Insourcing: A Capitol offense.

The 1990s ushered in a new era for the United States military. Although the Cold War ended peacefully, it was able to quickly deploy its still intact Cold War forces to eject Iraqi forces from Kuwait in 1991. Then, with no significant threats on the horizon, the United States was ready to reap a “peace dividend.” So began a significant reduction in the military force structure and in defense spending.

As a result of declining defense budgets, it was natural that the Department of Defense (DoD) would make significant cuts in its overall acquisition workforce. Congress, believing that the acquisition workforce was still too large, mandated a further cut of 25 percent in the FY 1996 Defense Authorization Act. As result of these cuts, the overall acquisition workforce fell from approximately 500,000 to around 200,000. Then, even as the defense budget began to level off and then skyrocket after the events of 9-11 and the subsequent wars in Iraq and Afghanistan, DoD’s acquisition workforce stayed essentially constant. Moreover, this post-Cold War downsizing of the DoD occurred at the same time as a government-wide trend of improving performance while lowering costs. This included an emphasis on transitioning the performance of “non-inherently governmental” functions to the competitive private sector (including many acquisition, but non-inherently governmental, functions – such as equipment maintenance, truck driving, analysis, etc.). DoD became reliant upon private contractors to perform many of the support roles critical to the success and sustainment of the military forces.

Inherently governmental?

The concept of “inherently governmental functions” — i.e., what specific functions should be the unique responsibility of governments to fulfill — has been a particularly hot topic of debate in political and policy circles of late. In this debate, much of the focus has centered upon private security and the use of force — or even potential use of force — by nongovernmental actors.

Private security companies and their personnel provide significant support for the U.S. government (among other clients) in some of the world’s most dangerous places. The number of privates ecurity personnel under contract in Iraq and Afghanistan gives an idea of how strongly the government relies upon contractors in combat zones. Of the 207,000 contractors that the U.S.government employs in Afghanistan and Iraq, at least 30,000 function as private security contractors. It is these contractors in particular who have drawn much of the attention in the debate over inherently governmental functions.

The term “private security” itself covers many different functions and activities — both inside and outside of the United States. Notably, some of these activities and functions involve armed personnel, while others do not. Thus, the concept private security encompasses many activities that cannot be all labeled as inherently governmental functions. Despite criticisms from some commentators, it is difficult to argue that every private security guard is performing an inherently governmental function.

Journal of International Peace Operations
Volume 6, Number 1 – July/August, 2010

The Department of Justice could take a keen interest in your operations.

IN this hyper-intensive environment of corporate scrutiny, the Department of Justice (DOJ) acts as the pre-eminent federal regulator of corporate culture. DOJ’s Principles of Federal Prosecution of Business Organizations, also known as the Filip Memorandum, affirmatively establish the government’s interest in using criminal prosecutions to achieve institutional reform in a corporate setting. Anticipating and defending against these structural enforcement actions requires an effective compliance program.

The Filip Memorandum underscores the importance of an effective corporate compliance program, which is commensurate with that company’s resources and business risks. In this post-Enron era of heightened regulatory enforcement designed to target corporate fraud, an effective compliance program deters criminal conduct by its employees and agents, and, thereby, helps avoid an investigation in the first place. Moreover, in light of the increasing criminalization of business conduct, it can persuade law enforcement that the company did not intend to benefit from the errant behavior of its employees and agents, thereby reducing the likelihood of a corporate prosecution under the Filip Memorandum.

Today, the government enjoys extraordinary leverage over companies facing the risk of an enforcement action. The imbalance of power between the government and the company is explained by the following two factors: the Draconian consequences of an indictment; and the elastic notions of corporate criminal liability.

Journal of International Peace Operations
Volume 5, Number 5 – March/April 2010

Special Inspector General for Iraq Reconstruction, Stuart W. Bowen

SINCE 2001, Congress has appropriated more than $39 billion to humanitarian and reconstruction assistance in Afghanistan. To ensure independent and objective oversight of these funds, Congress created the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) in 2008. Though Major General Arnold Fields (ret.) has received much praise for his work as Special Inspector General thus far, coordinating efforts between the various agencies involved in Afghanistan’s reconstruction and limiting financial waste remain ever-present concerns.

Much of this anxiety comes from the experiences of SIGAR’s predecessor, the Special Inspector for Iraq Reconstruction (SIGIR), – commissioned in 2004 in response to the growing reconstruction effort in Iraq – which found execution of the operation severely lacking. SIGIR’s latest report, “Applying Iraq’s Hard Lessons to the Reform of Stabilization and Reconstruction Operations,” contains a number of recommendations based on lessons learnt from the Iraq reconstruction effort, aimed at improving planning, management and the execution of stability and reconstruction operations (SROs).

Journal of International Peace Operations
Volume 5, Number 4, January – February 2010

NISOUR Square, human trafficking and degrading conduct: such events, although rare, undermine the ability of all private security companies (PSCs) to protect their clients in insecure environments. These clients include local government officials, agencies of governments, commercial corporations, humanitarian agencies and private individuals. Most PSCs operate in a way that supports the restoration of the rule of law and advocates accountability. Some do not. Many clients add to the problem by asking little of the companies they hire other than the lowest possible price. The results are practices that violate human rights, erode the effectiveness of all other companies operating in the region and increase insecurity for PSC clients and the general community. Governments, the private security industry and civil society can, and are working together to remedy this state of affairs.

The first step towards international accountability came in the fall of 2008, when 17 states, together with representatives from many PSCs and NGOs, endorsed the Montreux Document. Since then, another 17 states have become party to the recommendations in this document. Although an important achievement, by necessity it was extremely narrow in scope, being limited to states and to conditions of armed conflict; crucially, it did not include any process for implementing its provisions. However, even as preparations were made for endorsement, some participants began to plan beyond Montreux. Under this new Swiss Initiative, states, non-state clients, PSCs and civil society institutions are working together to craft binding standards of conduct for the entire industry regardless of client, region or level of conflict. This set of standards is intended to guide company operations and to serve as a tool for clients to use when selecting security solutions or drafting policy and legislation. As of this writing, an initial draft of this code — or industry standard — is being reviewed and will be developed through a series of stakeholder workshops, with the intent of industry endorsement in spring of 2010.

Journal of International Peace Operations
Volume 5, Number 2 – September-October, 2009

IPOA President Doug Brooks and Director J. J. Messner met with the U.N. Working Group in Washington, D.C.

CREATED in 2005, the U.N. Working Group on the use of mercenaries is mandated to study, monitor and identify trends and effects associated with the use of private military and security companies (PMSCs). Pursuant to this mandate, the Working Group distributed its Draft International Convention on the Regulation, Oversight and Monitoring of Private Military and Security Companies in July 2009.

The Working Group recently held discussions with U.S. government officials, academics, civil society organizations as well as IPOA. The Working Group held these meetings as part of an effort to compile findings voice concerns regarding specific alleged incidents, and discuss the prospects of an increased role for the U.S. Government in the regulation and oversight of PMSCs.

The draft Convention asserts the responsibility of states in the licensing, regulation, oversight, and accountability of PMSCs, and focuses on the consequences of inadequate regulation on human rights. The draft Convention prohibits PMSCs from engaging in “intrinsically governmental” functions, requires the creation of a state licensing process, identifies parameters for the use of force, establishes jurisdiction for offenses of PMSCs and outlines state reporting requirements. Additionally, the Convention seeks to create a 14-person committee to act as the international authority responsible for overseeing the implementation of the Convention.

Journal of International Peace Operations
Volume 4, Number 1 – July/August, 2008

“Inherently governmental?”

AS a matter of policy, the United States federal government has long limited the functions that can be performed by the private sector to those that are not “inherently governmental.” In order to avoid an “unacceptable transfer of official responsibility to Government contractors,” the Office of Management and Budget (OMB) promulgates the executive branch policy that prohibits service contractors from performing any inherently governmental functions, and offers the following definition:

[A]n “inherently governmental function” is a function that is so intimately related to the public interest as to mandate performance by government employees. These functions include those activities that require either the exercise of discretion in applying Government authority or the making of value judgments in making decisions for the Government.

OMB guidance offers 19 category examples of what is an inherently governmental function, and the same number of examples of what is not inherently governmental. Additional guidance appears in the Federal Acquisition Regulation, Department of Defense regulations, and the U.S. Code. But in the last six months, amid mounting media criticism of “outsourcing” and “privatization,” several key government officials have expressed concern that the existing definitions supporting the “inherently governmental” limitation are inadequate.