Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Are Government Contractors Exploiting Workers Overseas?

Our answer is that some Government Contractors are exploiting workers overseas by not filing Defense Base Act Insurance Claims on deaths and injuries of foreign workers.  Where is the investigation of this?

by David Isenberg at Huff Post  November 7, 2011

The following is an excerpt from the congressional testimony I gave yesterday. You can find the entire testimony on my blog (free registration required).

Testimony of David Isenberg Publisher, PMSC Observer and Author, Shadow Force: Private Security Contractors in Iraq, before the House Committee on Oversight and Government Reform, Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform, on “Are government contractors exploiting workers overseas? Examining enforcement of the Trafficking Victims Protection Act“November 2, 2011

Chairman Lankford, Ranking Member Connolly, other Members of the Subcommittee,

Thank you for the opportunity to testify at this hearing.

I commend you for examining the issue of whether government contractors exploit workers overseas. It is unquestionably a problem. Though it has come up elewhere it has not yet received the sustained attention it merits. As the Commission on Wartime Contracting in Iraq and Afghanistan noted in its final report:

U.S. contingency contractors, opportunistic labor brokers, and international criminal organizations have taken advantage of the easy flow of people, money, goods, and services to capitalize on this source of revenue and profit. Their actions bring discredit to the United States and act as a barrier to building good diplomatic relations.

The subject also means you have to look at the relationship between prime contractors and their subcontractors, which is another problem. It is often, to cite Winston Churchill, a riddle, wrapped in a mystery, inside an enigma.

I am pleased to be here to discuss the The Najlaa Episode Revisited report that I co-authored, which was published by the Project on Government Oversight this past June. I have a prepared statement which I ask be included in the hearing record in its entirety, along with the POGO report. In the interest of time I will just summarize some of the main points.

But first, let me outline where I stand on the ongoing debate over the outsourcing and privatization of functions that used to be considered inherently governmental. I am not an opponent of private military and security contractors. Nor am I am a fervent supporter. Over the years I have documented problems with the claims of both sides. Personally, I think most contractors, especially those operating in the field, are decent, honorably men and women, doing necessary, even vital work, under harsh and demanding conditions. Some of them, I believe, especially on the security side, are underpaid. But in the end I am simply an interested observer and chronicler, who, like the Mr. Spock character on the Star Trek television series, finds it a “fascinating” phenomenon worthy of continued study and analysis.

Speaking of science fiction we might note that the use of private actors in war and conflict is something that sc-fi writers have long written about, as in Gordon Dickinson’s Dorsai novels. So, in one sense, the subject of today’s hearing is an example of life imitating fiction.

First, let me address why this is important. For years industry advocates have been claiming that thanks to private military contractors (PMC) U.S. military forces have the best supported, supplied military in any military operation in history. It is inarguably true that PMC are now so intertwined and critical that the U.S. military simply can’t operate without them.

But that is not an unmitigated benefit. Many PMC have had problems implementing contracts. Some have committed outright fraud, thus wasting U.S. taxpayer’s money, and indirectly, negatively affecting U.S. military operations.

While the seven plus years has seen increased attention paid to the oversight of and accountability of PMC most of that attention has been at the level of prime contractors. Only now is government beginning to turn to the issue of subcontractors. This attention is long overdue. As the Center for Public Integrity noted last year

Please read the rest of David’s testimony at his blog The PMC Observer

November 7, 2011 Posted by | Civilian Contractors, Contingency Contracting, Contractor Corruption, Contractor Oversight, Defense Base Act, Government Contractor | , , , , , | Leave a comment

Guess What? It Is Cheaper to Use Federal Government Employees Than Contractor Employees

Dina Rasor Truthout September 14, 2011

Having looked at federal government contracting for 30 years, I have heard over and over again that government employees make too much money and that the service contractor employees are cheaper. The mantra has been repeated that the government workers are bad, ineffective and expensive and that the federal government would do better to hire service contractor workers to do more and more of the government’s work. This belief that the “free market” will always do better than the government at any task has increased over the years until each president since Reagan has taken it as a given.

Even Bill Clinton pushed to shrink the federal employee workforce by “outsourcing” the work to supposedly cheaper contract workers to save money during his “reinventing government” effort. This craze to outsource as much of the federal government as possible hit its height during the second Bush administration. Saving money was always the reason given, but there was very little actual proof that this was true. The Obama administration had started to reverse this trend and began an effort to “insource” many of these jobs back into the government, especially in areas that were tasks that should be done by government because of the sensitivity of the tasks and possibility of corruption or conflict of interest. But the push to lower government spending has stymied this trend and threatens to push jobs back into service contractor employees as money for government workers dries up. The irony is that this practice is costing the government even more money

Please read the entire story here

September 14, 2011 Posted by | Civilian Contractors, Contractor Oversight, Government Contractor | , , | Leave a comment

Taxpayers On the Hook for Retiree Costs for Federal Contractors

Fox Business  Friday June 10, 2011

A surprising new government report shows that taxpayers have been footing the bill for retiree benefits not just for federal workers, but for independent freelance contractors who do work for the government as well. 

And no one is watching the store to see if your tax dollars are being wasted.

Taxpayers for years have been covering private contractors’ retiree costs for things like pensions and health care, even though these workers are not on the federal payroll.

Taxpayers also cover these retiree costs for contractors’ spouses, too, and in some cases if contractors want to retire early (at age 50), just like regular federal workers, many can then get taxpayer-funded coverage, says an official at the Government Accountability office.

For the Department of Energy alone, overall this coverage cost taxpayers $6.8 billion over the last 10 years, according to the new GAO report recently sent to Congress. Nine out of ten  dollars spent on the DOE’s annual budget goes towards contracts, including contractor retiree benefits.

Please read the entire story here

June 10, 2011 Posted by | Civilian Contractors, Contractor Oversight, Government Contractor | , , , | Leave a comment

President Obama, Stand Up to the U.S. Chamber and Fight for Disclosure

Sign the Petition to Support the President’s Executive Order

“We will fight it through all available means […] To quote what they say every day on Libya, all options are on the table.”

That’s what the chief lobbyist for the U.S. Chamber of Commerce told the New York Times after hearing the White House may issue an executive order requiring corporations that do business with the government to disclose their political spending.

The Chamber’s pledge to fight tooth and nail to keep the American people in the dark about conflicts of interest in government is appalling, but not surprising.

If corporations and their executives are spending on politicians in an effort to “win” government contracts, the American people should know.

Urge President Obama to stand up to the U.S. Chamber and fight for disclosure. Sign the petition today!

April 28, 2011 Posted by | Civilian Contractors, Contractor Oversight, Follow the Money, Government Contractor | , , , | Leave a comment

Obama Administration Drafts Executive Order On Contractor Donation Transparency

By Sam Stein at Huffington Post   April 19, 2011

WASHINGTON — After exhausting normal legislative avenues, the Obama administration has prepared a draft executive order that would enact some campaign finance reform provisions.

The administration was unable to secure the changes to donation disclosures it wanted in the last Congress.

Several Democratic sources confirmed a document being circulated by the administration would require government contractors to disclose campaign contributions made by directors, officers, affiliates or subsidiaries to federal candidates, political party committees and “third party entities” involved in electioneering.

The document, which was first reported by the conservative Pajamas Media, represents just a small (and revised) chunk of the DISCLOSE Act, the election transparency law Democrats tried to push through Congress last fall. Under that bill, which fell one vote short of a filibuster-proof majority in the Senate, contractors would have been entirely prohibited from making political donations to federal candidates or parties.

“It was a ban and they are turning it into disclosure,” said Fred Wertheimer, the Founder and President of Democracy 21, a group that promotes greater donation disclosure. “It is becoming a condition of doing business with the government.”

White House officials did not immediately return a request for comment though a Democratic Hill aide confirmed that an executive order along these lines had been drafted.

Please read the entire post here

April 20, 2011 Posted by | Contractor Corruption, Contractor Oversight, Government Contractor | , , | Leave a comment

Defense Base Act Coverage for US Government Contractors Working in Japan

OWCP News Release March 24, 2011

In the aftermath of the devastating earthquake and tsunami in Japan on March 11, 2011, various agencies of the United States may utilize the services of private contractors to provide humanitarian and other assistance as part of the global relief effort there. Workers for such private contractors are covered under the Defense Base Act (DBA) (except for certain specified instances where the Department of Labor has granted a waiver). Agency contracting personnel and private contractors should ensure that the proper DBA insurance is in place before workers are deployed overseas.

DoD and DoS contracts have been granted a waiver for non US employees.

Please keep in mind that while you must purchase this insurance it cannot be depended on to provide the stated benefits.  The Department of Labor administrates the program but has no authority over the insurance companies.  Employees may go for many years or forever without medical care and compensation.

As this insurance is normally cost reimbursable to the contract, not an expense to the contract company,  we highly recommend no one go on one of these contracts without supplemental insurance being provided. 

See our Defense Base Act Compensation Blog to read about the battle injured contractors and widows must fight for the most basic benefits as stated in the Act.

March 25, 2011 Posted by | Civilian Contractors, Defense Base Act, Department of Defense, Government Contractor, Japan, State Department | , , , , , , , | Leave a comment

What might happen if federal government shuts down again

Government Shut Down What About Contractors?

By Ed O’Keefe at the Washington Post February 23, 2011

A potential government shutdown won’t just impact employees collecting government paychecks, but could also severely impact hundreds of thousands of contractors and the companies employing them to provide goods and services to federal agencies

Agencies retroactively paid workers once the doors reopened, but many government contractors – paid separately by private employers – earned nothing during the shutdown.

by Ed O’Keefe at the Washington Post February 21, 2011

If President Obama and congressional Republicans do not reach an agreement on how to fund the final seven months of the fiscal year, some military veterans might not receive benefits checks and other Americans would be unable to apply for Social Security. The State Department might not issue new passports, unemployment statistics would not publish as scheduled, museums and national parks would close, and worse – piles of elephant manure might pile up in a National Zoo parking lot because workers can’t ship it away for composting.

Budget disagreements between President Bill Clinton and Republicans prompted these incidents in 1995 and 1996, as federal agencies halted operations and stopped paying workers.

For more than 20 days, about 260,000 federal employees in the D.C. area stayed home, or reported for duty only to be sent packing hours later. Security guards roamed the halls forcing out workers who lingered, and some frustrated feds sought temporary jobs as bike messengers and servers at restaurants to pay holiday bills, according to Post reports from the time.

Agencies retroactively paid workers once the doors reopened, but many government contractors – paid separately by private employers – earned nothing during the shutdown. And congressional Democrats proposed last week that Obama and lawmakers also should not be paid during a shutdown.

Please read the entire article here

February 21, 2011 Posted by | Civilian Contractors, Government Contractor | , , | Leave a comment

Defense contractors object to revised rule on withholding payments

The Pentagon is encountering continued resistance to its proposal to withhold a portion of payments to any contractor that uses flawed accounting and pricing systems.

By Sean Reilly at Federal Times

The Defense Department argues the proposal is needed since flawed vendor business systems could inflate what vendors charge the department for goods and services.

The Pentagon proposed the new rule after the independent, bipartisan Commission on Wartime Contracting said in a 2009 report that auditors have been unable to verify billions of dollars worth of vendor-claimed costs charged to the Defense Department in connection with the military and reconstruction operations in Iraq and Afghanistan.

In a proposed rule published January 2010, the Defense Department had wanted to withhold 10 percent of contract payments if certain vendor business systems were found to be deficient. That proposal hit stiff opposition from industry groups.  Please read the entire article here

Thanks to Federal Times for keeping on top of this

January 17, 2011 Posted by | Civilian Contractors, Contingency Contracing, Contractor Oversight, Department of Defense, Government Contractor, Pentagon, Wartime Contracting | , , , , , , | Leave a comment

Pentagon issues conflict of interest rule for contractors

But Danielle Brian, executive director of the nonprofit group Project on Government Oversight, criticized the final rule as watered-down and disappointing.

By Marjorie Censor at The Washington Post

The Pentagon last week issued a new rule on organizational conflicts of interests — or instances in which a company provides multiple services that could have conflicting interests, such as building a system and then testing it — that instructs contracting officers to promote competition.

The rule has been a hot-button issue in the contracting industry, as Congress has pushed for clearer and stricter regulations while industry organizations have pushed back against requirements they considered too broad or too burdensome.

The new rule “applies to the most important defense programs,” said Thomas C. Papson, a partner in McKenna Long & Aldridge’s Washington office who focuses on government contracting. Companies that provide engineering or analysis support “cannot then subsequently supply the weapon systems that come out of that . . . work, so that’s very significant.”

Many area companies, including Lockheed Martin, Northrop Grumman and CSC, have already divested business units that they said posed potential conflicts of interest. For instance, Northrop Grumman sold off Chantilly-based TASC, which operated as Northrop’s advisory services business.

The regulations implemented last week depart from a draft version, which favored mitigation as a way to address potential conflicts. In the final version — which only applies to big-ticket defense programs — the Pentagon said it will instead seek “to promote competition and, to the extent possible, preserve DOD access to the expertise and experience of highly-qualified contractors.”

The Defense Department said the revised language will encourage contracting officers to consider many different ways to resolve a potential conflict.

“We really feel strongly that competition is very, very important to us, and we don’t want to do things to discourage competition unless there’s a good reason for that,” said Frank Kendall, the Pentagon’s principal deputy undersecretary of defense for acquisition, technology and logistics.

Alan Chvotkin, executive vice president and counsel at the Professional Services Council, an industry group, said “there’ll be some sigh of relief here that the rule is narrowly focused.”

But Danielle Brian, executive director of the nonprofit group Project on Government Oversight, criticized the final rule as watered-down and disappointing.

“We think this is a win for the contractors,” Brian said. “They were successful in undermining the spirit of what the proposed rule had set out to do.”

Industry analysts said they don’t expect the new regulations to kick off another round of divestitures.

“Our sense is that there’s nothing here in these final rules that was so different from what everybody thought,” said Mitchell Martin, a senior managing director with the investment firm McLean Group.

The Pentagon will now focus on training its workforce to implement the new regulations, according to Kendall. At the same time, the government is working on a broader conflict-of-interest rule that will apply to all federal agencies, not just the Defense Department.

“That’s not finished yet, so we may have to make some adjustments later, but I’m hopeful that won’t be necessary,” Kendall said. Please see the original here

January 3, 2011 Posted by | Civilian Contractors, Contractor Oversight, Department of Defense, Pentagon | , , , | Leave a comment

End of Iraq: What Happens to Our Stuff?

Jim Garrettson at Executive Biz

As the post-Iraq drawdown gets underway, 3.4 million pieces of military hardware will need to leave the country.  Many have already been repaired and shipped to new theaters of operation,  and thousands more are waiting for repairs at support bases around the Middle East.  However, despite the fact that overseas support contractors were exempt from Secretary Gates’ push to eliminate 33,000 contractor positions from DoD’s payroll, some major changes are coming to logistics support contracting.

First and foremost: oversight.  DCMA is hiring contracting oversight officers to address problems identified during the Iraq conflict, including a lack of oversight for contractors.  The most obvious change that will be apparent is the increase in DCMA pesonnel, with plans to hire thousands of new professionals.

Also, expect training for DoD personnel interacting with contractors (including unit commanders) to become standardized, as DoD has recognized the need to train all personnel, not just oversight personnel, to work with contractors.  Commanders who don’t understand the intricacies of the command and control relationship between soldiers and civilian support personnel could direct contractors to perform work outside the scope of the original contract, risking extra fees and even violations of competition requirements.

Finally, expect DoD to more clearly identify contractor requirements.  One of the lessons learned from Iraq is that failing to identify precisely what support the Pentagon needs early on in a conflict can lead to cost overruns later.  Expect future logistical support contracts to be very specific about what work will need to be performed, and expect fewer surprises in future support contracts.

Overall, the changes mean more DCMA personnel being hired as well as standardized training for them. Unit commanders in particular can benefit from this harmonization. Fewer surprises in contractor requirements also means fewer surprises in costs – a move which could very well save government clients money. This change in logistics, smoothing and standardizing the interaction between government agencies and the contractors they employ, could very well be a win-win situation.  Please see the original article here

October 7, 2010 Posted by | Civilian Contractors, Contractor Oversight, Iraq, Pentagon | , , , , | Leave a comment

Improper time-and-materials contracts prove costly

by Robert Brodsky at GovExec

Army contracting officials improperly awarded time-and-materials contracts and task orders to support the wars in Iraq and Afghanistan, potentially costing taxpayers nearly $3.7 million, according to the Defense Department inspector general.

The report, released on Aug. 27, found that contracting and program officials regularly ignored federal and defense acquisition regulations mandating competition and adequate justification when using time-and-materials contracts.

“As a result, the Army did not have the opportunity to obtain cost savings through competition and may have incurred additional costs by not negotiating reasonable prices and by unnecessarily using the riskiest contract type,” the audit said.

Time-and-materials awards have fallen out of favor because the contractor’s profit is built into the labor rates, reducing the company’s incentive to control costs and work efficiently. The Obama administration has directed agencies to cut their use of time-and-materials contracts, and the Defense Department has indicated it will phase out this type of contract altogether.

The IG reviewed seven contracts and 11 task orders with a total value of $605 million. Investigators reported that Army acquisition officials failed to open three of the contracts and seven task orders to competition.

In September 2006, for example, the Army Contracting Agency at White Sands Missile Range in New Mexico awarded a $9.9 million sole-source task order to Computer Sciences Corp. for “operation, training and maintenance of foreign aviation systems at Kabul Afghanistan International Airport.” The Army had noted CSC was the only firm capable of performing the work due to its specialized nature, but officials offered no evidence to back up their claim, auditors said.

“The justification also included an unexplained assertion that it would take 24 months and cost $25 million for another contractor to acquire the skills needed to gain proficiency for this effort,” the report said. “This assertion was shown to be false a year later, when CSC was forced to compete for the follow-on contract and lost to Northrop Grumman.”

Please read the entire article here

September 1, 2010 Posted by | Afghanistan, Civilian Contractors, Contractor Oversight, Iraq, Pentagon | , , , , , | Leave a comment

US Gov contractors have 20 days to get those illegal workers out of Iraq!

July 23, 2010 Ms Sparky

According to a recent memo to ALL CONTRACTORS IN IRAQ from COL Nolan of the Centcom Contracting Command, ALL contractors in Iraq have 20 days to repatriate (send home) third country nationals who’s countries prohibit travel to Iraq. This includes among others, the Philippines and Nepal.

OMG!! This will affect virtually every service KBR provides the DoD in Iraq. I would guess there are 1000′s of Filipino workers who work in the Dining Facilities (DFAC’s), in the Laundries, drive trucks and shuttle buses, craftspeople and laborers. I would suspect there are direct hire Filipinos as well as Filipinos who work for KBR subcontractors such as PPI and Serka who were evidently smuggled in most likely from countries like Jordan or Turkey.

I hope the DCMA will write Corrective Action Requests (CARs) if services suffer. KBR as well as every other contractor in Iraq had to know about the Iraq travel restrictions of the Filipinos. It only made sense the the Filipinos were being smuggled in therefore violating Philippine and Iraqi law.

This will take definitely put a kink in the illicit sex trafficking and trade in Iraq…..for a little while anyway. And I do hope these contractors don’t just dump these workers on the border somewhere and leave them like they have been leaving them stranded in Iraq.

On a positive note, in the midst of a huge Reduction In Force in Iraq, it may make room for more Americans to stay and work on DoD contracts.

I don’t want to be unappreciative of what appears to be very strong action on the part of the DoD, but I do have to ask….”What took you so long?”  Original at MsSparky

July 23, 2010 Posted by | Civilian Contractors, KBR, Legal Jurisdictions | , , , , , , | 1 Comment