Private Security Contractors in Iraq: Background, Legal Status, and Other Issues
Released: 2008-09-29T00:00:00

Introduction

The 110 th Congress is grappling with a broad range of issues regarding the use of private contractors to provide security for people and property in Iraq and elsewhere. The United States has gradually increased the types of tasks and roles for which it contracts private companies in military operations. Congress has generally accepted the concept of using unarmed private contractors to carry out support functions in military operations, such as providing food and laundry services, although not without concerns regarding the costs of contracts and alleged favoritism in issuing them. But for the Department of State and the military, Iraq is, in some ways, an atypical situation. There, the United States is relying heavily, apparently for the first time in an unstable environment, on private firms to supply a wide variety of security services. Especially given a shortage of Diplomatic Security agents and U.S. troops, private security contractors are widely viewed as vital to U.S. efforts to protect many Iraqi and U.S. government officials, general contractors working to stabilize and reconstruct Iraq, and government facilities. Nevertheless, many Members are concerned about transparency, accountability, and legal and symbolic issues raised by the use of armed civilians to perform security tasks formerly performed by the military and federal employees, as well as possible long-term effects on these organizations.

This report first summarizes available information on the private contractors providing security services under U.S. government contracts in Iraq. It then provides information on relevant U.S., international, and Iraqi law, and legal issues involved in the use of armed contractors. It concludes with a discussion of issues involving the need for and suitability of private contractors, costs, oversight, and control, as well as potential foreign policy implications.

Background

The United States is just one of many entities—including other governments, international organizations, and private industry—that employ private security contractors in Iraq. In recent years, the United States and many other nations and organizations, including the United Nations, have increasingly turned to private contractors to provide security, as well as a variety of other functions in support of stabilization and reconstruction efforts. This increased reliance on contractors has fueled the growth of the private security industry.

Services Provided by Private Security Contractors

There is some debate as to what constitutes a private security contractor. Some commentators define private security as any activity directly related to protecting a person, place, or thing. Others may use a broader definition that includes such activities as providing intelligence analysis, operational coordination, or security training. The National Defense Authorization Act for Fiscal Year 2008 ( P.L. 110-181 Sec. 864) defines private security functions as the guarding of personnel, facilities, or properties, and any other activity for which personnel are required to be armed. In addition to armed security, many private security contractors also offer a variety of unarmed services, which in a number of cases may represent 50% or more of the company's revenues. As such, the services provided by private security companies operating in Iraq can be divided into two major categories: armed services and unarmed services. Armed services include

static security—protecting fixed or static sites, such as housing areas, reconstruction work sites, or government buildings; convoy security—protecting convoys traveling in Iraq; security escorts—protecting individuals traveling in unsecured areas in Iraq; and personal security details—providing protective security to high-ranking individuals.

Unarmed security services include

operational coordination—establishing and managing command, control, and communications operations centers; intelligence analysis—gathering information and developing threat analysis; and security training—providing training to Iraqi security forces.

Number of Private Security Companies Operating in Iraq

It is estimated that some 50 private security contractors employing more than 30,000 employees are working in Iraq for an array of clients, including governments, private industry, and international organizations such as the United Nations. Peter Singer of the Brookings Institution estimates that citizens of some 30 countries are employed by private security companies in Iraq. Many PSC employees are security professionals from western countries—such as the United States or British Commonwealth countries—with experience in the military or law enforcement. Others are third-country nationals, coming from such countries as Chile, Fiji, Nepal, and Nigeria. A third category of PSC employees consists of local Iraqis. Most of those working in Iraq as private security contractors are Iraqi, according to Doug Brooks of the International Peace Operations Association (IPOA), an industry group. Some of the third-country nationals and local Iraqis working for PSCs have extensive military training and experience.

Private Security Companies Working for the U.S. Government

Some 20 different PSCs, employing 10,000 people, are working directly for the U.S. government, primarily for DOD and the Department of State. These security contractors are providing an array of armed and unarmed security services, including static security, personal security details, intelligence analysis, and operational coordination. The United States also has an indirect contractual relationship with many PSCs. For example, reconstruction contractors working for the United States Agency for International Development (USAID) have in turn subcontracted with PSCs to acquire security services.

The total direct cost to the U.S. government for acquiring security services in Iraq is not known. The U.S. Congressional Budget Office (CBO) recently estimated that between 2003-2007 the U.S. government obligated between $3 billion and $4 billion to PSCs to acquire security services. In 2005, the U.S. Government Accountability Office (GAO) reported that as of December 31, 2004, U.S. agencies had already obligated over $450 million to acquire security. CBO has estimated that starting in 2005, agencies have spent between $500 million and $1.2 billion annually on security services.

The total cost to the U.S. government for private security services acquired by government contractors in Iraq is also unknown. CBO recently estimated that between 2003-2007, U.S.-funded contractors spent between $3 billion and $6 billion to acquire security services. In 2007, House Oversight and Government Reform Committee Chairman Henry Waxman stated at the committee's February hearings on Iraq reconstruction that almost $4 billion "has been paid for private security services in the reconstruction effort alone." The amount of money spent by government contractors on security represents a significant portion of available reconstruction funds. In 2005, a GAO report surveying 15 U.S. government reconstruction contracts found that on more than half of the contracts security costs exceeded 15% of total billings; on four of the contracts security costs exceeded 25% of total billings. A 2006 report by the Special Inspector General for Iraq Reconstruction (SIGIR) surveying nine major U.S. contractors found costs to range from a low of 7.6% to a high of 16.7%, whereas the State Department in 2005 estimated such security costs as 16%-22%.

There has been much debate as to whether the use of private security contractors by the U.S. government is cost-effective. According to the CBO, the costs associated with using private security contractors in Iraq "did not differ greatly form 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." Agencies generally have not conducted comprehensive cost-benefit analyses comparing the costs of using private security companies with the costs of using in-house security resources.

Pay Scales for PSC Employees

Pay scales for these contractors reportedly vary depending on their experience, their nationality, and the U.S. government's perceptions of danger involved. When the hiring of such contractors first became controversial, the news media reported (in April 2004) a pay range of $500 to $1,500 per day. Since the earlier days of the conflict, experts suggest that the pay scale has decreased and is on average lower globally as the supply of those desiring such work has risen. The highest amounts are paid to highly trained and experienced former military personnel from the United States and British Commonwealth, with lower amounts paid to personnel from developing countries such as Chile and Nepal, and the lowest amounts going to locally hired Iraqis.

Dangers Faced by PSC Employees

Like soldiers, private security contractors incur the risk of death and injury from insurgents in Iraq. For example, all three contractors working for the Department of State under the Worldwide Personal Protective Services contract have had employees killed and wounded while providing security services. According to the private security contractor Blackwater Worldwide, 32 employees have been killed and more than 46 wounded while providing security in Iraq since March 1, 2004. Convoy-related deaths appear to be a significant portion of total private contractor deaths. U.S. Army Corps of Engineers data reportedly show that registered supply convoys have come under frequent attack. Of those involved in the 12,860 Corps-registered convoys that transported supplies in Iraq from August 2004 through May 10, 2007, some 132 "security employees and drivers" were killed and 416 were wounded, according to a report on that data. Recent reports indicate that violence in Iraq has significantly diminished. For example, according to media reports, the rate of attacks on convoys has dropped markedly: only about 1.5% of convoys were attacked in the first six months of 2008 compared with about 20% being attached in late 2006 and early 2007. While attacks on convoys and other targets have been on the decline, private security contractors remain at risk of being killed or wounded.

State Department and DOD Private Security Contracts

In the first years of Operation Iraqi Freedom, little information was available on State Department and DOD contracts for private security services in Iraq. The State Department and DOD have since made available the names of the companies holding its primary contracts for security services and the numbers of security personnel serving directly and indirectly under those contracts. Within the Department of Defense, the office of the Assistant Deputy Undersecretary of Defense (Program Support) is responsible for all contractor oversight, including private security contractors, in forward areas of operation. The office was established in response to section 854 of the National Defense Authorization Act of 2007 ( H.R. 5122 / P.L. 109-364 ).

State Department Private Security Contracts

Nearly 1,500 special agents of the State Department's Bureau of Diplomatic Security (DS) serve in the United States at 285 U.S. offices, and overseas posts and missions. DS special agents are law enforcement officers involved in deterring visa and passport fraud, overseeing worldwide training and assistance programs in anti-terrorism, providing a courier service for the Department, and providing a wide range of protective services for the Secretary of State, the U.S. Ambassador to the United Nations, and foreign dignitaries visiting the United States. DS is also responsible for the security of U.S. embassies and consulates around the world, the personnel and the homes of those who staff those facilities, and the U.S. dignitaries who visit those countries.

The State Department has increasingly employed private security contractors for more than 20 years to provide protection to both overseas posts and missions and the personnel and their families who staff them in an increasingly dangerous world. Starting in 1983 after the U.S. embassy bombing in Beirut, Lebanon, the State Department resorted to using contractors to provide perimeter security to U.S. diplomatic and consular posts around the world. The State Department's Bureau of Diplomatic Security first used PSCs in 1994 when MVM, Inc. was hired to help protect Haitian President Jean-Bertrand Aristide as he returned to Haiti. This was followed with the use of PSCs in Bosnia, Israel, Afghanistan, and most recently, Iraq.

In 2004, when the United States opened its embassy in Baghdad, DS took over the responsibility from the military of providing security for what was fast becoming the U.S.'s largest embassy. It became clear, however, that DS did not have sufficient personnel to take on this responsibility while continuing to accomplish its other duties around the world. To meet the shortfall, DS signed Blackwater USA (now Blackwater Worldwide), to a one-year sole-source contract to provide security services for the new Baghdad embassy and its staff. The State Department said it chose Blackwater because the company was already in-country, having operated there under a previous DOD contract to provide security for the Coalition Provisional Authority (CPA).

In the Summer of 2005, the State Department opened the Worldwide Personal Protective Services II (WPPS II) contract for bids. The WPPS II contract for Iraq is a five-year (one-year base and four optional years) $1.2 billion "Indefinite Delivery-Indefinite Quantity" (ID/IQ) contract with task orders to be competed on a firm fixed-price basis. The contract was awarded on a best value basis, meaning its award was based on what was most advantageous to the federal government. The WPPS II considered technical merit more important than cost.

WPPS II contracts are used to provide bodyguards and static guards (i.e., guards for buildings and other infrastructure) in Baghdad and other areas throughout Iraq. Three private security companies were eventually hired under the WPPS-II umbrella contract. These companies were Blackwater Worldwide, DynCorp, International, LLC, and Triple Canopy, Inc. Triple Canopy also holds a separate State Department contract to provide local guard services for the U.S. Embassy and other sites in the Baghdad Green Zone, which are under Chief of Mission control.

Blackwater Worldwide , founded in 1997 as Blackwater USA and headquartered in Moyock, North Carolina, has provided a variety of protective services in Iraq. It was one of the original companies providing protection for CPA chief Paul Bremer as well as other CPA employees and visiting dignitaries. The Blackwater staff includes former military, intelligence, and law enforcement personnel. According to news reports and its website, Blackwater, founded by former Navy SEAL Erik Prince, has the largest private training center in the United States. The center consists of various training ranges including those that simulate urban combat; the country's largest, multi-surface, multi-level tactical driving track; and an artificial lake built for conducting simulations of boarding a hostile ship. The company also has extensive technology design and manufacturing capabilities that have produced remotely piloted airships and IED-safe armored personnel carriers. Under the WPPS contract, Blackwater's primary area of operation is the Baghdad area.

On April 5, 2008, the Department of State renewed Blackwater's WPPS contract for a fifth year. The Department explained that the FBI investigation into the September 16, 2007, Nisoor Square shooting in which Blackwater employees protecting a diplomatic convoy fired upon and killed 17 Iraqis, is ongoing, and the current contract was to expire in May 2008. After the conclusion of the FBI investigation, the Department is to examine the FBI findings to determine whether the Blackwater contract should continue.

DynCorp International LLC, based in Falls Church, Virginia, evolved, according to its website, from a company formed in 1946 that provided support and services to U.S. military aircraft and weapons systems under Air Force contracts. Named DynCorp since 1987, it was acquired in 2003 by Computer Sciences Corporation (CSC) and now has nearly 14,000 employees in 30 countries. Under the WPPS contract, DynCorp operates primarily in the northern Kurdish area of Iraq. Besides the WPPS contract, DynCorp also holds another State Department contract, under the Bureau of International Narcotics and Law Enforcement, to provide police training and related services in Iraq.

Triple Canopy, Inc. , founded in September 2003 and based in Herndon, Virginia, bills its operational leadership as "comprised of former operators from tier-one special operations units...." Its two founders and co-chairs both served with the U.S. Army Special Forces, one with Special Forces' Delta Force. Under the WPPS contract, Triple Canopy operates primarily in southern Iraq.

DOD Private Security Contracts

PSCs provide a wide variety of security services to the Department of Defense. For example, one company, EOD Technologies, Inc., provides static perimeter and internal security throughout Victory Base Complex in Baghdad. Another company, Aegis Defence Services Limited, coordinates the movement of all DOD, Department of State, and other participating PSCs throughout Iraq. The company also continuously gathers, interprets, and disseminates information on the security situation throughout Iraq. Other companies provide security for convoys or officials traveling throughout Iraq. DOD uses both American and foreign PSCs. For example, Aegis Defence Services Limited, Erinys International, and ArmorGroup Services Ltd. are British companies.

The number of PSC employees working for DOD fluctuates significantly, depending on a variety of factors, including troop strength and operational need. For example, as of December 31, 2007, DOD had contracts with 32 different PSCs employing almost 10,000 individuals to provide security services to the government. By contrast, as of March 31, 2008, DOD had contracts with 18 different PSCs employing more than 7,000 individuals to provide security services to the government (see Table 2 ). DOD officials have stated that they anticipate the number of PSC employees operating in Iraq to increase again in the near future to support military efforts. Some government officials and industry experts also attribute part of the drop in the number of PSC employees working in Iraq to DOD's improved ability to accurately track PSCs. Generally, private security contractors constitute a relatively small portion—approximately 4-6%—of the over 160,000 strong contractor workforce working for DOD in Iraq. DOD was unable to provide data on how much was being spent on PSCs in Iraq.

Aegis Defence Services Limited, founded in 2002 and based in London, is a privately owned company with offices in Afghanistan, Bahrain, Iraq, and the United States. It bills itself as a security and risk management company. The company's founder and CEO, Tim Spicer, is a retired British lieutenant colonel. The company won an initial $293 million contract with the U.S. Army in 2004 and was subsequently awarded a $475 million contract, the largest PSC contract in Iraq awarded by DOD as of the date of the award. The contract award came under significant criticism as a result of the alleged role that founder Tim Spicer played in the late 1990s putting down a rebellion in Papua New Guinea and selling weapons to Sierra Leone in violation of a U.N. arms embargo.

ArmorGroup International plc, founded in 1981 and based in London, has approximately 8,500 employees worldwide, with 38 offices in 27 countries. The company bills itself as offering five security-related services: protective security; risk management consultancy; security training; development, humanitarian, and construction support; and weapons reduction and mine action services. ArmorGroup provides security training to more than 5,000 security professionals, government officials, and corporate executives and their families worldwide.

EOD Technologies, Inc., founded in 1987 and based in Lenoir City, Tennessee, is an employee-owned firm with offices in the United States, Afghanistan, Iraq, and Kuwait. The company bills itself as having three principal business units: munitions response, security services, and critical mission support. Its security services include armed security, guard force and reaction force training, surveillance and surveillance detection, counter IED response services, and security consulting.

Sources of Controversy

Public awareness of the extent to which private contractors were being used for security purposes was highlighted by the deaths of four Blackwater guards in Fallujah on March 31, 2004. The guards were three former Army Rangers and a former Navy SEAL. They were killed while escorting trucks carrying supplies for a private company that provided food services to U.S. military dining facilities in Iraq, and their bodies were then dragged through the streets and hung for display. Days later, Blackwater personnel again hit the news as they reportedly fought a prolonged gun battle in Najaf on April 4, 2004, allegedly defending the U.S. government headquarters there. These events sparked congressional debate over the role of private contractors in U.S. military operations, the desirability of using such contractors, and the appropriate legal and contractual framework to control them.

Congress has taken a renewed interest in questions about management, accountability, and transparency of PSCs. In November 2006, news reports about a lawsuit filed in Fairfax County [VA] Circuit Court brought to light allegations that a Triple Canopy employee in Iraq twice had wantonly fired at Iraqi civilians in the summer of 2005 and possibly killed one person. The two Triple Canopy employees filing the lawsuit state that they were fired for reporting that their supervisor had committed the act. The Company stated that while it does not have any evidence that any persons were harmed as a result of the alleged weapons firing incidents, the employees were terminated a result of their failure to immediately report the weapons firings incidents. According to a news report, the Triple Canopy employee was operating at the time under a KBR subcontract when the shootings occurred.

More recently, Blackwater has been in the news because of its involvement in several shooting incidents in which Iraqi civilians were wounded or killed. On September 16, 2007, Blackwater guards, escorting a U.S. diplomatic convoy, wounded or killed 17 Iraqi civilians at a Baghdad traffic circle in Nisoor Square. According to news reports, the Blackwater guards felt threatened by an oncoming car that did not stop as the convoy was going through the circle. Blackwater officials insisted that the guards were ambushed but many witnesses state that Blackwater's actions were unprovoked. Many military officials reportedly also expressed concerns that the security contractors were trigger happy and "out-of-control cowboys who alienated the same Iraqis the military is trying to cultivate." Defense Secretary Gates said that the contractors were at "cross purposes" with the military goals, and he suggested they be put under his authority.

News reporting on these incidents also raised concerns regarding charges of cultural insensitivity, Blackwater's sense of impunity in dealing with Iraqis, and whether the company was appropriately following the Department of State's guidelines for PSCs on the use of force. A Majority Staff hearing memorandum prepared for the October 2, 2007, House Committee on Oversight and Government Reform hearing regarding Blackwater and its involvement in shooting incidents in Iraq, describes Blackwater's record on the use of force to be "frequent and extensive resulting in significant casualties and property damage." The report states that between January 1, 2005, through September 12, 2007, Blackwater employees were involved in 195 incidents of firearms discharges. In 32 incidents, Blackwater personnel returned fire after an attack, while on 163 occasions, Blackwater fired first, according to the Majority Staff memorandum.

Members of Congress have also raised questions about the State Department's oversight of its protective service contractors' activities in Iraq. They accuse the State Department of not only failing to supervise contractor performance adequately but also of failing to properly investigate alleged killings by PSCs.

PSCs' use of deadly force, the actual and alleged killing of innocent Iraqi civilians by PSC employees, and the State Department's alleged lack of concern about accountability, many believe, have undermined U.S. foreign policy and specifically U.S. standing in Iraq. Many in the military reportedly expressed concerns that Blackwater's actions that day and over time could alter and degrade relationships that the military is seeking to build with Iraqis. Speaking prior to the September 16 killings, an Iraqi Interior Ministry official discussing Blackwater's actions in previous deadly fire incidents and the company's attitude in ignoring Iraqi law and customs, explained that Blackwater and its actions are part of the reason for the hatred of Americans. "Iraqis do not know them as Blackwater or other PSCs but only as Americans."

In a broader foreign policy context, the State Department's alleged protection of Blackwater as its employees act as if they are above Iraqi law and kill Iraqis with impunity makes it difficult to advocate for such issues as the importance of the rule of law and human rights as U.S. foreign policy objectives. Advances in worldwide communications make it possible for allegations of human rights violations by those associated with the United States to be spread worldwide almost instantaneously, and may affect both the perception of the United States as a country respectful of human rights as well as the international environment in which the United States works to advance its foreign policy objectives. Representative Tom Davis, concerned over the actions of PSCs, said:

Iraqis understandably resent our preaching about the rule of law when so visible an element of the U.S. presence there appears to be above the law. That is why the events of September 16 th sparked such an outcry by the Iraqi government which sees unpunished assaults on civilians as a threat to national sovereignty.

The incident is also being used by those seeking to exploit accumulated resentments and draw attacks on private contractors, a force even the Iraqi government concedes is still a vital layer of security.

Along with the very serious issue of killing innocent Iraqis by PSCs and the possible human rights, diplomatic, and military consequences, the Congress also examined cases of alleged sexual harassment and rape of female KBR employees in Iraq by other KBR PSCs, and the seeming lack of any judicial accountability in these cases. The House Judiciary Committee, on December 19, 2007, held a hearing on "Enforcement of Federal Criminal Law to Protect Americans Working for U.S. Contractors in Iraq"—and the Senate Committee on Foreign Relations on April 9, 2008, conducted a hearing on "Closing Legal Loopholes: Prosecuting Sexual Assaults and Other Violent Crimes Committed Overseas by American Civilians in a Combat Environment." These cases have again raised the question of the legal accountability of PSCs for their actions in Iraq but in a different context.

Legal Status and Authorities

Contractors to the coalition forces in Iraq operate under three levels of legal authority: (1) the international order of the laws and usages of war and resolutions of the United Nations Security Council; (2) U.S. law; and (3) Iraqi law, including orders of the CPA that have not been superceded. Under the authority of international law, contractors and other civilians working with the military are civilian non-combatants whose conduct may be attributable to the United States or may implicate the duty to promote the welfare and security of the Iraqi people. Iraqi courts do not currently have jurisdiction to prosecute them for conduct related to their contractual responsibilities without the permission of the Sending State. Some contractors, particularly U.S. nationals, may be prosecuted in U.S. federal courts or military courts under certain circumstances.

International Law

The international law of armed conflict, particularly those parts relating to belligerent occupation (at least for conduct that occurred prior to the handover of sovereignty on June 28, 2004) and non-international armed conflict, appears to be relevant in Iraq. The status of armed contract personnel in such circumstances falls into a grey area. While civilians accompanying the Armed Forces in the field are generally entitled to treatment as prisoners of war (POW) if captured by an enemy State during an international armed conflict, they are considered civilians (non-combatants) who are not authorized to take a direct part in hostilities.

Can Contractors Be "Combatants"?

A critical question appears to be whether the duties of contractors amount to "taking an active part in hostilities." In an international armed conflict or occupation, only members of regular armed forces and paramilitary groups that come under military command and meet certain criteria (carry their weapons openly, distinguish themselves from civilians, and generally obey the laws of war) qualify as combatants. Because contract employees fall outside the military chain of command, even those who appear to meet the criteria as combatants could be at risk of losing their right to be treated as POWs if captured by the enemy.

The Geneva Conventions and other laws of war do not appear to forbid the use of civilian contractors in a civil police role in occupied territory, in which case contractors might be authorized to use force when absolutely necessary to defend persons or property. Given the fluid nature of the current security situation in Iraq, it may sometimes be difficult to discern whether civilian security guards are performing law-enforcement duties or are engaged in combat. If their activity amounts to combat, they would become lawful targets for enemy forces during the fighting, and, if captured by an enemy government (if one should emerge), could potentially be prosecuted as criminals for their hostile acts. Contract personnel who intentionally kill or injure civilians could be liable for such conduct regardless of their combatant status.

On the other hand, if the conflict in Iraq is a non-international armed conflict within the meaning of Common Article 3 of the Geneva Conventions (CA3), customary international law would no longer distinguish between "unlawful" and "lawful combatants." Contractors captured by enemy forces who had engaged in hostilities would be entitled to the minimum set of standards set forth in CA3, but their right to engage in hostilities in the first place would likely be determined in accordance with the prevailing local law. In this case, Iraqi law, including CPA orders that have not been rescinded, apply.

Are They "Mercenaries"?

Mercenaries are persons who are not members of the armed forces of a party to the conflict but participate in combat for personal gain. They may be authorized to fight by a party to the conflict, but their allegiance to that party is conditioned on monetary payment rather than obedience and loyalty. For this reason, mercenaries are sometimes treated as "unlawful combatants" or "unprivileged belligerents," even though their employment is not strictly prohibited by international law. As discussed above, they may not qualify for POW treatment under the Geneva Convention Relative to the Treatment of Prisoners of War (GPW), and those meeting the definition of "mercenary" under the 1977 Protocol I to the Geneva Conventions are explicitly denied combatant status. Because mercenaries are not entitled to combat immunity, they may be tried, and if found guilty, punished for their hostile actions (including by the death penalty), even if such actions would be lawful under the law of war if committed by a soldier. Soldiers with a nationality other than that of the party on whose side they fight are not automatically considered mercenaries. Article 47 of Protocol I defines a mercenary as follows:

2. A mercenary is any person who: (a) Is specially recruited locally or abroad in order to fight in an armed conflict; (b) Does, in fact, take a direct part in the hostilities; (c) Is motivated to take part in the hostilities essentially by the desire for private gain and, in fact, is promised, by or on behalf of a Party to the conflict, material compensation substantially in excess of that promised or paid to combatants of similar ranks and functions in the armed forces of that Party; (d) Is neither a national of a Party to the conflict nor a resident of territory controlled by a Party to the conflict; (e) Is not a member of the armed forces of a Party to the conflict; and (f) Has not been sent by a State which is not a Party to the conflict on official duty as a member of its armed forces.

Under this definition, it appears that contractor personnel who are not U.S. nationals, the nationals of other coalition allies or Iraqi nationals, and who were hired to—and in fact do—take part in hostilities might be considered to be mercenaries, assuming the definition in Protocol I applies as customary international law in the context of the current hostilities in Iraq. On the other hand, it is not altogether clear what constitutes "direct participation in an armed conflict," and some of the other requirements are inherently difficult to prove, particularly the element of motivation. There is no distinction based on the offensive or defensive nature of the participation in combat.

Iraqi Law (Including Coalition Provisional Authority Orders)

Contractors to U.S. agencies or any of the multinational forces or diplomatic entities in Iraq operate under the law of the government of Iraq, which includes orders issued by the CPA prior to the hand-over of sovereignty to the Iraqi Interim Government that have not been rescinded or superceded. Under CPA Order Number 17, as revised June 27, 2004, contractors are exempt from Iraqi laws for acts related to their contracts. That order provides that "[c]ontractors shall not be subject to Iraqi laws or regulations in matters relating to the terms and conditions of their Contracts...," but that they are subject to all relevant regulations with respect to any other business they conduct in Iraq (section 4(2)). Contractors are also immune from Iraqi legal processes for acts performed under the contracts (section 4(3)). Iraqi legal processes could commence against contract personnel without the written permission of the Sending State, but that State's certification as to whether conduct at issue in a legal proceeding was related to the terms and conditions of the relevant contract serves as conclusive evidence of that fact in Iraqi courts (section 4(7)).

CPA Order Number 3, as revised on December 31, 2003, governs the use of weapons. It restricts the authority to carry weapons to members of Iraqi security forces and Coalition forces, and "groups and individuals who have been authorized to carry weapons in the course of their duties by the CPA or Commander, Coalition Forces or their duly authorized delegates," (section 3). It further provides that "private security firms may be licensed by the Ministry of the Interior to possess and use licensed Firearms and Military Weapons, excluding Special Category Weapons, in the course of their duties, including in public places." Id . All others must apply to the Iraqi Ministry of the Interior for a license in order to possess a weapon. The unauthorized use or possession of weapons is subject to penalty.

CPA Memorandum Number 17 provides for the registration and regulation of private security companies (PSC) operating in Iraq. Two annexes to the Memorandum provide for binding Rules for the Use of Force (Annex A) and a Code of Conduct (Annex B) that all PSC employees must follow. Section 9 prohibits PSC employees from conducting law enforcement activities; however, section 5 of Annex A permits PSC employees to stop, detain, search, and disarm civilians where the employees' safety requires it or if such functions are specified in the contract. Section 6 prohibits PSC employees from joining Coalition or Multi-national Forces in "combat operations except in self-defense or in defense of persons as specified in [their] contracts." Section 9 makes PSC subject to all "applicable criminal, administrative, commercial and civil laws and regulations," and provides that their "officers and employees may be held liable under applicable criminal and civil legal codes," except as otherwise provided by law.

U.S. Law

U.S. contractor personnel and other U.S. civilian employees in Iraq may be subject to prosecution in U.S. courts. Additionally, persons who are "employed by or accompanying the armed forces" overseas may be prosecuted under the Military Extraterritorial Jurisdiction Act of 2000 (MEJA) or, in some cases, the Uniform Code of Military Justice (UCMJ). However, some contractor personnel who commit crimes might not fall within the statutory definitions described below, and thus might fall outside the jurisdiction of U.S. criminal law, even though the United States is responsible for their conduct as a matter of state responsibility under international law and despite that such conduct might interfere with the ability of the Multi-National Forces in Iraq to carry out its U.N. mandate.

Prosecution in U.S. Federal Court

U.S. contractor personnel and other U.S. civilian employees in Iraq are subject to prosecution in U.S. courts under a number of circumstances. Jurisdiction of certain federal statutes extends to U.S. nationals at U.S. facilities overseas that qualify as part of the special maritime and territorial jurisdiction (SMTJ) of the United States. For crimes involving a U.S. national as a perpetrator or a victim, the SMTJ includes:

(A) the premises of United States diplomatic, consular, military or other United States Government missions or entities in foreign States, including the buildings, parts of buildings, and land appurtenant or ancillary thereto or used for purposes of those missions or entities, irrespective of ownership; and

(B) residences in foreign States and the land appurtenant or ancillary thereto, irrespective of ownership, used for purposes of those missions or entities or used by United States personnel assigned to those missions or entities.

Criminal statutes that apply within the SMTJ include maiming, assault, kidnapping, sexual abuse, assault or contact, murder and manslaughter. The Department of Justice (DOJ) is responsible for prosecuting crimes in this category. A CIA contractor was convicted under this provision in 2007 for the assault of a detainee in Afghanistan.

Extraterritorial Jurisdiction

In addition, many federal statutes prescribe criminal sanctions for offenses committed by or against U.S. nationals overseas, including the War Crimes Act of 1996. The federal prohibition on torture applies to acts outside the United States regardless of the nationality of the perpetrator (non-U.S. nationals need only be "found" in the United States to be prosecuted).

The War Crimes Act, as amended by the Military Commissions Act of 2006, prohibits "grave breaches" of Common Article 3, which are defined to include torture, cruel or inhuman treatment, performing biological experiments, murder of an individual not taking part in hostilities, mutilation or maiming, intentionally causing serious bodily injury, rape, sexual assault or abuse, and taking hostages. Federal jurisdiction is established for these crimes when they are committed by or against U.S. nationals or U.S. servicemembers. It does not appear to cover foreign nationals who commit war crimes in Iraq, even if they are employed by the U.S. government or U.S. government contractors.

Other criminal proscriptions with extraterritorial reach include assaulting, killing or kidnapping an internationally protected person, or threatening to do so. Jurisdiction exists over these offenses if the victim or offender is a U.S. national, or if the offender is afterwards found in the United States. The federal prohibition on torture applies to acts outside the United States regardless of the nationality of the perpetrator (non-U.S. nationals need only be "found" in the United States to be prosecuted). There is extraterritorial jurisdiction over murder where both the perpetrator and victim are U.S. nationals, but prosecution requires that the Attorney General or his designee give approval, which requires that the foreign country where the murder took place has not prosecuted the suspect for the same conduct and that the suspect is no longer present in that country and the country lacks the ability to lawfully secure the person's return.

Extraterritorial jurisdiction may be found to be implied in statute, especially where the statute's main purpose is to protect federal officers, employees and property, or to prevent the obstruction or corruption of the overseas activities of federal departments and agencies. Some statutes apply to conduct where foreign commerce is affected, although that jurisdictional basis alone may be insufficient to demonstrate that Congress meant to reach conduct overseas. Crimes involving only foreign nationals as either perpetrator or victim, even where one or more are employed by the U.S. government or a government contractor, may fall outside the jurisdiction of U.S. courts.

Military Extraterritorial Jurisdiction Act (MEJA)

Persons who are "employed by or accompanying the armed forces" overseas may be prosecuted under the Military Extraterritorial Jurisdiction Act (MEJA) of 2000 for any offense that would be punishable by imprisonment for more than one year if committed within the special maritime and territorial jurisdiction of the United States. Persons "[e]mployed by the armed forces" is defined to include civilian employees of the Department of Defense (DOD) as well as DOD contractors and their employees (including subcontractors at any tier), and, after October 8, 2004, civilian contractors and employees from other federal agencies and "any provisional authority," to the extent that their employment is related to the support of the DOD mission overseas. Depending on how broadly DOD's mission is construed, MEJA does not appear to cover civilian and contract employees of agencies engaged in their own operations overseas. It also does not cover nationals of or persons ordinarily residing in the host nation. While it appears to cover other foreign nationals working under covered contracts, it does not appear to extend federal jurisdiction over crimes not expressly defined as covering conduct occurring within the SMTJ. For example, it might not be available as a jurisdictional basis to prosecute non-U.S. national contractors for war crimes under 18 U.S.C. § 2441. However, under DOD's interpretation of the statute, MEJA is available to prosecute federal crimes that are prohibited everywhere within the United States, including areas that are not part of the SMTJ.

DOD issued regulations for implementing MEJA in 2005. DOD Instruction 5525.11, Criminal Jurisdiction Over Civilians Employed By or Accompanying the Armed Forces Outside the United States, Certain Service Members, and Former Service Members , March 3, 2005, implements policies and procedures pursuant to MEJA. Under the Instruction, the DOD Inspector General (IG) has the responsibility to inform the Attorney General whenever he or she has reasonable suspicion that a federal crime has been committed. The DOD IG is also responsible for "implementing investigative policies" to carry MEJA into effect. The Instruction notes that the Domestic Security Section of the DOJ Criminal Division has agreed to "provide preliminary liaison" with DOD and other federal entities and to designate the appropriate U.S. Attorney's Office to handle a case.

The Department of Justice has reported that 12 persons have been charged under MEJA since its passage in 2000, with several investigations underway that may result in charges. Very few successful prosecutions involving DOD contractors in Iraq under MEJA have been reported. A contractor working in Baghdad pleaded guilty to possession of child pornography in February 2007. Another contract employee was prosecuted for abusive sexual contact involving a female soldier that occurred at Talil Air Force Base in 2004. A contract employee was indicted for assaulting another contractor with a knife in 2007. In addition, a former U.S. soldier is being prosecuted under MEJA for the rape and murder of an Iraqi girl and the murder of her family while the defendant served on active duty in Iraq.

The House of Representatives passed legislation on October 4, 2007, to expand MEJA coverage during contingency operations ( H.R. 2740 ) (for information on H.R. 2740 , the Military Extraterritorial Jurisdiction Act (MEJA) Expansion and Enforcement Act of 2007, see section on " Selected Legislation in the 110 th Congress " below).

Uniform Code of Military Justice (UCMJ)

Contract personnel may be subject to military prosecution under the Uniform Code of Military Justice (UCMJ) for conduct that takes place during hostilities in Iraq in some circumstances, although any trial of a civilian contractor by court-martial is likely to be challenged on constitutional grounds. Article 2(a)(10), UCMJ, as amended by § 552 of the John Warner National Defense Authorization Act for Fiscal Year 2007 ( P.L. 109-364 ) ("FY07 NDAA"), extends military jurisdiction in "time of declared war or a contingency operation," to "persons serving with or accompanying an armed force in the field." There is one reported use of the amendment; an interpreter with dual Canadian-Iraqi citizenship pleaded guilty in connection with the stabbing of another contractor. Additionally, if offenses by contract personnel can be characterized as violations of the law of war, the UCMJ may extend jurisdiction to try suspects by court-martial or by military commission.

Prior to the FY2007 NDAA, the UCMJ covered civilians serving with the Armed Forces in the field only in "time of war." As a reflection of the constitutional issues that arise whenever civilians are tried in military tribunals, as reaffirmed by a series of Supreme Court cases beginning in 1957 with Reid v. Covert , courts have interpreted the phrase "in time of war" to mean only wars declared by Congress. In Covert , a plurality of the Supreme Court rejected the proposition that Congress's power to regulate the land and naval forces justifies the trial of civilians without according the full panoply of due process standards guaranteed by the Bill of Rights. The Supreme Court has also found that former servicemembers who have severed all ties to the military cannot be tried by court-martial for crimes they committed while on active duty.

The trial of civilian contractors by courts-martial will likely be subject to challenge on constitutional grounds. Congress's authority to "make Rules for the Government and Regulation of the land and naval Forces" empowers it to prescribe rules for courts-martial that vary from civilian trials and are not restricted by all of the constitutional requirements applicable to Article III courts. In addition to the express exception in the Fifth Amendment regarding the right to presentment and indictment in "cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger," the Supreme Court has found implicit exceptions to other fundamental rights as they pertain to servicemembers. Statutes relating to courts-martial have withstood objections based on due process. While the UCMJ offers soldiers procedural protections similar to and sometimes arguably superior to those in civilian courts, courts have been reluctant to extend military jurisdiction to civilians.

On the other hand, the Covert Court distinguished the peacetime courts-martial of civilian spouses at issue from Madsen v. Kinsella , in which a military spouse was tried by military commission in occupied Europe, on the basis that

[that case] concerned trials in enemy territory which had been conquered and held by force of arms and which was being governed at the time by our military forces. In such areas the Army commander can establish military or civilian commissions as an arm of the occupation to try everyone in the occupied area, whether they are connected with Army or not.

If Madsen remains valid, if and for so long as the United States is considered an "occupying power" in Iraq, it may be acceptable under the Constitution to subject DOD contractors there to military jurisdiction.

Further, the Covert plurality held open the possibility that civilians who were part of the armed services could be tried by court-martial during wartime. While the Court has suggested in dicta that courts-martial are never proper for the trial of civilians, it has never expressly stated that the Constitution forbids military jurisdiction over civilians who might properly be said to be "in" the Armed Forces during war. Lower courts addressed the issue during World War II, and upheld courts-martial of civilian employees of the U.S. Army in Eritrea. Merchant seamen were sometimes tried by court-martial by the Navy. One such conviction was overturned by a federal court on habeas corpus review because the offense charged, striking a superior officer, was essentially a military charge. However, another court upheld the conviction of a merchant seaman for the military charge of desertion.

Assuming the Constitution permits the trial of civilians accompanying the Armed Forces in wartime, a particular case will also have to satisfy the statutory requirements of the UCMJ. To determine whether a civilian contractor who is suspected of having committed an offense is subject to prosecution under the UCMJ, it will be necessary to determine whether he is "serving with or accompanying an armed force" that is operating "in the field." The phrase "serving with or accompanying" the forces was historically construed to require that the civilian's "presence [must be] not merely incidental to, but directly connected with or dependent upon, the activities of the armed forces or their personnel." Courts have found that military jurisdiction over a civilian "cannot be claimed merely on the basis of convenience, necessity, or the non-availability of civil courts."

The phrase "in the field" means serving "in an area of actual fighting" at or near the "battlefront" where "actual hostilities are under way." Whether an armed force is "in the field" is "determined by the activity in which it may be engaged at any particular time, not the locality where it is found." Therefore, it appears that contractors will not be subject to military jurisdiction merely because of their employment in Iraq. They might, however, be subject to jurisdiction even if the conduct occurs outside of Iraq, so long as it occurs away from a permanent garrison and there is sufficient connection to military operations ongoing in Iraq or elsewhere.

Other likely issues include whether civilian contractors may be prosecuted for military crimes, such as disrespect of an officer or failure to obey a lawful command, or whether non-judicial punishment will be available to discipline contract employees. Some of the standard punishments courts-martial ordinarily adjudge would not be available in the case of civilians, such as a dishonorable discharge or reduction in rank, and possibly forfeiture of pay. Appellate review over civilian cases may be effectively restricted by these sentencing consideration. For example, the government may appeal an adverse ruling (not amounting to a finding of not guilty) on an interlocutory basis only in cases in which a punitive discharge may be adjudged. On the other hand, there does not appear to be a means of compelling continued employment in order for a civilian to undergo court-martial proceedings; if misconduct by a contract employee results in his or her immediate dismissal by the contractor, military jurisdiction may also cease.

DOD recently issued guidance for implementing the new law. Secretary Gates, citing "a particular need for clarity regarding the legal framework that should govern a command response to any illegal activities by Department of Defense civilian employees and DoD contractor personnel overseas with our Armed Forces," instructed the Secretaries of the Military Departments, the Chairman of the Joint Chiefs of Staff, and the commanders of the regional combatant commands that the exercise of jurisdiction over civilians must be based on military necessity and supported by circumstances that meet the interests of justice. Such circumstances include those where U.S. federal criminal jurisdiction does not otherwise apply or is not being pursued, or where the conduct in question is adverse to a significant military interest of the United States. For conduct that occurs within the United States, or in cases where the offender was not at all pertinent times outside the United States, the Secretary of Defense is the sole authority for convening a court-martial or initiating non-judicial punishment.

For covered civilians outside the United States, commanders of geographic combatant commands may initiate disciplinary proceedings or delegate such authority to subordinate commanders who possess general court-martial convening authority. These convening authorities are required, prior to initiating court-martial or non-judicial proceedings, to follow the notification procedures outlined in DOD Instruction 5525.11 (MEJA implementation) to give the Department of Justice the opportunity to take action. The memorandum gives the Justice Department fourteen calendar days (or longer, if DOJ determines that extraordinary circumstances warrant more time to complete its determination) to advise DOD as to whether it intends to exercise jurisdiction. If the period of review passes without an indication that DOJ intends to exercise jurisdiction, DOD may notify DOJ that it intends to authorize the appropriate commander to initiate disciplinary action, at his or her command discretion. If DOJ elects to exercise jurisdiction, the commanders are not authorized to initiate disciplinary action, unless U.S. federal criminal jurisdiction of the case is later terminated. Military commanders are authorized to investigate and exercise other law enforcement authorities with respect to violations by civilians while DOJ makes its determination in order to be prepared to take appropriate action if DOJ declines jurisdiction.

Issues for Congress

The use of private contractors in personal security and military operations raises many questions regarding the appropriateness and practicality of entrusting private companies with duties that have been traditionally reserved for military and civilian federal personnel. Several issues are particularly sensitive when nations hire private contractors for potentially hostile situations. Some are even more sensitive when State-hired contractors carry arms, even on a strictly defensive basis. These issues, as related to contractors as a whole and to private security contractors in particular, are briefly discussed below.

"Inherently Governmental Functions" and Other Restrictions on Government Contracts

One question that arises whenever a federal agency hires private persons or entities to perform services is whether the duties to be performed under the contract are "inherently governmental" in nature and therefore ought to be performed by public officials. Congress defined "inherently governmental function" in the Federal Activities Inventory Reform (FAIR) Act of 1998 to mean a function that is "so intimately related to the public interest as to require performance by Federal Government employees." Under the FAIR Act, the term "includes activities that require either the exercise of discretion in applying Federal Government authority or the making of value judgments in making decisions for the Federal Government...." It involves functions that can "determine, protect, and advance United States economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal justice proceedings," contract management, and functions that can "significantly affect the life, liberty, or property of private persons...." Infrequently, Congress has provided by statute that a function is "inherently governmental." Congress may also directly forbid or limit the use of contractors for certain functions or forbid the contracting of certain kinds of employees, where the functions or employment may be considered inherently unsuitable for association with the government.

The Federal Acquisition Regulations (FAR) list examples of inherently governmental functions. The Office of Management and Budget sets forth in Circular A-76 the guidelines and procedures that executive agencies should take into account when determining whether an activity should be performed by government personnel or can be performed by the private sector. Executive agencies may also take into account legislation when making such a determination.

Circular A-76, as revised in 2003, states that using contractors to provide certain types of protective services—guard services, convoy protection services, plant protection services, pass and identification services, and the operation of prison or detention facilities, all whether performed by unarmed or armed personnel—is not prohibited. Nevertheless, Circular A-76 also stipulates that executive agencies should take into account whether circumstances exist where

the provider's authority to take action...will significantly and directly affect the life, liberty, or property of individual members of the public, including the likelihood of the provider's need to resort to force in support of a police or judicial activity; whether the provider is more likely to use force, especially deadly force, and the degree to which force may have to be exercised in public or relatively uncontrolled areas.

DOD implementation of the FAR, known as the Defense Federal Acquisition Regulation Supplement (DFARS), does not prohibit the use of contract personnel for security, but it limits the extent to which contract personnel may be hired to guard military installations and provides mandatory contractual provisions for contractors who are accompanying U.S. Armed Forces deployed overseas. Such contractors are considered civilians accompanying the U.S. Armed Forces during contingency operations and are not authorized to use deadly force against enemy armed forces other than in self-defense. However, in June, 2006, DOD published a rule amending the DFARS to create an exception for private security contractors, who are authorized to use deadly force "only when necessary to execute their security mission to protect assets/persons, consistent with the mission statement contained in their contract." The rule explained that

it is the responsibility of the combatant commander to ensure that the private security contract mission statements do not authorize the performance of any inherently Governmental military functions, such as preemptive attacks, or any other types of attacks. Otherwise, civilians who accompany the U.S. Armed Forces lose their law of war protections from direct attack if and for such time as they take a direct part in hostilities.

Further, the DFARS-mandated clause for contractors accompanying the armed forces limits the provision of military security for DOD contractors providing other services in the theater of operations to cases where, as determined by the Combatant Commander, the contractor cannot obtain effective security services at a reasonable cost or "threat conditions necessitate security through military means." In the event a contractor hires a subcontractor to provide security services for its workers and property, that contract must incorporate the substance of the required clause.

A recent decision by the Comptroller General may shed additional light on the current thinking regarding the nature of private security services. A contractor protested the terms of a pair of solicitations for contracts involving cargo transportation in Iraq on the basis that they included requirements for armed security escorts. The prospective bidder challenged the security requirements as running afoul of the Anti-Pinkerton Act as well as relevant DOD instructions regarding contractors accompanying the U.S. Armed Forces overseas. Specifically, the protestor contended that the statements of work (SOW) required performance of security services that would constitute the provision of "quasi-military armed forces for hire" and require civilian contractors to engage in combat. The Comptroller General denied the protest, relying on an earlier interpretation that "a company which provides guard or protective services does not thereby become a 'quasi-military armed force,' even if the individual guards are armed...." With respect to the charge that the work involved the "uniquely governmental" function of engaging in combat, the decision noted DOD regulations and DFARS provisions that would permit the contracting of armed security services but prohibit such contractors from engaging in direct combat or offensive operations. It appears that neither the Department of Defense nor the Government Accountability Office (GAO) regards the government use of armed security escorts in Iraq as violating any restrictions on government contracting. However, the Anti-Pinkerton Act might be construed to bar the hiring of any particular contractor who is found to operate as a "quasi-military armed force," at least if it acted as a strikebreaker during a labor dispute.

Neither the State Department acquisition regulations nor the U.S. Agency for International Development regulations specifically addresses contractors overseas during war or contingency operations. However, a recent amendment to the FAR imposes new requirements for government contracts that entail contractor personnel working in designated operation areas or at certain diplomatic or consular missions outside the United States for agencies other than the Department of Defense.

Need for and Suitability of Private Contractors172

Over the past two decades, the State Department and the Department of Defense have increasingly turned to private security contractors to provide protective and other services for the two departments. Both State and DOD report significant benefits from the use of private security contractors. For the State Department, the use of PSCs in Iraq offers a surge capability to meet an extraordinary but time-limited need. For the U.S. military, contractors are considered part of the total force and private security contractors contribute a small, but significant portion of the force multiplier effect of using private contractors to achieve mission success. Analysts, however, also note drawbacks in the use of private contractors.

Flexibility Considerations for the State Department

To meet various surge requirements, the Department of State argues that PSCs allow Diplomatic Security (DS) to rapidly expand its capability to meet security needs without a delay in recruiting and training direct-hire DS personnel. DS has stated that contractors can be recruited, vetted, hired, trained, and deployed in 90 to 120 days. DS special agents, on the other hand, are college-educated law enforcement officers, trained in the full range of the work of DS agents, including personal security. DS states that it takes two years to recruit, hire, and train a DS agent. DS also states that the use of PSCs allows the fielding of an already trained, experienced cadre of security professionals whose required skills can be designated in the contract. When the surge need is gone, just as the State Department could rapidly expand its force, it can also reduce its security force when requirements change.

Even if one considers the current demands for PSCs an anomaly because of Iraq, it appears to be the intention of the State Department to continue to use PSCs in meeting future personnel and perimeter security requirements. It is for policy makers to determine whether this flexibility is an appropriate long-term position for the use of PSCs, better suited as a short-term response to current needs, or whether the State Department should increase the number of full-time DS agents and security specialists and provide sufficient appropriations to do so instead of relying on PSCs.

Military Requirements and Private Contractors

Many defense analysts view private contractors as an indispensable force multiplier, especially needed over the past decade to ease the strain on a downsized military. By supplementing overstretched active duty personnel, beginning in the early 1990s, with contractors for jobs that do not require military expertise such as feeding, housing, and otherwise caring for soldiers' basic needs, policy makers hoped to meet the demands on the force while minimizing an increase in the number of military personnel and repeated call-ups of reserve units. The U.S. government's subsequent turn to private contractors for assistance with a wide variety of security needs served the same purposes. In Iraq, particularly, the use of private contractors may serve a variety of other interests. As Iraqis constitute a significant percentage of private security contractors, the use of private contractors provides a cultural and linguistic advantage over the use of U.S. soldiers and ameliorates much potential friction with the local populations, according to one expert. They may also forestall possible criticism from U.S. taxpayers for using U.S. soldiers to protect the profit-making companies that carry out U.S. reconstruction efforts.

Without private contractors, the U.S. military would not have sufficient capabilities to carry out an operation of the scale of Iraq, according to many analysts. If the United States wishes to engage in and contribute to sizable stabilization and reconstruction operations without contractor support to the U.S. military, policy makers would probably need to contemplate increasing the number of U.S. troops, perhaps also increasing incentives to attract volunteers or re-instituting the draft. On the other hand, some analysts point out that private security contractors are but a small part of the contractor workforce supporting the military in Iraq. Some analysts also question whether the use of private security providers in Iraq and elsewhere is beneficial to the U.S. military in the long run. Although contracting private sector firms for guard duties may help alleviate the current shortage of military personnel, analysts point to potential downsides to the force multiplier argument. One important area of concern is whether the use of PSCs is detrimental to military force structure; has a deleterious potential effect on the military mission, is flexible, and are of an appropriate quality for personnel.

Effects on the U.S. Military Force Structure

Analysts for the 1995 Commission on Roles and Missions (CORM) found that reliance on contractors could prove detrimental to military capabilities in a number of ways, the first of which was that it could keep the United States "from building and maintaining capacity needed for strategic or other important missions." Anecdotal reports that private security firms have been hiring away military personnel, particularly special forces personnel, with high salaries seem to illustrate the possibility that a competing private sector could deplete the military of highly trained personnel in needed specialties.

Proponents of the use of private sector security providers discount such concerns, stating that the numbers employed by private security companies are too low to have a significant effect on U.S. capabilities. Quantifiable evidence of a detrimental effect is lacking. A 2005 GAO analysis shows that the average attrition rates for military occupational specialities preferred by private security providers were lower in FY2004 (when demand for such providers in Iraq was high) than in fiscal years 2000 and 2001. (These specialities were Army and Navy enlisted and officer special operations forces, Army infantry, and military police from all four services.) In the particular case of Army Special Forces enlisted personnel, however, attrition was somewhat higher in 2004 than in 2000 and 2001. The GAO pointed out that a variety of factors could play into an individual's decision to leave the armed services.

Effects on the U.S. Military Mission in Iraq

Recent reports also point to possible complications for military commanders with the use of private security guards. Many analysts point out that the primary mission of private security personnel is to ensure the security of the individuals, the transport convoys, and the property they are hired to protect. News reports from Iraq indicate that this may have led in some cases to a disregard of the sensitivities of and consequences for the Iraqi public. For a U.S. commander in Iraq whose mission may well include winning "hearts and minds," such a disregard is problematic, some analysts argue. These reports, however, generally discuss incidents involving contractors who are American, not Iraqi or other foreign nationals; as noted above, proponents argue that a sizable presence of Iraqis among those providing security under U.S. contracts overall reduces the possible friction that the use of U.S. soldiers in these positions would entail.

Concerns Regarding Flexibility

Some analysts also contend that military forces have additional benefits in hostile situations. Although some state that private contractors can be deployed more quickly than military forces, others argue that military commanders can respond more quickly to changing situations when military forces rather than contractors are used. Commanders do not exercise command and control over private contractors, nor do they have the authority to amend contracts in the midst of an operation to reallocate contract employees to perform necessary tasks that fall outside the terms of the contract. Proponents of the use of private security contractors discount such concerns, however, arguing that they are not employed on the battlefield, where such flexibility is a needed.

Concerns About Reliability and Quality of PSC Personnel in Iraq

The larger companies, particularly, have reputations for supplying high-quality personnel. Some have wondered, however, if these companies can maintain that standard as demand for their services increases.

Although U.S. companies have generally hired former U.S. professional military personnel with established careers, who may still possess the discipline, professionalism, and esprit de corps that the U.S. Armed Forces seeks to instill in its soldiers, the increasing use of private personnel may reduce the quality of contractor recruits. On the other hand, some analysts point out that private companies can maintain top quality people in the field indefinitely, whereas the military is required to rotate soldiers regularly. Those who favor the use of such contractors also contend that private companies can maintain standards because they can draw from a larger and more competitive pool of personnel than the U.S. military does, including former military personnel from elite forces of other countries and former police personnel.

Some critics are also concerned about the high number of non-U.S. citizens hired under U.S. government contracts, especially third-country nationals from lesser-developed countries who might be more difficult to screen. A GAO official noted in June 2006 testimony that (1) private security companies and DOD "have difficulty completing comprehensive criminal background screenings for U.S. and foreign nationals when data are missing or inaccessible," and (2) "[n]o U.S. or international standards exist for establishing private security providers and employee qualifications."

Industry Controls

Companies engaged in the private security business have incentives and opportunities to control quality, proponents say. Companies employing individual contractors have opportunities to observe their behavior and performance during training sessions and, according to analysts, can screen out potential misfits at that stage. U.S. government agencies establish baseline standards in contracts, by specifying performance standards, experience requirements, and/or precise qualifications to be met. U.S. government agencies have mandated changes—under threat of penalties—when contracted personnel are perceived as not up to standard, according to Doug Brooks, President of the International Peace Operations Association (IPOA). In addition, according to Brooks, there are many examples of companies that act proactively to address client complaints. For example, an industry association has instituted a system to review complaints concerning its members and to sanction those found to have violated the Association's Code of Conduct. IPOA members include some of companies listed above (i.e., ArmorGroup, DynCorp International, Erinys International, and EOD Technologies, Inc.). In addition, PSC officials have stated that they fire or discipline employees for an array of inappropriate behavior, including insubordination and drinking alcohol in violation of established policy.

State Department PSC Employee Standards and Training

In testimony before the House Committee on Oversight and Government Reform, Ambassador David Satterfield stated, "Insofar as the State Department's security contractors in Iraq are concerned, we demand high standards and professionalism. Those standards include relevant prior experience, strict vetting, specified pre-deployment training, and in-country supervision." Possible employees of PSCs undergo an initial screening process by their employer/contractor before the PSC employer submits the application of the proposed employees to the State Department. The Department performs a background check on American citizen applicants who must qualify for an appropriate level of a security clearance. A similar process for foreign national is also required and they must also qualify to receive an appropriate level of clearance. All applicants must have at least one year of experience in protective security assignments, law enforcement, or military service. After being approved by the Department for employment, before the PSC employee is deployed, he or she receives 164 hours of DS-approved training.

Supporters of the use of private security contractors point out that while objectionable contractor actions in Iraq have been highlighted recently, the employees themselves and their work should be kept in perspective. They point out that from January 1 to September 18, 2007, PSC contractors conducted 3,073 missions in which American diplomats or visitors were escorted outside of the secured Green Zone in Baghdad. Of those missions, there were 77 incidents involving PSC personnel using weapons. While over 30 Blackwater employees have been killed while performing their security duties, supporters state that no American diplomat or visitor has been killed or seriously injured while being escorted by Blackwater. Ambassador David M. Satterfield, former Deputy Chief of Mission at the U.S. Embassy in Baghdad from May 2005 to July 2006, said that he had "personally benefitted from Blackwater and other private security details ... and witnessed first hand their professionalism."

If PSCs continue to be used in the long term, the adequacy of the selection and vetting process and the training received should be a matter of continual review. For instance, it has only been since the end of October 2007, following the September 16 Blackwater firing incident at Nisoor Square in Baghdad that human rights and cultural sensitivity training has become a part of the pre-deployment training for PSC employees along with the more standard Terrorist Operations, Organization of a Protective Detail, Protective Services Formation and Standard Operating Procedures, and Defensive Driver Training. A former Blackwater employee expressed his belief that training such as in cultural sensitivity was not necessary in that Blackwater's mission was different from the military and the State Department. He said, "We're not paid to go out and find and eliminate the insurgents. Our job is to keep people alive and safe, and do what we need to do."

Military Considerations

Proponents of the use of private security contractors argue that they are as responsible as serving military personnel because many are former soldiers or individuals equally dedicated to the national mission. Skeptics voice concerns that individual contractors may be less reliable in some situations as they probably bear lesser costs than military personnel if they refuse to perform a particular task. According to a 2003 GAO report, The DOD recognized the risk that contractors might not be available in crisis or hostile situations. Nevertheless, proponents argue that private security contractors working for the U.S. government, as well as other contractors, have been "remarkably robust in terms of reliability." There is little evidence to the contrary.

Oversight and Control/Coordination Issues

Many analysts claim that the U.S. government is unable to adequately oversee and control or coordinate the performance of military contractors in general and private security contractors in particular. Members are concerned with transparency issues that impede oversight by Congress, as well as control and coordination in the field.

Transparency and Congressional Oversight

Some Members have been concerned with the dearth of information made available to Congress by the Administration and to the public on U.S. government contracts with contractors in general and private security contractors in particular. As oversight hearings have demonstrated, the executive branch either has not kept sufficient records to produce or has been unwilling to present basic, accurate information on the companies employed under U.S. government contracts and subcontracts in Iraq. The lack of contracting personnel, discussed below, may be responsible at least in part for this problem. In response to calls for greater transparency, DOD and the State Department have been providing additional information to Congress. For example, DOD now submits a quarterly report that includes information on the number of active PSC contracts, the number of employees working under these contracts, and an analysis of the contractor workforce (i.e., number of contractors that are armed versus unarmed, number of contracts that are American, Iraqi, or third-country nationals).

Military Oversight in the Field

One industry professional described the oversight situation in the early years of Operation Iraqi Freedom as "a nightmare" and stated that the better companies would prefer closer oversight. Some U.S. government officials believed that U.S. agencies did not adequately supervise contracts. At the field level, the problem is often attributed by many, including U.S. government personnel, to a lack of qualified contracting oversight personnel, including contracting officer's representatives (CORs), who are responsible for supervising the contracted work. Arguing for an increase in such personnel, they state that over the years, the number of such representatives has been cut sharply in the Departments of Defense and State, while the number of contractors has escalated.

According to officials at the Department of Defense, the Blackwater shooting incident that took place at Nisoor Square on September 16, 2007, was a watershed event that highlighted the need for improved management and oversight of all U.S. government private security contractors operating in Iraq. According to these officials, DOD initiated a number of steps to improve contractor oversight, including establishing an Armed Contractor Oversight Division and significantly increasing the number of Defense Contracting Management Agency personnel performing contractor oversight in Iraq. In addition, MNC-I has consolidated the rules and regulations regarding private security companies and issued mandatory guidance on the management and oversight of PSCs.

Many observers of developments in Iraq point to the important role that CORs can play and the possible results when contracting agencies have insufficient or the wrong staff to do this important work. Recognizing the important role of CORs in managing PSCs, DOD recently issues an order which states that contracting office representatives should be appointed who possess the appropriate rank given the contract oversight responsibilities, and that oversight should be the primary—and not an ancillary—responsibility of the COR. It is for Congress, in the end, to determine whether sufficient staff has been requested by the Administration, and if the Administration fills the slots provided in the various contracting bureaus of the government. Further, through the power of the purse, Congress could make sure that the government's CORs have sufficient resources and training to do their work.

State Department Oversight in the Field

In its formal structure, the DS Regional Security Officer (RSO) at post provides general oversight and manages the operation of security contractors. The DS High Threat Protection Program personnel in Washington meets weekly with contractor management and conducts periodic program management/contract compliance reviews of task order operations at posts. The WPPS II base contracts require that PSCs follow the mission firearms policy of the post to which they are assigned. In the case of the U.S. Embassy in Baghdad, the mission firearms policy is defensive in nature and utilizes a seven-step escalation of force continuum that ends with the use of deadly force when no safe alternative is available to protect the diplomat or dignitary being guarded. There are levels of incident reporting requirements to the RSO when weapons are discharged, or there are attacks, serious injury or death. Contractors are also required to report any incident that would reflect negatively on the United States, the Department, the Embassy, or the contractor.

While oversight and management of PSC procedures seem to be in place in Iraq, many news reports relate embassy officials rebuffing Iraqi complaints about Blackwater employees' alleged involvement in Iraqi deaths or firing on Iraqi civilians, actions by PSC employees as being arrogant, and the State Department allowing Blackwater to ignore Iraqi law such as operating without an Interior Ministry license, even after the requirement became a standard part of Defense Department requirements for its security contractors. Many in Iraq have come to see Blackwater as untouchable because they have a sponsor, the State Department, who would defend the company at every turn regardless of what the company does.

Tighter State Department Oversight

After the September 16, 2007, shooting in Baghdad's Nisoor Square, several studies were conducted to investigate the shooting and the embassy's actions. Among these, Secretary of State Rice formed a review panel led by Ambassador Patrick Kennedy to examine the shooting incident in terms of management and policy. The Federal Bureau of Investigation sent a separate team to investigate the shootings and, in particular, Blackwater's compliance with U.S. policy. Through an October 4 Interim Report and an October 23, 2007 Final Report, Ambassador Kennedy's panel made 19 recommendations. Among its findings, the panel stated the following:

The Department's security operations in Iraq have been highly effective in ensuring the safety of mission personnel. Improvements are necessary to address shortcomings in coordination and oversight that have undermined confidence in the operation of the security program on the part of the U.S. military command and the Iraqi government and public. The U.S. military in Iraq does not consider it feasible or desirable under existing conditions in Iraq for the Department of Defense to take on responsibility for provision of Personal Protective Service support to the Embassy. The drawdown of the U.S. military in Iraq is likely to create increased requirements for personal protective services. The Diplomatic Security Service does not have sufficient special agents worldwide to take on all personal service operations in Iraq and meet requirements in other countries.

Following Ambassador Kennedy's reports and recommendations, the Secretary ordered new measures to increase State Department oversight of contractors' activities in Baghdad. From among the recommendations made by the Kennedy panel, Secretary Rice ordered the following:

DS Special Agents, serving as the Officer in Charge, accompany all State Department personal security details leaving the Green Zone in Baghdad for other parts of the city. Additional agents from other DS posts were ordered to Baghdad to assure sufficient personnel to cover all of the Blackwater convoys. DS mount video cameras on security vehicles and begin taking and archiving electronic video information regarding reported incidents. DS monitor and record radio transmissions of PSCs while they are operating outside the Green Zone to increase the Department's capability to review material after an incident. State amend the WPPS II contracts to require (1) contractors to employ a limited number of Arabic language staff for convoy movements; (2) PSC employees to take predeployment training in cultural awareness and sensitivity, and the diplomatic and military environment in which they will be operating; (3) tightening of the rules on the use of deadly force to ensure greater parallelism with USCENTCOM rules; and (4) revision of the embassy's U.S. Mission Firearms Policy to specify that if an authorized employee must fire his/her weapon, he/she must fire only aimed shots; fire with due regard to the safety of innocent bystanders, and make every effort to avoid civilian casualties. A "Go Team" of embassy security officials be established to quickly proceed to the scene of any weapons discharge involving State Department PSCs to gather information and material and provide an analysis of what happened, why, and report on the incident. An Embassy Joint Incident Review Board be established, made up of embassy diplomatic and security officials, a U.S. military officer, and another U.S. government official other than State or Justice, to review all incidents involving contractor use of deadly force, and recommend to the recommend to the ambassador whether the use of force was justified, and if not, whether the case should be referred to the Department of Justice. A permanent working group be established between the Regional Security Office and Multi-National Force-Iraq to develop commonly agreed operational procedures, establish a robust liaison element, exchange information ensure optimal situational awareness, and ensure that any issues are discussed and quickly resolved.

State Department/DOD Memorandum of Agreement

To address the growing concerns in both the executive and legislative branches regarding perceived insufficient management of PSCs in Iraq and the negative impact their actions can have on U.S. efforts in the region, Deputy Secretary of State John Negroponte and Deputy Secretary of Defense Gordon England signed a Memorandum of Agreement (MOA) for their departments on December 5, 2007, regarding PSCs. The MOA defined the authority and the responsibility for accountability and operations of U.S. PSCs in Iraq. Under the categories of responsibilities and standards, the Departments agreed on the following:

The Secretary of Defense and the Combatant Commanders (COCOM) are responsible for the security of all DOD elements and personnel under operational control of COCOM. The Secretary of State is responsible for the security of U.S. government personnel on official duty in Iraq, other than those under the command of an area military commander. The Secretary of State and the Secretary of Defense will jointly develop, implement, and follow core standards, policies, and procedures for the accountability, oversight, and discipline of PSCs. The core standards would, at a minimum, include

1) management of PSC personnel;

2) coordination of PSC operations outside secure base and U.S. diplomatic property;

3) clear legal basis for holding private security contractor employees accountable under U.S. law;

4) recognition of investigative jurisdictions and coordination of joint investigations where conduct of PSC personnel are to be investigated.

The Chief of Mission and the COCOM would make every effort to consult and coordinate responses to common threats.

The MOA also outlines a process for dispute resolution between the two departments, and a requirement for the two secretaries to designate their Washington representatives regarding the MOA to meet as frequently as necessary but not less than every quarter.

Further, the departments agreed to an ANNEX A: Deliverables As Part of the MOA. The annex, to be jointly completed by the U.S. Embassy in Baghdad and the Multi-National Force—Iraq (MNF-I), stated the details of how the MOA would actually operate on the ground. Other elements to be included in the Annex were still to be developed, such as a common graduated warning system for PSCs to use when they felt threatened so that the threatening individual/force could withdraw. Some of the elements of the MOA/Deliverables are as follows:

Common definitions for Defense of Self or Others, Imminent Threat, Hostile Act, Hostile Intent. The Use of Deadly Force. The authority to possess and carry firearms and the minimum requirements that must be met for a person to have such authority. The coordination and control of PSC details outside of secure areas, which include advance notification to MNC-I of time, route, destination, and convoy composition outside the Green Zone or a military base, and the right of MNC-I to recommend that the route or time be altered or PSC mission be cancelled. The steps to be taken by the embassy and MNF-I as an immediate response to any serious incident involving PSCs. The steps include securing the area for investigation of the incident, determining who has jurisdiction to conduct the investigation, notifying the Government of Iraq, and providing condolence payments to Iraqi families. An agreement for State and DOD to work together to develop a common database for the purpose of increasing PSC accountability and visibility.

Control and Coordination in the Field

The GAO has issued several reports regarding DOD contracting in Iraq that address issues regarding the use of private security contractors, several of which mention control and coordination issues. As pointed out above, military commanders do not have a command and control relationship with contractors, and thus must know how to secure cooperation from contractors to promote order in the theater of operations. In June 2006 testimony before Congress, a GAO official cited two major related problems: (1) that private security providers did not coordinate with the U.S. military when they entered the "battle space" in Iraq and (2) that military units were not trained prior to deployment on (a) private security provider operating procedures and (b) the role of the Reconstruction Operations Center (ROC) (The ROC was charged with coordination between military and private security personnel. Coordination is now managed by Contractor Operations Cells, as discussed below). In March 2007, DOD set forth a new requirement that companies enter data on their personnel, before deployment, into a new "Synchronized Predeployment and Operational Tracker" (SPOT). In April 2007, testimony the Comptroller General stated that GAO continued "to find little evidence that DOD has improved training for military personnel on the use of contractors prior to deployment."

As a result of the December 5, 2007, Memorandum of Agreement between DOD and the Department of State, the agencies have worked to coordinate the movement of PSCs throughout Iraq, taking such steps as giving advance notification to MNC-I of time, routes, destination, and convoy composition of PSC details operating outside the Green Zone or a military base, and the right of MNC-I to recommend that the route or time be altered or PSC mission be cancelled. In addition, the State Department and USAID now require their contractors to coordinate PSC movements with MNC-I. MNC-I manages and coordinates the movement of PSCs in Iraq through Contractor Operations Cells that are co-located with the tactical operations centers of MNC-I's five division operating in Iraq.

Effect of DOD and Department of State Efforts to Improve PSC Management and Coordination

Since the institution of measures to manage PSCs better, the Department of Defense reports that incidences where weapons were fired by PSCs have decreased by about 67%. DOD and Department of State officials have stated that while they believe their efforts to improve management have contributed to the improved performance of PSCs, they cannot determine to what degree the reduction in shooting incidents is the result of their efforts, the general decrease in violence in Iraq, or the military surge.

A recent report issued by the Government Accountability Office found that since the September 16, Nisoor Square Blackwater incident, both DOD and the State Department have taken steps to increase staffing, oversight, and coordination over PSC, and that these steps may help reduce the number of PSC incidents in Iraq. The report also stated that DOD and the State Department have improved coordination related to PSCs in Iraq and points to several steps taken as an illustration of the point. Further the report states that the State Department and DOD have improved their coordination with the Government of Iraq. However, the report expressed concerns regarding DOD's ability to sustain its staffing and training efforts in managing its PSCs in Iraq, as well as pointing to steps that the State Department still has to take in implementing the Kennedy Group recommendation.

Through its oversight responsibilities, Congress might use a variety of measures to determine whether the management and coordination taken by the State Department and DOD are adequate in controlling the actions of PSCs in Iraq or whether additional steps are still needed. Changes in the number of weapons discharge by PSCs may serve as an indicator that the issue of PSC oversight and management may need to be revisited. Another measure may be the number and veracity of complaints lodged by the Iraqi people, Iraqi government, or U.S. government personnel against PSCs. Also, if PSCs continue to play an important role in the protection of U.S. personnel and dignitaries abroad, which seems likely, will agencies take the lessons learned in Iraq and apply those lessons to other locations where the U.S. government will call upon PSCs to provide security.

Cost Issues

CRS is unaware of comprehensive agency-conducted analyses comparing the use of private security companies, U.S. servicemembers, and State Department Diplomatic Security Agents. Both proponents and opponents of the use of contractors have made cost comparisons but usually have not elaborated on what factors were involved in the assumptions underlying the cost comparisons, and whether those factors were comparable. The relative direct cost advantage of contractors can vary, and may diminish or disappear altogether, depending on the circumstances and contract conditions. Apart from the direct cost of salaries, which will vary according to the mix of countries of origin of employed personnel offered, the costs to the U.S. government of private security contracts can depend on any benefits provided and the terms negotiated in a contract or a subcontract. For instance, the U.S. government does not pay for benefits such as health insurance or incur long-term liabilities such as disability compensation and pensions when private security contractors are employed. On the other hand, some analysts contend that the total costs of private security contracts have been underestimated because they do not include the subsidy that the U.S. government in effect provides contracting companies, including when former U.S. soldiers, trained at taxpayer expense, are employed.

Proponents of the use of private security contractors have said that private security contractors are less expensive than using U.S. military forces because private companies can employ locals and third-country nationals whose earnings are a fraction of U.S. servicemembers. Private contractors can incur much lower costs by using local hires extensively, as they do not have to transport them, house or feed them, and can pay wages that are relatively low compared to those paid to U.S. servicemembers. Private security contractors in Iraq keep total costs low by employing many Iraqis, according to proponents.

One recent congressional analysis, however, found that in the case of personnel provided by one company (i.e., Blackwater Worldwide), the total cost of private security personnel was "significantly higher than the direct costs that would-be incurred by the [U.S.] military" because of markups and other costs charged the U.S. government.

From a State Department perspective, in testimony before the House Committee on Oversight and Government Reform, Deputy Assistant Secretary of State for Logistics Management testified that considering a fully loaded cost analysis, it costs around $400,000 for an American diplomat or a DS agent to serve in a regular mission around the world. To have an American diplomat or a DS agent serve in Iraq, by comparison, costs around $1 million. Part of that amount, such as transportation and shipping of goods, does not appear in the employee's salary.

In August, 2008, CBO issued a report that compared the costs of a particular security contract between Blackwater and the State Department to the cost of an equivalent U.S. military force. The report estimated that the costs of PSCs did not differ significantly from the costs of a comparable military unit. The report pointed out that in peacetime there would be carrying costs for maintaining the military unit whereas a contract with a PSC could be terminated.

Perception of State Authority and Commitment

The desire to entrust the capability to use force legally on behalf of the United States to private companies, including those employing non-U.S. citizens has foreign policy implications for the United States. Although many analysts perceive the officially sanctioned private use of force as significantly eroding the modern state's monopoly on the use of force, whether this erosion is beneficial or detrimental to U.S. foreign policy and to the international order is a matter of dispute. To the extent that private companies are perceived as participating in combat operations, it may be difficult for the United States to persuade other states to recognize contractors' rights to protection under the Geneva Conventions. On a symbolic level, the use of private companies may be perceived by some observers as signaling a lesser U.S. commitment than would the use of national military forces.

Selected Legislation in the 110th Congress

H.R. 4986 (Skelton)—National Defense Authorization Act for FY2008 (P.L. 110-181)

Subtitles D and F of P.L. 110-181 address contracting in Iraq and Afghanistan. Subtitle A, which addresses acquisition of services, also contains provisions that may affect private security contracts. Section 808, for example, requires an independent management review of contracts for services, including an assessment of their use to contract for services related to inherently governmental functions.

Section 841 of P.L. 110-181 provides for the establishment of a special Commission on Wartime Contracting to investigate and report to Congress on federal agency contracting for the reconstruction of Iraq and Afghanistan, the logistical support of coalition forces and the performance of security and intelligence functions in Operation Iraqi Freedom and Operation Enduring Freedom. It requires the Commission to assess the extent and impact of reliance on contractors, the extent of waste, fraud, abuse, or mismanagement under such contracts, and the appropriateness of the organizational structure, policies, and practices of the Departments of Defense and State for handling contingency contract management and support. An interim report from the Commission is due March 1, 2009, and a final report is due no later than two years after the date of appointment of all Commission members. Section 862 requires the Secretary of Defense to prescribe, within 120 days of enactment, regulations on the selection, training, equipping, and conduct of personnel performing private security functions under a covered contract or covered subcontract in a combat area. These include processes for (1) registering, processing, and accounting for such personnel; (2) authorizing and accounting for their weapons; (3) investigating the death and injury of such personnel and their discharge of weapons; (4) investigating the injury, death, or damage of property caused by the actions of such personnel; and (5) incidents of alleged misconduct. The regulations also provide guidance to commanders of combatant commands on orders, directives, and instructions to contractors and subcontractors performing private security functions relating to force protection, security, health, safety, relations and interaction with locals, and rules of engagement. Section 861 requires the Secretary of Defense, the Secretary of State, and the Administrator of USAID to enter into a memorandum of understanding (MOU) no later than July 1, 2008, regarding contracting in Iraq and Afghanistan, including matters related to authorizing the carrying of weapons, establishing minimum qualifications for personnel carrying weapons, and setting rules regarding the use of deadly force. The MOU is to delineate responsibilities for investigating and referring possible violations of MEJA by contractor personnel. The MOU is also to identify a common database to house information on all contracts in Iraq and Afghanistan. Section 862 calls for the revision of relevant Federal Acquisition Regulations to require all contracts and subcontracts for such personnel to conform with these regulations.

Vetoed forerunner to H.R. 4986 is H.R. 1585 , which was introduced March 20, 2007. H.R. 1585 was referred to the House Armed Services Committee. Referred to HASC subcommittees April 10, 2007. Subcommittee mark-ups were held May 2-8, 2007. Committee consideration and mark-up was held May 9, 2007. Reported (amended) May 11, 2007 ( H.Rept. 110-146 ). A supplemental report was filed May 14, 2007 ( H.Rept. 110-146 , part 2). The House passed a substitute amendment in lieu on May 17, 2007. H.R. 1585 , as passed by the House, was placed on Senate calendar, June 5, 2007; laid before the Senate by unanimous consent, June 28, 2007. H.R. 185 was passed by the Senate with amendments, October 1, 2007. The Conference Report filed December 6, 2007 ( H.Rept. 110-47 . The Conference recommendations were agreed to in the House on December 12, 2007, and in the Senate on December 14, 2007. President Bush vetoed H.R. 1585 , as agreed to by the House and Senate, on December 28, 2007, based on objections to provisions not germane to this report. A modified H.R. 1585 was reintroduced as H.R. 4986 and passed by the House on January 16, 2008, and by Senate January 22, 2008. President Bush signed H.R. 4985 on January 28, 2008, as P.L. 110-181 .

Section 864 defines private security functions as guarding personnel, facilities, or property, or any other activity that requires contractors to be armed to perform their duties.

H.R. 3222 (Murtha)—Department of Defense Appropriations Act, 2008 (P.L. 110-116)

While not addressed in law, the joint explanatory statement of the managers of the conference version ( H.Rept. 110-434 ) of H.R. 3222 states that the DOD "lacks accountability and management of its contracted services." It states that additional funding totaling $48 million has been provided to the Defense Contract Audit Agency ($10 million), the Defense Contract Management Agency ($14 million), and the Defense Inspector General ($24 million) "to provide more robust staffing of contractor management and oversight personnel. It calls on the DOD to improve its management of contract services "by instituting clear accountability mechanisms; instituting unambiguous and short chains of command to the most-senior decision makers; and improving the tracking and reporting of contract service costs and management of contract service performance." The conferees directed the Secretary of Defense to develop, within 90 days of enactment, uniform minimum personnel standards for contracted personnel and a compliance mechanism that specifies penalties for noncompliance with personnel standards "including fines, denial of contractual obligations or contract rescission." The Secretary is also directed to establish "a clear set of rules of engagement for all contracted security personnel operating in the Iraq and Afghanistan theaters of operations."

House Committee on Appropriations introduced an original measures, H.R. 3222 , on July 230, 2007 with an accompanying Committee Report, H.Rept. 110-279 . H.R. 3222 was passed by the House August 5, 2007, and by the Senate October 3, 2007. The House and Senate approved the conference report ( H.Rept. 110-434 ) on November 8, 2007. President Bush signed the legislation and it was enacted as P.L. 110-116 .

H.R. 5658 (Skelton)—Duncan Hunter National Defense Authorization Act for FY2009

Section 322 of H.R. 5658 would mandate that development of a single government-wide definition for "inherently governmental functions." Section 824 would bar the Department of Defense from allowing contractors to perform inherently governmental functions in a combat area. The section would also require the Secretary of Defense to list those functions that should not be performed by private security contractors. Section 847 would require PSCs working for the U.S. government in a combat area to report whenever a weapon is discharged against a private security contractor, and whenever a private security contractor takes active, non-lethal countermeasures.

On May 22, 2008, the House passed the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 ( H.R. 5658 ).

S. 3001 (Levin)—National Defense Authorization Act for FY2009

Section 841 of S. 3001 would mandate that private security contractors not be authorized to perform inherently governmental functions in an area of combat operations. The section defines "inherently governmental" as protecting people, information, equipment, and supplies in non-permissive environments where deadly force is likely to be initiated by security personnel in public places or where security personnel are expected to make real-time decisions that could affect the private individuals or U.S. interests. Section 842 would require the establishment of mechanisms to ensure that contractors are required to report specified offenses that are alleged to have been committed by or against contractor personnel. Section 1036 would require that the Federal Acquisition Regulations to prohibit contractors from interrogating prisoners during or after the cessation of hostilities.

On August 1, 2008, with a Cloture motion failing to receive sufficient votes, the Senate proceeded to consider S. 3001 on the Floor.

S. 2147 (Obama)—Security Contractor Accountability Act of 2007

S. 2147 would expand the coverage of the Military Extraterritorial Jurisdiction Act (MEJA) to include all persons "while employed under a contract (or subcontract at any tier) awarded by any department or agency of the United States, where the work under such contract is carried out in a region outside the United States in which the Armed Forces are conducting a contingency operation." The bill would mandate that the Federal Bureau of Investigation (FBI) establish a "Theater Investigative Unit" for each contingency operation in which contract personnel are working to investigate suspected misconduct. The FBI and other agencies or departments affected by the bill would have 90 days to implement to the provision, and the Department of Justice Inspector General would be required to report to Congress within 30 days of enactment on the investigation of abuses alleged to have been committed by contract personnel.

Introduced October 4, 2007. (Similar to H.R. 2740 ). Referred to the Committee on the Judiciary.

H.R. 2740 (Price)—MEJA Expansion and Enforcement Act of 2007

H.R. 2740 , passed as amended by the House of Representatives, would extend the coverage of the Military Extraterritorial Jurisdiction Act (MEJA) to include all persons "while employed under a contract (or subcontract at any tier) awarded by any department or agency of the United States, where the work under such contract is carried out in a region outside the United Sates in which the Armed Forces are conducting a contingency operation." Currently, MEJA covers contractors only if employed by "the Armed Forces outside the United States," or if employed by other federal agencies or "provisional authority," to the extent their employment is related to the support of the DOD mission overseas. The bill would mandate that the Federal Bureau of Investigation (FBI) establish a "Theater Investigative Unit" for each contingency operation in which covered contract personnel are working to investigate suspected misconduct. It would also require that the Department of Justice Inspector General report to Congress within 30 days of enactment on the investigation of abuses alleged to have been committed by contract personnel.

Introduced June 15, 2007. Referred to the House Judiciary Committee. Referred to the Subcommittee on Crime, Terrorism, and Homeland Security. Full Committee consideration and mark-up, July 24, 2007. Ordered to be reported August 2, 2007. Reported (amended) September 27, 2007, H.Rept. 110-352 . House passed an amendment in the nature of a substitute, October 4, 2007, 389-30. The amended version includes a new section, which provides that "[n]othing in this Act shall be construed to affect intelligence activities that are otherwise permissible prior to the enactment of this Act." (Sec. 6). Section 6 was added in response to the Administration's concerns that the bill "would have unintended and intolerable consequences for crucial and necessary national security activities and operations." Ordered placed on the Senate Legislative Calendar under General Orders October 5, 2007.

S. 674 (Obama)—Transparency and Accountability in Military and Security Contracting Act of 2007

S. 674 would require the Secretaries of Defense, State, and the Interior; the Administrator of the U.S. Agency for International Development; and the Director of National Intelligence to provide information to the Congress within 90 days of enactment on U.S. government contractors and subcontractors working in Afghanistan and Iraq, with particularly detailed requirements for information on private security contractors. This information would include the number of persons performing work in Iraq and Afghanistan under contracts and subcontracts; the companies awarded such contracts and subcontracts; the total cost of these contracts; and a method for tracking the number of persons killed and wounded while serving under such contracts. Also contains provisions intended to improve coordination between the U.S. Armed Forces and contractors performing private security functions, and to clarify the legal status of contract personnel by expanding MEJA (similar to H.R. 369 , H.R. 2740 and S. 2147 ).

Introduced February 16, 2007. Referred to the Senate Armed Services Committee.

H.R. 369 (Price)—Transparency and Accountability in Military and Security Contracting Act of 2007

H.R. 369 would require the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development to prescribe minimum hiring standards and issue equipment guidance for contracts regarding private security contractors and would require contractors to provide specified information on costs and personnel and update it during the period of contract performance. Also contains provisions intended to improve coordination between the U.S. Armed Forces and contractors performing private security functions, and to clarify and extend the Military Extraterritorial Jurisdiction Act (MEJA). Would extend MEJA to cover contractors "while employed under a contract (or subcontract at any tier) awarded by any department or agency of the United States, where the work under such contract is carried out in a region outside the United Sates in which the Armed Forces are conducting a contingency operation." MEJA covers contractors only if employed by "the Armed Forces outside the United States," or if employed by other federal agencies or provisional authority, to the extent their employment is related to the support of the DOD mission overseas. (This last provision is also included in H.R. 2740 , below.)

Introduced January 10, 2007. (Similar to S. 674 .) Referred to the House Armed Services Committee (HAS) and the Judiciary Committee. Referred to the HAS Subcommittee on Readiness, February 1, 2007. Referred to the Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security, February 2, 2007. The subcommittee held hearings on June 19, 2007.

H.R. 3695 (Hall)—Freeze Private Contractors in Iraq Act

H.R. 3695 would prohibit the DOD and the Department of State from increasing the number of private security contractors it uses to perform security functions in Iraq.

Introduced September 27, 2007. Referred to the Committees on Foreign Affairs and Armed Services.

H.R. 4102 (Schakowsky) and S. 2398 (Sanders)—Stop Outsourcing Security Act

H.R. 4102 and S. 2398 would require that only U.S. federal government personnel provide security to all personnel at any U.S. diplomatic or consular mission in Iraq within six months after enactment. It also would require that the President report to specified congressional committees on "the status of planning for the transition away from the use of private contractors for mission critical or emergency essential functions by January 1, 2009, in all conflict zones in which Congress has authorized the use of force." Contracts with the federal government requiring personnel to perform mission critical or emergency essential functions may be renewed after that date only if the President reports to those committees that the relevant agency does not have adequate personnel to perform the duties stipulated in the contract. The President must also certify that all contract employees meet set standards, including having undergone background checks to ensure they do not have criminal records and have not been accused of human rights abuses, and that they would remain in the custody of the United States if they are accused of crimes by the host country. It also would provide for Congressional access to contracts under certain conditions and reports to Congress on Iraq and Afghanistan contracts.

H.R. 4102 was introduced on November 7, 2007. It was referred to the Committees on Foreign Affairs, Armed Services, and Intelligence. S. 2398 was introduced on November 16, 2007, and was referred to the Committee on Homeland Security and Governmental Affairs.

H.Res. 97 (Murphy, Patrick)—Providing for Operation Iraqi Freedom Cost Accountability

H.Res. 97 would resolve that the Department of Defense Inspector General and the Special Inspector General for Iraq Reconstruction should report to Congress on the expenditure of military and reconstruction funds in Iraq and on the types and terms of U.S. contracts there. It would resolves that Congress should create a "Truman Commission" to conduct an ongoing investigation of the award and implementation of U.S. contracts with regard to Operation Iraqi Freedom.

Introduced January 24, 2007. Referred to the House Armed Services and Foreign Affairs Committees. House Foreign Affairs Committee hearing held March 20, 2007.