Contractor security: Pentagon revisits rules for battlefield contractors.

The role of contractors in Iraq has driven them into the spotlight, but experts disagree over the level of regulation and oversight that these operations.

The Defense Department is rewriting regulations under which such firms will operate. However, insiders cannot predict if guidelines created for the current conflict will help or hamper future efforts.

The Defense Department's relationship with contractors is changing as it becomes more reliant on them. The heavy use of contractors on the battlefield is not a new phenomenon, but as the military downsized during the past decade, it increasingly has outsourced more functions.

"If you are going to try to expand the capability of your military within the limited end-strength you are going to have to figure out which functions you can afford to contract out," said Robert St. Onge, vice president of operations and business development of MPRI, a military contractor that has seen its workload grow as a result of the increased outsourcing of battlefield jobs.

But the Defense Department has been criticized that it has not provided enough oversight and accountability in its dealings with firms in Iraq.

Doing business in Iraq is "an interesting juggling act," said Deidre Lee, director of defense procurement and acquisition policy. "In Iraq, business arrangements were made in austere and hostile environments."

Contractors work in dangerous, fluid settings, but that does not mean the business relationships are less accountable, she said in a keynote speech at a conference entitled, "Contractors in the Battlefield: Learning from the Experience in Iraq", that was organized by George Washington University.

Lee predicted that the U.S. military will continue to deploy shoulder-to-shoulder with its contractors. "The acquisition community and the business community have to understand the environment, be flexible and figure out how to work it."

The Defense Department is currently working on documents to clarify its contractual relationships with private firms, she said.

One of these documents, called "Contractors Supporting the Force," now is going through the defense acquisition regulation review process, Lee said. The Pentagon also is working on a contingency contracting handbook, which helps contractors prepare for a battlefield environment.

Although there is widespread disagreement on this issue, some contractors welcome more regulation to guide future business with the Defense Department.

"This may be the only industry in the world that craves regulation," Doug Brooks, president of the International Peace Operations Association, a non-profit group that is seeking to increase privatization in peacekeeping operations. "We would like to see more guidelines. Tell us what we can do and what we can't do."

Companies also are looking for a default legal template so that everyone going into a country without a legal system can follow certain rules.

The problem, however, is that most current regulations have focused mainly on Iraq, said Brooks. "They haven't addressed the things that need to be addressed," he told National Defense. "A lot of regulations seem to focus on perceived dangers versus realities."

These rule changes come on the heels of intense criticism from the Government Accountability Office, politicians and the media that the Defense Department has mishandled its dealings with contractors in Iraq.

"We probably haven't been as clear articulating to the general public what is going on, and put things into context," Lee acknowledged. "We need to better explain that we analyzed the situation and made a certain decision and why the decision we made. I do not think we have done a good job explaining that."

No one in the Defense Department was ready to deal with the complexity of the situation in Iraq, said James Jay Carafano, a retired Army lieutenant colonel and a senior fellow at the Heritage Foundation. The Pentagon lacked the "capacity to oversee the contracts, [and] did not have the contract workforce because nobody anticipated the scale of what they would be doing."

Carafano said he does not expect to see new legislation emerging in the short term. "It is going to take a while for people to separate the facts. Everything is anecdotal and no one is looking at the data in a non-partisan way. Nobody knows what the story is," he said.

There is a need for private firms to take the initiative rather than wait for the government to do it for them, Carafano suggested.

"There need to be rules of conduct, standards," he suggested. "This is where industry needs to get its act together, if it wants to thrive as a security provider. If it wants to be a mature industry, it needs to act like a mature industry."

But there are some players who believe that the government should not be too eager to set new rules. "Key to integrity is people, it's not regulation," said Marine Corps Col. Thomas Hammes, a senior military fellow at the National Defense University.

"Every time someone does something wrong, we write another regulation," he added. "Get good people, have minimal supervision, and then you punish the guy who does something wrong, but you do not create a regulation for the next guy."

Last year, Hammes was tasked with setting up and maintaining bases and facilities for the Iraqi armed forces, a job that required the help of private companies. In his experience, none of the contractors were allowed to cooperate with each other.

Furthermore, legal oversight can hamper the efforts on the ground. In his case, the program was held up "because one herd of lawyers beat up another heard of lawyers in Washington, D.C.," he said. "So we cannot give soldiers a rifle because lawyers were tying it up in D.C. for months."

Hammes said Pentagon officials create too many "boxes" for each entity on the battlefield. "Everybody built a box, and none of the boxes connected," he said. Their distance from conditions on the ground drives this tendency, said Hammes.

His advice is to hire enough contracting officers, and keep them focused on their job overseas. "Make sure that they are working the hours of the country," he suggested. "You cannot be on U.S. time when there is a war going on."

The future of military contractors after the so-called "Baghdad bubble" bursts remains to be seen, and much of what that future will look like depends on the firms themselves.

"They can provide some very valuable services at a reasonable price, but it is not a disciplined industry," Carafano noted.