Contractors Investigating Contractors: Outsourcing Has Finally Gone Too Far

ABC News reported last week that the U.S. State Department's Bureau of Diplomatic Security hired U.S. Investigations Services (USIS), a Falls Church, Va.-based security and information services company, to staff a special unit that investigates possible misuse of force against civilians by American private security contractors (PSCs) in Iraq.

Under the $4.4 million contract, USIS is providing eight investigators, two translators, and a senior advisor/liaison to work with the State Department's new Force Investigation Unit (FIU) "Go Team."  The unit was created in response to the September 2007 shooting in Baghdad, Iraq, when guards working for Blackwater Worldwide were accused of firing on civilians without provocation, killing 17 and injuring several others.  To date, no security contractor in Iraq has been prosecuted for misuse of force.

The contract has sparked a controversy.  There is concern the State Department is breaking the law by outsourcing an inherently governmental function that must be performed by government employees only.

Federal Acquisition Regulation (FAR) subpart 7.503(c) lists "the direct conduct of criminal investigations" as one of several inherently governmental functions that may not be outsourced.  Yet that is exactly what USIS is doing.  Its investigators are conducting "complex and sensitive investigations," performing such tasks as interviewing witnesses, collecting and analyzing evidence, analyzing incidents for compliance with policy, laws and regulations, and testifying in administrative and judicial proceedings.  The contract states USIS will only "assist" Diplomatic Security personnel, but with USIS providing the majority of the team's investigators, the contractor employees could easily exert undue influence on the FIU.

That the contract was even outsourced in the first place is another source of controversy.  Last October, Ambassador Patrick F. Kennedy, Under Secretary of State for Management, assured the public the FIU would include only State Department employees:

Question: Great, okay. Listen, who are on these Go teams? These aren't going to be Blackwater or part-contractors on the Go teams --
Ambassador Kennedy: No.
Question: -- are they? Because that would be the same --
Ambassador Kennedy: No, no, the Go teams are composed of State Department employees from the Regional Security Office.

Last month, Sen. Russell Feingold (D-Wis.) wrote a letter to Secretary of State Condoleezza Rice asking about the FIU contract.  "It is highly troubling that the Department is apparently outsourcing oversight of its security contractors," Feingold wrote.  "The presence of contractors in the Force Investigation Unit could jeopardize this responsibility and undermine the perceived impartiality of the investigation unit."

He urged Secretary Rice to cancel the contract and staff the FIU solely with government employees.  "I note that the Department has received funding to hire 100 additional Diplomatic Security personnel.  Therefore, there is no justification for outsourcing sensitive law enforcement activities to a contractor."

The contract runs through February 2009 with options to extend it until February 2013.  The government is paying USIS an hourly base salary of $63.59 for all 11 of its employees.  According to the U.S. Office of Personnel Management's 2008 general schedule pay table, this exceeds the rate paid to senior government employees.  In addition, USIS is billing hourly rates of $63.59 for overtime pay and $19.69 in hazard pay ($17.77 for the translators) The government is also reimbursing USIS for a wide assortment of incidentals: insurance ($85,310); mini-van rental and gas ($7,499); travel expenses ($225,775, plus an additional $30,542 for in-flight per diem and lodging in Kuwait); firearms training ($73,533); authorized equipment ($25,685); medical exams, psychiatric evaluations and immunizations ($14,300); lodging during stateside training ($122,540); general and administrative expenses ($162,088); and company fees ($78,212).

USIS has an interesting history.  Before emerging as an employee-owned company in 1996, USIS had been a government agency called the Office of Federal Investigations, the investigative arm of the Office of Personnel Management.  It still serves as OPM's main provider of civil service personnel background checks.  USIS was also awarded lucrative Defense and State Department contracts to provide security services in Iraq.  For about seven years, USIS's main shareholder was the Carlyle Group, a private equity firm that has counted several high-ranking former government officials among its executives and advisers, including former President George H. W. Bush.

In 2005, the company made news when Col. Ted Westhusing, the U.S. Army officer charged with overseeing a $79 million USIS contract to train Iraqi police, was found dead in a trailer at a military base in Baghdad with a gunshot wound to his head.  The Army ruled his death a suicide, but some believe something more sinister took place.  A few weeks before he died, Westhusing received a tip from an anonymous whistleblower that USIS was overcharging the U.S. government and had committed human rights abuses.  (According to the Los Angeles Times, inquiries turned up unspecified "problems," but nothing to support the human rights violation allegations.)

During the investigation into Westhusing's death, a USIS employee reportedly rushed into the trailer to try to revive him and might have inadvertently tainted forensic evidence at the scene, possibly compromising the investigation.  That this employee was reported to have many years of law enforcement training begs the question: Should taxpayers be concerned about the competence and integrity of the USIS investigators on the FIU?

-- Neil Gordon

UPDATE: POGO was extensively cited in yesterday's Government Executive article on the State Department's USIS contract.

Comments

[Inbound Call Center]

Outsourcing is subcontracting a process, like product design or developing to a third-party company.The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, technology and resources.

[Megan]

It is not the contractors' fault speficially but rather the person who orchestrated the decision to put them there doing what they are doing. However, I see no problem with it if the investigators are responsibly doing their job. If they aren't it would have been a mistake to hire them in the first place. Trust me--there is nothing to worry about regarding the intentions of these contractors, but if it is unconstitutional then so be it.