I hope I don't over emphasize this issue, but I personally find it fascinating as one of the foundational parameters of procurement theory. And so, another perspective from another writer, Marc Ambinder, the politics editor of The Atlantic:
Previewing Priest: Inside the Semi-Secret World of Intelligence Contractors
The public literature on intelligence community contracting is quite large, thanks to work by journalists like Greg Miller, Tim Shorrock, Jeremy Scahill and Mark Mazzetti. The basic narrative of the "problem" is also fairly well known: contractors do a lot of work that the government used to do by itself; oversight has become next to impossible; the intelligence-policy complex has created a revolving door of sorts where the line between private companies and intelligence agencies blurs; and of course waste, mismanagement, and more.
Since 9/11, the intelligence community has welcomed a surge in contractors while building a larger civilian counterterrorism workforce -- a larger national security state. (A significant number of contract personnel are in support jobs like food supply and landscaping, so the head count is less important than the functions.)
Priest's story is said to focus on redundancies, particularly the number of individual counter-terrorism analytical cells costing the government billions of dollars. Some of the redundancy is deliberate because of the nature of intelligence work. But a lot of redundancy, especially in terms of information technology, is probably just wasteful.
The administration has been trying to tackle this from the angle of IT acquisition and procurement reform. It's proved hard to do. For taxpayers unfamiliar with the contracting world, the redundancies and the general confusion of authorities will probably cause outrage.
Point one: when counterterrorism and counterintelligence functions are funded by [Congressional supplemental bills], new jobs can't be created. Why? Because supplementals provide funding for one year at a time, and you can't fund a new federal employee for one year. So a lot of counterterrorism operations have to be farmed out to companies who have the cleared personnel to handle them.
Point two: there hasn't been a true intelligence authorization bill for five years. That's left the basic funding of the intelligence community to the appropriations committees, which won't budget with the same level of granularity and expertise that the intelligence committees would.
Point three: in the absence of an intelligence authorization bill, Congress hasn't increased its oversight capacity over contractors because it hasn't had the mechanisms to do so. This year's authorization is on life support because of a dispute between Speaker Nancy Pelosi and the President. Among its provisions: a census of all IC contracts and incentives for government agencies to use their own personnel for critical functions.
Policy comes into the equation here. There wouldn't be a need for expensive counterterrorism contracts if the U.S. was not expanding its counterterrorism footprint overseas.
It's gotten to the point where, in the words of one intelligence official, "we're bidding against ourselves." Take the example of Blackwater, or Xe, as they're now called.
The CIA uses Blackwater to protect its facilities in Afghanistan and Iraq. One could argue -- as, indeed, some do -- that providing physical protection for intelligence officers is a core function of the intelligence community and thus something that Blackwater shouldn't be able to do by law. But the CIA needs its bases to perform the work it needs to perform in support of warfighters and policymakers in the region. It does not have the personnel itself.
Blackwater managed to attract the largest share of qualified former Diplomatic Security Service agents and special forces personnel by paying them more than they'd get if they worked for the government. Because it's easier for Blackwater to hire someone to do a function than for the CIA to hire someone directly to do the same function, Blackwater gets to set the price boundaries for its contract, indirectly. (This is also a function of the rules governing security clearances: if you leave government on good terms, your clearance will be valid for a few more years.)
The secrecy involved in some of the contracts often makes it hard to police them. Take the case of Abraxis, a company that the CIA used to create covers and legends for its personnel who don't work out of embassies. Again, that would be seem to be a core governmental function, but the CIA was able to argue that it could not function without Abraxis.
That's because Abraxis, smelling a business opportunity, lured a bunch of qualified intelligence officers and analysts to join their company after 9/11. It's a zero sum world because the CIA has to pay a lot of money to train new people; it's thus cheaper to contract the work out, and it's more efficient, at least in the short run.
Major companies like Science Applications International Corporation (SAIC) are said to be worried about a database that Washington Post researchers have compiled linking contractors to the location and function of their contracts. That's because SAIC performs many classified functions for the government, and at least one intelligence agency occasionally uses SAIC facilities as cover for its own operations. That's how intermingled the worlds have become.
At the Department of Homeland Security, a significant percentage of its headquarters intelligence and cybersecurity personnel work for Booz Allen Hamilton, which hired former DNI Mike McConnell, among others, to bolster its ability to win new lucrative cybersecurity and homeland security contracts. At the beginning of the year, 60 percent of DHS's intelligence capacity was taken up by contractors. The share is now 54 percent and dropping, thanks to a special program that allows DHS managers to make better offers to potential employees.
There's much more on this subject in The secrets next door, itself part of a much larger investigation by the Washington Post, but, however interesting that may be, it ventures too far beyond the procurement subject matter of this blawg.