Yes, another Defense-contractor-in-Iraq story. But this one provides some interesting insights into the whole contractor management process, including a key bureaucrat baring his soul and sharing his plans for fixing it all up.
ITT Federal Services International, a defense contractor hired to maintain battle gear for U.S. troops in Iraq, repeatedly failed to do the job right.
Combat vehicles ITT declared as repaired and ready for action flunked inspections and had to be fixed again. Equipment to be sanitized for return to the United States was found caked with dirt. And ITT’s computer database for tracking the work was rife with errors.
Formal “letters of concern” were sent to the contractor. Still, the Army didn’t fire ITT. Instead, it gave the Colorado Springs, Colo.-based company more work to do. Since October 2004, ITT has been paid $638 million through the Global Maintenance and Supply Services contract.
Apparently, that’s not an omission or an oversight. That’s simply how the system works in Iraq. A feature, not a bug.
The Army’s ongoing arrangement with ITT, detailed in an audit from the Government Accountability Office, shows how captive the military has become to the private sector for overseas support. Even when contractors don’t measure up, dismissing them may not be an option because of the heavy pace of operations.
Sen. Claire McCaskill, D-Mo., co-author of legislation creating a special commission to examine wartime contracting, said poor-performing contractors are more likely to get bonuses than to be penalized.
“It has just been a mess,” McCaskill, a former state auditor, said in an interview with The Associated Press. “It’s bad enough how much this war is costing. But it’s heartbreaking the amount of money that has just gone up in smoke.”
In ITT’s case, there were too few soldiers to handle the maintenance duties and no other contractors ready to step in quickly, according to Redding Hobby, the Army Sustainment Command’s executive director for field support operations.
What’s with the “quickly”? When you’re in something for the long-haul, you should take a long-haul view, shouldn’t you? When it comes to cleaning up the contractor mess in Iraq, by all accounts we do have world enough and time. (Or maybe not “world enough”, seeing as how the once-vaunted coalition of the willing is not very vaunted any more, but “time” certainly.) The war on Iraq is not going away any time soon. American soldiers will continue to kill and be killed in Iraq for years, maybe a hundred years. So why is “quickly” the operative word here? What’s wrong with developing an alternate contractor to take over ITTFSI’s contract down the road? In six months, say, or twelve? And then firing ITTFSI’s pathetic ass once the replacement contractor is ready: why isn’t that solution in the feasible set? Why is wringing our hands, and worrying, and losing American lives through contractor incompetence (see “Combat vehicles ITT declared as repaired and ready for action flunked inspections and had to be fixed again”) the only option?
“I’m not sure that our manning levels would have allowed us to do anything except wring our hands and worry and work people harder and work people overtime,” Hobby said in a telephone interview.
And here, as a parting shot, is another example of the math that the U.S. military in Iraq has consistently shown themselves to excel in — the addition of insult to injury:
At one point, although the Army had documented several incidents of poor performance, ITT was paid an additional $33 million to overhaul 150 Humvees a month. Over a nearly yearlong period, the contractor never came close to meeting the mark but still got the money, according to the GAO. (Being paid for what you were supposed to do, even though you didn’t do it — isn’t that a new one?)
Many of the problems occurred in 2005 and 2006, when the insurgency in Iraq was at its height and there was a heavy burden on the contractor to get equipment back into the fight as quickly as possible, according to Hobby, the Army Sustainment Command official.
The terms of the contract called for ITT to be compensated for all labor costs. That meant the company was often paid twice to fix equipment it didn’t repair correctly the first time.
I don’t know, if I were Hobby, I would be beating my head (hard) against blunt metallic objects and even the occasional sharp object (much like a certain character from the world of Harry Potter), and going “Bad Hobby! Hobby bad!) After all, how long does it have to be before it is allowed to occur to one of the people whom we pay for such occurrences that maybe the terms of such contracts need to be revised? (I looked it up, dear Redding Hobby; even when you renew, you are allowed to revise. Apparently, you — yes, you personally — are allowed to do more than just wring your hands and worry. How about that, huh? An epiphany like that could change your whole life.)
To Hobby’s credit, he does grant that “it sounds bad economically”. But wait! What have we here? Hobby continues: “… we’ve learned an awful lot of lessons from this.” And here’s the punchline:
The ITT contract and other similar support arrangements will be changed so a company’s profits are linked to performance, Hobby said.
Okay, so we still haven’t actually got around to doing it yet. But in some dim and distant future, ITTFSI (who will, of course, still be around; may as well stick with the devil you know; and so what if he beats you every payday, doesn’t he always tell you later how much he loves you?) will no longer be paid more money if they screw it up the first time around.
Hobby’s innovative solution:
“We are transitioning to a contract that gives an incentive to the contractor,” Hobby said. “Our argument would be, ‘We paid you to fix these vehicles, they didn’t get fixed on time, so you lose your award fee.’ A penalty, so to speak.”
I don’t know if I’m reading this right. But it doesn’t sound like a simple penalty, does it? It sounds like we first bump up the amount we pay them for doing it right (by way of an award fee), and then take the award fee away if they don’t do it right. Right now, we have a contract that says we’ll pay you X for doing blah-blah-blah. So we’ll change that to say: “Hey, we’ll give you X + y for doing blah-blah-blah; if you don’t do blah-blah-blah, or if you do it wrong, we’ll only pay you X, got it?” “A penalty, so to speak“, indeed! First, we tuck extra money into their g-string. And then we penalize them by taking the extra money away. Just brilliant!
And how about a bonus second parting shot — Hobby effortlessly adding insult to insult-and-injury:
“I think if Joe Sixpack or Sally Homemaker read that report, they would probably have the same feeling,” Hobby said when asked why ITT’s contract was not terminated. “I share your pain.”
Can’t speak for Joe Sixpack, Mr. Hobby, but if this Sally Homemaker ever meets you face to face, you’re going to wish you had invested in industrial strength family-jewel protectors. Of the strength you would be hunting frantically for if you were an NHL goalie and, just before the game, every player on the opposing team learned that you have not only been sleeping with his wife, but fathered at least one of his children.