How Contractors are Like Crack: Part 2 of WaPo's National Security Blockbuster

| Tue Jul. 20, 2010 7:46 AM EDT

The next installment in the Washington Post's blockbuster series dropped this morning, this one focused on the national security establishment's unprecedented reliance on contractors. Like Monday's installment, on the unwieldy sprawl of the nation's intelligence bureaucracy, today's article suggests the government has created a beast it cannot fully control. But the government has grown so dependent on contractors that cutting off or even drastically curbing their use is hardly an option. It's kinda like a drug addiction, where you use more and more until you find you can't stop. Indeed, the widespread use of contractors, the Post reports, begs the question of "whether the government is still in control of its most sensitive activities."

Here are some of the key revelations:

Under federal regulations, contractors are prohibited from performing what are known as inherently governmental functions (see Spencer Ackerman's Danger Room post for intel officials' totally lame pushback on this subject):

"But they do, all the time and in every intelligence and counterterrorism agency…"

The main argument for relying on contractors is that though their rates are higher, they ultimately cost the government less than full-time employees with health insurance, 401Ks, and other benefits. That notion, the Post reports, has been thoroughly "repudiated" over the past 9 years:

Hiring contractors was supposed to save the government money. But that has not turned out to be the case. A 2008 study published by the Office of the Director of National Intelligence found that contractors made up 29 percent of the workforce in the intelligence agencies but cost the equivalent of 49 percent of their personnel budgets. Gates said that federal workers cost the government 25 percent less than contractors.

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Government agencies have little to no idea how many contractors they actually employ. I've noted this in the past, in connection with contractors serving in Afghanistan. But here's the money quote from Defense Secretary Robert Gates:

"This is a terrible confession," he said. "I can't get a number on how many contractors work for the Office of the Secretary of Defense."

You might be surprised to learn some of the 007-style work contractors have been involved in:

Private contractors working for the CIA have recruited spies in Iraq, paid bribes for information in Afghanistan and protected CIA directors visiting world capitals. Contractors have helped snatch a suspected extremist off the streets of Italy, interrogated detainees once held at secret prisons abroad and watched over defectors holed up in the Washington suburbs. At Langley headquarters, they analyze terrorist networks. At the agency's training facility in Virginia, they are helping mold a new generation of American spies.

They also:

…kill enemy fighters. They spy on foreign governments and eavesdrop on terrorist networks. They help craft war plans. They gather information on local factions in war zones. They are the historians, the architects, the recruiters in the nation's most secretive agencies. They staff watch centers across the Washington area. They are among the most trusted advisers to the four-star generals leading the nation's wars.

Private sector companies have created a nice little racket for themsolves, poaching intelligence and military talent from the government and then leasing them back at a premium. A company called Abraxas, "headed by a former CIA spy… recruited midlevel managers during work hours from the CIA's cafeteria, former agency officers recall." And the government simply can't keep pace with the money and perks private sector firm provide.

Contractors can offer more money - often twice as much - to experienced federal employees than the government is allowed to pay them. And because competition among firms for people with security clearances is so great, corporations offer such perks as BMWs and $15,000 signing bonuses, as Raytheon did in June for software developers with top-level clearances.

This is why the profligate contracting cycle is here to stay:

At a U.S. Special Operations Command conference in Fayetteville, N.C., in April, vendors paid for access to some of the people who decide what services and gadgets to buy for troops. In mid-May, the national security industry held a black-tie evening funded by the same corporations seeking business from the defense, intelligence and congressional leaders seated at their tables.

Such coziness worries other officials who believe the post-9/11 defense-intelligence-corporate relationship has become, as one senior military intelligence officer described it, a "self-licking ice cream cone."

Another official, a longtime conservative staffer on the Senate Armed Services Committee, described it as "a living, breathing organism" impossible to control or curtail. "How much money has been involved is just mind-boggling," he said. "We've built such a vast instrument. What are you going to do with this thing? . . . It's turned into a jobs program."

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