CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

Contractors’ Support of

U.S. Operations in Iraq

AUGUST 2008

Saudi Arabia

Oman

U.A.E.

Iraq

Turkey

Jordan

Bahrain

Qatar

Kuwait
Pub. No. 3053
The Congress of the United States O Congressional Budget Office

A

PAPER

CBO

Contractors’ Support of 

U.S. Operations in Iraq

August 2008
Notes

All dollar amounts are in 2008 dollars.

Unless otherwise indicated, all years referred to in this report are federal fiscal years.

Numbers in the text and tables may not add up to totals because of rounding.

Obligations are a legally binding commitment by the federal government that will result in 

outlays, immediately or in the future.
Preface

Contractors play a substantial role in supporting the United States’ current military, 

reconstruction, and diplomatic operations in Iraq. That support has raised questions regarding the costs, quantities, functions, and legal status of contractor personnel working in the 

Iraq theater.

This Congressional Budget Office (CBO) paper, which was prepared at the request of the 

Senate Committee on the Budget, examines the use of contractors in the Iraq theater from 

2003 through 2007. It provides an overview of the federal government’s costs of employing 

contractors in Iraq and in nearby countries, the type of products and services they provide, the 

number of personnel working on those contracts, comparisons of past and present use of contractors during U.S. military operations, and the use of contractors to provide security. CBO 

also investigated the command-and-control structure between the U.S. government and contract employees and the legal issues surrounding contractor personnel working in Iraq.

This paper was prepared by Daniel Frisk and R. Derek Trunkey of CBO’s National Security 

Division under the supervision of J. Michael Gilmore and Matthew Goldberg. Adam Talaber 

contributed to the analysis, and Adebayo Adedeji and Victoria Liu provided additional assistance. Robert Dennis, Theresa Gullo, and Frank Sammartino provided helpful comments. 

Robert Murphy reviewed the section on legal issues, as did Jennifer Elsea of the Congressional 

Research Service. Victoria A. Greenfield, a professor at the United States Naval Academy, 

reviewed the entire study. (The assistance of external reviewers implies no responsibility for 

the final product, which rests solely with CBO.)

Sherry Snyder edited the study, and Loretta Lettner proofread it. Cindy Cleveland produced 

drafts of the manuscript. Maureen Costantino prepared the report for publication and 

designed the cover. Lenny Skutnik printed the initial copies, Linda Schimmel handled the 

print distribution, and Simone Thomas prepared the electronic version for CBO’s Web site 

(www.cbo.gov).

Peter R. Orszag 

Director

August 2008

Contents

Introduction and Summary 1

Costs, Functions, and Numbers of Contractor Personnel in the Iraq Theater 2

The U.S. Government’s Obligations for Contracts Principally Performed in the 

Iraq Theater 2

Products and Services Provided by Contractors in the Iraq Theater 5

Counting and Tracking Contractor Personnel in the Iraq Theater 8

Comparing Past and Present Use of Contractors During Military Operations 11

Private Security Contractors 12

Costs for Private Security Contractors and Subcontractors 13

Costs for PSC Personnel Compared with a Military Alternative 14

Number of PSC Personnel in Iraq 14

PSC Personnel Who Are Armed 15

Legal Issues Associated with Contractor Personnel Supporting U.S. Operations 15

Restrictions on the Use and Arming of Contractor Personnel 18

Military Authority Over Contractor Personnel 20

Legal Status of Contractor Personnel 21

Laws Governing the Conduct of Contractor Personnel Supporting 

Military Operations 23

References 25
VI CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

Tables

1. Number of Contractor Personnel Working in the Iraq Theater, by Department or 

Agency Awarding the Contract 9

2. Presence of Contractor Personnel During U.S. Military Operations 13

Figures

1. The U.S. Government’s Obligations for Contracts Performed in the 

Iraq Theater, 2003 to 2007 3

2. The Department of Defense’s Obligations for Contracts Performed in the 

Iraq Theater, by Department or Agency Awarding the Contract, 

2003 to 2007 6

3. U.S. Government Contracts Performed in the Iraq Theater, by Product and 

Service Code, 2003 to 2007 7

4. Number of Contractor Personnel Working on Contracts in Iraq 

Funded by the Department of Defense, by Function and Nationality 10

5. Number of Contractor Personnel Working on Contracts in Iraq 

Funded by the Department of State, by Function 11

Boxes

1. The Federal Procurement Data System—Next Generation 4

2. Costs of a Private Security Contract and a U.S. Military Alternative 16
Contractors’ Support of U.S. Operations in Iraq

Introduction and Summary

Contractors play a substantial role in supporting the 

United States’ current military, reconstruction, and diplomatic operations in Iraq, accounting for a significant portion of the manpower and spending for those activities. 

The Congressional Budget Office (CBO), at the request 

of the Senate Committee on the Budget, has studied the 

use of contractors in the Iraq theater to support U.S. 

activities in Iraq.1

This paper, which covers the period from 2003 through 

2007, provides an overview of the federal costs of 

employing contractors in Iraq and in nearby countries, 

the type of products and services they provide, the number of personnel working on those contracts, comparisons 

of past and present use of contractors during U.S. military operations, and the use of contractors to provide 

security. CBO also examined the command-and-control 

structure between the U.S. government and contract 

employees and the legal issues surrounding contractor 

personnel working in Iraq.

The findings of CBO’s study include the following:

B From 2003 through 2007, U.S. agencies awarded 

$85 billion in contracts for work to be principally performed in the Iraq theater, accounting for almost 

20 percent of funding for operations in Iraq. (Dollar 

amounts in this paper are in 2008 dollars.) More than 

70 percent of those awards were for contracts performed in Iraq itself.

B The Department of Defense (DoD) awarded contracts 

totaling $76 billion, of which the Army (including the 

Joint Contracting Command—Iraq/Afghanistan) 

obligated 75 percent. The U.S. Agency for International Development and the Department of State obligated roughly $5 billion and $4 billion, respectively, 

over the same period. 

B Contractors provide a wide range of products and services in-theater. Most contract obligations over the 

2003–2007 period were for logistics support, construction, petroleum products, or food. The contract 

for the Army’s Logistics Civil Augmentation Program 

(LOGCAP) is the largest one in the Iraq theater, with 

obligations totaling $22 billion.

B Although personnel counts are rough approximations, 

CBO estimates that as of early 2008 at least 190,000 

contractor personnel, including subcontractors, were 

working on U.S.-funded contracts in the Iraq theater. 

Just under 40 percent of them are citizens of the country where the work is being performed (primarily 

Iraq); about 20 percent are U.S. citizens.

B The United States has used contractors during previous military operations, although not to the current 

extent. According to rough historical data, the ratio of 

about one contractor employee for every member of 

the U.S. armed forces in the Iraq theater is at least 2.5 

times higher than that ratio during any other major 

U.S. conflict, although it is roughly comparable with 

the ratio during operations in the Balkans in the 

1990s.

1. For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United 

Arab Emirates. CBO found that in-theater contracts to support 

operations in Iraq were almost entirely performed in those countries, all of which are located within the U.S. Central Command’s 

area of operations.
2 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Private security contractors have been a particular focus 

of attention. CBO finds that:

B Total spending by the U.S. government and other 

contractors for security provided by contractors in 

Iraq from 2003 through 2007 was between $6 billion 

and $10 billion, CBO estimates. As of early 2008, 

approximately 25,000 to 30,000 employees of private 

security contractors were operating in Iraq. Those 

contractors worked for the U.S. government, the Iraqi 

government, other contractors, and other customers.

B The costs of a private security contract are comparable 

with those of a U.S. military unit performing similar 

functions. During peacetime, however, the private 

security contract would not have to be renewed, 

whereas the military unit would remain in the force 

structure.

Regarding the legal issues associated with contractor personnel, CBO finds that:

B Military commanders have less direct authority over 

the actions of contractor personnel than over their 

military or civilian government subordinates. Contractors’ duties are set out in their contract, which is 

managed by a government contracting officer, not the 

military commander.

B The legal status of contractor personnel in Iraq is 

uncertain, particularly for those who are armed. Contractor personnel are potentially subject to a number 

of laws and jurisdictions, including the Uniform Code 

of Military Justice, the Military Extraterritorial Jurisdiction Act of 2000, the Special Maritime and Territorial Jurisdiction Act of the United States, and the USA 

Patriot Act. However, there have been few tests in 

courts of how those laws apply to contractors.

Costs, Functions, and Numbers of 

Contractor Personnel in the Iraq 

Theater

Using available data, CBO assessed the costs of in-theater 

contractor support for operations in Iraq and summarized 

the primary types of products and services they provide. 

CBO estimated the number of contractor personnel 

working for the United States in the Iraq theater and 

compared the current ratio of contractor to military personnel with that of previous conflicts. CBO also estimated the costs and numbers of contractor personnel 

providing security, including those working as subcontractors. Such personnel are referred to in this paper as 

private security contractors (PSCs).

The U.S. Government’s Obligations for Contracts 

Principally Performed in the Iraq Theater

From 2003 through 2007, U.S. government agencies 

obligated a total of $85 billion for contracts principally 

performed in the Iraq theater, CBO estimates.2

 In-theater 

support for operations in Iraq occurred in multiple countries, including $63 billion of obligations for contracts 

principally performed in Iraq, $14 billion for contracts 

principally performed in Kuwait, and $8 billion for contracts principally performed in other nearby countries 

(see the top panel of Figure 1). New obligations for contracts performed in the Iraq theater have totaled about 

$17 billion to $21 billion annually since 2004.3

The $85 billion in obligations for contracts performed in 

the Iraq theater accounts for almost 20 percent of the 

$446 billion of U.S. appropriations for activities in Iraq 

from 2003 through 2007 (CBO 2008, p. 7, converted to 

2008 dollars). However, the $85 billion estimate does not 

capture the total share of U.S. spending on Iraq that goes 

to contractors. CBO’s estimate excludes the costs of contracts supporting operations in Iraq that are performed in 

countries outside the Iraq theater, including the United 

States (such as the manufacture of mine-resistant 

ambush-protected vehicles, or MRAPs, and any of the 

other military equipment used in the Iraq theater).

CBO’s estimates come with additional qualifications and 

assumptions. First, the accuracy and completeness of the 

available data on procurement directly influence the 

accuracy of CBO’s estimates of contract obligations (see 

Box 1). Second, the Department of Defense is the only 

U.S. government agency employing significant numbers 

2. Principal place of performance is defined as “the location of the 

principal plant or place of business where the items will be produced, supplied from stock, or where the service will be performed.” If more than one location is involved, the principal place 

of performance is the location where the most dollars are spent. 

See FPDS-NG User’s Manual, Version 1.0 (May 2006), p. 23, 

www.fpds.gov.

3. Because this paper focuses on Iraq, CBO’s estimate excludes about 

$10 billion in obligations for contracts performed in Afghanistan 

over the 2003–2007 period.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 3

CBO

Figure 1.

The U.S. Government’s Obligations for 

Contracts Performed in the 

Iraq Theater, 2003 to 2007

(Billions of dollars)

Source: Congressional Budget Office based on data from the Federal Procurement Data System—Next Generation and the 

Joint Contracting Command—Iraq/Afghanistan.

Notes: For this study, the Congressional Budget Office considers the 

following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and 

the United Arab Emirates.

USAID = U.S. Agency for International Development.

a. Includes the Departments of Agriculture, Commerce, Health 

and Human Services, the Interior, Justice, Transportation, and 

the Treasury, as well as the Broadcasting Board of Governors and 

the General Services Administration. Obligations of other agencies totaled $113 million or less in each year.

of contractor personnel who support operations in Iraq 

but are located elsewhere in the Iraq theater; CBO’s estimates therefore exclude all non-DoD contracts performed outside Iraq. Third, CBO assumed that some of 

DoD’s contract obligations supported programs and facilities located in the Iraq theater that existed before the war, 

such as the Incirlik Air Base in Turkey. The estimates of 

obligations to support operations in Iraq exclude that 

prewar level of contracting effort, about $1.5 billion 

annually.4 Last, CBO assumed that all of DoD’s obligations above prewar amounts for contracts performed in 

Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, 

Turkey, and the United Arab Emirates were to support 

operations in Iraq but not those in Afghanistan or 

elsewhere. 

DoD’s obligations for contracts performed in the Iraq 

theater are substantially larger than those made by other 

agencies (see the bottom panel of Figure 1). DoD’s 

$76 billion in obligations represents almost 90 percent of 

all dollars awarded from 2003 through 2007 for such 

contracts. Of that amount, $54 billion was for contracts 

performed in Iraq, $14 billion was for contracts performed in Kuwait, and $8 billion was for contracts performed in other nearby countries. The U.S. Agency for 

International Development (USAID) and the Department of State (DoS) obligated $5 billion and $4 billion, 

respectively, for contracts in Iraq over the same period.5

Other U.S. departments and agencies obligated a total of 

less than $300 million. That category includes the 

Departments of Agriculture, Commerce, Health and 

Human Services, the Interior, Justice, Transportation, 

and the Treasury, as well as the Broadcasting Board of 

Governors and the General Services Administration.

Within DoD, the Department of the Army is by far the 

largest obligator of funds for contracts in the Iraq theater 

(see Figure 2). The Army awarded $57 billion for such 

contracts from 2003 through 2007. The Departments of 

the Air Force and the Navy (which includes the Marine 

Corps) awarded $6 billion and $1 billion, respectively. 

Defensewide agencies obligated an additional $12 billion 

over that period, primarily for contracts awarded by the 

Defense Logistics Agency. 

2003 2004 2005 2006 2007

0

5

10

15

20

25

30

Iraq Kuwait Other Countries

2003 2004 2005 2006 2007

0

5

10

15

20

25

30

Department of Defense

Department of State

USAID

Other Agencies

By Place of Performance

By Department or Agency

a

4. In Saudi Arabia, average annual contract obligations made before 

the war were larger than those made after operations in Iraq 

began. Consequently, CBO’s estimates exclude all obligations for 

contracts performed in Saudi Arabia.

5. USAID is an independent federal agency but reports to the Secretary of State. Part of USAID’s budget is managed jointly with the 

Department of State.
4 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Continued

The Army’s obligations have been much larger than those 

of the other DoD services for two reasons. Most U.S. 

military personnel (roughly 125,000 of the 200,000 total 

military personnel in Iraq as of December 2007) are 

Army service members. In addition, contracts awarded by 

the Joint Contracting Command—Iraq/Afghanistan 

(JCC-I/A) are attributed to the Army because that command operates under the Army’s acquisition authority. 

JCC-I/A, a major subordinate command of MultiNational Force—Iraq, awards in-theater contracts to support coalition military forces as well as reconstruction and 

economic development in Iraq and Afghanistan. Those 

contracts typically address immediate needs and rely on 

the local vendor base.6

 Created in early fiscal year 2005, 

JCC-I/A obligated about $15 billion through 2007 for 

contracts performed in Iraq. The Department of the 

Navy’s contract obligations have been low relative to its 

manpower presence in the Iraq theater, in part because 

the Marine Corps is receiving some logistics support 

through the Army’s Logistics Civil Augmentation Program. (The Marine Corps reimburses the Army for support received from LOGCAP; FPDS-NG does not capture interagency contract agreements.)

LOGCAP is the Army’s primary means of providing support services for military personnel.7

 Contractor personnel provide a wide range of services under LOGCAP, such 

Box 1.

The Federal Procurement Data System—Next Generation

The Congressional Budget Office’s (CBO’s) estimates 

of federal contract obligations are largely based on 

data collected from the Web-based Federal Procurement Data System—Next Generation (FPDS-NG).1

It is the only governmentwide system that tracks federal spending on procurement. Federal Acquisition 

Regulations require executive departments and agencies to report all unclassified procurement data to 

FPDS-NG shortly after a contract has been awarded. 

The FPDS-NG database allows queries based on dozens of contract parameters, including the name of the 

department or agency awarding the contract, the 

dates on which the contract was signed and completed, a description of the products or services in the 

contract, the vendor’s name, and the principal place 

where the contract will be performed. FPDS-NG is 

continually updated; CBO obtained most of the data 

used in this paper by querying the database in April 

2008. 

FPDS-NG has some limitations. A number of organizations—including the Government Accountability Office, the RAND Corporation, and the Acquisition Advisory Panel—have issued reports that 

criticize the accuracy of procurement data contained 

in FPDS-NG.2

 Among their concerns were the timeliness of the availability of data, inaccuracies in the 

data due to human or technological errors, and a lack 

of detail in how products and services in the contract 

were classified. Those reports also highlighted difficulties that the Department of Defense (DoD)—the 

largest contracting entity in the government—was 

experiencing in attempting to electronically interface 

with FPDS-NG.

1. The Federal Procurement Data System—Next Generation 

and its associated documentation are available at 

www.fpds.gov.

2. Government Accountability Office, Improvements Needed to 

the Federal Procurement Data System-Next Generation, GAO05-960R (September 27, 2005); Lloyd Dixon and others, An 

Assessment of Air Force Data on Contract Expenditures (Santa 

Monica, Calif.: RAND Corporation, 2005); Acquisition 

Advisory Panel, Report of the Acquisition Advisory Panel to the 

Office of Federal Procurement Policy and the United States Congress (January 2007). The panel’s report also provides a history of the Federal Procurement Data System.

6. JCC-I/A also reviews all contracts for work in Iraq and Afghanistan to ensure that the correct terms and conditions are included 

in the contract language and that the contracted work is consistent 

with the plans of the in-country commander.

7. The Army awarded LOGCAP III, contract number DAA09-02-

D-0007, to Kellogg Brown and Root, Inc., on December 14, 

2001. 
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 5

CBO

as operating food service and dining facilities, storing and 

supplying ammunition, distributing fuel, maintaining 

equipment, and managing procurement and property. 

From 2003 through 2007, the Army obligated more than 

$22 billion to the LOGCAP contract for services rendered in the Iraq theater. CBO previously conducted a 

detailed analysis of LOGCAP, including a description of 

its functions and a comparison of the costs of contractor 

and military personnel to provide those services (CBO 

2005). In that study, CBO determined that Army support units could perform LOGCAP tasks during wartime 

for virtually the same costs as contractors. During peacetime, however, the costs of contractors would be substantially lower than those of Army units. 

Products and Services Provided by Contractors in 

the Iraq Theater

Contractors provide a wide variety of services and products in support of U.S. government agencies operating in 

the Iraq theater. Examples of services performed by contractors include logistics, construction, engineering and 

technical support, linguist services, economic development, humanitarian assistance, and security. Examples of 

products provided by contractors include food, fuel, vehicles, and communications equipment. Contractor personnel are involved in many aspects of U.S. operations in 

Iraq, with the notable exception of roles defined as 

“inherently governmental” or “military essential.” Those 

roles, and the restrictions on services provided by contractors, are described later in this paper.

Box 1. Continued

The Federal Procurement Data System—Next Generation

The General Services Administration (the executive 

agency responsible for FPDS-NG) and the Office of 

Management and Budget have recently taken steps to 

improve the quality of the data in FPDS-NG. Nearly 

all government offices, including most of those 

within DoD, now send data to FPDS-NG via a 

machine-to-machine interface with their systems for 

writing contracts, reducing the possibility of human 

error. (That interface does not address any deficiencies with agency-unique databases that feed into 

FPDS-NG, however.) All agencies are required to 

certify the data they report in FPDS-NG and to submit plans for improving the quality of their data.3

DoD, the last agency to certify, provided an interim 

confirmation of its 2007 data in April 2008.

In light of those apparent improvements, and because 

no other governmentwide procurement databases 

exist, CBO determined that FPDS-NG was the most 

comprehensive and accessible source of data on federal contract obligations in Iraq. Although FPDS-NG 

may contain some inaccuracies in the details of individual contracts, CBO’s analysis is based on aggregated data, so errors should be relatively small in the 

context of billions of dollars of reported obligations. 

CBO did not audit the FPDS-NG data used in this 

report.

One important exception to FPDS-NG’s reporting 

requirements is the Joint Contracting Command—

Iraq/Afghanistan (JCC-I/A). In part because of limitations on Internet bandwidth, JCC-I/A currently 

provides information to FPDS-NG in a bulk fashion, 

rather than reporting individual contract actions as 

they occur.4

 As of June 2008, JCC-I/A had not yet 

reported all of its 2007 procurement actions to 

FPDS-NG; CBO collected those data directly from 

JCC-I/A. 3. Office of Management and Budget, “Improving Acquisition 

Data Quality—FY 2008 FPDS Data” (memorandum from 

Paul A. Denett, Administrator, Office of Federal Procurement Policy, to chief acquisition officers, senior procurement 

executives, and small agency council members, May 9, 

2008). 

4. JCC-I/A uses its own system, the Joint Contingency Contracting System, to maintain a current record of its contracts. 

See Joint Contracting Command—Iraq/Afghanistan, Acquisition Instruction (December 15, 2007), p. 18.
6 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Figure 2.

The Department of Defense’s Obligations for Contracts Performed in the Iraq 

Theater, by Department or Agency Awarding the Contract, 2003 to 2007

(Billions of dollars)

Source: Congressional Budget Office based on data from the Federal Procurement Data System—Next Generation and the Joint Contracting 

Command—Iraq/Afghanistan.

Note: For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, 

Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates.

a. The Joint Contracting Command—Iraq/Afghanistan (JCC-I/A) operates under the Army's acquisition authority. 

b. The Department of Defense formed JCC-I/A in 2005. 

c. Obligations of other agencies within the Department of Defense totaled $93 million or less in each year. 

The Federal Procurement Data System—Next Generation (FPDS-NG) classifies contract functions using the 

North American Industrial Classification System 

(NAICS) and a system of product and service codes. 

Product and service codes, though still general, are more 

specific than NAICS in the context of government procurement.8

 Nonetheless, both systems of classification 

have weaknesses. Some experts claim that the functional 

categories lack sufficient specificity and are too broad to 

allow detailed analyses of procurement spending. FPDSNG allows a single product and service code and a single 

NAICS code to be assigned to each reportable contract 

action (such as contract awards, corrections, or modifica2003 2004 2005 2006 2007

0

2

4

6

8

10

12 Army (Excluding JCC-I/A)

2003 2004 2005 2006 2007

0

2

4

6

8

10

12 JCC-I/Aa,b

2003 2004 2005 2006 2007

0

2

4

6

8

10

12

Air Force Navy

Air Force and Navy

2003 2004 2005 2006 2007

0

2

4

6

8

10

12

Defense Logistics Agency Other

Department of Defense Agencies

a

c

8. The FPDS-NG Web site explains the benefit of having two classification systems: “The NAICS classifies commercial activity into 

broad service categories, e.g., farming, manufacturer, wholesaler, 

retail, services. Contracts, on the other hand, generally purchase 

specific goods (such as cameras or telephones) and services. Therefore, FPDS has a second set of codes called Products and Services 

Codes.” See Question 16, www.fpdsng.com/questions.html.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 7

CBO

Figure 3.

U.S. Government Contracts Performed in the Iraq Theater, by Product and 

Service Code, 2003 to 2007

(Billions of dollars)

Source: Congressional Budget Office based on data from the Federal Procurement Data System—Next Generation and the Joint Contracting 

Command—Iraq/Afghanistan (JCC-I/A). 

Note: For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, 

Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates.

a. Consists mostly of contracts awarded by JCC-I/A.

tions). Agencies’ use of the codes does not always capture 

the diversity of functions that some contracts provide, 

however. For example, 95 percent of the obligations 

made under the Army’s LOGCAP contract in the Iraq 

theater are assigned a single product and service code in 

FPDS-NG. 

CBO’s analysis of contractors’ functions in the Iraq 

theater is also hindered by the fact that data on about 

$19 billion in contract obligations have not been categorized by function, have not been entered in the FPDSNG database, or both. Almost all obligations made by 

JCC-I/A and entered in FPDS-NG were coded under the 

nonspecific product and service code “miscellaneous” and 

the NAICS code “other general government support,” 

even though those obligations were probably used to procure a wide but identifiable variety of products and services. In addition, contract data provided directly to 

CBO by JCC-I/A and USAID were neither recorded in 

FPDS-NG nor classified by function. Consequently, 

without investigating each of those uncategorized contract actions, CBO cannot classify the functions provided 

by about one-fifth of obligations for contracts performed 

in the Iraq theater over the 2003–2007 period.

Notwithstanding those limitations, grouping contracts by 

FPDS-NG product and service codes provides some 

insight into the breadth of work that contractors perform 

in the Iraq theater, as well as a rough indication of the 

functions that contractors most often provide (see 

Figure 3). From 2003 through 2007, U.S. government 

agencies obligated funds to perform 99 of 102 possible 

principal product and service codes.9

 Total obligations 

for each of those categories ranged from only a few thousand dollars to billions of dollars. CBO estimates that, on 

the basis of contract classifications in FPDS-NG, nearly 

80 percent of categorized U.S. obligations for contractors’ 

activities in the Iraq theater over that period were for 

services.

All Other Categories

Architect and Engineering—Construction

Research and Development

Maintenance, Repair, and Rebuilding of Equipment

Utilities and Housekeeping Services

Maintenance, Repair, or Alteration of Real Property

Lease or Rental of Facilities

Subsistence (Food)

Fuels, Lubricants, Oils, and Waxes

Construction of Structures and Facilities

Uncategorized or Miscellaneousa

Professional, Administrative, and Management Support

0 5 10 15 20 25 30

Performed in Iraq

Performed Elsewhere in the Iraq Theater

9. For a complete list of product and service codes and their subcategories, refer to General Services Administration (1998).
8 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Eleven product and service codes (excluding the “uncategorized or miscellaneous” category) each received over 

$1 billion in contract obligations in the Iraq theater from 

2003 through 2007. The category “professional, administrative, and management support” accounted for the largest share—nearly $26 billion, or about 30 percent of all 

obligations. Most obligations in that category have been 

in the subcategory “logistics support services,” which primarily consists of the Army LOGCAP contract. To date, 

that contract is the largest one performed in Iraq. 

Although logistics support is a reasonable, albeit broad, 

description of the LOGCAP contract, portions of that 

contract could also be classified under other categories, 

such as construction, equipment and property maintenance, subsistence (food), and housekeeping services.

Other categorized product and service codes accounted 

for much smaller shares of obligations. Over $7 billion 

was obligated for “construction of structures and facilities,” primarily buildings in Iraq. “Fuels, lubricants, oils, 

and waxes” received over $6 billion, about three-quarters 

of which was used to purchase petroleum-based liquid 

propellants outside Iraq. Contracts for food; leasing or 

renting of facilities; and property maintenance, repair, or 

alteration each totaled nearly $4 billion. (Private security 

services, the costs of which have been considerably lower 

than those of the most heavily contracted functions, are 

distributed across several product and service codes.)

Counting and Tracking Contractor Personnel in the 

Iraq Theater

On the basis of data collected from DoD, DoS, and 

USAID, CBO estimates that at least 190,000 contractor 

personnel work in the Iraq theater on contracts funded by 

the United States.10 The ratio of U.S.-funded contractor 

employees to members of the U.S. military in the Iraq 

theater is therefore approximately 1 to 1. The 190,000 

estimate includes personnel who work directly for the 

U.S. government as prime contractors and, to the extent 

possible, the personnel of subcontractors who work for 

other contractors. (Only DoD included subcontractor 

personnel in its data.)

About 20 percent (38,700) of all contractor personnel 

working in the Iraq theater are U.S. citizens (see Table 1). 

Local nationals, defined as citizens of the country in 

which they are working, and third-country nationals, 

who are neither U.S. citizens nor local nationals, each 

account for roughly 40 percent of the theater’s contractor 

population (70,500 and 81,000, respectively). The 

majority of contractor personnel—at least 160,000—

work in Iraq. DoD is the only U.S. agency employing significant numbers of contractor personnel who support 

operations in Iraq but are located in countries elsewhere 

in the Iraq theater, such as Kuwait.

DoD employs the bulk of contractor personnel in the 

Iraq theater, and its U.S. Central Command (CENTCOM) estimates the number of those personnel by 

means of a quarterly manual census of contractors. That 

census is a synthesis of headcounts at project and military 

sites across the theater. CENTCOM’s census data categorize contractor personnel working in Iraq (but not in 

other countries within the Iraq theater) according to the 

service they provide and their nationality (see Figure 4). 

More than one-half of the estimated 149,000 DoDfunded contractor personnel in Iraq perform base support 

functions, and 20 percent provide construction services. 

The Department of State also provided CBO with a categorization of its contractor personnel in Iraq based on job 

function (see Figure 5). As of late 2007, about 40 percent 

of the approximately 6,700 contractor personnel working 

for DoS in Iraq were providing security.

Counts of contractor personnel in Iraq and nearby countries are only rough approximations. Government agencies indicate that counting contractor personnel intheater is a difficult task. The contracting effort to support operations in Iraq is extensive, involving hundreds of 

U.S., Iraqi, and international firms employing tens of 

thousands of people of various nationalities. Contract 

work is continuously awarded and completed as requirements dictate; numbers, nationalities, and functions of 

contractor personnel fluctuate over time. In addition, 

prime contractors may subcontract portions of their contract to other firms. Subcontracting may run several tiers 

deep, further decentralizing administration of the workforce and reducing the likelihood of an accurate tally of 

all contractor personnel. (CBO does not have an estimate 

of the percentage of federal obligations for contracts in 

Iraq that have been subcontracted.) 

Although U.S. agencies attempt to closely account for 

contract obligations, their mechanisms for determining 

the number of nongovernment personnel have not been 

well established. Headcounts of contractor personnel

10. CBO did not collect data on contractor personnel from other 

agencies because they represent a very small percentage of total 

contract obligations for work in the Iraq theater.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 9

CBO

Table 1.

Number of Contractor Personnel Working in the Iraq Theater, by Department or 

Agency Awarding the Contract

Source: Congressional Budget Office based on data from U.S. Central Command, 2nd Quarter Contractor Census Report (April 30, 2008); 

Department of State; U.S. Agency for International Development.

Notes: Estimates of numbers of personnel in Iraq and nearby countries are rough approximations; numbers, nationalities, and functions of 

contractor personnel continually fluctuate. Including subcontractors who work on contracts for the Department of State and the U.S. 

Agency for International Development would increase the totals.

For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, 

Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates.

Local nationals are citizens of the country in which they are working. Third-country nationals are neither U.S. citizens nor local 

nationals.

a. Data include both prime contractors and subcontractors; they also include contractors working for the Army Corps of Engineers.

b. The Department of Defense is the only government agency with a significant number of contractor personnel who are supporting operations in Iraq but are located in countries elsewhere in the Iraq theater. Although CBO’s estimates exclude contractor personnel working in 

Afghanistan, some personnel located in the Iraq theater may be supporting operations in Afghanistan.

c. The Department of State counts only prime contractors and was therefore unable to provide estimates of the number of subcontractors 

working on its contracts. The department’s data do not include contractors working under its Personal Service Agreements (such individuals are treated as employees of the U.S. government).

d. The U.S. Agency for International Development (USAID) counts only prime contractors and was therefore unable to provide estimates of 

the number of subcontractors working on its contracts. Those data, collected in the summer of 2007, also exclude USAID grantees and an 

estimated 75,000 Iraqis (as of fall 2007) who were working on programs sponsored by USAID in Iraq.

e. Includes the Departments of Agriculture, Commerce, Health and Human Services, the Interior, Justice, Transportation, and the Treasury, 

as well as the Broadcasting Board of Governors and the General Services Administration. Data are CBO estimates using contract obligations from the Federal Procurement Data System—Next Generation.

Location

Department of Defensea Iraq 29,400 62,800 57,300 149,400

Elsewhere in the

Iraq Theaterb 6,700 3,500 20,100 30,300

Department of Statec Iraq 2,300 1,300 3,100 6,700

U.S. Agency for 

International Developmentd Iraq 200 2,900 300 3,500

Other Agenciese Iraq 200 100 200 500 _______ _______ _______ ________

Total Iraq Theater 38,700 70,500 81,000 190,200

Total

Nationality

U.S. Citizens Local Nationals

Third-Country

Nationals
10 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Figure 4.

Number of Contractor Personnel Working on Contracts in Iraq Funded by the 

Department of Defense, by Function and Nationality

(Thousands)

Source: Congressional Budget Office based on data from U.S. Central Command, 2nd Quarter Contractor Census Report (April 30, 2008).

Note: Data include people working for subcontractors.

have typically been the responsibility of their employers. 

Increased use of performance-based contracting—a procurement model that emphasizes outcomes rather than 

specification of work processes—has further reduced the 

government’s ability to know how many people are working on a given contract. (Performance-based contracts are 

described in Federal Acquisition Regulation (FAR), 

subpart 37.6.) 

As operations in Iraq and elsewhere continue, however, 

government agencies have strengthened their efforts to 

account for contractor personnel.11 DoD, for example, 

believes that the accuracy of the data in CENTCOM’s 

quarterly census of contractors has improved since the 

census’s inception in August 2006.12 (According to DoD, 

the counts of contractor personnel are the most accurate 

for U.S. citizens and the least accurate for Iraqis.) DoD is 

also working to fully implement a Web-based system for 

tracking contractor personnel (known as the Synchronized Predeployment and Operational Tracker, or SPOT) 

before the end of calendar year 2008. A March 2007 

update to the Defense Federal Acquisition Regulation 

Supplement (DFARS) requires contractors to report 

counts of their personnel into that system.13 SPOT currently contains roughly half of the contractor personnel 

counted in CENTCOM’s manual census, including all 

personnel of prime contractors employed on DoD’s

Base Support Construction Translator/

Interpreter

Transportation Security Communication

Support

Other

0

10

20

30

40

50

60

70

80

90

U.S. Citizens Local Nationals Third-Country Nationals

11. Legislation has spurred improved tallying and tracking of contractor personnel in Iraq. For example, sections 815 and 854 of the 

National Defense Authorization Act for Fiscal Year 2007 (Public 

Law 109-364); section 3305 of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110-28); and section 861 of the 

National Defense Authorization Act for Fiscal Year 2008 (Public 

Law 110-181) have each required DoD to issue reports detailing 

the use of contractors operating in-theater and the policies that 

govern them.

For a detailed description of DoD’s initiatives to improve its management of contractors accompanying the force, refer to Department of Defense (2007b); DoD (2008b).

12. Although CENTCOM had collected six quarters of census data as 

of April 2008, trends in the number of contractor personnel are 

not meaningful because of low confidence in the accuracy of the 

early quarterly counts and inconsistencies in how the data have 

been collected. An increase in the number of contractors, for 

example, could be due to actual growth in the number of contract 

personnel in Iraq, more complete reporting, or a combination of 

both factors. 

13. Refer to DFARS clause 252.225-7040. DFARS is a DoD supplement to the U.S. government’s Federal Acquisition Regulation, 

which sets the policies and procedures for acquisition by all agencies in the executive branch. 
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 11

CBO

Figure 5.

Number of Contractor Personnel Working on Contracts in Iraq Funded by the 

Department of State, by Function

(Thousands)

Source: Congressional Budget Office based on data from the Department of State.

Note: Data include U.S. citizens, local nationals, and third-country nationals; they exclude people working for subcontractors and people 

working under the Department of State’s Personal Service Agreements (people in the latter group are treated as employees of the U.S. 

government).

contracts to provide security, translator, and linguist services in Iraq (DoD 2008c). CENTCOM’s manual counting will continue until SPOT is robust. When fully 

implemented, SPOT will track all contractor personnel 

working on both new and existing contracts that are 

funded by DoD, DoS, and USAID.14

Some Members of Congress have expressed concern that 

contractors’ recruitment of government personnel is 

depleting the supply of specific in-demand skills and 

experience within the federal workforce (see, for example, 

House Committee on Armed Services, 2004). In particular, during the first few years of operations in Iraq, private 

security firms increased their size by drawing on former 

special operations forces for additional personnel. The 

Government Accountability Office (GAO) found in 

2005, however, that the expanded use of private security 

contractors did “not appear to be increasing attrition 

among military personnel” (GAO 2005, p. 35). More 

recently, DoD officials have said that the hiring of experienced military and government personnel by contractors 

is not causing significant shortages of certain categories of 

military personnel at this time.15 Because of a lack of 

data, CBO was unable to determine the number of contractor personnel who are former U.S. military or U.S. 

government civilians.

Comparing Past and Present Use of 

Contractors During Military 

Operations

Throughout the history of U.S. military conflicts, contractor personnel have worked alongside military and 

government civilian personnel in the theater of operaSecurity Police and

Correction

Advisors

Administration Construction Information

Technology and

Communications

Operations and

Maintenance

Language

Services

0

0.5

1.0

1.5

2.0

2.5

3.0

14. Section 861 of the National Defense Authorization Act for Fiscal 

Year 2008, Public Law 110-181, required DoD, DoS, and USAID 

to identify a common database for information on contracts and 

contractor personnel in Iraq and Afghanistan. SPOT has been 

selected as that database.

15. Interview with officials from the Office of the Assistant Deputy 

Secretary of Defense (Program Support) and DoD’s Office of 

the General Counsel, February 21, 2008, and follow-up 

communications. 
12 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

tions. The United States has hired contractors to perform 

noncombat functions beginning with the Revolutionary 

War and continuing to the present day.16 Contractors 

typically provide services judged too menial or too specialized for government personnel to accomplish themselves. Those services generally fall under the following 

broad categories (Epley 1990):

B Transportation (moving people, supplies, and 

equipment); 

B Engineering and construction (building and repairing 

bases, bridges, roads, railways, and communications 

systems);

B Maintenance (providing technical support for increasingly complex equipment);

B Base operations (providing food and housekeeping 

services on bases); and

B Medical (using civilian surgeons, nurses, and 

attendants).

Contractors continue to provide most of those services 

in-theater today, with the exception of medical support, 

almost all of which is now provided by military personnel. Contractors also perform some functions, such as 

security, that traditionally have been reserved for the military. 

Although the use of contractors during military operations is well established, most experts agree that the scale 

of the deployment of contractor personnel in the Iraq 

theater (relative to the number of military personnel in 

the country) is unprecedented in U.S. history. Historical 

data on numbers of contractor personnel in-theater, 

though sparse and inexact, support that conclusion.17

The current ratio of contractor to military personnel in 

the Iraq theater is 1 to 1—higher than it has been during 

any other major U.S. military operation (see Table 2). In 

the 1990s, however, U.S. operations in the Balkans illustrated the potential extent of the use of contractors during future conflicts. The ratio of contract to military personnel in the Balkans was also about 1 to 1, but those 

operations involved no more than 20,000 U.S. military 

personnel at any time, about one-tenth of the total in the 

Iraq theater as of December 2007. The Army used the 

LOGCAP contract in the Balkans, and logistics support 

was also provided through the Balkans Support Contract. 

The historically high ratio of contractor personnel to military personnel in the Iraq theater is the result of several 

factors. In response to reductions in the size of the post–

Cold War military, DoD has augmented its force structure by relying more heavily on contractors for support 

functions, for example, through LOGCAP (CBO 2005, 

pp. 16–21). Those contractors perform functions intheater that would otherwise require the deployment of 

additional military personnel. The extent of DoD’s contracting is particularly evident during prolonged, largescale operations—like those in Iraq—where there may 

not be enough military personnel available to provide 

logistics support.

More generally, the U.S. government has placed greater 

emphasis in recent decades on outsourcing activities to 

the private sector that are not inherently governmental. 

The government’s policy is to subject services identified 

as commercial to the forces of competition.18 In addition, the ratio of contractor personnel to military personnel reflects the United States’ attempt to reconstruct Iraq 

while military activities are under way, rather than delaying rebuilding until hostilities have ended. As a result, 

that ratio includes thousands of contractor personnel 

associated with Iraq’s reconstruction, not with military 

operations. 

Private Security Contractors

Providing security for all personnel, including contractors, is an inescapable aspect of U.S. operations in Iraq 

because of the instability and violence in that country. 

Under current DoD policy in Iraq, the military provides 

16. For a more detailed discussion of the support that contractors security to contractors and government civilians only if have provided during past contingency operations, see CBO 

(2005), Chapter 1. For the historical use of armed contractors, see 

Parks (2005) and Tabarrok (2007).

17. CBO does not have historical data on numbers of contractor personnel used by DoS during earlier contingency operations. Other 

U.S. agencies, such as USAID, do not have a history of working 

in-theater until after military operations have ended.

18. See Office of Management and Budget (2003) for federal policy 

on determining whether services should be provided by government or commercial sources.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 13

CBO

Table 2.

Presence of Contractor Personnel During U.S. Military Operations

Source: Congressional Budget Office based on data from William W. Epley, “Civilian Support of Field Armies,” Army Logistician, vol. 22 

(November/December 1990), pp. 30–35; Steven J. Zamparelli, “Contractors on the Battlefield: What Have We Signed Up For?” Air 

Force Journal of Logistics, vol. 23, no. 3 (Fall 1999), pp. 10–19; Department of Defense, Report on DoD Program for Planning, Managing, and Accounting for Contractor Services and Contractor Personnel During Contingency Operations (October 2007), p. 12.

Note: n.a. = not available.

a. For some conflicts, the estimated number of contractor personnel includes civilians employed by the U.S. government. However, because 

most civilians present during military operations are contractor personnel, the inclusion of government civilians should not significantly 

affect the calculated ratio of contractor personnel to military personnel.

b. The government of Saudi Arabia provided significant amounts of products and services during Operations Desert Shield and Desert Storm. 

Personnel associated with those provisions are not included in the data or the ratio.

c. For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, 

Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates.

they deploy with the combat force or directly support the 

military’s mission (GAO 2005, p. 10).19 Unless special 

arrangements are made, U.S. government agencies and 

contractors, such as reconstruction contractors, that do 

not meet that requirement must provide their own security. As a result, the use of contractors to provide security 

has increased—a well-publicized and controversial aspect 

of contractor support in Iraq. 

Private security contractors, or PSCs (also referred to as 

private security companies), protect people and property 

in Iraq for U.S. agencies, the Iraqi government, and private businesses, namely, other contractors working in 

Iraq. Virtually all PSCs in the Iraq theater work in Iraq. 

They provide personal security details for high-ranking 

officials, security escorts for government and contractor 

personnel, security for convoys and at fixed sites, and 

advice and planning related to security (GAO 2005, 

p. 9).

Costs for Private Security Contractors and 

Subcontractors

CBO estimates that total spending by U.S. agencies and 

U.S.-funded contractors for private security services 

ranged between $6 billion and $10 billion over the 

2003–2007 period. Between $3 billion and $4 billion of 

that spending was for obligations made directly by the 

U.S. government for private security services in Iraq.20

The government’s obligations for those services have 

Conflict

Revolutionary War 2 9 1 to 6

War of 1812 n.a. 38 n.a.

Mexican-American War 6 33 1 to 6

Civil War 200 1,000 1 to 5

Spanish-American War n.a. 35 n.a.

World War I 85 2,000 1 to 24

World War II 734 5,400 1 to 7

Korea 156 393 1 to 2.5

Vietnam 70 359 1 to 5

Gulf War 9 b 500 1 to 55 b

Balkans 20 20 1 to 1

Iraq Theater as of Early 2008c 190 200 1 to 1

Estimated Personnel (Thousands)

Contractor Military a

Estimated Ratio of Contractor

to Military Personnela

19. DFARS Procedures, Guidance, and Information, PGI 225.7402. 

The Army provides security for LOGCAP contractor personnel 

under that policy. The LOGCAP contract does not permit the 

hiring of subcontractors to provide security.

20. CBO’s estimate, based on data from FPDS-NG and JCC-I/A, is a 

range because some obligations that may be for security contracts 

are not clearly categorized or described. Security services are distributed across several categories of product and service codes.
14 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

amounted to roughly between $500 million and $1.2 billion annually since 2005. DoD, DoS, and USAID have 

awarded all of the U.S. government contracts for security 

services in Iraq. Since Iraq’s transition to sovereignty, 

DoS’s security contracts have also protected USAID 

employees, so USAID is not obligating new funds for 

PSCs in Iraq.

Contractors hired by the U.S. government that are not 

protected by the U.S. military generally hire PSCs as subcontractors to provide security. Neither FPDS-NG nor 

U.S. agencies explicitly track the costs of those subcontracts because those costs are not direct government obligations. Consequently, estimating the costs associated 

with subcontracts for security services in Iraq generates a 

wide range of values. 

CBO estimates that U.S.-funded contractors spent 

$3 billion to $6 billion for subcontractors to provide 

security services over the 2003–2007 period. That spending makes up the balance of CBO’s $6 billion to $10 billion estimate of total spending for those services. CBO 

calculated that range by first estimating the value of the 

government’s service contracts performed in Iraq that 

required nonmilitary security. That estimate––$32 billion––is based on the assumptions that the military provides security for the LOGCAP contract, that contracts 

for products do not have significant security costs, and 

that JCC-I/A contracted for products or services at a ratio 

similar to that for all other in-theater contracts supporting operations in Iraq. CBO then determined that contractors spend between 10 percent and 20 percent of that 

$32 billion on security subcontracts.21

Costs for PSC Personnel Compared with a 

Military Alternative

A widely reported aspect of private security contractors is 

the perception that PSC personnel cost significantly more 

than equivalent military personnel. For example, in 

Joseph Stiglitz and Linda Bilmes’s estimates of the overall 

cost of the war in Iraq, they state that “In 2007, private 

security guards working for companies such as Blackwater and DynCorp were earning up to $1,222 a day; this 

amounts to $445,000 a year. By contrast, an Army sergeant was earning $140 to $190 a day in pay and benefits, a total of $51,100 to $69,350 a year.”22

Those figures, however, are not appropriate for comparing the cost-effectiveness of contracting the security function or performing it using military personnel. The figure 

of $1,222 a day represents the contractor’s billing rate, 

not the amount paid to the contractor’s employees. The 

billing rate is greater than an employee’s pay because it 

includes the contractor’s indirect costs, overhead, and 

profit. A better comparison would involve estimating a 

soldier’s “billing rate”—the total cost to the government 

of having a soldier fill a deployed security position for one 

year. Further, contractors generally bid various numbers 

of personnel in different labor categories, so focusing on a 

single labor category—such as the security guards—gives 

an incomplete picture of the total cost of providing security. A better comparison would also reflect all types of 

personnel as well as nonlabor costs (such as vehicles and 

other equipment) that a security contractor includes in its 

bid.

CBO performed such an analysis, comparing the costs of 

a private security contractor with those of a military alternative. That analysis indicates that the costs of the private 

contractor did not differ greatly from the costs of having 

a comparable military unit performing similar functions. 

During peacetime, however, the military unit would 

remain in the force structure and continue to accrue costs 

at a peacetime rate, whereas the private security contract 

would not have to be renewed (see Box 2).

Number of PSC Personnel in Iraq

Reported tallies of the total number of PSC personnel in 

Iraq vary. In 2005, DoD estimated that at least 60 private 

security providers were operating in Iraq, with as many as 

25,000 employees working for the U.S., Iraqi, and coali21. For example, a $100 million contract would allocate between 

$10 million and $20 million for security. That range is based on 

information from Department of State (2006); GAO (2006); and 

discussions with officials of the Army Corps of Engineers.

22. See Stiglitz and Bilmes (2008), p. 12. Their figures appear to 

come from a memorandum to members of the House Committee 

on Oversight and Government Reform, Additional Information 

About Blackwater USA (October 1, 2007), http://oversight.house.gov/documents/20071001121609.pdf. The committee’s report sources the contractors’ figures to invoices from a 

particular contract that Blackwater had with the Department of 

State; the committee posted that information on its Web site 

(http://oversight.house.gov/story.asp?ID=1509, accessed June 20, 

2008). The report sources the military’s figures to an online compensation calculator of the Department of Defense (subsequently 

moved to www.defenselink.mil/militarypay/pay/calc, accessed 

June 20, 2008). 
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 15

CBO

tion governments, businesses, and other customers (GAO 

2005, p. 8). The Private Security Company Association 

of Iraq (PSCAI), an industry association with 40 member 

companies, puts that number at about 30,000 in 2008. 

That estimate, which excludes some Kurdish areas where 

PSCAI has no presence, includes approximately 5,000 

U.S. citizens, 15,000 Iraqis, and 10,000 third-country 

nationals.23

Approximately 30 percent to 40 percent of PSC personnel work directly for the U.S. government as prime contractors. That share assumes that estimates of the total 

number of PSC personnel (25,000 to 30,000) are accurate. According to CENTCOM’s April 2008 census of 

contractors, almost 7,300 PSC personnel (including all 

nationalities) work on DoD-funded contracts or subcontracts. Nearly 3,000 additional PSC personnel (including 

all nationalities) work directly for DoS as prime contractors.24 The remaining 15,000 to 20,000 work for the 

Iraqi government, other coalition governments such as 

Great Britain, or private companies. (CBO does not have 

estimates of how many PSC personnel work for each of 

those customers.) Among some of the larger non-U.S. 

employers are Baghdad International Airport, which 

employs approximately 1,000 PSC personnel, and the 43 

diplomatic missions in Iraq (most of which hire private 

security contractors).

PSC Personnel Who Are Armed

Given the nature of their work, many PSC personnel are 

armed. CENTCOM’s census reports that about threequarters of the 7,300 PSC personnel working for DoD in 

Iraq carry weapons. A similar proportion of armed personnel probably holds for all other PSCs in Iraq.

The presence of armed contractor personnel––hired by 

various governments, agencies, and businesses––has created significant challenges for the United States in overseeing contractors and managing the combat zone in Iraq 

(GAO 2006). As events in that country have shown, the 

presence of armed contractors introduces the possibility 

of shooting incidents between contractor personnel and 

military or local civilian personnel. In response to those 

issues and to requirements instituted by the National 

Defense Authorization Act for Fiscal Year 2008, DoD 

and DoS signed a memorandum of agreement in December 2007 to jointly develop policies and procedures for 

vetting, training, and using PSC personnel.25 Under that 

agreement, PSCs working for the U.S. government will 

follow common principles regarding the use of force, and 

details of all of their movements will be provided in 

advance to the appropriate military commander. The role 

of private security contractors in Iraq, including their 

possession and use of weaponry, has also generated questions about their legal status, as described in the next 

section.

Legal Issues Associated with 

Contractor Personnel Supporting 

U.S. Operations 

The restrictions on how contractor personnel are used 

and the mechanisms by which they are controlled are different from the corresponding restrictions and mechanisms for uniformed military personnel or civilian government employees. Contractor personnel have a 

different legal status than government employees and are 

subject to different regulations and laws (both U.S. and 

international). Those differences have led some Members 

of Congress to express concern about using contractors as 

part of military operations—concerns that date back to 

the use of contractors in the Revolutionary War (Cahlink 

2002; Continental Congress 1781, p. 591; GAO 2008b; 

Pincus 2008; Senate Committee on Armed Services 

2007; Shrader 1999; Zamparelli 1999).

23. CBO phone interview with PSCAI in February 2008. Although 

PSCAI does not maintain a formal database of contractors, the 

association has frequent contact with its members and the Iraqi 

and coalition governments. One of PSCAI’s functions is to help 

PSCs register with the Iraqi Minister of Interior and to verify that 

registry with U.S. contracting authorities. See PSCAI, 

www.pscai.org/moikrgreg.html, accessed February 26, 2008.

24. Meeting with DoS officials, November 2007. About 1,700 contractor personnel provide local guard services for DoS in Iraq. An 

additional 1,150 contractor personnel in Iraq work as bodyguards 

and provide security for fixed sites under DoS’s Worldwide Personal Protective Services umbrella contract.

25. Memorandum of Agreement (MOA) between the Department of 

Defense and the Department of State on USG [U.S. Government] Private Security Contractors (December 5, 2007), as 

required by section 862 of the 2008 defense authorization act. 

Section 861 of that act further requires DoD, DoS, and USAID 

to enter into a memorandum of understanding (MOU) by July 

2008 that establishes policy, guidance, and regulations covering all 

contracts and contractor personnel in Iraq and Afghanistan.
16 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

Continued

Box 2.

Costs of a Private Security Contract and a U.S. Military Alternative

The Congressional Budget Office (CBO) analyzed available information on a security contract between Blackwater and the Department of State for the one-year period 

beginning June 11, 2004. Because the terms of security 

contracts vary in the work to be performed and the qualifications of contractor personnel, the Blackwater contract is 

not necessarily representative of other security contracts.

Private Security Contractor Personnel

Nearly 80 percent of personnel on the Blackwater contract 

were bid as “protective security specialists” (PSS) and billed 

at $1,222 per day, or $1,325 in 2008 dollars. The contract 

included other types of personnel—those who supervise 

the PSS (such as project managers and detail leaders) and 

those who support their activities (such as administrative 

personnel and emergency medical technicians). Blackwater 

bid 314 operational positions and 7 positions in project 

management and administration but did not propose to 

fill every position every day; the contract would deliver 

189 full-time equivalent (FTE) operational personnel. The 

contract also included about $1.7 million to lease nine personnel carriers (vehicles) and provide spare parts. Other 

equipment costs were not shown explicitly but were presumably rolled into the labor rates.1 Finally, the contract 

included about $2.1 million for insurance, yielding a total 

cost of $99 million for the 189 FTEs for one year (in 2008 

dollars, and excluding aviation support, which CBO did 

not analyze).

Military Personnel

To compare the costs of private security contractor personnel (PSCs) and military personnel, CBO assumed that an 

equivalent U.S. military force would be composed of units 

of light infantry (units not equipped with heavy armored 

vehicles). Using infantry as a substitute for PSCs is supported by the fact that U.S. Marines have traditionally 

provided infantry personnel to guard U.S. missions overseas; since 1986, however, private companies have also 

been allowed to compete for security contracts.2 The differences between Marine and Army infantry units would 

not be relevant for performing a security mission; CBO 

assumed that the Army, because of its greater size, would 

be more likely to provide units to replace PSCs.

Typically, an Army unit would not be organized in the 

same way as a contractor’s workforce. To calibrate the two, 

CBO identified a hypothetical Army unit that could 

deliver roughly the same 189 FTEs as Blackwater. The precise mix of personnel in the two workforces would differ 

because Army doctrine implies support elements in different proportions than those observed in Blackwater’s contract. Delivering 189 FTEs would require about one-third 

of an Army light infantry battalion—a rifle company plus 

one-third of the battalion’s headquarters company.3 The 

headquarters company would include not only command 

elements but also medics, scouts, snipers, and others who 

functionally correspond to some of Blackwater’s specialized 

personnel.4

Costs Included in the Analysis

CBO included three types of costs in its analysis: military 

personnel costs, operating costs, and equipment costs. The 

military pay rates ($140 to $190 a day) correspond to cash 

pay (basic pay, subsistence and housing allowances, plus a 

federal tax advantage because those allowances are not 

taxed) but exclude noncash benefits, such as free health 

care for military families back home, and deferred benefits, 

such as pay and health care for those who receive military 

retirement benefits. Cash pay accounts for about half of 

total peacetime compensation for typical enlisted personnel.5 CBO therefore roughly doubled cash pay when estimating annual personnel costs for the Army to perform 

1. Testimony of Erik D. Prince, chairman and CEO of Blackwater USA, 

before the House Committee on Oversight and Government Reform 

(October 2, 2007). Prince said, “They [the contractor personnel] need 

uniforms, equipment, body armor, boots, everything you wear from 

head to toe, their training, their travel, their insurance, [and] sometimes their food.” See the preliminary transcript, p. 128, http://oversight.house.gov/story.asp?ID=1509.

2. Omnibus Diplomatic Security and Antiterrorism Act of 1986, Public 

Law 99-399.

3. Such a battalion also has a weapons company, but security personnel 

would probably not need the additional heavy machine guns, grenade 

launchers, and antitank missiles that a weapons company provides.

4. The typical soldier would be a corporal (pay grade E-4); virtually all 

soldiers of that rank have served for at least three years. All PSS contractor personnel have at least one year’s experience in protective security work, which may have been gained in the Army or Marine Corps 

infantry or, alternatively, in other federal agencies such as the Federal 

Bureau of Investigation, Secret Service, or the Department of State (see 

statement of Richard J. Griffin, Assistant Secretary of State, Bureau of 

Diplomatic Security, before the House Committee on Oversight and 

Government Reform, October 2, 2007). Army infantry personnel 

would have much of the training required to perform the PSS function, 

except possibly in skills such as motorcade operations and evasive 

driving.

5. Congressional Budget Office, Evaluating Military Compensation (June 

2007), Table 2.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 17

CBO

Box 2. Continued

Costs of a Private Security Contract and a U.S. Military Alternative

Source: Congressional Budget Office based on Blackwater’s invoice for contract S-AQMPD-04-D-0061.

functions in Iraq and then added the costs of providing 

special pays to deployed soldiers.6

The Army’s goal is to have two units at home station (that 

is, in the rotation base) for each unit deployed overseas.7

The time at home lets units recuperate from their deployment, reconstitute personnel and equipment, and train for 

their next deployment.8

 The Army, however, has not been 

achieving its rotation goal. CBO previously estimated that 

the ratio of units at home station to units deployed was 1.2 

as of April 2007 (just before the “surge” in U.S. forces in 

Iraq), and the ratio has averaged about that value as far 

back as 2004.9 To capture the costs of maintaining a rotation base for infantry units assigned to provide security in 

Iraq, CBO analyzed two cases: Case 1 adds the cost of 1.2 

soldiers at home for each soldier deployed; Case 2 adds the 

cost of 2.0 soldiers at home. CBO included only peacetime 

costs for soldiers at home station, not wartime special pays.

Operating costs would be paid out of the Army’s operations and maintenance (O&M) appropriation. CBO estimated O&M costs separately for the deployed unit and for 

the 1.2 or 2.0 units at home station. Finally, CBO assumed 

that equipment for the deployed unit, and its counterparts 

at home station, would have a useful life of 20 years. Thus, 

CBO amortized one-twentieth of the total equipment cost 

for a single year’s operations.10

Comparison of the Estimated Costs

CBO estimated the Army’s total costs at $88 million to 

maintain 1.2 units at home station and $110 million to 

have 2.0 units at home station for each deployed unit (see 

the table above). Those costs bracket Blackwater’s total 

cost of $99 million to perform the same security function.

The costs of the two organizations would be different in 

peacetime. The Blackwater contract would not have to be 

renewed once the Iraq conflict ends, except possibly for a 

small retainer to allow Blackwater to maintain a capability 

to meet the demands for security in a future conflict. The 

Army units would stay in the force structure, although 

they would accrue costs at a peacetime rate without the 

wartime special pays or the elevated rate of O&M spending. CBO estimates the Army’s annual peacetime cost at 

$60 million to maintain 2.2 units (where “unit” again represents about one-third of an Army light infantry battalion) and $82 million to maintain 3.0 units. During peacetime, however, the Army units need not devote themselves 

to security missions that parallel Blackwater’s contract. 

Army infantry units can serve many other functions in 

peacetime or in other conflicts.

Type of Cost

Military Personnel 21.8 24.9 46.6 41.5 63.2

Operations 33.2 7.4 40.6 12.4 45.6

Equipment 0.4 0.5 0.9 0.8 1.2 ____ ____ ____ ____ _____

Total Costs 55.4 32.8 88.2 54.6 110.1 98.5

Case 2—2.0 Units in Rotation Base

Cost of Army Infantry Units (Millions of 2008 dollars)

Case 1—1.2 Units in Rotation Base

Blackwater's Costs

Deployed Units Rotational Units 2008 dollars)

(Millions of

Total Cost Rotational Units Total Cost

6.Those special pays are Hostile Fire and Imminent Danger Pay, $225 a 

month; Hardship Duty Pay, $100 a month; and, for soldiers who have 

dependents and are away from their family for at least 30 consecutive 

days, Family Separation Pay, $250 a month.

7. Statement of Richard Cody, Vice-Chief of Staff, U.S. Army, before the 

Subcommittee on Military Personnel of the House Committee on 

Armed Services (February 2, 2005). www.army.mil/leaders/leaders/

vcsa/testimony/20050202.html.

8. Blackwater deploys its security personnel to Iraq for at most 90 days, 

then flies them back to the United States; they must wait another 90 

days before Blackwater will redeploy them. Blackwater does not pay its 

personnel during their 90-day layovers and therefore, unlike the Army, 

does not have an explicit rotation base. However, Blackwater implicitly 

maintains its workforce by paying its employees enough during their 

90-day deployment that they can afford the layover. Those costs are 

captured by the in-theater billing rates in Blackwater’s contract.

9. Congressional Budget Office, Some Implications of Increasing U.S. 

Forces in Iraq (April 2007), Figure 1 and Table 1.

10. If the Army added infantry units to its force structure, and particularly 

 if this analysis was scaled to replace more than a single private security 

 contract with infantry units, a large up-front outlay would have to be 

 made to initially equip those units. CBO reports instead the recurring 

 annual amortization to equip the units.
18 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

The legal issues regarding the government’s use of contractors to support military operations are encapsulated 

in the following four questions:

B What restrictions are placed on the use of contractors?

B What authority does the U.S. military have over the 

actions of contractor personnel?

B What is the legal status of contractor personnel supporting military operations such as those in Iraq?

B What laws govern the actions of contractor personnel?

The Congress and the President have enacted legislation 

and DoD has changed its policies in response to problems and concerns that have arisen in recent military 

operations overseas, and that process is ongoing. This section discusses in greater detail several of the legal issues 

that have come to light under the framework of those 

four questions. The new laws and policies, and assertions 

of jurisdiction related to them, may be challenged in U.S. 

and international courts. Because of those potential challenges, CBO’s assessment provides only tentative answers 

to some of the questions posed above.

Restrictions on the Use and Arming of 

Contractor Personnel

The federal government uses several approaches to identify which functions should be performed only by government personnel and which others may be contracted 

to the private sector.26 The Federal Activities Inventory 

Reform Act of 1998 (FAIR) and guidance provided by 

the Office of Management and Budget require functions 

classified as “inherently governmental” to be performed 

by government personnel. Inherently governmental functions are those that are “so intimately related to the public 

interest” as to mandate performance by government personnel; such activities generally require either exercising 

sovereign government authority or establishing procedures and processes related to the oversight of monetary 

transactions (Office of Management and Budget 2003, 

p. A-2).27 Applying those constraints, the Department of 

Defense characterizes some functions—those directly 

linked to the military’s warfighting mission or requiring 

personnel who have recent hands-on experience in a military position—as “core” or “military essential” and may 

also reserve them for government personnel.28

DoD’s core or military essential functions can be defined 

narrowly as those associated directly with the use of physical force (and thereby also meet the definition of inherently governmental as an exercise of sovereign government authority). However, the term “core” is sometimes 

used more broadly and subjectively to include functions 

less directly related to warfighting, such as those defined 

as “core business missions” of the Defense Business Transformation Agency (DoD 2008a) and “core depot maintenance” for weapon systems (DoD 2007a).29 Those designations are sometimes applied to commercial-type 

functions that are required by law or policy to be performed by government employees. For example, federal 

law requires that DoD perform at least half its annual volume of depot maintenance activities at in-house facilities.30 The difference between the two interpretations of 

core functions leaves ambiguous the classification of particular support functions, such as maintenance, and 

whether or to what extent having contractors perform 

such support functions is appropriate (CBO 1995, p. xi; 

GAO 2003, pp. 3, 11).

In instances in which the classification is ambiguous, 

additional factors must be considered to determine 

whether a particular function can or should be performed 

by contractors. Those factors include cost, risk, flexibility, 

the government’s ability to draft an enforceable contract, 

and the availability of government employees (for example, in cases like Iraq, in which there may not be enough 

military personnel to perform logistics support) (Camm 

and Greenfield 2005, p. 56; CBO 2005, p. 32). In practice, most classifications based on the above criteria 

exclude certain functions that involve making financial or 

policy decisions, overseeing contractors, conducting 

offensive military operations, and performing police 

26. This section focuses on the types of functions that must be 

performed by government employees rather than on the broader 

question of which functions should be paid for by government 

funds. For example, building and repairing roads is a function 

often paid for by public funds but performed by private 

companies.

27. Federal Activities Inventory Reform Act of 1998 § 5, 31 U.S.C. 

§ 501 note.

28. For one definition of “core,” see DoD (2001), p. 53; for other definitions, see GAO (2003), p. 1. “Military essential” is defined in 

Camm and Greenfield (2005), p. 179.

29. 10 U.S.C. § 2464.

30. 10 U.S.C. § 2466.
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 19

CBO

functions. Contractors, however, sometimes provide support to government personnel who perform those functions (GAO 2008a, p. 8).

The U.S. government often reserves certain functions, 

such as those involving a high risk of physical harm or the 

likely application of physical force, for uniformed law 

enforcement agencies (for example, federal marshals or 

customs agents) or for the military. There are many 

exceptions, however, including contractor personnel who 

accompany military forces, private bounty hunters, and 

security guards (Drimmer 2006, p. 734; Industrial College of the Armed Forces 2006, p. 2; Sklansky 1999, 

p. 1175). In a military operation like the current one in 

Iraq, contractor personnel performing logistics functions, 

such as driving trucks, may encounter enemy forces and 

be at risk of physical harm above and beyond what they 

would face in most domestic occupations (Debusmann 

2007, p. 13).31

When DoD contractor personnel are at risk of physical 

harm, the Combatant Commander may authorize contractor personnel to be armed for self-defense (DoD 

2005, sections 6.3.4 and 6.3.5).32 The Combatant Commander must determine on an individual basis whether 

military forces can adequately protect contractor personnel, whether military protection is inadequate and contractor personnel need to be armed to provide for their 

safety, or whether the function is so dangerous that it 

should instead be performed only by military personnel. 

A condition for arming contractor personnel is that they 

must be eligible to possess weapons under U.S. laws or 

under the laws of their home nation. Eligibility mainly 

requires the lack of any felony convictions. Armed contractor personnel must also be trained in the proper use 

of weapons and must voluntarily accept weapons for selfdefense. With the exception of contractor personnel performing certain security functions discussed in the next 

paragraph, DoD policy limits contractor employees to 

carrying a sidearm (a pistol). As of February 28, 2008, 

638 contractor employees in Iraq and Afghanistan were 

armed in that manner for self-defense. About 200 DoD 

civilians have also been armed for self-defense.33

Additional issues arise for some types of contractor personnel, such as private security contractors, who perform 

functions that are similar to those of military combat 

forces (Northam 2007). When contractor personnel perform security functions, they may use small arms (with a 

caliber of 7.62 mm or smaller) similar to those used by 

infantry soldiers, but the contractors are subject to “rules 

of the use of force” that are more restrictive than the 

“rules of engagement” governing military forces.34 Specifically, PSCs are not allowed to engage in any offensive 

military operations.35 As of April 2008, 5,613 of DoD’s 

7,259 security contractor personnel in Iraq were authorized to be armed (U.S. Central Command 2008).

Under DoD policy, contractors may provide security for 

fixed-perimeter defenses and private convoys as well as 

perform some police functions.36 Thus, PSCs are sometimes positioned in a defensive posture adjacent to military forces, and those contractors—as well as contractor 

personnel performing other support functions—may 

drive armored vehicles into areas subject to attack. DoD 

recognizes the potential for problems to arise when placing contractor personnel in a position in which they are 

likely to be physically harmed or need to employ force, 

but DoD relies on the discretion of commanders rather 

than a clear policy rule to guide the use of contractors in 

such cases. “Contracts [for security services] shall be 

issued cautiously in contingency operations where major 

combat operations are ongoing or imminent,” and the 

security contractor personnel are not to guard military 

personnel or property unless authorized specifically by 

31. For a comparison of fatality rates for people in dangerous domestic occupations with rates for military personnel and logistics contractors in Iraq, see CBO (2005), p. 13.

32. That policy applies to defense contractors, their employees, and 

subcontractors at all tiers who are authorized to accompany the 

U.S. armed forces. 

33. Interview with officials from the Office of the Assistant Deputy 

Under Secretary of Defense (Program Support) and DoD’s Office 

of the General Counsel, February 21, 2008, and follow-up communications.

34. Ibid. For other statutory restrictions on using contractors to perform security functions, see 10 U.S.C. § 2465. Additional policy 

guidance in implementing those restrictions is found in Army 

Materiel Command (2000), p. 40-1; DoD (2006b); Office of 

Management and Budget (2003), p. A-3.

35. DoD policy also prohibits using contractors as mercenaries. See 

Army Materiel Command (2000), p. 40-2; 73 Fed. Reg. 16764–

16765 (2008). Security contractor personnel are not generally 

considered mercenaries because their mission is to protect property and personnel, not to overthrow governments or undermine 

the order of the state. See De Wolf (2006), p. 323.

36. Interview with officials from the Office of the Assistant Deputy 

Under Secretary of Defense (Program Support) and DoD’s Office 

of the General Counsel, February 21, 2008, and follow-up communications; DoD (2006b); Elsea and Serafino (2007), p. 12.
20 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

the Combatant Commander, an authority that cannot be 

delegated (DoD 2005, section 6.3.5). A local commander 

may also restrict the movement of security contractor 

personnel according to the threat level.

Military Authority Over Contractor Personnel

Although military commanders can directly control the 

actions of military personnel and government civilians, 

their control over individual contractor personnel is less 

direct. Military personnel are subject to criminal punishment if they fail to obey a lawful order from their military 

commanders (Turner and Norton 2001, p. 35).37 Government civilians may fall under the control of military 

commanders either permanently or temporarily during a 

conflict, but only under extraordinary circumstances 

would they be subject to administrative actions, such as 

suspension or termination, if they failed to obey an order 

(Turner and Norton 2001, p. 35). Military commanders 

may change the daily tasks and duties of military and 

civilian DoD employees within the usual military chain 

of command, subject broadly to the laws and regulations 

of the United States.38 In practice, that authority enables 

the military commander to allocate the personnel under 

his or her command among any number of tasks those 

personnel are able and trained to do. The military commander may also request that additional personnel be 

reassigned from other parts of the government if 

necessary.

By contrast, the duties of contractor personnel are set out 

in a fixed written contract (DoD 2005, section 6.1.4; 

Vernon 2004, p. 369).39 The military commander generally lacks the authority either to increase the scope (dollar 

value) of the contract or to change the contractor’s duties 

except in ways anticipated in the contract language. 

However, using a task-order arrangement may enhance 

the flexibility of a contract by enabling the military commander to add new tasks, sometimes quickly, to an existing contract within overall resource bounds (Army Regulation 700-137, “Logistics Civil Augmentation Program 

(LOGCAP),” December 16, 1985; CBO 2005, p. 25; 

Wilkinson 2007, p. 259). Task orders are particularly useful if the types of functions can be anticipated but not 

their timing or precise quantity. The LOGCAP contract 

is a task-order contract.

The contracting officer is the official designee of the head 

of the agency for binding the government on matters 

related to a particular contract (DoD 2005, section 

6.3.3).40 Typically a civilian, the contracting officer is not 

always colocated with the military commander or the 

contractor personnel and may not even be within the theater of operations (Douglas 2004, p. 139). The contracting officer may not have access to the place of performance if that place is remote or dangerous or if it covers a 

large geographic area (GAO 2007). Instead, he or she 

may rely on a technical representative, usually a military 

officer on the staff of the military unit being supported 

and colocated with the contractor. The technical representative interacts frequently, sometimes daily, with the 

contractor about details of performance but not about 

the scope or size of the contract.41 In one example that a 

security contractor provided to CBO, the technical representative often directed the location to which contractor 

personnel were assigned but did not determine the number of such personnel.

The military commander has less direct authority over 

the actions of contractor employees than over military or 

government civilian subordinates. The contractor, not 

the commander, is responsible for ensuring that employees comply with laws, regulations, and military orders 

issued in the theater of operations. Short of criminal 

behavior by contractor personnel, the military commander has limited authority for taking disciplinary 

37. Applying the Uniform Code of Military Justice to contractor per- action (DoD 2005, section 6.3.3). 

sonnel could mean criminal prosecution for disobeying an order, 

but that would be an unusual case. (Interview with officials from 

the Office of the Assistant Deputy Under Secretary of Defense 

(Program Support) and DoD’s Office of the General Counsel, 

February 21, 2008, and follow-up communications.)

38. The commander can only give orders that are consistent with the 

laws and regulations of the United States (Manual for Courts, 

United States, 2008 ed., www.usapa.army.mil/pdffiles/mcm.pdf, 

p. iv-24). The commander and employees may also be subject to 

local laws, depending on the content of treaties and status-offorces agreements.

39. Contracts are also governed by the Federal Acquisition Regulation 

and the Defense FAR Supplement. The regulations governing 

contractor personnel authorized to accompany U.S. armed forces 

under contracts performed outside the United States were recently 

revised along with the standard contract provisions. See 73 Fed. 

Reg. 10943–10959 (2008) and 73 Fed. Reg. 16764–16777 

(2008).

40. FAR, 48 C.F.R. 1.602 (1995).

41. DFARS, 48 C.F.R. 201.602 (1991).
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 21

CBO

Legal Status of Contractor Personnel

The Laws of Armed Conflict (LOAC), primarily as 

embodied in the Third and Fourth Geneva Conventions, 

govern the status and treatment of people who come 

under the control of enemy forces engaged in a declared 

war or other armed conflict.42 U.S. policy is to follow 

those laws even in cases in which they may not apply, but 

enemy forces, such as the insurgency forces in Iraq, might 

not follow them (DoD 2006a).43 Thus, even if DoD 

contractor personnel in Iraq qualified for protection 

under the LOAC, they might not receive it. The nature of 

the hostilities in Iraq may change, however, and enemies 

in future conflicts may recognize the LOAC. Therefore, 

the distinctions in legal status under the LOAC are still 

an important consideration in using contractor and government civilian personnel in positions in which they are 

subject to risk of capture. This section looks at distinctions in legal status and how that status changes when 

contractor and government civilian personnel are armed.

General Distinctions in Legal Status. The legal status of 

contractor personnel is not only different from that of 

military or government civilian personnel but is also subject to less agreement among legal scholars (CBO 2005, 

p. 12). It also depends on many factors such as their 

nationality, the phase of military operations, where they 

work, and what type of work they do (Davidson 2000; 

Elsea 2007, p. 7; Parks 2005; Rivkin and Casey 2008; 

Turner and Norton 2001, p. 24; Vernon 2004).

Under the LOAC, legal status determines whether personnel in a particular group can be targeted legitimately 

by enemy forces; how they should be treated if captured 

by enemy forces; and who would have the legal jurisdiction to punish their behavior if they committed offenses 

against the laws, regulations, or policies of the United 

States, the country where the work was performed, or 

international agreements (Vernon 2004). DoD has issued 

policies regarding the legal rights and responsibilities of 

contractor personnel, but some experts believe those policies are likely to face court challenges when DoD implements them (Elsea and Serafino 2007, p. 21).

Prisoner-of-War Status. Under the Laws of Armed Conflict, primarily as embodied in the Third Geneva Convention, the highest level of protection given to people 

who come under the control of enemy forces while 

engaged in a declared war or other armed conflict is called 

prisoner-of-war (POW) status. Uniformed military personnel, government civilians, and contractor personnel 

can all qualify for POW status under some conditions.44

Most military personnel qualify if they meet the criteria 

for being a lawful combatant, but contractor and government civilian personnel generally have to remain noncombatants and carry appropriate identification cards 

(Army Materiel Command 2000, p. 11-2; Elsea 2007, 

p. 5; Turner and Norton 2001, pp. 25, 35). Under the 

LOAC, POW status affords protections such as humane 

treatment, the right to communications, and a safe return 

at the end of hostilities (Turner and Norton 2001, p. 66; 

Vernon 2004). Even when POW status does not apply, 

other provisions of the Geneva Conventions still call for 

some protections, such as humane treatment (Elsea and 

Serafino 2007).

Lawful Combatants. Lawful combatants are identified primarily by four criteria: clearly wearing particular types of 

uniforms or other distinguishing markings, carrying their 

weapons openly, operating under a clear command structure, and obeying the Geneva Conventions or other Laws 

of Armed Conflict. Military personnel, except for medical personnel and chaplains, usually qualify as lawful 

combatants under the Geneva Conventions, meaning 

that they are legitimate military targets of enemy forces.45

They also obtain some immunity from prosecution for 

hostile actions taken during combat and receive POW 

42. Third Geneva Convention Relative to the Treatment of Prisoners 

of War, August 12, 1949, 6 U.S.T. 3316; Fourth Geneva Convention Relative to the Protection of Civilian Persons in Time of War, 

August 12, 1949, 6 U.S.T. 3516.

43. For U.S. citizens who are captured and taken hostage, U.S. government policy is to “use every appropriate resource to gain” their 

safe return but will “make no concessions to individuals or 

groups” holding the hostages (Department of State 2002).

44. The details of those conditions are complex and often in dispute, 

and they do not have equal authority and effect. One important 

determination is the current state of hostilities and the nature of 

the parties (such as international war, civil war, or occupation). 

This discussion does not attempt to comprehensively address the 

subject, but it does point out some differences in the treatment of 

military, government civilian, and contractor personnel. For more 

information, see Adedeji and Rosen (2000); Army Sustainment 

Command, www.aschq.army.mil/gc/battle2.asp; Davidson 

(2000); Elsea (2007); Parks (2005); Rivkin and Casey (2008); 

Rosky (2004); Turner and Norton (2001).

45. Medical personnel and chaplains have separate protections. See 

the Geneva Convention Relative to the Treatment of Prisoners of 

War, August 12, 1949, 6 U.S.T. 3317, art. 33.
22 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

CBO

status (Elsea 2007, p. 6). Contractor personnel are not 

classified as lawful combatants because they do not wear 

military uniforms and are not in the military chain of 

command.

Noncombatants. If contractor personnel take “no active 

part in hostilities,” they probably qualify as noncombatants (Guillory 2001, p. 115). As such, they would not be 

legitimate military targets of enemy forces, although they 

might be injured or killed during a military action against 

a legitimate target.

Illegal Combatants and Uncertain Status. The legal status 

of government civilians and contractor personnel performing functions closely linked to military operations—

such as analyzing intelligence data, maintaining weapon 

systems, and resupplying forward-based forces—is less 

certain than that of contractor personnel performing 

purely commercial functions such as laundry or food services (Guillory 2001, pp. 134–136). Many contractor 

personnel deploy as systems technicians, helping to maintain, repair, and operate weapon systems. Others operate 

unmanned aerial vehicles that can provide reconnaissance 

or even fire weapons. Still others analyze intelligence data, 

which they may transmit in the form of targeting coordinates to unmanned aerial vehicles or other manned or 

unmanned platforms that fire weapons. Government 

civilians and contractor personnel performing such functions could be deemed to have taken an active part in 

hostilities, in which case they would no longer qualify as 

noncombatants. But they also do not meet the definition 

of a lawful combatant, and some experts argue that those 

personnel could be classified as illegal combatants and 

could be criminally prosecuted for actions taken during 

a conflict (Adedeji and Rosen 2000; Guillory 2001, 

pp. 134–136; Zamparelli 1999).46 Illegal combatants 

are entitled to humane treatment, but they may be subject to more intensive interrogation than a POW and may 

not be entitled to be released after hostilities have ceased 

(Elsea 2007, pp. 19–43).

DoD’s position is that most of its contractor personnel in 

Iraq are neither combatants nor noncombatants and that 

they fall into a special category called “civilians authorized to accompany the force” (DoD 2000, p. V-6; DoD 

2005, section 6.1.1).47 DoD’s interpretation of the 

LOAC is that the combatant and noncombatant classifications apply only to military forces, but some experts 

disagree (Turner and Norton 2001, p. 30). According to 

DoD, civilians accompanying the force are entitled to 

some, but not all, protections afforded to noncombatants 

in addition to some protections afforded to combatants 

(McCullough and Edmonds 2004). For example, they 

qualify for humane treatment (and possibly POW status) 

yet may be subject to criminal prosecution under local 

laws for actions taken during the conflict (Davidson 

2000, p. 245). Those contractor personnel are not legitimate targets of enemy forces, but the functions they perform are (Fortner 2000). For example, the equipment the 

personnel are using may be targeted, but not the personnel themselves.

The distinctions among combatant, noncombatant, civilian, and illegal combatant classifications for personnel 

working for the U.S. military may not have practical significance for a conflict like the current operation in Iraq. 

Insurgency forces have not been following the Laws of 

Armed Conflict; for example, they have detonated explosives in public areas that are as likely to result in the death 

of noncombatants (including Iraqi civilians) as well as 

combatants. The issues raised in this section involving the 

status of contractors who are captured will matter only 

when the United States faces an enemy that recognizes 

the LOAC. Even if that occurs, many related issues are 

subject to different interpretations that will take time to 

resolve.

Distinctions in Legal Status When Armed. The legal status 

of government civilians and contractor personnel 

becomes even less certain when they are armed. The intheater military commander may authorize them to be 

armed for their own protection or to use arms in security 

guard functions (DoD 2005, sections 6.3.4 and 6.3.5).48

Even if those personnel shot at enemy forces in selfdefense, their noncombatant status could be open to 

challenge (Guillory 2001; Turner and Norton 2001, 

p. 27). The distinction between performing security functions and taking “no active part in hostilities” may be 

ambiguous in an atmosphere of frequent attacks (Elsea 

and Serafino 2007, p. 13).

46. Ex parte Quirin, 317 U.S. 1, 31 (1942).

47. Interview with officials from the Office of the Assistant Deputy 

Under Secretary of Defense (Program Support) and DoD’s Office 

of the General Counsel, February 21, 2008, and follow-up communications.

48. DFARS, 48 C.F.R. 252.225-7040 (2005).
CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ 23

CBO

Laws Governing the Conduct of Contractor 

Personnel Supporting Military Operations

Contractor personnel are potentially subject to a number 

of sources of law and jurisdiction.49 Determining which 

laws govern contractor personnel depends on a variety of 

factors, including citizenship, location, and the particular 

laws they may have broken. Recent changes to U.S. law 

may make it easier to apply U.S. jurisdiction to contractor personnel in Iraq, but attempts to apply that jurisdiction could lead to challenges in court (Elsea and Serafino 

2007, p. 21; GAO 2008b, p. 28).50

Also, criminal jurisdiction is not exclusive to one country. 

In general, the concept of “dual sovereigns” means that in 

cases in which one sovereign (a foreign government, the 

U.S. government, or state government) has asserted jurisdiction, other sovereigns are not precluded from also 

attempting to assert jurisdiction.51 However, because 

assertions of jurisdiction have thus far been rare, dual sovereignty has been only a theoretical consideration to date.

Iraqi and International Law. Contractor personnel who 

commit crimes in Iraq could be tried in local Iraqi courts 

or International Criminal Courts except for the immunity agreement that the United States obtained from the 

Coalition Provisional Authority (CPA) and the U.N. 

Security Council (Garcia 2008, p. 5).52 The United 

States can waive that immunity but has chosen not to do 

so in any case thus far. The immunity, which also applies 

to contractors of other coalition partners, is set to expire 

in December 2008; the United States is negotiating to 

extend it (Byrne and McNett 2008).

Uniform Code of Military Justice. One type of jurisdiction that could be applied to contractor personnel is the 

Uniform Code of Military Justice (UCMJ), which outlines procedures for prosecuting members of the military 

who commit crimes in the United States or abroad.53

Traditionally, DoD civilian and contractor personnel 

have been subject to the UCMJ only when they participate in a declared war or are “retired members of a regular 

component of the armed forces who are entitled to pay.” 

Thus, retired service members serving as contractors or as 

government civilians may be subject to the UCMJ and 

could be court-martialed for criminal violations (Ives and 

Davidson 2003). 

In 2006, Congress expanded the jurisdiction of the 

UCMJ over “persons serving with or accompanying an 

armed force in the field” to include times of a contingency operation.54 Thus, the UCMJ may cover DoD 

contractor personnel in Iraq (Elsea and Serafino 2007, 

p. 20).55 On March 27, 2008, DoD used that expanded 

jurisdiction to bring charges against a contractor 

employee accused of assault with a dangerous weapon 

against another contractor employee. The employee 

pleaded guilty to lesser charges at a court-martial on 

June 22, 2008. A military judge sentenced him to five 

months of confinement. That was the first conviction of 

a civilian under the UCMJ during the current operation 

in Iraq (Multi-National Corps—Iraq 2008). Using the 

UCMJ to prosecute civilians, even during a war, may 

generate constitutional challenges based on the standards 

of due process applicable to military courts.56

In addition to the offenses specified in the punitive articles of the UCMJ (articles 77 through 134) that apply to 

“any person” (not just military members), the UCMJ also 

incorporates the LOAC by reference.57 Thus, civilians 

(including contractor personnel) subject to the UCMJ 

are also subject to the LOAC. Before the 2006 expansion 

of the UCMJ jurisdiction, however, the military lacked a 

general mechanism for trying DoD civilians or contractor 

personnel who were not retired service members for 

crimes committed during contingency operations.

49. This section does not address civil cases, such as contract cases 

against U.S. companies that may apply to contractors in Iraq.

50. Even in the recent changes, jurisdictional holes remain for some 

types of crimes and some types of contractors—notably, DoD 

contractors who are working outside U.S. territory and not during 

a war or contingency operation. Contractors working for agencies 

other than DoD who do not provide support to DoD’s mission 

would also not fall under U.S. jurisdiction.

51. United States v. Wheeler, 435 U.S. 313, 317 (1978).

52. All CPA orders remain in effect until amended or rescinded by the 

Iraqi government. See De Wolf (2006), p. 349, note 118.

53. 10 U.S.C. ch. 47.

54. Section 552 of the John Warner National Defense Authorization 

Act for Fiscal Year 2007, Public Law 109-364.

55. However, not all portions of the UCMJ apply to civilians. Some 

portions apply only to military personnel, such as the provisions 

covering desertion and absence without leave. 

56. On initial guidance, see DoD (2008c). On potential challenges, 

see Baker (2008); Elsea and Serafino (2007), p. 21; Gensheimer 

(2008).

57. 10 U.S.C. § 818.
24 CONTRACTORS’ SUPPORT OF U.S. OPERATIONS IN IRAQ

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Military Extraterritorial Jurisdiction Act of 2000. The 

Military Extraterritorial Jurisdiction Act of 2000 (MEJA) 

extended jurisdiction of the U.S. courts to DoD civilians 

or contractor personnel supporting DoD missions who 

commit a felony (an offense punishable by more than one 

year in prison) outside sovereign U.S. territory while 

accompanying U.S. forces (Elsea and Serafino 2007; 

GAO 2008b).58 The defendants may be tried in federal 

court after being brought to the United States. MEJA 

jurisdiction applies only if civilians (including contractor 

personnel) have not been prosecuted by the host nation’s 

legal system or under the UCMJ. It does not apply to 

civilians working for foreign governments or for federal 

departments or agencies other than DoD; it also does not 

apply to nationals of the host country (in this case, Iraq). 

For example, employees of security contractors working 

for the Department of State would not be subject to 

MEJA.

The statute has been used infrequently. Since enactment 

of MEJA in 2000 and through March 2008, DoD has 

referred 58 cases to the Department of Justice, 12 of 

which have been charged in federal court and one in state 

court (Department of Justice 2008; Singer 2004, 

p. 537).59 Of those, 8 resulted in a conviction and 5 

await trial.

Special Maritime and Territorial Jurisdiction of the 

United States. Certain federal criminal statutes govern 

actions in U.S. facilities overseas, including the premises 

of the U.S. military in foreign states that qualify as part of 

the special maritime and territorial jurisdiction (SMTJ) 

of the United States (Elsea and Serafino 2007, pp. 17–

18). Examples of such statutes include those addressing 

murder, torture, and assault committed by or against U.S. 

nationals. The United States has also asserted jurisdiction 

over crimes committed against U.S. government property 

or personnel, regardless of where the crimes occur (Doyle 

2007). The Department of Justice is responsible for prosecuting such crimes in U.S. courts. That jurisdiction has 

been used sparingly, but it was used recently to convict a 

Central Intelligence Agency contractor who assaulted a 

detainee in Afghanistan (Elsea and Serafino 2007, p. 18).

Other Statutes. Two recent statutes prescribing sanctions 

for offenses committed outside U.S. territory may also 

apply to civilians accompanying U.S. forces. The USA 

Patriot Act expanded extraterritorial jurisdiction in two 

ways.60 First, it augmented the list of federal statutes that 

apply federal extraterritorial criminal jurisdiction, adding 

some computer-related crimes and the transportation of 

illegal drugs and explosives related to terrorism. Second, 

the act expanded the coverage of SMTJ to include the 

“premises of the United States diplomatic, consular, military, or other United States government missions or entities in foreign States” with respect to offenses committed 

by or against a citizen of the United States.

Another statute covering actions overseas is the War 

Crimes Act of 1996, as amended by the Military Commissions Act of 2006. That act provides that “whoever, 

whether inside or outside the United States, commits a 

war crime . . . shall be fined under this title or imprisoned 

for life or any term of years, or both, and if death results 

to the victim, shall also be subject to the penalty of 

death.”61 The law applies to members of the U.S. armed 

forces as well as to any U.S. citizen, regardless of his or 

her employment. It would not apply to contractor personnel who are not U.S. citizens.

58. 18 U.S.C. §§ 3261–3267.

59. Interview with officials from the Office of the Assistant Deputy 

Under Secretary of Defense (Program Support) and DoD’s Office 

of the General Counsel, February 21, 2008, and follow-up communications.

60. Pub. L. 107-56, 115 Stat. 272 (2001), codified in various sections 

of 18 U.S.C.

61. 18 U.S.C. § 2441.
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