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Report: Spending On Contracts In Iraq Nears $100B

By the end of this year, the United States will have spent an estimated $100 billion on military contractors in Iraq since the war began in 2003, according to a government report released Tuesday. The report also says the ratio of contractors to U.S. military personnel there is higher than in any other conflict in American history.

The study by the Congressional Budget Office, a nonpartisan federal office that monitors budgetary and spending issues, is the first to analyze the cost and the number of contractors in Iraq. The report was requested by the Senate Budget Committee after widespread concern on Capitol Hill about the amount of money being spent on private contractors.

There are 190,000 private contractors in Iraq and Kuwait to support Operation Iraqi Freedom, according to the report. That's one contractor for every member of the U.S. armed forces. The ratio far exceeds that of past wars. In World War II, for example, there was one contractor for every seven service members; in Vietnam, the ratio was 1-to-5.

"Roughly one in every five dollars that the federal government has spent in the war on Iraq has gone to private contractors," says CBO director Peter Orszag.

The analysis also found that it costs about the same for a contractor as it does for an American service member performing either a security or a support job.

The reason the number of contractors is so high compared with past conflicts, the CBO says, is because the U.S. military has been cut back drastically since the end of the Cold War. The jobs military personnel used to do are now being done by contractors. After the 1991 Persian Gulf War, the Army dropped from 19 divisions to the current 10, so it, in particular, has been relying on civilian contractors for work previously done by soldiers.

For the most part, the contractors transport food and fuel, work in dining facilities and haul gas and oil by truck. But as many as 30,000 work for private security contractors and carry weapons. Of the total spent on contracts, an estimated $6 billion to $10 billion went to security.

Orszag says one concern about the use of armed private contractors involves the issue of supervision. Military commanders have less direct authority over contractors than they do over military personnel and government employees. Those contractors potentially could be subject to U.S. laws, though there have been few tests in the courts about how those laws apply to contractors.

About 20 percent of the contractors in the Iraq theater are U.S. citizens. Iraqi and Kuwaiti nationals make up 40 percent, and the remaining workers are from other countries.

The Bush administration has been trying to increase the number of government employees who could be called on to handle some of the functions currently done by contractors. It has requested $249 million in next year's budget to create a Civilian Response Corps that could deploy to a crisis.

The corps would be made up of about 250 "active" civilian experts who could deploy immediately. Another 2,000 "standby" members would be regular federal employees — doctors, lawyers, engineers, agronomists, police officers and public administrators — who could deploy for stabilization and reconstruction missions. They would take over some of the jobs now being handled by contractors.

"Stabilization and reconstruction is a mission that civilians must lead," Secretary of State Condoleezza Rice said in unveiling the plan last month. "But for too long, our civilians have not had the capacity to lead and investments were not made to prepare them to lead."

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