to shift many “routine” requiremen

from national technical platforms and permit a focus on high-priority miss

the most technically challenging targets. Additionally, Clapper suggested 

unclassifi ed nature of commercial remote sensing products meant that the gov

has much greater fl exibility to share data with foreign national partners and th

government entities for use in non-intelligence related applications.138

Certainly the noteworthy success of integrating commercial remote 

products for intelligence use provides optimism for the future of such publi

partnerships. Commercial augmentation holds a major advantage for the gov

as it may now opt to purchase products for some collection requirements ra

building costly systems for every need. This also has the benefi t of reducin

expenditures from limited acquisition budgets and permitting organizations 

Operations and Maintenance funding to satisfy certain collection requirem

effect “changing the color of money” that may be applied for short-term, high 

missions.

Despite these clear advantages, the use of commercial remote sensing for int

operations raises several important questions. Firstly, high-quality commercial 

products are also potentially available to non-U.S. governmental organizat

other private entities with suffi cient monetary resources. This issue of “shutter 

has already become a matter of some concern within the Intelligence Commu

was addressed in the President’s 2003 remote sensing directive. The policy de

that in some cases “the United States government may restrict operation

commercial systems in order to limit collection and/or dissemination of cer

and products.”139 As part of its “assured access” agreement with commercial 

135 Joint Forces Command, “Joint Lessons Learned: Operation IRAQI FREEDOM Maj

Operations,” unpublished coordinating draft report, 1 March 2004, 67

136 “Joint Lessons Learned: OIF Major Combat Operations,” 67.

137 Lieutenant General James R. Clapper, (USAF, Ret.), Director, National Geospatial-I

Agency, untitled lecture given at the Joint Military Intelligence College, Distinguished Speake

Washington, DC, 5 December 2004. Comments used with the permission of speaker.

138 Clapper lecture, 5 December 2004.

139 “Commercial Remote Sensing Policy Fact Sheet,” 3.
41

public dissemination.141

The government has not repeated use of “checkbook shutter control

but the OEF experience raises interesting questions regarding proprieta

dual-use commercial technology. When commercial providers have acces

intelligence information or unique technical capabilities there is a 

government interest in maintaining security and control of that data. Thi

illustrates the complex challenges for effective contract management as p

enterprise becomes more and more integrated into U.S. intelligence operat

noted that as such public-private intelligence partnerships expand, “we 

suffi cient workforce in the government to oversee what the contract prov

Another issue of concern is the viability of commercial providers d

of reduced government demand. The GWOT has been a boon for comm

sensing providers, as well as numerous other intelligence and security 

But most Intelligence Community observers suggest that current levels o

spending will be unsustainable in the long term. As the security situatio

Afghanistan stabilize, there will be reduced demand for such commercia

products. This inevitable reduction in demand will be less of a dilemm

based providers who can quickly downsize their personnel levels. But fo

oriented, highly capitalized industries such as remote sensing providers

downturn in acquisition by the government may seriously jeopardize thei

viability. As the government increasingly relies on private sector provi

critical operational requirements, careful consideration of market mat

long-term viability of providers will be appropriate.

APPLYING THE EVALUATIVE CRITERIA

The government’s exploitation of cutting-edge private sector rem

technology is a prime example of the enormous potential benefi ts of p

partnerships for commercialized intelligence augmentation. Thro

commercial acquisition program the government has used its contra

to acquire needed intelligence products that may be effectively supplie

140 Numerous press reports used the term “checkbook shutter control” to describe 

agreement with several commercial providers during the initial stages of Operation ENDURI

It should be noted that during a 5 December 2004, JMIC Distinguished Lecture Program, 

strongly denied the accusation that NGA’s intent was to “control” access by purchasi

commercial collection capability. Clapper indicated that the NGA purchases were made 

operational requirements — not to corner the market. Clapper suggested that the media ha

the intent of NGA actions. Comments used with the permission of speaker.

141 Antonio Regalado, “U.S. Allows Dissemination of Satellite Photos of Iraq,” The Wa

21 March 2003, URL: <http://www.globalsecurity.org/org/news/2003/030321-iraq-i

accessed 16 November 2004.

142 Clapper lecture, 5 December 2004. Comments used with the permission of speaker.
42

commanders to seamlessly integrate commercial products and technology i

intelligence mission cycle and permitted government resources to be applied e

for mission requirements where commercial services are either unavailabl

suited to operational needs.

Based upon the evaluative criteria there are two main areas of conc

the government’s commercial remote sensing program. The fi rst issue is 

government will maintain suffi cient operational security over privately produ

in cases where unlimited public distribution may jeopardize U.S. military op

or national security. This issue will only become more problematic as high-re

commercial imagery becomes widely available to non-governmental entit

second issue is the viability of the commercial marketplace during periods of 

government demand and whether the private sector will be able to provide 

levels of service to meet the variable requirements of the Intelligence Com

Much of the value of commercial augmentation will be lost if private sector p

do establish business models that can accommodate unpredictable gov

requirements only by maintaining a wider viability in the open marketplace.
43

These two cases of commercial augmentation demonstrate seve

benefi ts and liabilities. The following analysis offers a somewhat differ

examining the overall methodology of contract management across the 

of commercial intelligence support services currently provided to deplo

the Global War on Terror. This structured analysis provides an opportuni

several key aspects of the acquisition process including contract deve

award, management procedures, and quality control measures. This 

intended to examine several specifi cally identifi ed shortfalls in cur

management procedures and shows how the evaluative framework may b

improved policy decisions on commercial augmentation.

Recent government investigations and information gathered for thi

revealed numerous shortfalls in contract management procedures within th

Community, particularly the weak oversight of intelligence support 

GWOT operations. Some issues cited in recent reports are repeated 

Federal Acquisition Regulation, misuse of the Federal Supply Schedul

performance of out-of-scope activity by contractors, improper use of pers

contracts, and inadequate attention to contract delivery and performance

A 2004 DoD Inspector General report reviewed a sampling of contract a

Iraq Coalition Provisional Authority, including several vendors providin

related support services in Iraq, and found “signifi cant weaknesses” in 

procedures for 22 of the 24 contracts reviewed.143 Another recent review o

of Interior contracts for intelligence support services in Iraq revealed “a lac

management controls” in 10 of 11 task orders worth a total of $66 million.1

2003 GAO report on DoD contracting practices, including intelligence ope

Balkans, Afghanistan, and Iraq, determined that contract oversight was “l

areas, making it diffi cult for commanders to manage contractors effectivel

Generally speaking, the record of contract management for intellig

to contingency operations has been poor. While intelligence organi

aggressively exploited a wide range of commercial augmentation, th

dedicated suffi cient resources to effectively develop and manage the

Signifi cant shortfalls have occurred in several key aspects of the managem

as noted below.

143 Department of Defense, Offi ce of the Inspector General, Contracts Awarded fo

Provisional Authority by the Defense Contracting Command - Washington, Report No. 

March 2004): 28, URL: <http://www.globalsecurity.org/military/library/report/2004/0

accessed 30 September 2004.

144 Government Accountability Offi ce, Interagency Contracting: Problems with DoD

Orders to Support Military Operations, GAO-05-201 (April 2005), URL: <http://www.ga

d05201high.pdf>, accessed 11 May 2005.

145 GAO, Military Operations: Contractors Provide Vital Services to Deployed For

Adequately Addressed in DOD Plans, 3.
44

the establishment of effective contract management procedures beginning with t

process. This includes the tasks of identifying requirements, solicitation and c

requests for proposals, market research and developing contract language. Sho

any step of the development process can make management and surveillance of 

performance diffi cult, if not impossible, to achieve.

The enormous demands for intelligence support since 9/11 have placed IC orga

under signifi cant pressure to rapidly expand their collection and analytical capab

the rush to provide critical support for contingency operations, there has been s

modifi cation of the acquisition procedures used for many intelligence-related c

Several recent government investigations have noted the use of expedited awards pr

that have fallen outside the guidelines established by Federal Acquisition Regulat

problem was cited as a contributing factor in the Department of the Interior Inspecto

report on intelligence support contracts for both Iraq and the detention facility at Gua

Bay.146 These support contracts included commercial augmentation for human int

teams, linguistic support, strategic debriefi ng services, and interrogation support. 

Among the issues cited in a recent Department of Interior IG report was th

of Blanket Purchase Agreements (BPA) under the GSA schedule to expedite 

awards and bypass an open bidding process.147 This episode arose as contracting 

misused the GSA schedule labor categories to acquire out-of-scope services for int

support activities.148 For example, the GSA schedule used to procure strategic d

interrogators, counterintelligence agents, and analysts for work in Iraq was clas

“engineering” and “information technology services.” A recent GAO review 

contract awards found that “the labor category descriptions in the GSA contracts 

most cases, signifi cantly different from the descriptions on DoD’s statements of 

do not accurately represent the work the contractor performed.”149

146 Department of Interior, Offi ce of the Inspector General, Review of 12 Procurements Pla

General Services Administration Federal Supply Schedules 70 and 871 by the National Business 

July 2004 (Washington, DC: DOI Publication, 16 July 2004), 1-5.

147 Generally speaking, Blanket Purchase Agreements (BPAs) are a simplifi ed contracti

whereby an agency uses an indefi nite delivery order for a broad class of goods where the precise q

delivery requirements are not known in advance. This contract vehicle is particularly useful for th

procurement of individual services over a given period of time. This simplifi ed procurement 

particularly effective for habitual government service providers who offer a known price adv

have an established performance record.

148 For a general description of the procedures for GSA Federal Supply Schedule contracts see FA

“The Federal Supply Schedule program, pursuant to 41 U.S.C. 259(b)(3)(A), provides Federal agen

simplifi ed process of acquiring commercial supplies and services in varying quantities while obtain

discounts. Indefi nite-delivery contracts are awarded using competitive procedures to fi rms.”

149 Interagency Contracting: Problems with DoD’s and Interior’s Orders to Support Military O

8. The General Services Administration also awarded similar contracts for interrogation 

Guantanamo Bay detention facility on behalf of the U.S. Army Southern Command. These con

canceled in February 2004 when the improper use of the GSA schedule was revealed. Shane Ha

Canceled Guantanamo Interrogator Contract,” GOVEXEC.com. online ed., 16 July 2004, URL

www.govexec.com/dailyfed/0704/071604h1.htm>, accessed 9 May 2005.
45

report, these contracts did not have “an effective system of policies, pro

process controls to ensure an equitable and competitive contracting env

complies with acquisition laws and regulations and protects the public i

separate government investigation into the abuse incidents at Abu Ghraib 

misuse of the GSA Federal Supply Schedule and added that such “contra

carefully scrutinized given the complexity and sensitivity connected to 

operations.”151

Generally speaking, the GSA supply schedule process has many ad

acquiring routine services from well-established markets. This system 

expedite the process of solicitation and market research. The major p

these contracting vehicles arise because with the GSA system the govern

signifi cant degree of oversight into how vendors may fulfi ll an individu

The use of the GSA supply schedule generally limits the government’s di

a vendor’s screening and vetting of personnel. Additionally, GSA proced

little visibility into how a prime contractor may subcontract out variou

required services. Given such limitations on government overview of h

orders are fi lled, the use of GSA schedules for sensitive intelligence servi

carefully scrutinized and monitored.

Inappropriately expedited awards also led to other discrepancies in th

process for many support contracts with the Coalition Provisional Auth

A separate DoD Inspector General report identifi ed several problems 

requirements language, improper use of personal services contracts, an

price reasonableness determinations prior to award.152 Additionally, oth

irregularities surfaced during investigations of abuse incidents at Abu G

the contract development process for interrogation support, the vendo

the drafting of the requirements language and preparation of the Statem

(SOW) prior to the contract award. While there are some legal allowan

collaboration, the subsequent contract award to the same vendor potentia

a confl ict of interest in violation of FAR guidelines.153

Many of the cited discrepancies in contracting award procedures may 

to the enormous unforeseen operational demands of GWOT operations. T

placed signifi cant strain on a limited number of contracting offi cials, m

did not possess adequate knowledge of mission requirements or the spec

the vendors would perform. Unfortunately, these shortcomings someti

150 Department of Interior Inspector General Report, 3.

151 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 50.

152 Department of Defense, Offi ce of the Inspector General, Audit of Contracts Awarded f

Provisional Authority by the Defense Contracting Command Washington (18 March 20

D-2004-057, URL: <http://www.globalsecurity.org/military/library/report/2004/04057sum

1 October 2004.

153 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 49.
46

interrogation support. A CENTCOM after-action review of OEF operations 

that “the Army could not provide, and did not have an effective system in 

identify and contract for this support.”154

DEVELOPING CONTRACT LANGUAGE

Another important shortfall affecting some intelligence service contrac

been the lack of standardized contract language and explicit Statements 

(SOW). A recent GAO report on DoD contract management procedures obse

generally there is “no standardization of necessary contract language for dep

of contractors.”155 These problems have led to contractor personnel arriving 

locations with insuffi cient training, equipment, or professional qualifi cat

their assigned tasks. In some cases this problem is compounded by the fact 

orders lack precise language describing the nature of services to be perfor

the conditions of the work environment. One offi cial involved with OIF co

commented that “the demands that we asked of our contractors were not alway

in the contracts that they were supporting.”156

154 OPERATION ENDURING FREEDOM: CAAT Initial Impressions Report, 54.

155 Military Operations: Contractors Provide Vital Services to Deployed Forces but are Not A

Addressed in DOD Plans, 3.

156 Roxana Tiron, “Army not Equipped to Manage Contractors on the Battlefi eld,” National D

no. 598 (September 2003), 32.
47

In How Can the U.S. Army Effectively Outsource Tactical EW/S

Retain Mission Effectiveness? Raymond Younger examines whether 

can or cannot feasibly allow contracting of EW/SIGINT collection an

to private industry. 

The research addressed the author’s concern that outsourcing cou

detrimental effect on mission readiness. The Army intelligence mod

effort attempts to address the proliferation of technology inclu

example, the rapid use of spread spectrum communications means. Th

prescription for future EW/SIGINT capabilities centers on new sys

organizations. 

Most importantly for acquisition, Younger analyzes the pit

advantages that outsourcing will have, pointing out private industry 

considerations, weighing the effects of training, and describing how 

can benefi t from private industry without giving up capabilities. 

examines outsource opportunities and how private industry can co

the current Army SIGINT architecture. 

This issue of inadequate SOW language was cited as a compoundin

contract interrogators serving in OIF. Particularly for sensitive intelligen

the report noted that “requiring activities must carefully develop the app

to include technical requirements and requisite personnel qualifi cations

and training.”158 The Statement of Work for contract interrogation s

during OIF described a similar skill-set as military occupational sp

Human Intelligence Collector. Yet many of the contractor personne

determined to lack equivalent professional training possessed by their 

and uniformed counterparts. Several of the contractors in question ha

in law enforcement or related civilian functions but lacked specifi 

military interrogation techniques, the law of land warfare, Geneva 

and applicable DoD intelligence oversight policy.159 This was also 

OEF interrogation contractors operating at Bagram Air Base, Afgha

later investigations revealed that two of the four contractors had no p

intelligence training.

157 Raymond Younger, How Can the U.S. Army Effectively Outsource Tactical EW/SI

Mission Effectiveness?, (Washington, DC: Joint Military Intelligence College, 2002).

158 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 49.

159 Department of the Army, “Detainee Operations Inspection” (21 July 2004): 88, URL

army.mil/ocpa/reports/ArmyIGDetaineeAbuse/>, accessed 16 August 2004. Legislation n

the Secretary of Defense certify that all Federal employees and civilian contractors engage

or interrogation of detainees must receive training in the laws of war and the Geneva Conv

Congress, House, Ronald W. Reagan National Defense Authorization Act for Fiscal Year 20

2nd sess., 20 January 2004. H.R. 4200, SEC. 1092 (c). URL: <http://www.wifcon.com/d

accessed 11 November 2004.
48

need for prior training in military interrogation procedures, policy, and doc

some cases the contracting authorities did not possess a background in inte

operations and therefore lacked familiarity with the specifi c needs of the r

unit. These oversights resulted in the deployment of some contract person

were not properly screened or qualifi ed for their required duties. 

Poorly defi ned SOW language may also signifi cantly limit the range of l

a contractor may perform once at their place of duty. On-site Contracting 

Representatives (COR) are legally unable to revise SOW language bas

changing mission needs without explicit revisions to the contract. Thus, 

personnel will often be pressured by the receiving unit to perform out-

activities for which they are not properly trained or which the contract 

stipulate. In the case of Abu Ghraib, several of the contract personnel per

interrogation and analytical functions were originally employed only for tra

services.

Several respondents to this study also noted problems with infl exible 

language limiting the utilization of contract personnel. Often when task or

not refl ect the actual nature of work to be performed on site, there was 

from the vendor’s managers to “grow the contract” outside of the scop

original proposal. This situation results in operational ineffi ciencies and un

costs to the government as contracts are modifi ed to refl ect the actual cond

performance.

For sensitive functions such as intelligence collection and analysis it is im

that Statements of Work, performance standards, and technical qualifi ca

explicitly defi ned in the contract language. Effective development of SOW l

requires that contracting offi cers without operational intelligence experien

close interaction with technical experts from the requiring unit and design

site CORs, but frequently this does not occur. A GAO report on contract man

procedures for several intelligence support contracts in Iraq found that con

offi cers “had little to no communication with the CORs in Iraq and did not f

to obtain monthly reports from them on the contractor’s performance....[an

verifi ed that the Army personnel serving as CORs had appropriate training.

Communication between the contracting offi cer, the requiring unit, 

designated CORs must begin at the earliest stages of the request for proposa

so that effective market research may be conducted to determine the most 

vendor, and appropriate contract language developed. Without signifi cant in

the requiring unit and awareness of the mission requirements it is nearly im

for contracting offi cers to communicate clear performance expectations to 

vendors. The independent panel reviewing intelligence operations dur

160 Interagency Contracting: Problems with DoD’s and Interior’s Orders to Suppor

Operations, 12.
49

MANAGEMENT OF CONTRACT PERSONNEL

One of the major challenges of utilizing commercial augmentation 

understanding of contract management procedures among intellige

A recent GAO report on army contract management procedures noted 

generally “inadequate training for staff responsible for overseeing co

limited awareness by many fi eld commanders of all contractor acti

place in their area of operations.”162 A separate report on management p

intelligence support in Iraq noted that “the Army offi cials responsible fo

the contractor, for the most part, lacked knowledge of contracting issues 

aware of their basic duties and responsibilities.”163

Existing doctrinal guidelines for managing deployed contractors were 

the GAO report as “inconsistent and sometimes incomplete.”164 Even th

doctrinal manual for Contractors on the Battlefi eld acknowledges that 

specifi cally identifi ed force structure nor detailed policy on how to establi

management oversight within an AOR. Consolidated contractor manag

goal, but reality is that it has been, and continues to be, accomplished thr

convoluted system”165 An independent investigation of OIF interrogatio

reinforced this fi nding, noting that “oversight of contractor personnel and 

not suffi cient to ensure intelligence operations fell within the law and th

chain of command.”166

Although there is ample doctrinal literature on the generic issue 

management, there is virtually no guidance specifi cally dealing with 

of commercial intelligence services.167 The Abu Ghraib investigations 

“no doctrine exists to guide interrogators and their intelligence leaders in 

161 “Final Report of the Independent Panel to Review DOD Detention Operations,” Indep

Review DOD Detention Operations (August 2004), 69, URL: <http://www.defenselink.mi

d20040824fi nalreport.pdf>, accessed 24 August 2004.

162 Military Operations: Contractors Provide Vital Services to Deployed Forces but are 

Addressed in DOD Plans, Executive Summary.

163 Interagency Contracting: Problems with DoD’s and Interior’s Orders to Su

Operations, 1.

164 Military Operations: Contractors Provide Vital Services to Deployed Forces but are 

Addressed in DOD Plans, 1.

165 U.S. Army, Field Manual (FM) 3-100. Contractors on the Battlefi eld (Washington, DC

the Army, January 2003).

166 “Final Report of the Independent Panel to Review DOD Detention Operations,” 69.

167 The Army’s major doctrinal references dealing with contractors in contingency oper

Regulation 715-9, Contractors Accompanying the Force; DA Pamphlet 715-16, Contrac

Guide; and Field Manual 3-100.21, Contractors on the Battlefi eld. These documents are 

toward logistics-associated contracting services and offer no guidance on intelligence-spec

or legal issues.
50

on in the management, control and discipline of these personnel.”168 Over

was signifi cant confusion among military supervisors over their legal respon

for contractor personnel and their ability to dismiss employees for unsat

performance.169

The investigations also determined that intelligence “leaders faced n

issues involving contract management: roles and responsibilities of....person

respect to contractors; roles, relationships, and responsibilities of contract 

and contract interrogators with military personnel; and the methods of dis

contractor personnel.”170 Clearly, a proximate cause of the failures with OIF d

operations evolved from this lack of familiarity with contract management pr

and confusion over legal responsibilities and control over contract employee

Based upon respondent feedback for this study, these problems of poor 

management are not uncommon for many intelligence-related augmentation p

Frequently leaders unfamiliar with their management responsibilities w

performance evaluation, discipline, and contract oversight to the vendor’

manager. In the absence of a government-appointed COR, this approach es

amounts to the vendors providing their own management and evaluation.

CONTRACTOR TRAINING AND INTEGRATION

Another signifi cant issue of concern with using commercial augmenta

sensitive intelligence operations is proper vetting, training and integration of 

support. Service contracting has several unique challenges that are distin

engineering or product acquisition where performance specifi cations can b

defi ned. Performance measures for service contracting are inherently im

but a well-written SOW can clearly articulate the level of training, exper

qualifi cations required of the vendor. Each operational situation is unique 

contracting authority must consider the skills and training that contract person

need in order to satisfy all potential mission requirements.

The Department of the Army Inspector General report noted that 35 pe

the contract interrogators at Abu Ghraib lacked any formal training as inter

Furthermore, prior to deployment, none of the contractor personnel had 

training on Geneva Convention guidelines or the rules of engagement for t

of detainees.171 The report found that “the lack of specifi c training in military 

and techniques has the potential of placing these interrogators [contractors] at 

168 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 19.

169 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 50.

170 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 18.

171 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 51.
51

proper equipment, or inappropriate skill-sets to satisfy mission requirem

As discussed previously, a signifi cant limitation on the governm

to closely monitor the training and vetting of contractor personnel is t

Blanket Purchase Agreement. The Army investigation of Abu Ghrai

military supervisors had little or no control over the vetting and pre-tra

for arriving contractors. The report found that leaders “knew little of th

backgrounds or experience and relied on higher headquarters to screen 

arrival. Such screening was not occurring.”173 Several of the contracto

determined to have little or no experience with intelligence operation

noting that the “integration of some contractors without training, q

and certifi cation created ineffective interrogation teams and the poten

compliance with doctrine and applicable laws.”174

Similar problems were also cited in a review of early operations at 

facility in Guantanamo Bay. Many of the contract linguists supporting th

operations had no experience with military interrogation techniques o

methods. Although contract linguists were screened for basic language 

some of their skills were not appropriately matched for their requir

interrogators. The original contract SOW listed only generic language req

over time the operational demands became more specifi c as the mission 

evolved.175

Another issue of concern is the deployment of intelligence support c

several cited cases, deployed contractors with interim clearances were un

in their assigned functions while awaiting fi nal clearances, a situation 

government resources and created work backlogs for the supported unit. 

is partly attributable to unmonitored vendors who do not adequately pre

employees and consequently deploy personnel who are later unable to pas

background checks. In recent years approximately 30-40 percent of lingu

provided by DoD vendors never receive fi nal clearance for work on intelli

missions.176 Recent rules changes to the DFAR now stipulate that “all requ

and background checks be complete and acceptable” prior to deployment

the enormous backlog of contractor background investigations, this requi

172 “Detainee Operations Inspection,” 87.

173 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 40.

174 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 18.

175 This comment was provided for non-attribution by an intelligence language contra

the Joint Detention Facility, Guantanamo Bay. Interview and operational questionnaire cond

November 2004.

176 Lynn McCann, Army Language Support Contracting Offi cer, Army G2, Intellig

Operations Directorate, interview by the author, 22 October 2004.

177 “Defense Federal Acquisition Regulations Supplement; Contractor Personnel Sup

Deployed Outside the United States,” 48 CFR Part 252.225-7040 (h).
52

In order to effectively utilize commercial augmentation, contracting au

must have a clear understanding of the operational environment, mission requi

skills, equipment, clearance, and training requirements of the gaining comman

details must be clearly outlined in the Request for Proposals and articulated in 

SOW language so that vendors are able to pre-screen the personnel best suite

requirement. Finally, contract language must clearly provide the government 

power to easily remove and replace any contractor that does not meet the perf

expectations established in the SOW.

CONTRACTING OFFICER REPRESENTATIVE

TRAINING AND RESPONSIBILITIES

Of the numerous issues that undermine effective contract management, per

biggest challenge is providing quality contract surveillance and performance ev

The most frequently cited cause of this shortfall is the lack of properly traine

Contracting Offi cer Representatives (CORs).178 In many operational scenari

responsibilities are thrust upon intelligence specialists as an “additional dut

performed on top of their primary management, analytical, or collection task

intelligence specialists lack formal training in contract management proced

are forced to learn through “on the job training.” As the Abu Ghraib inve

noted, “if functions such as these [intelligence] are being contracted, MI 

intelligence] personnel need to have at least a basic level of contract training 

can protect the Army’s interests.”179 All too often this is not the case. Critical s

of intelligence personnel have meant that many CORs frequently do not work 

proximity to the site of contract performance and do not have suffi cient pers

effectively assure quality control.

A sampling of several ongoing operational support missions suggests wide 

in the procedures and training for CORs managing intelligence support c

During the fi rst 18 months of operations at the joint detention facility in Gua

Bay there was no assigned on-site COR monitoring performance under the lin

interrogation support contracts.180 Investigations of Abu Ghraib found that “p

acting as CORs did not, for the most part, have the requisite training and were 

178 Training guidelines for CORs vary signifi cantly from command to command. The Defen

Acquisition Regulations Supplement is rather vague on precise requirements, stating only that a C

be qualifi ed by training and experience commensurate with the responsibilities to be delegated in 

with department/agency guidelines.” Defense Federal Acquisition Regulations Supplement (199

201.602, URL: <http://www.acq.osd.mil/dpap/dfars/>, accessed 27 January 2005.

179 AR 15-6 Investigation of the Abu Ghraib Detention Facility, 51.

180 This comment was provided for non-attribution by an intelligence language contract coo

the Joint Detention Facility, Guantanamo Bay, interview and operational questionnaire conducted 

November 2004.
53

not impossible, to effectively administer a contract when the COR is n

Fortunately the situation for intelligence support contracts in the Balka

be more closely monitored. Several respondents to this study indicated 

CORs were currently tasked to cover intelligence support contracts in the 

all had received appropriate COR training prior to deployment.

An additional challenge for many organizations is that designated 

often serve only for short periods of time and are then relocated fo

duties elsewhere. Few intelligence support contracts are afforded ded

term oversight by a single individual. Several respondents contacted f

also mentioned a lack of good documentation on contract performance; 

new COR arrives on site there is often little evidence of past performan

basis for comparative analysis. Frequent rotations for intelligence pe

exacerbate this challenge. Commonly the vendor’s on-site manager wil

individual with lengthy operational experience at a given site. All of these 

it extremely diffi cult for intelligence specialists without specifi c contract 

effectively fulfi ll their responsibilities as CORs. Ultimately good contract 

and on-site surveillance are the only avenues for the government to assu

performance as described in the requirements language.

Another challenging aspect of intelligence-related service contractin

performance measures and developing effective surveillance methodolog

major DoD contracts, dedicated personnel from the Defense Contract 

Agency will oversee vendor performance and evaluation, but these oversi

are in short supply. Over the past decade DoD has reduced its acquisiti

levels by nearly half while during the same time procurement of con

has more than doubled.183 As a consequence, for the vast majority of 

related contracts, appointed organizational CORs will serve as the primar

most cases this COR will be an intelligence specialist rather than a contr

therefore, it is critically important that contract language have clear an

performance standards to assist in quantifying vendor performance.

181 Interagency Contracting: Problems with DoD’s and Interior’s Orders to Su

Operations, 18.

182 The report observed that “an important step in precluding the reoccurrence of 

contractor personnel may engage in abuse of prisoner is to ensure that a properly trained 

Meaningful contract administration and monitoring will not be possible if a small numb

asked to monitor the performance of one or more contractors who have 100 or more empl

and in some cases, perhaps in several locations.” The report concluded that “it is apparent t

credible exercise of appropriate oversight of contract performance at Abu Ghraib.” AR 15-6 

the Abu Ghraib Detention Facility, 52.

183 Stephen Barr, “Defense Bills Push for Stricter Contract Procedures,” Washington Po

May 2005, URL: < http://www.washingtonpost.com/wp-dyn/content/article/2005/05/29/AR

html>, accessed 4 June 2005.
54

criteria for contract personnel but typically will not provide any program f

maintenance, developmental training, or periodic evaluation. Most of the cr

work evaluation are informal at best, with little consideration given to develo

counseling or performance review. These tasks are generally left to the vend

site contract manager but often without suffi cient government surveillance.

The challenge of defi ning effective evaluation metrics has become ev

important as the government moves toward greater use of Performance-Based 

Acquisitions (PBSA). The PBSA contracting methodology focuses more on 

based evaluation rather than specifi c process description. With PBSA, the r

activity defi nes specifi c performance goals, known as a Statement of Ob

then provides the vendor signifi cant latitude in developing a work plan to sa

government’s needs. The benefi t of this approach is that the vendor is not b

a specifi c SOW description and is free to devise an optimal solution for me

government’s needs. DoD established a goal to award 50 percent of all ac

dollars utilizing PBSA methodology by FY 2005.184

Most of the current intelligence-related contracts reviewed for this st

employ traditional SOW methodology in which specifi c labor functions ar

defi ned for the vendor. It is uncertain how the PBSA will be employed for int

services as the government moves toward greater use of this contracting meth

Although PBSA has clear advantages by leveraging vendor expertise to 

creative solutions, this system also places a much greater burden on co

offi cers to clearly defi ne the mission objectives, conduct careful market rese

appropriate vendors, closely manage performance, and evaluate standards of w

achievement of mission objectives. PBSA only increases the necessity for wel

on-site intelligence professionals to closely monitor and evaluate the con

contribution to overall mission goals. Present defi ciencies in contract sur

practices leave considerable doubt as to the government’s ability to adequate

these management concepts for sensitive intelligence related missions. Indeed, 

currently signifi cant shortages of government contract offi cers trained in perfo

based acquisition policy.185 Furthermore, the proper evaluation of perform

these contract vehicles places an even greater burden on the many untraine

who are likely to be unfamiliar with PBSA methodologies.

184 Claude M. Bolton, Assistant Secretary of the Army for Acquisition, Logistics and T

“Performance Based Service Acquisition,” Department of the Army Memorandum, 10 March 20

185 Zack Phillips. “Performance-Based Contracts Gaining Popularity - but is the Governm

to Use Them?” CQ.com Homeland Security, 17 November 2004. URL:<http://www.cqhls.com

do?dockey=/cqonline/prod/data/docs/html/hsnews/108>. Accessed 17 March 2005.
55

measures, several other intangibles must be considered as the governmen

use of commercial augmentation for intelligence functions. Issues of conc

not been adequately addressed by intelligence policymakers are the lo

effectiveness of commercial augmentation, effects of labor competition on 

retention, operational fl exibility of private sector providers, and equity c

for government employees working with commercial partners.

The question of whether commercial augmentation is actually a cost-e

term management strategy for the government remains unresolved. A qua

benefi t analysis is beyond the scope of this study, but numerous responde

contract personnel are frequently paid several times what their governmen

make for performing exactly the same intelligence functions. Adm

complaints should be viewed with some skepticism. Short-term contra

enjoy none of the extensive benefi ts and job security offered to civi

military personnel. Furthermore, the vagaries of the marketplace necessi

“risk premium” for contract employees who may be terminated by the g

any time. Additionally, many contract employees possess unique skills

and qualifi cations that clearly justify differing levels of compensation.

Nevertheless, several respondents mentioned cases of perceived 

pay and privilege between contractor and civil service employees, su

individuals felt a disincentive toward public sector service when they c

similar functions in the private sector for improved benefi ts. To some 

outsourcing policy has exacerbated labor competition and created a “se

for certain high-demand intelligence skills. There is strong indirect eviden

that military and civil service employees already vetted in retirement 

choosing to leave government service due to the lucrative opportunities 

sector. This situation has led DoD to implement unprecedented reten

of up to $150,000 for retirement-eligible intelligence specialists unde

Skills Retention Bonus Program.186 This program specifi cally targets serv

serving in the intelligence specialties such as imagery analyst, unmanned 

operator, HUMINT collector, and Arabic voice-intercept specialists.

Several respondents to the present study also expressed concern over o

cohesion and morale due to equity disputes between contractors and 

employees working on various intelligence missions. Some responden

the perception that contract workers lacked equivalent dedication 

accomplishment as their government counterparts. One respondent 

scenario in which several contractors, also military intelligence reservist

their deployed status as contractors to “hide” from activation with the

186 This program was fi rst introduced in 2002 to retain critical special operations perso

GWOT operations. A recent expansion of this program was announced in January 2005. Jim 

skills Bonus Program Expanding,” ArmyTimes.com, 7 March 2005, URL: <http://www

sgmlparse.php?f=archive2/20050307/atpc19257836.sgml>, accessed 10 March 2005.
56

augmentation of intelligence support services.

APPLYING THE EVALUATIVE CRITERIA

As these fi ndings suggest, present commercial augmentation progr

intelligence support to GWOT operations are far from optimized. The use of com

augmentation has been applied primarily as a stop-gap measure to mitigate a si

crisis in intelligence manpower. This situation has led to improper so

procedures, poor market research and ineffective contract management. In som

contracting practices have skirted the intent of the Federal Acquisition Regula

lacked suffi cient oversight and accountability. Ineffective surveillance plans a

of performance metrics have made contract surveillance and evaluation e

diffi cult. This mixed record of performance demonstrates serious shortfalls i

key areas of the evaluative criteria.

Of all the diffi culties with current commercial augmentation progr

intelligence support, the most troubling aspect is the government’s poor r

contract surveillance. Too frequently this important task has been left to u

personnel, unaware of their responsibilities or simply too far removed from the 

to provide adequate management and control. CORs lack standardized trainin

resources necessary to perform their jobs and frequently lack clear metrics to 

vendor performance. Compounding this situation, deployed intelligence 

already heavily burdened with command or analytical responsibilities, are fr

assigned contract management responsibilities as “additional duties.” The

are not viewed as a core competency among intelligence professionals, and 

inevitably neglected or simply misunderstood. Due to this generally poor r

contract management, many of the benefi ts of commercial augmentation are u

lost.
57

The enormous intelligence demands of the Global War on Terrorism 

the government into an unanticipated reliance on commercial augme

situation has exposed signifi cant fl aws in DoD’s contract management m

Nevertheless, these short-term challenges should not be used as an excu

entirely the potential benefi ts of commercial augmentation. The lesson

recent counterterrorism operations have demonstrated the inherent wea

traditional intelligence bureaucracy. As intelligence reform advocates ha

IC organization is “characterized by centralized planning, routinized ope

hierarchical chain of command. All of these features leave the intelligence 

ill-suited for the information age.”187

Traditional bureaucratic structures produce the positive 

standardization, predictability, and accountability, but often at the 

flexibility, innovation, and responsiveness. To succeed against cur

challenges, intelligence organizations will need a healthy dose of e

enhancing the capabilities of government organizations by leverag

talent and technology of the private sector.

Emerging security threats will require that intelligence organizations 

like private sector entities and less like traditional bureaucracies. Some o

will be achieved by adopting the best management practices of success

entities but also by exploiting the enormous potential of well-managed p

partnerships to create a dynamic synergy of governmental and commerci

challenge for Intelligence Community leaders will be to develop effectiv

for integrating commercial services and establishing safeguards to protec

interests while maximizing the potential benefi ts of private sector augme

CONSIDERATIONS FOR REFORM

This study concludes with three proposed models for future use of non-g

resources to augment intelligence collection and analysis. These broa

plans represent a range of policies designed to build a foundation fo

IC surge capacity. The intent of each option is to infuse greater fl exib

IC talent pool and provide formalized mechanisms to rapidly integrat

specialized commercial tools, talent, and technology to satisfy an u

range of operational needs. These proposals offer management strateg

institutionalize the use of non-governmental resources to enhance the fl 

effectiveness of the intelligence bureaucracy.

187 Bruce Berkowitz and Allan Goodman, Best Truth: Intelligence in the Information A

CT: Yale University Press, 2000, 67.
58

Among many policymakers within the Intelligence Community there 

signifi cant apprehension with the wholesale privatization of intelligence fu

Some observers cite concern with private corporations gaining too much infl ue

national security matters. Other critics suggest legitimate fears that privacy ri

civil liberties will be compromised as commercial entities gain greater purv

sensitive personal information or technical collection capabilities. Others a

excessive privatization efforts will undermine the civil service system and je

the status of government employees. All of these concerns raise valid points an

be considered in any commercial augmentation program.

Notwithstanding these concerns, there remain several management opt

support a conservative approach to diversifying the talent and capabilitie

Intelligence Community while still providing greater fl exibility for surged op

As the recent Presidential Commission Report on WMD Intelligence noted, the 

think more creatively and strategically about tapping external resources, “rec

that the Community may simply not be the natural home for real expertise o

topics.”188

One recent initiative is the National Security Personnel System.189 This DoD 

offers a modifi ed human resources management system permitting the fl exib

of “highly qualifi ed experts from outside the civil service and uniformed s

exempt from the civil service restrictions established by U.S. Code Title 5

exemption permits up to 5-year appointments with modifi ed compensation 

hire individuals “possessing uncommon, special knowledge or skills in a p

occupational fi eld beyond the usual range of expertise” generally availabl

the Department but needed to satisfy short-term, non-permanent require

Although the current DoD program is capped at 2,500 personnel, it does p

model for the short-term acquisition of unique talents from outside the tradi

bureaucracy. If successful, this initiative could represent an important tool for 

tap resources from industry, academia, and non-governmental organizations t

unanticipated short-term needs for surged collection.

Besides the National Security Personnel System, there are several othe

that would permit the IC to better exploit external resources for a more 

surge capacity. A 1998 Army War College study suggested a “Civilian Int

188 Commission on the Intelligence Capabilities of the United States Regarding Weapon

Destruction, 2005. URL: <http://www.state.gov/t/np/rls/fs/29153.htm>, accessed 15 March 200

189 David S.C. Chu, Under Secretary of Defense for Personnel and Readiness, “Employmen

Qualifi ed Experts.” 27 February 2004, URL: <http://www.cpms.osd.mil/fas/staffi ng/pdf/hqep

accessed 10 May 2005.

190 “Employment of Highly Qualifi ed Experts,” 3.

191 “Employment of Highly Qualifi ed Experts,” 3.
59

augmentation. Tier Two incorporates private U.S. citizens who are no

specialists but vetted professionals with unique expertise in technical m

science, fi nance, or engineering. Tier Three would draw individuals fro

sector to work short-term contracts for more routine Community pro

program analysis, budget, or administrative tasks. These individuals wou

a non-career employment status but in a fashion more formalized than 

commercial augmentation programs. A fi nal tier would comprise priva

academic specialists who would maintain routine relationships with the 

term analytical projects such as regional indications and warning, in-d

studies, or specialized technical projects.

A civilian intelligence reserve program offers a reasonable, if not 

approach for integrating non-governmental resources into an IC surge 

even with this relatively modest proposal there are several potential o

as security and legal oversight concerns, rapid integration of personn

crisis, bureaucratic resistance to outsourcing certain intelligence funct

likely reluctance of many private sector and academic professionals to w

Intelligence Community. Despite these potential shortcomings, a civilian 

reserve program is a promising compromise between the bureaucratic s

full-scale commercialization.193

Another potential model worth consideration is the current DoD fea

for the United States Civilian Linguist Reserve Corps (CLRC).194 

objective of the CLRC is to “warehouse high-level expertise in langu

currently or potentially critical to national security.”195 The proposal 

languages of interest that were operationally relevant to national securit

encumbering full-time federal positions is neither practical nor cost-ef

study recommended that the CLRC “draw from a wide range of civilian e

within and outside the federal sector including higher education, non-pro

192 Eileen G. Swicker, Strategic Restructuring of the US Intelligence Community: A Civi

Reserve (Carlisle, PA: U.S. Army War College Strategy Research Project, 1998), URL: <h

mil/100.2/ADA342156>, accessed 4 June 2005.

193 It should be noted that the Intelligence Reform and Terrorism Prevention Act of 20

new Director of National Intelligence (DNI) with the authority to experiment with such in

1053 of the legislation outlines a “National Intelligence Reserve Corps” for “the temporar

on a voluntary basis of former employees of elements of the Intelligence Community d

emergency.” This proposal would include any individual who previously served as a ful

within the Intelligence Community. U.S. Congress, House. Intelligence Reform and Terro

Act of 2004. 108th Cong., 2d sess., 7 December 2004, URL: <http://www.c-span.org/pd

pdf>, accessed 7 March 2005.

194 This feasibility study was ordered by the Secretary of Defense as part of the FY 2

Authorization Act, National Defense University, National Security Education Program

Civilian Linguist Reserve Corps Feasibility Study, 2004, URL: <http://www.ndu.edu/nse

August 2004.

195 United States Civilian Linguist Reserve Corps Feasibility Study, 8.
60

federal government agency or private contractor.

The CLRC concept supports several recent operational recommendatio

upon critical language shortfalls identifi ed during GWOT operations. A key 

from after-action reviews of intelligence operations during OEF recom

“establishing a pool of linguists, already granted security clearances and pro

the diversity of languages needed for short-notice contingencies. Similar to co

in peacetime and paying a retainer fee to commercial airlines for their suppo

war [OEF], the army should identify and begin a formal relationship wit

linguists across the United States.”197

A variation of this program appeared in the January 2005 Defense L

Transformation Roadmap. This DoD proposal would formalize the critical 

surge capacity through the use of privately contracted support and stand

language contract management among all DoD elements under the control of 

executive agent.198 This proposed management structure would establish 

guidelines for counterintelligence procedures, contractor security screenings

and labor pricing, and centralized prioritization of community requirements

program could potentially resolve many shortfalls of the language and int

support contracting program experienced during recent operations.

For the most part these proposals fall short of a true privatization prog

they do offer a useful, though conservative, approach to establishing a fo

IC surge capacity. These proposals achieve the important goal of infusing 

organizational fl exibility into the IC talent pool without signifi cantly jeop

the basic bureaucratic structure of the Community. They offer a modest 

for rapid diversifi cation of the analytical base without raising the si

challenges associated with the management and oversight of extensive com

augmentation. This conservative approach offers improved operational fl 

while still retaining the accountability, predictability, and standardizatio

traditional bureaucratic model.

Option Two: Incremental Reform in Commercial Integration and C

Management as Core Competency

A more ambitious model for reform takes into account the already exten

of commercial augmentation and seeks to normalize this approach by stren

contract management procedures and improving the integration of priva

196 United States Civilian Linguist Reserve Corps Feasibility Study, 5.

197 U.S. Army Central Command, Combined Arms Assessment Team, “OPERATION EN

FREEDOM: CAAT Initial Impressions Report,’’ September 2002.

198 Department of Defense, Defense Language Transformation Roadmap, Washington, DC: GP

2005, 1-15.
61

the full benefi ts of commercial augmentation, contract management m

core competency. This complex task cannot be delegated to untrained m

are overwhelmed with demanding leadership or analytical responsibilit

management cannot become just another “additional duty” for busy 

professionals.

In order for a robust program of commercial augmentation to be effecti

must adopt improved business practices and better management tec

effective exploitation of commercial augmentation requires three basic 

First is the development of a clear business strategy outlining specifi c m

required skills and services, defi ned performance standards, and a routin

development process. Second is the identifi cation of capable vendors ab

suitable services and resources to satisfy mission goals. The third, and 

challenging task, is a comprehensive program of contract administratio

surveillance led by specialists trained in procurement policy and kn

of intelligence operations. These major elements are addressed by th

framework suggested in this paper and refl ect the minimum baseline req

any successful commercial augmentation program.

These goals are by no means unattainable but they will require t

attention of leaders at the highest level of the Intelligence Community. 

could begin with intelligence organizations adopting the best practices an

of the logistical community where there is a generally more well-develo

approach to contract management. Existing contracting regulations such 

should be adapted to the unique requirements of intelligence operations a

added challenges of monitoring service-type contracts.

Additionally, contracting offi cers must become better educated on 

requirements and receive improved technical support from intelligence 

during the contract development process. One possible solution is to e

intelligence specialization at the Defense Contract Management Agen

where acquisition experts are provided with professionalization opportu

the Intelligence Community educational system. DCMA contract spec

potentially attend continuing education programs at intelligence offi c

schools or participate in programs offered at the Joint Military Intellige

After completing this educational immersion, these intelligence contra

would be assigned permanent duties at DIA or the J2 specifi cally 

intelligence-related contract management issues. Additionally, these 

offi cers must develop a solid knowledge of industry providers and a res

of qualifi ed vendors.

199 For an excellent discussion of the contract management process, see Steven Ke

Contracting Management,” in Market-Based Governance: Supply Side, Demand Sid

Downside, eds. John D. Donahue and Joseph S. Nye, Washington DC: Brookings Institutio
62

intelligence contract management will never become a prestige assignmen

professionals, but at the very least these individuals must be trained and provi

clear surveillance plans and performance metrics to evaluate vendor service

contract administration, such as from the Defense Contracting Command, has g

not been suffi cient to meet IC needs due to manpower shortages and a lack of 

with IC mission requirements. Given the unique demands of intelligence op

good management practices will be best achieved if maintained as an internal 

within Community organizations.

A fi nal recommendation calls for the establishment of a centralized co

authority for all IC-related missions. Typically, centralization proposals are 

with great skepticism among Intelligence Community experts, but the curren

of decentralized contracting authority, managed by non-intelligence specialists

produced satisfactory results. Under current practice, IC leaders have extremel

oversight of the myriad commercial suppliers who support the Community as a 

more rationalized model might resemble an NGA-like acquisitions directorate est

a centralized authority for procurement and management of all commercial pro

This consolidated “clearinghouse” approach would provide greater standardi

procurement processes, improved accountability and oversight, as well as more 

mechanisms for market research, cost comparisons, and evaluation of perf

metrics among vendors. A recent IC reform proposal by Sen. Saxby Chambliss 

has called for the consolidation of the entire military intelligence community 

“INTCOM” unifi ed command structure.201 If such a proposal were adopted it w

the logical embryo for a unifi ed intelligence contracting command that woul

strengthen management and oversight of commercial augmentation programs.

These reform proposals offer the baseline requirements needed for the 

management, integration, and oversight of commercial intelligence augm

With improved controls and management procedures it is possible to imagine 

wider range of future applications for commercialized intelligence support, pa

as private sector providers establish strong records of accountability and perf

Some observers have gone so far as to suggest that the IC should actively seek 

load” certain operational responsibilities as soon as commercial entities are ca

handling them, noting that “if intelligence consumers could use a commercial s

whenever they found one that met their needs, intelligence managers would ha

opportunity (and incentive) to concentrate on those highly specialized areas 

government has a comparative advantage.”202

200 For a brief description of the role of NGA’s Acquisitions Directorate, see URL: <http:/

mil/portal/site/nga01/index.jsp?epicontent=GENERIC&itemID=46c86591e1b3af00VgnVCMSe

a95RCRD&beanID=1629630080&viewID=Article>.

201 Senator Chambliss intends to reintroduce legislation for a unifi ed intelligence command 

109th Congress. Saxby Chambliss, “We Have Not Correctly Framed the Debate on Intelligenc

Parameters 35, no. 1 (Spring 2005), 5-13.

202 Best Truth: Intelligence in the Information Age, 46.
63

to United Nations missions or to non-governmental humanitarian relief eff

scenarios where specialized private sector corporations could provide 

functions, open-source collection, and mission-focused analysis. The i

private corporations into these lower-priority missions could potentially fre

forces to concentrate on more diffi cult higher-priority contingency operati

Option Three: Radical Change into A Virtual Networked Intelligen

Community

The fi nal proposal is a step beyond what current augmentation progr

It offers an aggressive model for market-based governance that challen

structure of the intelligence bureaucracy, replacing it with a “networked” o

model that is highly responsive, adaptable, innovative, and scalable.20

simply consuming the products of commercialization, the IC would 

along a corporate model and become a strategic competitor for the be

technology in the private sector. As several IC reform advocates have o

Intelligence Community needs at least as much fl exibility as private 

Many of its requirements for specialized information are likely to cha

Traditional civil service tenure is probably suited only for employees w

general, long-term skills.”204 As one study of intelligence privatization h

the “strength of non-governmental intelligence is partially based upon it

of operational fl exibility, a minimal need to acquiesce to political con

higher level of effi ciency and often, a better return on investment.”205 

market-based governance models would permit IC organizations to capit

inherent qualities of private sector enterprise.

The concept of networked governance is a somewhat ambiguous te

been used to describe a process whereby state agencies rely upon the col

a variety of non-governmental providers to deliver a public good. The m

feature of this model is its enormous potential for dynamic collaboration 

bureaucracy is replaced by a consortium of independent providers. In 

has been the model for defense hardware procurement for some time 

partnership among strategic planners, government research and developm

independent think tanks, and private industry.

The proposed system would create a dynamic, networked, virtua

program based upon the model of the Defense Advanced Research Proje

203 For a general discussion of the concept of “networked government,” see Elaine Ciulla 

End of Government as We Know It,” in Market-Based Governance: Supply Side, Demand S

Downside, eds. John D. Donahue and Joseph S. Nye, Washington DC: Brookings Institutio

204 Best Truth: Intelligence in the Information Age, 56.

205 James R. Sutton, Subversion of a Government Monopoly: The Privatization of Intel

(Erie, PA: Research Intelligence Consortium, Inc, February 2000), 7.
64

invests about 90 percent of its funds at organizations outside of federal gov

primarily at universities and in industry.”207 The organizational goal is 

dynamic, innovative, short-term project management teams to solve DoD

diffi cult technical problems. 

Of particular relevance to this study is DARPA’s use of several special co

authorities to build its project teams. The use of “Experimental Personnel Au

provides DARPA with signifi cant latitude to acquire unique technical 

and develop contractual relationships with the private sector entities and 

universities. These authorities permit the Secretary of Defense to carry out p

under a special personnel management authority to hire temporary “empl

the civil service, appoint scientists and engineers from outside the civil ser

uniformed services...without regard to any provision of title 5, United States C

These short-term, project-based management teams are able to avoid the form

institutional interests that inhibit innovation and discourage collaboration w

governmental expertise.

Certainly a DARPA-like program of “networked government” is not su

necessary for many routine intelligence functions, but it does offer a potenti

for managing short-term surge requirements and providing an innovative stru

conducting the type of serious in-depth research that is often sacrifi ced to 

demand for current intelligence products. Among the recommendations of the co

report on WMD intelligence failures was the creation of a not-for-profi t “sp

research institution” to serve the Intelligence Community. Such an organizatio

be fi nanced by IC dollars but insulated from Community management in 

seek innovative and creative solutions to the nation’s most demanding techn

analytical challenges. Although this type of virtual networked communit

suitable for most Intelligence Community organizations, the approach doe

model for using the government’s contracting power to develop focused, ad

and specialized teams to tackle a broad range of intelligence challenges tha

met by the traditional bureaucratic structure.

206 For a general overview of DARPA’s management and contracting philosophy, see Defense 

Research Projects Agency, Bridging the Gap: DARPA Overview, March 2004, URL: <http://w

mil/body/pdf/BridgingTheGap_Feb_05.pdf>, accessed 21 January 2004.

207 Bridging the Gap: DARPA Overview, 8.

208 5 U.S.C. § 3104. “Experimental Personnel Program for Scientifi c and Technical Personnel
65

209 CarolLyn Lewis, Technology Investment Agreements and the Technology Fellowshi

for Thinking Outside the Tool Box, unpublished MSSI Thesis, Washington, DC: Joint Mili

College, 2004.

CarolLyn Lewis’s Technology Investment Agreements and 

Technology Fellowship: A Case Study for Thinking Outside the Tool 

presents an example of contracting methods that take the Intellig

Community outside of a comfort zone, into new methods that ma

more relevant to changed and radically improved communication 

technological skills. 

In her research Lewis proposes that a Technology Fellowship Prog

(TFP) could inject future National Reconnaissance Offi ce (N

mission needs into current industry research and development (IR

programs, and that one-year research fellowships with experts 

particular technology may benefi t NRO long-term objectives. 

objectives include the participant’s solving a research problem du

the fellowship, and then taking lessons learned and ideas for suppor

government initiatives back to industry. Using a Technical Investm

Agreement (TIA) instead of a standard contract vehicle would imp

the amount of participation from industry. Though commonly use

federal agencies, sectors of the Intelligence Community have b

slow to embrace TIAs, apparently unaware they exist. Recognizing 

her proposal will shift the type of participating commercial busi

away from the traditional consulting fi rms that held the majorit

the fellowships, she is aware of the challenges in an arena that has 

readily accepted rapid or radical changes.

CarolLyn Lewis’s Technology Investment Agreements and 

Technology Fellowship: A Case Study for Thinking Outside the Tool 

presents an example of contracting methods that take the Intellig

Community outside of a comfort zone, into new methods that ma

more relevant to changed and radically improved communication 

technological skills. 

In her research Lewis proposes that a Technology Fellowship Prog

(TFP) could inject future National Reconnaissance Offi ce (N

mission needs into current industry research and development (IR

programs, and that one-year research fellowships with experts 

particular technology may benefi t NRO long-term objectives. 

objectives include the participant’s solving a research problem du

the fellowship, and then taking lessons learned and ideas for suppor

government initiatives back to industry. Using a Technical Investm

Agreement (TIA) instead of a standard contract vehicle would imp

the amount of participation from industry. Though commonly use

federal agencies, sectors of the Intelligence Community have b

slow to embrace TIAs, apparently unaware they exist. Recognizing 

her proposal will shift the type of participating commercial busi

away from the traditional consulting fi rms that held the majorit

the fellowships, she is aware of the challenges in an arena that has 

readily accepted rapid or radical changes.
66

The three proposed models provide a range of potential options for ha

non-governmental and commercial resources to create a dynamic, fl exi

responsive IC surge capacity. To varying degrees all three proposals requ

basic reconsideration of the traditional IC bureaucracy, but it is importan

that none of the options relieves the government of responsibility for careful 

development, good management practices, and effective surveillance method

Thus, the present study offers the baseline evaluative criteria that must be a

any program of commercial augmentation.

Regardless of the future direction of IC reform, some form of com

augmentation will undoubtedly play a vital role in the collection, analy

production of intelligence support to national security policy. In order to 

security challenges of the post-9/11 world, private industry must be view

strategic partner of the Intelligence Community. Collaborative effort w

governmental entities offers a powerful mechanism to diversify and streng

IC’s collection and analytical capabilities, but to fully realize the benefi t 

resources the management and oversight of commercial providers must becom

competency for all intelligence organizations.
67

Evaluative Criteria for Determining the Applicability of Comme

Intelligence Augumentation: Consolidated Case Study Over

Evaluative Criteria

Personnel 

Security 

Investigations

Commercial 

Remote

Sensing

Acceptability of Private

Sector Involvement

Contract service does not perform 

inherently governmental functions ✔ ✔ 

Contract administration adheres 

to proper solicitation and award 

procedures

✔ ✔ 

Contract service does not undermine 

operational security ✖ ✖ 

Vendor offers a best value alternative 

(price and performance standards) ✖ ✔ 

Suitability of Vendor Services

Vendor offer-unique services or 

products unavailable in the public sector ✔ ✔

Vendor offers scalability if service 

and fl exible output to meet mission 

requirements

✖ ✖ 

Contract is negotiated in a mature 

market environment with in-sector 

competition

✔ ✖ 

Bidder offers past performance record 

and known reliability ✖ ✔ 

Accountability of Contract

Management Procedures

Contract language offers clear legal 

oversight and accountability ✔ ✔ 

Contract offers clear Statement of Work 

(SOW) and evaluation procedures ✔ ✔ 

Contract provides effective integration 

plan and clear performance measures ✖ ✔ 

Government possesses suffi ciently 

trained, on-site contract management 

personnel

✖ ✔ 

69

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79

Major Glenn J. Voelz was commissioned 

as an Infantry offi cer from the United States 

Military Academy at West Point in 1992. His 

previous assignments include service with two 

separate infantry battalions in Berlin, Germany 

and Vicenza, Italy. Assigned to the Army’s 

World Class Athlete Program for the sport of 

Modern Pentathlon, he competed in the 1996 

U.S. Olympic Trials.

After transferring to Military Intelligence, 

Major Voelz served for two years as a budget 

and logistics officer, then company commander for a human inte

counterintelligence battalion in the Republic of Korea. Subsequent to 

appointed as an Assistant Professor in the Department of History at 

where he taught from 2001 to 2003.

He is currently an advisor to the Joint Intelligence Staff of the S

Ministry of Defense and Aviation as part of the U.S. Military Training M

Kingdom. He manages industrial security oversight for the U.S. Securi

Program and Foreign Military Sales cases to the Kingdom, and provi

assistance on intelligence training, education, and doctrinal developmen

the Saudi Arabian Armed Forces.

Major Voelz holds a Master of Arts degree from the University of V

Master of Science of Strategic Intelligence degree from the Joint Militar

College.

PCN 5193