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S. Hrg. 111–251 

ALLEGATIONS OF WASTE, FRAUD, AND ABUSE 

IN SECURITY CONTRACTS AT THE 

U.S. EMBASSY IN KABUL 

HEARING 

BEFORE THE

AD HOC SUBCOMMITTEE ON CONTRACTING 

OVERSIGHT 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JUNE 10, 2009 

Available via http://www.gpoaccess.gov/congress/index.html 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

ROLAND W. BURRIS, Illinois 

MICHAEL F. BENNET, Colorado 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

LINDSEY GRAHAM, South Carolina 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT 

CLAIRE MCCASKILL, Chairman 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

JON TESTER, Montana 

MICHAEL F. BENNET, Colorado 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

LINDSEY GRAHAM, South Carolina 

MARGARET DAUM, Staff Director 

MOLLY WILKINSON, Minority Staff Director 

KELSEY STROUD, Chief Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

Senator McCaskill ............................................................................................ 1 

Senator Collins ................................................................................................. 3 

Prepared statement: 

Senator Collins ................................................................................................. 29 

WITNESSES 

WEDNESDAY, JUNE 10, 2009 

William H. Moser, Deputy Assistant Secretary, Logistics Management, U.S. 

Department of State ............................................................................................ 4 

Samuel Brinkley, Vice President, Homeland and International Security Services, Wackenhut Services, Inc. ............................................................................ 19 

ALPHABETICAL LIST OF WITNESSES

Brinkley, Samuel: 

Testimony .......................................................................................................... 19 

Prepared statement with an attachment ....................................................... 35 

Moser, William H.: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 31 

APPENDIX 

Eleven documents submitted for the Record from Senator McCaskill ................ 42 

‘‘New Information About the Guard Force Contract at the U.S. Embassy 

in Kabul,’’ Majority Staff Analysis, prepared by Chairman McCaskill ........... 83 

National Security Archive, prepared statement with attachments ..................... 95 

Questions and responses submitted for the Record from: 

Mr. Moser .......................................................................................................... 106 

Mr. Brinkley ...................................................................................................... 110 

(1) 

ALLEGATIONS OF WASTE, FRAUD, AND ABUSE 

IN SECURITY CONTRACTS AT THE 

U.S. EMBASSY IN KABUL 

WEDNESDAY, JUNE 10, 2009 

U.S. SENATE,

AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:34 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Claire McCaskill, 

Chairman of the Subcommittee, presiding. 

Present: Senators McCaskill and Collins. 

OPENING STATEMENT OF SENATOR MCCASKILL 

Senator MCCASKILL. Welcome to the hearing of the Subcommittee on Contracting Oversight of the Homeland Security and 

Governmental Affairs Committee. 

I am really glad that our Ranking Member is here. She has a 

long record of oversight on all issues relating to accountability in 

the government and has been a great mentor for me in this area 

and it is great to have her here this afternoon. 

As we bring this hearing to order, I just want to briefly talk 

about why we are here today. This is an effort to look at one contract out of tens upon thousands of contracts that has had a difficult record in terms of being compliant with contract provisions 

and see if by looking at this contract we cannot learn some lessons 

about contract oversight. 

I think it is particularly important because this particular contract deals with the security of our embassy in theater. We are in 

a conflict in Afghanistan and so there is extreme pressure on the 

State Department to make sure that the embassy is secure. That 

is why I think this particular contract should get extra scrutiny 

and oversight as it relates to how the contractor has performed 

under the provisions of the contract. This is about a $190 million contract to provide the guard force 

at the U.S. Embassy in Kabul. It is a unique contract. At most U.S. 

embassies around the world, the State Department hires local nationals if they need guard force assistance. In Iraq and Afghanistan, however, the State Department has decided to contract out 

the embassy’s security to a mix of Americans, expatriates, and 

third-country nationals. In Kabul, our embassy security force is 

largely comprised of individuals from Nepal. 

2 

The Kabul Embassy contract can be viewed as a case study on 

how mismanagement and lack of oversight can result in poor performance. AGNA is the contractor and their performance on this 

contract has been deficient since the contract began in July 2007. 

The result is that at times, the security of the U.S. Embassy in 

Kabul may have been placed at risk. 

In July 2007, the State Department contracting officer issued a 

cure notice, a formal letter saying the contractor had failed to meet 

major contract requirements. The contracting officer told AGNA, ‘‘I 

consider the contract deficiencies addressed below to endanger performance of the contract to such a degree that the security of the 

U.S. Embassy in Kabul is in jeopardy.’’ 

The State Department also told ArmorGroup North America 

(AGNA) that it questioned the contractor’s ability to provide security for the embassy in the hostile environment of Afghanistan. According to the State Department, ‘‘The government has serious concerns regarding AGNA’s ability to respond in the aftermath of a 

mass casualty incident or extreme loss of personnel due to mass 

resignation, hostile fire, or loss of manpower due to illness. Therefore, AGNA needs to come quickly to terms with contract requirements, especially in light of the current incidents occurring in and 

around Kabul and the corresponding threat environment they 

pose.’’ 

In September 2008, AGNA’s performance problems had grown so 

severe that the State Department advised AGNA that the State 

Department was considering terminating the contract. According to 

the State Department, AGNA’s failure to provide sufficient guards 

has ‘‘negatively impacted the security posture of the local guard 

program for the U.S. mission to Kabul. The staffing situation has 

further deteriorated to a level that gravely endangers performance 

of guard services in a high-threat environment such as Afghanistan.’’ 

In March 2009, in inspections of the guard force operations, the 

State Department observed that at least 18 guards were absent 

from their posts at the embassy. In response, AGNA stated that 

the guards’ absences were due to supervisory personnel negligence. 

Documents produced to the Subcommittee also show that AGNA 

officials responsible for buying winter clothing and boots for the 

guard force acquired over $130,000 of counterfeit goods from a company owned and managed by this same official’s wife. In total, the 

AGNA official purchased $380,000 worth of equipment from his 

wife’s company. 

Instead of letting the contract end after the first year, the State 

Department chose to exercise the first option year. We have also 

learned the Department intends to exercise the second option year, 

which begins July 1. If they do, the Kabul embassy will be guarded 

by this contractor at least until next June. 

In testimony to be delivered today, the witness from the State 

Department has said that at no time was the security of the American personnel at the U.S. embassy compromised. I hope that is the 

case. I have been told that it is. But the State Department’s own 

prior statements indicate that we have a problem and that, in fact, 

the U.S. embassy could have been at risk, and this is something 

we need to examine closely. 

3 

1The 11 documents and the staff analysis submitted by Senator McCaskill appears in the Appendix on page 42 and 83 respectively. 2The prepared statement of Senator Collins appears in the Appendix on page 29. 

The State Department and AGNA have also advised the contractor is now fully compliant with requirements relating to staffing. I am satisfied the Department and AGNA have made major 

progress and there are no remaining glaring deficiencies which endanger the security of the embassy. But I am not satisfied with the 

record of mismanagement that is before us today and the oversight 

that this contract had. 

So my question for the hearing today is: Is this the best we can 

do? 

There are lessons to be learned from this embassy contract. By 

examining how the State Department and the contractor allowed 

so much to go wrong, we can begin the process of ensuring that 

mismanagement of a contract doesn’t ever jeopardize any of our 

U.S. embassies. 

My staff has prepared an analysis of the evidence that the Subcommittee has received and also there are 11 documents that I 

would like to put in the hearing record. By unanimous consent, I 

would like to place the staff analysis and the 11 documents that 

we have received in support of this hearing information in the 

record.1

Senator COLLINS. I have no objection. 

Senator MCCASKILL. Thank you very much. 

I will then turn to Senator Collins for any opening remarks she 

has. 

OPENING STATEMENT OF SENATOR COLLINS 

Senator COLLINS. Thank you, Madam Chairman, and I want to 

commend your leadership in this area. I would ask unanimous consent that my entire statement be placed in the record and I am just 

going to make a few comments.2

Senator MCCASKILL. So ordered. 

Senator COLLINS. In government procurement, ensuring the best 

value for the American taxpayer is important under the best of circumstances, but it is crucial when our Nation is at war and our fellow citizens are serving in harm’s way in Iraq, Afghanistan, and 

in other overseas locations. 

Federal employees and contractors working in these hostile environments should feel secure within the walls of our embassies. 

While safety cannot be guaranteed, our Nation owes its citizens as 

well as the foreign nationals that serve by their sides a reasonably 

secure safe haven from those who would do them harm. 

Our embassies depend on private security contractors to supplement the Marine security detachments or other Federal security officials. The vast number of these security contractors perform admirably for the U.S. Government. Unfortunately, however, the Government Accountability Office, the Inspectors General, and other 

investigative bodies have found numerous examples where private 

security contractors have failed to uphold their contractual obligations and have left their government partners vulnerable to failure 

or attack. 

4 

1The prepared statement of Mr. Moser appears in the Appendix on page 31. 

To improve private security contractors and to protect Federal interests, the Federal Government needs to have explicit expectations, precise contract requirements, and diligent program management and oversight by all agencies. Today’s hearing will examine 

this very issue in the specific context of security at the American 

Embassy in Kabul. 

We will examine the State Department’s role in writing a clear, 

performable contract and its ability to provide consistent and responsible contract management and oversight. We will examine the 

steps that the State Department took to identify the deficiencies in 

performance by the contractor and whether the State Department 

held the contractor accountable for poor and declining performance. 

In the end, we hope that the lessons learned from this hearing 

will improve contract administration and lead to better security for 

our embassy’s dedicated staff. 

Thank you, Madam Chairman. 

Senator MCCASKILL. Thank you. 

Our first witness is William Moser, who is the Deputy Assistant 

Secretary of State for Logistics Management at the U.S. Department of State. 

It is the custom of the Subcommittee to swear all witnesses that 

appear before us, so if you don’t mind, I would ask you to stand. 

Do you swear that the testimony that you will give before this 

Subcommittee will be the truth, the whole truth, and nothing but 

the truth, so help you, God? 

Mr. MOSER. So help me, God. 

Senator MCCASKILL. Thank you. 

We will be using a timing system today. We would ask that your 

oral testimony be no more than 5 minutes and your written testimony will be printed in the record in its entirety. 

Thank you, Mr. Moser, for being here and we welcome your testimony. 

TESTIMONY OF WILLIAM H. MOSER,1 DEPUTY ASSISTANT SECRETARY, LOGISTICS MANAGEMENT, U.S. DEPARTMENT OF 

STATE 

Mr. MOSER. Thank you very much, Chairman McCaskill, Ranking Member Collins, for the opportunity to appear today before you 

to discuss the State Department’s management of contracts to provide security services at the U.S. Embassy in Kabul. 

The Department of State has extensive experience with procuring services to protect our overseas diplomats and facilities. Diplomatic activity is ever-changing to meet the needs of our country 

amid evolving world events. In today’s testimony, I will address the 

performance of ArmorGroup North America, as the provider of static guard services for our embassy as well as the State Department’s 

oversight of this contract. 

Because of the dangerous and unique environment, acquiring 

guard services for our mission in Kabul is challenging. However, by 

staying focused on the No. 1 priority, the security of the embassy, 

complemented by effective contract management, the Department 

of State has successfully balanced its security requirements and 

5 

contract compliance. Indeed, improving the worldwide program for 

procuring guard services is a Department priority. 

The Department of State established an Embassy Guard Branch 

in the Office of Logistics Management to consolidate, streamline, 

and regionalize these contracts previously administered individually by post. We believe that these complicated contracts should 

be centralized so that they receive the attention from procurement 

professionals that they deserve. We have grown to administer 53 

contracts worldwide. 

This transition, however, has not been without growing pains, including a backlog of price adjustments and change management 

with the individual posts. However, we already see that the centralizing of the guard contract program has achieved results that 

individual posts could not achieve. 

I would like to go into a little bit more detail about the security 

services in Kabul. We have met with your staff three times in the 

past 3 weeks. We believe that these meetings have been extremely 

productive. The Department presented historical background, described the on-the-ground conditions in Kabul, and outlined the 

many steps taken to ensure appropriate oversight of ArmorGroup 

North America. Prior to the award of the ArmorGroup North America contract, the Department had terminated a contract with MVM 

due to the contractor’s failure to meet contract requirements. 

In March 2007, a new guard contract was awarded to ArmorGroup North America. As required by law, this contract was 

awarded based on the lowest price, technically acceptable offer. 

This award was for one base year and four option years. The Department is currently in the first option year. 

As with all guard contracts, there is constant communication 

with and collaborative efforts by the contracting officer and Diplomatic Security in Washington and the Regional Security Officers 

on the ground in Kabul. For the ArmorGroup North America contract, weekly meetings, and at times daily meetings, are held on 

contract performance. 

At the end of the first contract year, Diplomatic Security and the 

contracting officer completed a thorough evaluation. In addition, 

the Bureau of Diplomatic Security has conducted 14 program management reviews since contract award. Through this constant oversight, the Department identified several issues and deficiencies and 

worked to correct them with ArmorGroup. However, at no time was 

the security of American personnel at the U.S. Embassy compromised. Indeed, one of my priorities in traveling to Afghanistan 

last week was to have discussions with the Regional Security Officer and senior post management to confirm this fact. 

During the 2007 transition to ArmorGroup North America, the 

Department identified deficiencies in personnel, training, equipment, and performance. The contracting officer and the program 

manager issued several deficiency letters, a cure notice, a show 

cause notice, and carefully monitored ArmorGroup North America’s 

corrective action plans. During this monitoring, we discovered other 

deficiencies concerning reporting, invoicing, and weapons for training. The most serious of our concerns were manning deficiencies 

that the contractor covered by the use of overtime hours. 

6 

1The letter referred to by Senator McCaskill appears in the Appendix on page 42. 

2The letter referred to by Senator McCaskill appears in the Appendix on page 52. 

The Department always took appropriate deductions from its 

payments to ArmorGroup North America to ensure that the U.S. 

Government was compensated for less than full compliance with 

contractual terms. At the same time, we worked with ArmorGroup 

North America to correct these problems. 

Through this difficult period of contract administration, we have 

always remained focused on what counts the most, the security of 

our personnel and facilities in Kabul. The Regional Security Officer 

in Afghanistan has always reported that despite the contractual deficiencies, the performance on the ground by ArmorGroup North 

America has been and is sound. The Regional Security Officer and 

the senior officials of the Kabul Embassy reaffirmed this to me last 

week. 

Effective contract administration in a war zone is challenging. 

However, in this case, we feel we found the right balance of enforcing contract compliance without losing sight of protecting our people and facilities in Kabul. 

I look forward to discussing these issues with the Subcommittee 

and look forward to your questions. 

Senator MCCASKILL. Thank you, Mr. Moser. 

Let me start by bringing your attention to a couple of documents 

which don’t seem to reconcile completely with your testimony 

today. On June 19, 2007—and if we can put this document up 1— 

this was after the contract had begun, and I am quoting the document, ‘‘I consider the contract deficiencies addressed below to endanger performance of the contract to such a degree that the security of the U.S. Embassy in Kabul is in jeopardy.’’ 

And then a year later, a letter to AGNA,2 once again in a document from the State Department, AGNA’s inability to permanently 

correct personnel staffing shortages has negatively impacted the security posture of the local guard program for the U.S. mission to 

Kabul. The staffing situation has further deteriorated to a level 

that gravely endangers performance of guard services in a highthreat environment, such as Afghanistan. 

These are two documents that were generated by the State Department that has this language in them. I am trying to reconcile 

your testimony today with those documents and want to give you 

a chance to do just that. 

Mr. MOSER. Senator McCaskill, thank you very much for the 

question. And I really do want to start, first of all, to put this in 

the context of where we were in the contract administration, particularly with the first one. 

The first letter was actually after we looked at the transition 

from our previous guard contract with the P.A. Berger bridge contract to ArmorGroup North America. Well, to be frank about it, this 

transition was not easy, and I will say this based on my 25 years 

in the Foreign Service. If you have ever been in a post where the 

guard contract transitions from one contract to another, it is a very 

difficult situation. There is usually a turnover in guards. They have 

to understand their responsibilities. The management changes. It 

is a very difficult situation. And, to magnify this, we have never 

7 

done so many transitions in a place as dangerous as Kabul, Afghanistan. 

So, really, what I think that you see in the first letter and really 

in the subsequent one, too, is what I have actually encouraged all 

the contracting officers that work in my section to do, which is to 

be tough with the contractor at the very beginning and make sure 

that they know that we are serious about these things. 

Now, I am not going to say that these were necessarily exaggerations, but what we want to emphasize here, that if they did not correct these deficiencies with the things that were left out that were 

not done properly. Yes, this could end up to be a serious deficiency 

in the security posture of the embassy. But I didn’t want them to 

go out and say to the contractors, well, you need to correct these 

because they don’t comply with dotting the ‘‘i’’s and crossing the 

‘‘t’’s in the contract. We want to tell them that these things really 

do have real consequences, but at the same time, the people on the 

ground said, for now, this is OK. 

Now, Senator McCaskill, I do want to make one point more on 

that. One of the reasons why the RSOs on the ground, and I talked 

both to the previous RSO who was there in 2007 and to the one 

that is currently on the ground in Afghanistan, and one of the 

things that they both—or the one that was previously in Afghanistan emphasized to me is that the previous contract, the bridge 

contract, was so bad and security was so poor under that contract 

that the transition to ArmorGroup was still a major improvement 

in the security posture of the embassy. And, to the extent that the 

guard posts could be covered, the requirements of the contract were 

met in terms of the actual security, they didn’t want to go through 

transitioning to yet another contractor. 

And I can be a little bit more specific with your question—— 

Senator MCCASKILL. OK. So you are anticipating my next question. 

Mr. MOSER. Sure. 

Senator MCCASKILL. And I don’t mean to put words in your 

mouth— 

Mr. MOSER. OK. 

Senator MCCASKILL. I am good at doing that, so stop me if I do 

it. But what you are saying is that the first letter was meant to 

be serious with them, but it probably wasn’t quite as serious as it 

sounded? Is that what you are saying? 

Mr. MOSER. Well, Senator McCaskill, I think maybe to put it this 

way, the previous bridge contract was terrible and we really were 

concerned about the security at the embassy under the previous 

bridge—— 

Senator MCCASKILL. I understand that. 

Mr. MOSER. I have a new contractor, and frankly, Senator 

McCaskill, I think that you want the contracting officers in the 

Federal Government to be tough on contractors, particularly when 

they are starting into a new contract—— 

Senator MCCASKILL. OK. So let us, just for purposes of this discussion, take that first letter and say, this is the new sheriff, the 

new contractor—— 

Mr. MOSER. That is right. 

Senator MCCASKILL. You are going to be tough. 

8 

Mr. MOSER. Yes. 

Senator MCCASKILL. But a year later, you use the language 

‘‘gravely endangers performance of guard services in a high-threat 

environment such as Afghanistan.’’ 

Now, this is a full 12 months later, Mr. Moser. I mean, are we 

still exaggerating to get their attention or were we not saying what 

was accurate at that point in time? 

Mr. MOSER. I think it is fair to say that because we want this 

to be a thoroughly documented and tough stance toward contractors, we are going to continue to emphasize that what we are talking about here is security. But this is a tough balancing act. 

A year later, yes, we were right there on that borderline where 

we were thinking about, continue with them, terminate them. 

What are we going to do? And we had lots of discussions in the Department about what to do. So we knew that there were problems, 

but that said, and as I said in my testimony, the day-to-day tasks 

on the ground were still adequate and the security was sound. 

Senator MCCASKILL. OK. 

Mr. MOSER. So it is a really hard balancing act, and just to put 

this in the right context, Senator McCaskill, is that, yes, we want 

the contract, every part of it to be complied with, and we do feel 

that all of the parts of the contract are important for the security 

of the mission. But we have got to think about what is going to be 

better for our people on the ground in Afghanistan, because at the 

end of the day, we manage first of all toward their security, and 

second, in terms of thorough contract compliance. 

Senator MCCASKILL. I want to make sure I give Senator Collins 

a chance to question now, but I do want to come back and ask you 

a few more questions. But I think it is important to put on the 

record right now that the first letter, you have made an effort to 

explain. The second letter, you have made an effort to explain. But 

I think it is very important to point out that on the initiative of 

the Department of State, in March of this year, you did a check 

and inspected the guards—— 

Mr. MOSER. Yes. 

Senator MCCASKILL [continuing]. And found 18 posts had been 

left empty by the guards on duty at the embassy, and that was 

March of this year. 

Mr. MOSER. No, March of last year. Wasn’t that 2008? Or was 

that 2009? 

Senator MCCASKILL. No. This is 2009. That is this year. 

Mr. MOSER. OK. 

Senator MCCASKILL. The third year of the contract, or coming up 

upon the third year of the contract. I have taken my initial time 

allotment and let me defer to Senator Collins for questions. 

Senator COLLINS. Thank you. Mr. Moser, I have to tell you that 

in reviewing these documents, I, too, find them to be very conflicting and confusing. It troubles me if you are telling a contractor—and by you, I mean the Department of State—— 

Mr. MOSER. Yes, I am sure. I understand. 

Senator COLLINS [continuing]. Not you personally—if the Department of State is telling a contractor that the deficiencies address 

below to endanger performance of the contract to such a degree 

that the security of the embassy is in jeopardy, if that is not a true 

9 

statement, then the Department of State should not be saying it. 

If that is an exaggeration, then it is unfair to the contractor that 

that is being said. If it is accurate, then it is an alarming situation 

that demands action by the State Department. So clarify that for 

me. 

Mr. MOSER. OK. Well, I am not a contracting officer. 

Senator COLLINS. Right. 

Mr. MOSER. I am a Foreign Service Officer, and one of the things 

that we are very much aware of in the contracting activity is that 

there is—the actual service being delivered is to provide security 

services for the U.S. Embassy in Kabul. That is, the principal security service. But there are a lot of other contract terms that have 

an impact on the delivery of that service that are reflected. 

Now, deficiency letters and cure notices are things that if you 

work with the parties involved can be corrected over time. In other 

words, we never said that you are not providing the security services. We are saying that these deficiencies, which they call them 

cure notices because they are curable, that we could work with 

these and correct them, but they are going to have to be corrected 

to maintain the long-term posture of security at the embassy. 

And those are the things—it is a difficult—I don’t want to say 

that the contracting officers have exaggerated. No. But I think that 

they have given them a tough enough posture to say, look, if you 

don’t correct these problems, then over time, this could lead to a 

serious degradation in the security in the embassy and its posture. 

Senator COLLINS. Well, let us look at another measure. The Defense Security Service does an annual security review of the contractor. Now, initially, in June 2006, the ArmorGroup received a 

superior rating. So that seems inconsistent to start with as far as 

your statement that when there is a change in the contractor, that 

the contracting officer is very tough up front. But here is the other 

unit, the Defense Security Service, giving the contractor a superior 

rating. 

Then what happened over the 3-year period is the contractor’s 

rating declines each year. It doesn’t go all the way to unsatisfactory, which is what you would expect based on the cure notice, but 

it does decline from superior to satisfactory. 

Now, it is my understanding that the Defense Security Service 

notifies the sponsoring agency, in this case the State Department, 

merely whether or not the contractor is still satisfactory, correct? 

Mr. MOSER. That is correct. That is my understanding, too, Senator Collins. 

Senator COLLINS. But does the Defense Security Service share 

the actual performance reviews of the contractor with the Department of State? 

Mr. MOSER. They do not share them with the contracting authority who holds the actual contract. 

Senator COLLINS. Shouldn’t that information be shared? 

Mr. MOSER. Absolutely. But that is not something that, if I can 

say this, we would be happy to have external information on the 

contractor and what the contractor has done in the past. In fact, 

one of the things in previous contracts that I have actually discussed with the Congress in the past, my contracting officers will 

trace down blog posts and see—if there is an allegation of blog 

10 

posts, they will go chase after it to see if it is right. I would really 

think it would be beneficial for us to get official information. I fully 

agree. 

Senator COLLINS. It seems to me that it should be an automatic 

requirement. 

Let me go to another issue, and that is the nature of the deficiencies that were identified. You have testified here this morning 

that at no time during the performance of this contract have you 

felt that the security of the perimeter was breached or that the embassy personnel were, in fact, endangered, is that correct? 

Mr. MOSER. Yes, ma’am, that is correct. And it is not what I 

think. It is my discussions with the security officials who were on 

the ground. It means the people who—I talked about this with the 

people whose lives were at risk. 

Senator COLLINS. What concerns me about that assessment is 

the nature of some of the deficiencies. Some of the deficiencies to 

me could not possibly have an impact on security. For example, 

there was a failure to provide adequate gym equipment. Now, that 

is not complying with the contract and that means potentially we 

are paying for services that weren’t rendered and that is important, 

but that is a whole different issue and does not speak to security. 

But some of the issues seem to speak to security. For example, 

there is a charge that there was a late submission of ammunition. 

Mr. MOSER. Yes. 

Senator COLLINS. So why wouldn’t that have an impact on security? 

Mr. MOSER. Well, the ammunition issue was one of the ones that 

we were most disturbed about, and this is the reason why. At one 

time in the early days of the contract, in 2007, in the first 6 

months, the State Department had to loan ArmorGroup North 

America ammunition, not with which to stand post, but with which 

to train. In other words—and the contract actually requires the 

ammunition in three forms. The contractor is supposed to supply 

ammunition for its personnel to stand at post, to train with, and 

then a reserve storage. 

Now, we were disturbed that ArmorGroup North America did not 

have sufficient reserve storage, and the reason why this is such a 

disturbing thing to us is that it is Afghanistan and supply chain 

can be very difficult. So this was one of the ones we really were 

kind of jumping up and down about. In actual circumstances, the 

guards were still on post. They had enough ammunition to shoot 

with. They didn’t have to shoot anybody. But we were disturbed 

that if we had an incident, then we could actually get pressed, and 

that was where we were really disturbed. But ArmorGroup North 

America did make up that deficiency and currently have sufficient 

ammunition supplies. 

Senator COLLINS. I see my time has expired. 

Senator MCCASKILL. In the deficiencies, following up on Senator 

Collins’ questions, in the contract, we have personnel, we have 

training, we have equipment, we have performance, we have reporting, and we have invoicing. My understanding, they still don’t 

have the weapons they are required to have under the contract for 

training, is that correct? 

Mr. MOSER. That is true. 

11 

Senator MCCASKILL. And we are not talking about office supplies 

on that list. We are talking about missing guards, counterfeit 

goods, insufficient relief guards, manning posts with people who 

lack English language training and weapons training required 

under the contract. Now, maybe the question that needs to be 

asked, Mr. Moser, is when we are in theater, when we are sending 

thousands of Americans to risk their lives in a country that we 

have deemed such a risk to our country that we are putting men 

and women’s lives on the line every day, is it maybe time to say 

that we should not be guarding embassies in theater with private 

security contracts? 

Mr. MOSER. Senator McCaskill, that is an excellent question. I 

can’t really give you an official Department position, but I can give 

you some of my personal views on this. 

Basically, we have had local guards or contract guards at our embassies for many years, as long as I have been in the Foreign Service, I think. I have been in the Foreign Service 25 years and the 

first embassy I went to in Bamako, Mali, had contract guards, and 

going back much further than that. 

It is a good question and one that I would encourage this body 

to really examine and in a dialogue with the State Department 

about whether, in certain situations, it is a good idea. But let me 

give you a couple perspectives on this. 

One reason that it is an advantage to use contractors is that it 

allows us flexibility. As our requirements go up, we can hire more 

guards or we can ask the contractor to hire more guards. We can 

decrease as our requirements go down. 

And one of the things that is something that the Legislative 

Branch will have to contemplate if we do change our current arrangements in this is that we actually look at the possibility—that 

we actually remember that if we would Federalize this workforce, 

then we also have to increase the amount of embassy staff on the 

ground in order to supervise that force and to handle things like 

personnel transactions and financial transactions. 

Senator MCCASKILL. Well, couldn’t they be military? 

Mr. MOSER. No. Well, that—— 

Senator MCCASKILL. Why couldn’t it be military? 

Mr. MOSER. I think you will need to talk to my colleagues in 

DOD about that, because that—— 

Senator MCCASKILL. Well, here is what I am trying to figure out. 

I mean, the reason we have these unusual situations in Iraq and 

Afghanistan is because there was a decision made that nationals 

were too dangerous. We couldn’t hire nationals because of the nature of the threat. So what do we do? We hire people from Nepal 

who can’t speak English for $800 a month. 

Now, I have got to tell you, if this is about the locals being not 

sufficient to guard our embassy in theater because of the threat, 

it seems to me that we are not going up the food chain, we are 

going down the food chain. I mean, these people still—they have 

told you they can speak English, but you still have not made any 

verification that the people that are standing guard at this embassy can communicate in English, isn’t that correct? 

Mr. MOSER. Senator McCaskill, we are currently evaluating the 

information that we have from ArmorGroup North America and 

12 

they have actually attested to us that the English certifications are 

now correct for all of the Gurkha guards. 

Senator MCCASKILL. And they also told you they are going to 

have weapons a year ago. 

Mr. MOSER. Yes, but, Senator, with all due respect—— 

Senator MCCASKILL. Didn’t they? 

Mr. MOSER. I am somewhat sympathetic with them about the 

weapons based on my other experience in procurement. We try to 

get radios for our embassy in Baghdad or for our other embassies 

around the world. We can’t get them anymore. The reason we can’t 

get them is because the DOD is sucking up all these resources, and 

particularly for the weapons that we procure for this, we are really 

in competition with a much bigger buyer, and ArmorGroup North 

America and the other security companies are, too. There is a real 

shortage in terms of the supply chain side that really keeps them 

from getting to them. 

And so this is one of the reasons why, even though I am not 

happy about their shortage of the weapons, I actually am somewhat sympathetic based on my own personal experience in trying 

to supply equipment for our embassy and our offices. 

Senator MCCASKILL. I understand the point you are making 

about the supply chain on the weapons, but Mr. Moser, this is a 

contract that anybody with a cold, cruel eye looking at the oversight of this contract would say that there have been serious performance issues. And I guess at this point, the idea that you would 

trust and not verify when literally just a few months ago when you 

did try to verify you found 18 posts empty—now either those posts 

were empty because they didn’t have sufficient staff, which they 

have told you they have now, or they were empty because they 

were negligent in covering those posts. 

Now, we are going to renew this contract again and I guess I am 

a little worried that at this juncture, with this kind of record on 

contract performance, that them just telling you that they are now 

in compliance seems to be sufficient for you. 

Mr. MOSER. Well, Senator McCaskill, one of the things is I have 

worked with local guard contracts or guard contracts for a long 

time as management officer overseas, and in fact, at one of my 

small posts, I was actually the post security officer and had to run 

the guard contract myself. There are two RSOs on the ground out 

of 16, I think, total, and with that total to grow, that spend most 

of their time working on this. In terms of the language skills, those 

are things that we look at the data that they have presented but 

they go out and verify that, as well. In fact, our attitude with contractors in general is not trust, but verify. Our attitude is more like 

we don’t believe what you are saying, we are going to check it out, 

and we really do try to do that in this contract, as well. 

That is the reason why I have to have those eyes and ears on 

the ground in Kabul to go out and check with the Gurkhas and see 

if they can come out with a complete sentence of English. And I 

have to have them go and check the guard posts to make sure that 

they are manned. 

Senator MCCASKILL. Well, when you checked the last time, could 

they come out with a sentence in English when you checked? 

13 

Mr. MOSER. Well, from what the indications that we had from 

the RSO, yes, they have made a lot of progress and that things are 

better. We are going to go over the data. We think that it may be 

resolved, but we are not entirely certain. 

Senator MCCASKILL. OK. Go ahead, Senator Collins. 

Senator COLLINS. Thank you. 

Mr. Moser, just so we don’t leave the wrong impression here, it 

is my understanding that the Gurkhas are extremely well regarded—— 

Mr. MOSER. Yes, they are. 

Senator COLLINS [continuing]. In security circles, that they are 

well known for staying at their posts regardless of the threat, is 

that correct? 

Mr. MOSER. That is my understanding, too, Senator Collins. I 

have seen them at posts, but I have never been in a country where 

we have had them full time. 

Senator COLLINS. And they are, in fact, used at several embassies? 

Mr. MOSER. Yes, they are. And in fact, the U.K. uses them quite 

extensively in various dangerous places around the world. 

Senator COLLINS. I just wanted to clarify that point. 

Senator MCCASKILL. Thank you. I probably got carried away 

about the food chain. 

Senator COLLINS. Even though, I was just going to say, I am 

sympathetic with the Chairman’s point, that even if you have exceptional guards, they have got to be able to communicate—— 

Mr. MOSER. Yes. 

Senator COLLINS [continuing]. To the English-speaking embassy 

personnel. 

Mr. MOSER. Well, this is something that we do care about. I 

mean, this is what the RSOs have to go out and determine, that 

they can actually run the workforce. 

Senator COLLINS. Let me talk about the award of this contract. 

It is my understanding that prior to the award of the AGNA’s contract, the State Department had terminated the previous contract 

with MVM, is that correct? 

Mr. MOSER. Senator Collins, if I can give you one point of clarification on that—— 

Senator COLLINS. Yes. 

Mr. MOSER [continuing]. We did terminate it, but they actually 

never performed. 

Senator COLLINS. I guess that would be extremely poor performance. 

Mr. MOSER. Well, let us say that, to use a polite phrase, they just 

couldn’t get their act together and it was very obvious in the transition period that they weren’t going to be able to perform. And 

that is the reason why we had to terminate that one rather precipitously. 

Senator COLLINS. So let us talk about the contract that was 

awarded to AGNA. That was awarded in March 2007 and I am informed that it was based on an evaluation technique that is called 

lowest price, technically acceptable. 

Mr. MOSER. Yes, ma’am. 

14 

Senator COLLINS. And it is my understanding that in such circumstances, the lowest price bid is selected regardless of the relevant strength of the bidder’s qualifications, is that correct? 

Mr. MOSER. Senator Collins, if I could put that—just one more 

finer point on it—— 

Senator COLLINS. Yes. 

Mr. MOSER [continuing]. Is the lowest price, technically acceptable. It is in the State Department legislation passed by Congress. 

It is actually in our authorizing legislation, is my understanding. 

I have seen the legislation, but I don’t remember the exact passage. 

And it is technically acceptable. 

In other words, to get the specifics on this, there were eight bidders on this contract. Two were found to be technically acceptable. 

We had discussions with both of those who were found technically 

acceptable and AGNA was the winner after that based on a price 

that was lower than the other technically acceptable bidder. 

Senator COLLINS. Now tell me how that differs from a best value 

approach to awarding the contract. 

Mr. MOSER. Well, in a best value approach, we would weigh the 

cost versus the quality of the proposals or what we think that the 

contractor could bring to the table. You have to make trade-offs 

between cost and what is being offered. And it is a much more 

complicated technical evaluation. In other words, at the program 

office—and this is true in any contract, not necessarily—not only 

security services, but in any contract—you are trying to make a decision of what is the best value to the U.S. Government given both 

cost and technical qualifications. 

Senator COLLINS. Now, it is my understanding that the current 

contractor, Wackenhut, bought the company AGNA. 

Mr. MOSER. Yes, ma’am. 

Senator COLLINS. They had been one of the bidders but lost out 

because their bid was considerably higher, is that correct? 

Mr. MOSER. Their bid was not judged to be technically acceptable. 

Senator COLLINS. It was not technically acceptable. Was it also 

higher? 

Mr. MOSER. That, I don’t know. 

Senator COLLINS. Is there a process when a company is acquired 

for reevaluation of the contract? 

Mr. MOSER. Normally, we do not do that. Companies do get traded, and usually if one goes to another, as long as the other security 

parts are met in terms of the acquisition about foreign ownership 

or other things, we don’t really go in and change because our contract is still valid. 

Senator COLLINS. Do you know why Wackenhut was viewed as 

not being technically qualified? 

Mr. MOSER. No, ma’am, I do not. 

Senator COLLINS. It is my understanding that the contractor is 

currently operating at a loss of $1 million a month, according to the 

testimony. This has raised the question in my mind of whether, 

given the lack of compliance with the contract requirements, the 

requirement that you essentially take the lowest acceptable bidder—which sounds great, we want competition and we want the 

lowest bidder—but we also want quality performance. Do you beVerDate Nov 24 2008 09:46 Jan 29, 2010 Jkt 051785 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\DOCS\51785.TXT SAFFAIRS PsN: PAT
15 

lieve that the bid price was too low to be feasible for a security contract under these constraints or is this just a—the contractor 

agreed to it, so obviously that is not the government’s fault, but 

what is your assessment? 

Mr. MOSER. Well, maybe if I can answer the question this way. 

As I have said, I have been in the State Department, overseas 

mostly, for the last 25 years and seen a lot of contracts, overseas 

contracts, and our biggest contract at any normal post is always 

the guard services contract. Lowest price, technically acceptable 

gets us the best value product but usually at the least cost, but it 

gets us an acceptable product at a least cost. 

If you have best value, you would have the chance to get perhaps 

at a higher cost a better product. And this is the reason why, particularly for these very difficult security situations, like Afghanistan and Iraq and Pakistan, I think that we really should look at 

a change in legislation that would give us a best value way of appraising this. 

Now, I say this partly because I am a big believer in contracting 

officers, and contracting officers and program officers, and I really 

think that if they have—if you give the employees at the Federal 

Government enough flexibility or the employees at the State Department enough flexibility to make good decisions, they will try to 

make a decision that is in the U.S. Government’s best interest, because I think you both share with me that our first priority is making sure that we have good security for our embassy personnel in 

the most dangerous of situations. 

Senator COLLINS. Thank you. 

Senator MCCASKILL. In January 2008, AGNA informed the State 

Department that the logistics manager, the official responsible for 

AGNA’s contracting for embassy guard force, may have been buying counterfeit goods and had purchased over $380,000 worth of 

equipment from a company owned and managed by his wife. What 

actions did the State Department take at the point in time that it 

learned that information? 

Mr. MOSER. At the point in time when we learned that information, we told AGNA to continue its investigation, report back to us, 

and once we learned that this was true, we asked for the individual 

to be removed from the contract, the person that was their employee. 

Senator MCCASKILL. And what about the wife’s company? Was 

there any investigation? Was there any thought to having a fraud 

investigation, because clearly when you have that kind of arrangement, speaking as a former auditor, that is generally when you 

have kickbacks going on. That is generally when you have money 

being exchanged under the table. Was there any thought at the 

State Department that this would be a time that you would want 

your fraud investigators to look at what was going on in this contract in case taxpayer money had been stolen? 

Mr. MOSER. Well, one of the things is, Senator McCaskill, I am 

a big believer in audits. Actually, I am a big believer in them. But 

this is a firm fixed-price contract. That is part of the nature of lowest price, technically acceptable, that it is at a given price. In other 

words, we pay them for the guard hours that we ask for. So there 

16 

isn’t really—the fraud isn’t really committed against us. In other 

words, let me give you an example. 

Senator MCCASKILL. Wait a minute. 

Mr. MOSER. Well, let me explain. I lived in Central Asia for 3 

years. I was assigned to our embassy in Kazakhstan. The counterfeit goods were all over the local markets, but I couldn’t always tell 

whether they were or were not counterfeit. And I know that this 

happens, particularly in these Asian countries with close proximity 

to China. This is very common. 

In our contract, we say, you will give the guard a coat. We don’t 

say what kind of coat, quality of coat, anything like that. So to us, 

the fraud wasn’t really committed against us. The contractor was 

giving the guard a coat. We didn’t know what the coat was. So 

there wasn’t really any fraud against us. 

Now, we are more than happy to call our own Inspector General 

when we think there is something untoward in our contract, but 

we didn’t ask the contractor to provide a certain brand or a certain 

quality. We just specified the item. 

Senator MCCASKILL. OK. So I want to make sure that I understand this. If the U.S. Government is not seen as the victim of a 

financial crime, there is no interest in looking at for fraud purposes 

activity of a contractor that could, in fact, be criminal? Is that what 

you are testifying, Mr. Moser? 

Mr. MOSER. Now, Senator McCaskill, I am not sure if I can really 

answer that question. All I can do is talk about what we did in this 

case, and what we did was the person was removed from the contract. We weren’t really affected by the counterfeit goods and we 

didn’t do anything further on this. 

Senator MCCASKILL. Well, I have to tell you, I am surprised. I 

think most people would be surprised that if you knew that someone that was a contractor for the U.S. Government, that someone 

who was a major acquisitions personnel within that contract, if you 

found out that they were buying counterfeit goods from their wife 

and it was $380,000 worth of goods, even if it was a fixed-price contract, it would seem to me that somebody would go, we need to ask 

some questions here because it may be that we have got criminals 

working for us. 

Mr. MOSER. Well, we did take appropriate action in terms of having that individual removed from the contract. 

Senator MCCASKILL. Are you confident that this particular company was no longer used in terms of buying things from this company as the contract moved forward? Did you make inquiry in that 

regard? 

Mr. MOSER. We felt that the problem was resolved after the person involved was removed. And we also felt that they gave us an 

adequate explanation of what was going on. But I will be honest 

with you, Senator McCaskill. The RSOs, looking at the goods that 

the guards have, are not going to know whether they are counterfeit or not. That is just realistic. 

Senator MCCASKILL. I am more worried about the relationship 

between the procurement official in this contract and the person 

they bought the stuff from. I mean, do we have no responsibility 

to make sure that the people who are working for us are following 

basic guidelines in terms of following the law? 

17 

Mr. MOSER. Senator McCaskill, this is what I would say, is that 

the person that my contracting officer has a relationship with is 

the company. The company informed us that this activity was 

going on and that they needed to investigate it. They took appropriate action by dismissing the employee involved in this. 

Senator MCCASKILL. Well, I guess what I am saying is—— 

Mr. MOSER. We felt that our interest in it—— 

Senator MCCASKILL [continuing]. Maybe appropriate action was 

sending that person to prison. How do we know they took appropriate action if you never asked the question? 

Mr. MOSER. Well, I can’t answer that. 

Senator MCCASKILL. All right. Finally, Mr. Moser, this contract 

is going to be renewed, correct? 

Mr. MOSER. Our intention is to renew this contract. 

Senator MCCASKILL. OK. 

Mr. MOSER. Or not actually to renew. What it is is actually exercise the second option year. 

Senator MCCASKILL. And was this a close call? 

Mr. MOSER. Senator McCaskill, it wasn’t really a close call this 

year and this is the reason why. The contractor has, as I have said 

today, done a reasonable job in providing security for the embassy 

and we have been satisfied with that performance. When there 

haven’t been enough men at posts, and we do have, let us say, redundant coverage to make sure that the manning never endangers 

the security of our personnel on the ground in Kabul, that we have 

been able to make up for that through using our redundancy to 

make sure that the manning was covered. The security has been 

sound. 

The things that we have asked for them to correct, the deficiencies that are outlined voluminously in our contract files, have 

for the most part been corrected except for the one deficiency regarding the training weapons and we feel that will be resolved 

going into the next year. 

Now, weighing that against the risk that we would undertake for 

our employees in Afghanistan if we went to another contractor, we 

think that exercising the next option year is really the best alternative. 

Senator MCCASKILL. Would it change your opinion as to whether 

or not you would want to renew an option year if you knew the contractor didn’t want to work under this contract anymore? 

Mr. MOSER. Well, Senator McCaskill, if the contractor doesn’t 

want to work under the contract anymore, he should give us a formal notice that he doesn’t. 

Senator MCCASKILL. OK. Thank you, Mr. Moser. 

Mr. MOSER. Sure. 

Senator MCCASKILL. Senator Collins is no longer here. 

Thank you very much for being here today. I also want to just 

briefly mention that I think that you have tried diligently to provide us with documents. I know that you didn’t have months to 

prepare. But I would just put on the record that I think there is 

still some work to be done in terms of how responsive the State Department is to requests for information because it has been a little 

bit of an arm wrestle. 

18 

Mr. MOSER. Senator McCaskill, if I can say one thing on that, 

the document release or the process of document release is not 

something that I am responsible for in the State Department, but 

I will say that in the contracting authority, there is virtually no 

document that we are unwilling to share because the contracting 

officer’s best friend is transparency. And, in fact, we think an honest dialogue with the members of the Legislative Branch is to our 

benefit and we are more than happy to share the documentation 

with you. But we do have a process in the State Department. 

Senator MCCASKILL. And I think that is a question for another 

time and it is something I would like to get into with the State Department—— 

Mr. MOSER. Yes, ma’am. 

Senator MCCASKILL [continuing]. Because it is my understanding 

that based on an independent analysis, there are FOIA requests 

that are a decade old at the State Department, and that, for somebody who has just used the word ‘‘transparency,’’ I am proud of our 

State Department, but for anybody who works there, I can’t imagine an excuse that could be valid for FOIA requests languishing as 

long as they do in many instances. And unfortunately, for purposes 

of most members of the Senate, if you are not the Chairman of a 

Subcommittee or a Committee, your request for information at the 

State Department is treated the same as any person off the street. 

Now, I am not sure that is a bad thing as long as the person off 

the street is getting the service they deserve. 

But I would certainly send you back to the State Department 

with encouragement that we are going to continue to look very 

closely at how easy it is to get information and how quickly we can 

get information out of the State Department and ask you to send 

the word out that that needs some work over there. 

Mr. MOSER. Senator McCaskill, the person that is in charge of 

that function is another one of the deputy assistant secretaries in 

the bureau I work in, in the Bureau of Administration, and I am 

sure she would be happy to talk to you about this issue at any 

time. 

Senator MCCASKILL. We will do that. 

Mr. MOSER. It is something she is very passionately concerned 

about. 

Senator MCCASKILL. Thank you for being here today. 

I want to put on the record that Mr. Moser has indicated that 

he will come back to the table, if necessary, for follow-up questions 

after the testimony of Mr. Brinkley. I haven’t been here a long 

time. I am not really sure about this, not being at the same table 

at the same time and where that comes from. I don’t get it. But 

it is what it is. 

So welcome, Mr. Brinkley. You are the Vice President for Homeland and International Security Services of Wackenhut Services, 

Incorporated. As I indicated to Mr. Moser, it is the custom of this 

Subcommittee to swear in all witnesses and would ask if you would 

stand. 

Do you swear that the testimony that you are about to give before this Subcommittee will be the truth, the whole truth, and 

nothing but the truth, so help you, God? 

Mr. BRINKLEY. I do. 

19 

1The prepared statement of Mr. Brinkley with an attachment appears in the Appendix on 

page 35. 

Senator MCCASKILL. We welcome your testimony. Your entire 

testimony will be put in the record. We ask that you try to limit 

your testimony to 5 minutes. Thank you. 

TESTIMONY OF SAMUEL BRINKLEY,1 VICE PRESIDENT, HOMELAND AND INTERNATIONAL SECURITY SERVICES, WACKENHUT SERVICES, INC 

Mr. BRINKLEY. Thank you, Madam Chairman. I know that Ranking Member Collins has left, but—— 

Senator MCCASKILL. She will be back. 

Mr. BRINKLEY. I am looking forward to seeing her return. 

I am here at the request of the Subcommittee to discuss the U.S. 

Government’s contract to provide the protective force for the U.S. 

Embassy in Kabul. 

As background, I am the Vice President for Homeland and International Security Services. I have previously served as a Marine infantry officer for 20 years. I have commanded from platoon through 

battalion levels. I was the WMD policy advisor in the Office of 

Counterterrorism in the Department of State for over 3 years, including on September 11, 2001, and I have been a professional staff 

member on the 9/11 Commission. I have over 35 years of experience in security, special operations, and force protection. 

This past year, Wackenhut Services, Inc. (WSI) came to own 

ArmorGroup North America, often called AGNA, the prime contractor for the Kabul Embassy contract. Now, the events that led 

to this acquisition are somewhat circuitous, so let me go through 

that. 

In May 2008, our parent, G4S, purchased the parent of AGNA, 

ArmorGroup International, in a friendly take-over on the London 

Stock Exchange. G4S purchased ArmorGroup International for the 

purpose of acquiring ArmorGroup’s profitable operations in other 

parts of the world, not for any reason having to do with AGNA. 

AGNA was a troubled part of the broader ArmorGroup enterprise 

and they came along with the acquisition of ArmorGroup International. 

At the time of G4S’s acquisition of ArmorGroup in May 2008, 

ArmorGroup North America was subject to a notice to cure 16 deficiencies and weaknesses that had been issued by the Department 

of State on April 30, 2008. WSI has a strong reputation for effective 

performance of guard service contracts at U.S. Government facilities and our parent, G4S, asked WSI if we would take responsibility for assessing ArmorGroup North America’s problems at the 

Kabul Embassy contract and for ensuring that whatever needed to 

be done was done to come into full compliance with contract requirements. 

With the concurrence of appropriate U.S. Government officials, 

ownership of the stock of ArmorGroup North America was transferred to WSI in November 2008. 

Now, within WSI, I was given the responsibility of overseeing 

ArmorGroup North America’s corrective action and bringing AGNA 

into contract compliance starting in May 2008 and I have total reVerDate Nov 24 2008 09:46 Jan 29, 2010 Jkt 051785 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\DOCS\51785.TXT SAFFAIRS PsN: PAT
20 

1The chart referred to by Mr. Brinkley appears in the Appendix on page 41. 

sponsibility operationally for AGNA’s performance of the Kabul 

Embassy contract. During the past year, we have, one, worked very 

hard to correct the inherited deficiencies in AGNA’s performance of 

the contract. 

Two, we have brought to bear the extensive experience of WSI 

acquired over many years of successful performance of guard services contracts for the U.S. Government. 

Three, I personally worked with the forces on the ground at the 

Kabul Embassy and with the responsible parties at State Department to address each deficiency and weakness. 

Four, WSI has made appropriate personnel changes and has 

thoroughly redone AGNA’s internal processes and procedures to attain and sustain contract compliance. 

We are proud to say that now we have addressed each weakness 

and deficiency in the performance of the contract and that today, 

AGNA is in full compliance with staffing and major requirements 

of the contract. The Kabul contract has been fully staffed since 

January 2009. 

There are only two issues that we see remain open. We are 

awaiting the manufacture of certain training weapons, and that 

has been discussed with the previous panel member; however, I 

would like to point out that no training has been missed because 

we were using government-furnished training weapons versus the 

ones the contract required. 

We also have a requirement for a relief or a back-up armorer. 

That armorer completed training yesterday and we will be deploying that person to Kabul. However, the contract requirement of 

having an on-scene armorer at post is filled. 

I have submitted my written testimony. In that written testimony is a chart that shows the timing of our acquisition of 

ArmorGroup and the ownership chain and some of the key contract 

events since May, and you have that as an attachment to the written testimony.1

I would like to emphasize four areas. Upon arrival, we immediately took steps to assess the situation, both on the ground and 

here in the United States. We sent a senior management team into 

Afghanistan to get a firsthand view of the situation. We were most 

concerned that the security of the embassy was impaired. While 

there, we walked the ground with our leadership, talked with the 

Department of State customer to get their view of the operational 

status. Back here, we brought in staff expertise to examine export 

control compliance, finance, and contract administration. 

What we found was, first, the protective force operations on the 

ground were executed well and in good standing, according to the 

RSO. There were significant contract compliance and administrative issues. The Department had issued a cure notice with 16 deficiencies on April 30. The Department did not believe that AGNA’s 

contract noncompliance rose to the level to impair the security of 

the embassy. We agreed with the Department’s perspective that 

the embassy was secure. 

Second, we moved to quickly develop a comprehensive corrective 

action plan that would bring the contract into compliance. We subVerDate Nov 24 2008 09:46 Jan 29, 2010 Jkt 051785 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\51785.TXT SAFFAIRS PsN: PAT
21 

mitted a new comprehensive plan to address each deficiency and 

weakness on June 12, 2008. We implemented within AGNA and 

onto the contract proven WSI processes to staff the project with talented, reliable U.S./ex-pat and Gurkha guard force. Staffing, of 

course, was the major weakness of contract compliance. We 

changed and strengthened the ArmorGroup North America headquarters and in-country leadership. 

Third, while we take the contract deficiencies seriously, we still 

see the embassy secure. The contract has been fully staffed since 

January 2009. There are several items left to be closed on the original 16 deficiencies. We found nothing inconsistent with DOS’s 

views that the embassy is secure. 

Finally, to attain and sustain contract compliance, financial resources have been spent. WSI and G4S are losing about $1 million 

a month in the execution of this contract. In 2006, which has been 

discussed with the previous panel member, Assistant Secretary 

Moser, we bid on this contract. We lost to AGNA. The Department 

did determine that our bid was not technically correct, but I will 

tell you that our proposal price was significantly higher than 

ArmorGroup’s. 

Ironically, we now own AGNA and are having to execute this 

contract with what we believe is an unreasonably low price. After 

a year, I have become convinced that the services within the statement of work cannot be provided with ArmorGroup North America’s proposed price. Let there be no doubt. Regardless of the negative financial impact that WSI has had, WSI is dedicated to mission one, the security of the U.S. Embassy. 

In conclusion, I am most proud of the AGNA and the WSI employees who have worked so hard over the past year, both here and 

in Kabul, to make this contract right and to keep this embassy secure. They, in fact, are true professionals. 

With that, I will be glad to answer your questions. 

Senator MCCASKILL. Thank you, Mr. Brinkley. 

Let me start with what is obvious here. Did you send a notice 

to the State Department that you did not wish to participate in the 

third year of the contract? 

Mr. BRINKLEY. We have not. 

Senator MCCASKILL. And why have you not done that? 

Mr. BRINKLEY. Well, I look at this in two ways. We are a guard 

company that prides itself in doing missions well. We have worked 

very hard over the last year to make this contract compliant. We 

are very proud of that. We can do this job. So from that perspective, operationally, we are proud to do that and proud to make it 

right. 

On the other hand, there is the financial business side. I would 

prefer to do it and not lose money. So that is where we are at this 

point in time. 

Senator MCCASKILL. Well, I am confused. If you are losing $1 

million—did you say $1 million a month, you are losing? 

Mr. BRINKLEY. That is correct. 

Senator MCCASKILL. Well, if you are losing $1 million a month, 

why wouldn’t you tell them you don’t want the contract again and 

they would have to rebid it? 

22 

Mr. BRINKLEY. Well, it is my understanding that it is the government’s decision to execute the option and I just heard Assistant 

Secretary Moser’s testimony that we have the option and we will 

take that under advisement. 

Senator MCCASKILL. OK. You have testified that in January of 

this year, the contract was fully staffed and even over-staffed according to the requirements of the contract. But yet a few months 

ago when the State Department did a verification of that, there 

was, in fact—it was determined there were 18 posts vacant. If you 

were fully staffed, was that just negligence? 

Mr. BRINKLEY. It was an issue associated, Senator, with break 

time with the guard force. The guard force has a requirement that 

on several times a day—in the morning, at lunch, and in the afternoon—to break personnel on post. The personnel on post were improperly relieved. They were actually on embassy property and 

were in the break room. Were the posts open? Yes. Were the personnel on the embassy grounds and able to respond? Yes. The deficiency was based upon the supervisors that were immediately over 

them and that they did not ensure that break occurred properly. 

Senator MCCASKILL. Could you shed any light on the situation 

with the counterfeit purchases and the procurement officer buying 

almost $400,000 worth of goods from his wife? 

Mr. BRINKLEY. Madam Chairman, that happened before our acquisition of the company. I have the same knowledge of the documents that the Committee has and I don’t have any—— 

Senator MCCASKILL. Is that individual working for you? 

Mr. BRINKLEY. No. 

Senator MCCASKILL. And do you buy anything from his wife’s 

company? 

Mr. BRINKLEY. No. 

Senator MCCASKILL. Let us talk about the language issue. You 

are now representing that you have all of your folks in compliance 

with the language requirement of the contract? 

Mr. BRINKLEY. That is correct. And if I might, let me explain the 

process that—what we inherited and the process we are doing to 

ensure that the personnel that are at the embassy have their language requirements and maintain, if you would let me. 

One, there were a number of personnel prior to our acquisition 

that did not have the language capability in which the contract 

mandates. As we acquired the company, there at that time was a 

full-time English instructor in Kabul on the contract teaching 

English to fill that gap. That instructor certified all the personnel 

at that time at the level two English, in accordance with the requirement. 

Now, we noticed that this is obviously a problem for the longterm, so as we go now to recruit Gurkhas as replacements, we give 

them full language tests in Kathmandu to even qualify them to be 

a part of this guard force. And so we certify that with an independent instructor in Kathmandu outside of those that would do 

the actual recruiting. So we have an independent assessment of 

their capability and then we have that documentation. 

Additionally, we currently have a full-time English teacher in 

Kabul in Camp Sullivan that has language classes every week with 

the current force. Additionally to that, we are in the process of hirVerDate Nov 24 2008 09:46 Jan 29, 2010 Jkt 051785 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\DOCS\51785.TXT SAFFAIRS PsN: PAT
23 

ing a second language instructor to go in to augment that current 

instructor to increase the number of hours that we have capable. 

So all the current guard force have certifications of which they are 

level two or level three, as required, and we are going to increase 

the capability to sustain that with language instructors on the contract. 

Senator MCCASKILL. And finally, before I defer to Senator Col- lins, you are receiving around $37 million a year on this contract? 

Mr. BRINKLEY. I would have to look at the exact numbers. It is 

whatever $190 million is divided by five, I guess, whatever onefifth of that might be. 

Senator MCCASKILL. And the third-country nationals are making 

about $5.35 an hour? 

Mr. BRINKLEY. They have a set rate of about $800 a month, yes. 

Senator MCCASKILL. And the local nationals, which you have 

some working on this contract, make $2 an hour? 

Mr. BRINKLEY. That is correct. 

Senator MCCASKILL. Thank you. Senator Collins. 

Senator COLLINS. Thank you. 

Mr. Brinkley, I want to go back to the letter that the Chairman 

mentioned that was sent on March 30 of this year, so this is when 

the obligations are at this point firmly under WSI’s control, talking 

about the Kabul staffing issues and listing the areas where there 

appeared to be vacant guard posts over a period of, I guess it is 

just 2 days. Now, it is evident that the 19 posts that were identified were not vacant all at the same time, correct? 

Mr. BRINKLEY. That is correct. 

Senator COLLINS. But what is disturbing to me is this was a spot 

check over 2 days and it found so many vacancies. So to me, what 

you have here is a pattern that is disturbing and it isn’t as if these 

guard posts were vacant just for a few moments. They were vacant 

for long periods of time. For example, in one case, they are vacant 

from 11 p.m. to 2:30 a.m., 210 minutes. In another case, they are 

vacant for 76 minutes. So it is not as if just for a few minutes these 

were vacant. And while I understand that not all 19 were vacant 

at the same time, to me, it is more troubling that there was a pattern each day of vacancies. Has this problem been remedied? 

Mr. BRINKLEY. Senator Collins, the answer to that is yes. We 

were disturbed with that, as you would think we would be. We obviously debriefed and have talked to the actual inspector. We have 

made sure we understood clearly how it was done and the problems, and where we needed to take corrective action with supervisors that was necessary, they have been removed from their post 

and different supervisors have been placed. I have personally 

talked to the program manager about that issue and we know that 

they have taken corrective actions and we believe that that will not 

be a reoccurring theme. 

Senator COLLINS. I discussed with Mr. Moser the initial award 

of the contract to AGNA and he told me that WSI had bid on the 

contract but that you had not been found to be technically acceptable. Is that accurate? 

Mr. BRINKLEY. I was not in the debrief of WSI from the selection. 

I was part of the operations advisors on building the contract, or 

on our submittal. So I believe from my perspective I was most foVerDate Nov 24 2008 09:46 Jan 29, 2010 Jkt 051785 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\DOCS\51785.TXT SAFFAIRS PsN: PAT
24 

cused on the price difference. If there was a technical part of the 

proposal in which WSI was found not technically acceptable, I am 

unaware of what exactly what that might be. 

Senator COLLINS. I would like you to get back to me on that issue 

because your testimony says that it was a matter of cost, not technical qualifications. Mr. Moser says that it wasn’t a difference in 

the price but rather that WSI was not found to be technically acceptable. So I am going to ask both of you to get back to me on 

that issue. 

Mr. BRINKLEY. Yes, ma’am. We will take that for the record and 

we will get back. 

Senator COLLINS. You have mentioned in your testimony and 

confirmed to Senator McCaskill that you are losing $1 million a 

month on this contract, which does raise the issue of why you 

would want to continue the contract in the next option year. That 

seems very odd to me. Could you expand on your answer on that? 

Mr. BRINKLEY. Yes, Senator. As I described to the Chairman, it 

falls into two areas. Operationally, we take great pride in being 

able to perform very complex, complicated contracts and doing 

them very well, and we have a long history of being able to do that 

in WSI. We bid on this contract because we knew we could do this 

contract and we knew we could do it well. We now have assumed 

this contract and it has been difficult, not without a lot of work by 

some very hard-working professionals, we have become contract 

compliant. And so from that perspective, it would be very difficult 

for me to sit here, knowing how hard everyone has worked to get 

here, to say we would not want to continue to do it and do it well. 

On the other side, from the business side, of course, we would 

like to get paid for what it costs us to do it well. And as my testimony indicates, I am convinced after a year that we cannot do it 

contractually compliant and meet the statement of work requirements with the initial bid. 

Senator COLLINS. Which I guess gets me back to the issue I 

raised with Mr. Moser about the statutory requirement that is 

clearly well intended—I hope I don’t find out later that I actually 

wrote it—— [Laughter.] 

That says that it ought to be the lowest bid of the technically acceptable contractors. That makes perfect sense. We want competition. We want the lowest price. But it looks to me like there was 

a pattern here of underbidding to try to secure the contract in the 

first place and then a failure to perform. 

Is WSI financially secure enough to fulfill the contractual obligations, such as providing all of the necessary, legally obligated 

equipment, staffing, supplies, training, for the employees who are 

working on this contract and continue to lose $1 million a month? 

Mr. BRINKLEY. Senator, I can assure you that we are financially 

capable of fulfilling all of the requirements of this contract. 

Senator COLLINS. Thank you. 

Senator MCCASKILL. Well, let me just step back and take a broad 

view. We have thousands and thousands of men and women in uniform in Afghanistan. We all know the challenges Afghanistan represents in terms of our military mission. We know that the option 

of hiring local nationals was not an option because of the issues of 

security surrounding local nationals. 

25 

You are a former Marine, and thank you for your service. I am 

looking at a security contract where we are paying some people as 

little as $2 an hour to guard the embassy. The majority of the people guarding the embassy are making a little over $5 an hour. And 

the company that is providing this is telling the U.S. Congress that 

they are losing $1 million a month on the deal. I don’t want to impugn in any way your company’s integrity. I am sure you have 

every intention of complying with this contract over the year, but 

losing $1 million a month is pressure. 

I am asking you now, should we be hiring private contract firms 

such as yourself to guard embassies in this situation or should we 

as a Nation begin to contemplate the notion that when we are in 

theater, the embassy in theater should, in fact, be guarded by our 

own military? 

Mr. BRINKLEY. I will defer the answer on the latter to the force 

capabilities for the Department of Defense to determine whether or 

not they have the resources to do that or not and their view of that. 

Can we as private security do this job? Oh, yes, absolutely. There 

is not an issue here. I mean, we are doing it now and we are doing 

it well. Some of the issues associated with the cost issues are really 

based upon how the proposal itself was structured. 

There are two issues, as you would know, in a firm-fixed price— 

let me put it this way. In some competitive markets, the requirements that people think are necessary to get the work can drive 

people to do things that are unreasonable in the price and they will 

lose money on it. People make bad business decisions. In this case, 

we know that it takes more than this proposal was initially bid for, 

not necessarily because of the price for the salaries, but how it was 

structured—the manning factors, the number of people that it 

takes to actually meet the contract requirements. So the structure 

of the contract or the bid itself is significant in what the losses are. 

We have applied all the resources necessary to ensure that we 

are fully contractually compliant, can handle people on emergency 

leave, can handle people that are delayed coming back from R&R. 

That takes additional manning on the ground. Many of those cases 

that financially drive are the U.S. personnel that are required on 

this contract because they are not $800 a month people. Let me go to the $800 or the $2 an hour person. The local nationals, as anyone would know, and I am sure even on the ground at 

the embassy, are getting paid prevalent wages that are for that 

particular area. I will tell you, because I have been on the ground 

and I have talked to the senior local national that is our interpreter and works with all the local nationals, the pay that we give 

them makes some of those local nationals some of the higher-paid 

people in Afghanistan. They are loyal. They have been with this 

contract for a long time. They come to work every day and they are 

very dedicated to doing this well. The $800 that we pay the Gurkhas, and that is the minimum 

level for a guard. That is not the leadership. That number is significantly different for the senior guy who is a retired sergeant 

major of British Army Gurkha experience. This is a prevalent 

wage. It is competitive. That wage itself is higher than we pay for 

the guards, the Gurkha guards, that are in the embassy in Bahrain. It is higher than the Gurkha guards that are standing duty 

26 

on the Naval Support Activity in Bahrain. And it is competitive 

with the salaries according to the Gurkhas that are protecting the 

British Embassy in Kabul. And many of those Gurkhas have been 

out there for any number of years. It is competitive. They are very 

talented, dedicated people who come to work every day and do 

their jobs very well. 

So it is difficult for me to, at times, make you think that it is 

the cost per hour versus it is the problem that we are not getting 

value for the people that we pay those wages to, because that is 

not correct. And in that, we should not be, in my view, using as 

the standard from which we judge the security of the embassy. 

Senator MCCASKILL. OK. The contracts you just referred to, does 

your company have all those contracts? 

Mr. BRINKLEY. I have oversight of the security for the Naval Support Activity in Bahrain. 

Senator MCCASKILL. And for the British Embassy in—— 

Mr. BRINKLEY. The British Embassy does not fall under my responsibility, but it does fall under a part of Group 4 Securicor 

(G4S). 

Senator MCCASKILL. So it is your company? 

Mr. BRINKLEY. The parent company on the latter. 

Senator MCCASKILL. OK. So are those contracts profitable? 

Mr. BRINKLEY. I am not clear. I don’t know the answer to that. 

The Naval Support Activity in Bahrain, the answer is yes. I have 

that contract, so I know that contract is profitable. 

Senator MCCASKILL. Well, I would be interested—and you can 

take this question for the record—I would be interested in your answer as to why the contract that you have in Bahrain, why it is 

profitable and why this one isn’t and what are the differences between the two contracts that make one profitable and one not. 

I am going to continue to be troubled by the notion that you can 

be fully compliant on a contract that you are losing significant 

money on. I think we have got to figure out a way to resolve that 

because there are two more years of options on this contract. So are 

you signing up to lose $12 million a year for the next 3 years? And 

if so, I just think that defies common sense, and generally when 

we are defying common sense, something happens that shouldn’t 

happen. 

So I would like you, Mr. Brinkley, to go back and take a look at 

that proposition and give us some information for the record comparing these contracts that your company has where you are essentially providing third-country national guards for the U.S. Government for security purposes so that we can try to get to the bottom 

of it from an oversight perspective. 

Mr. BRINKLEY. We will be glad to do that, Senator. 

Senator MCCASKILL. Thank you very much. 

Senator COLLINS. I have no further questions. 

Senator MCCASKILL. I thank you and Mr. Moser and the State 

Department for the hearing today. I think we have learned some 

things about contract oversight as it relates to guarding our embassy in theater. I think we have some issues that we need to talk 

about in terms of going forward. I greatly appreciate the cooperation that was shown to the Subcommittee and I look forward to 

27 

even greater cooperation, and maybe I can talk you guys into sitting at the same table next time. 

Thank you all very much. This hearing is adjourned. 

[Whereupon, at 4:02 p.m., the Subcommittee was adjourned.] 

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