The Foreign Service Journal, February 2013

26 FEBRUARY 2013 | THE FOREIGN SERVICE JOURNAL year were Veritas Capital Fund, B.L. Harbert Hold- ings, Miscellaneous Foreign Contractors, Triple Canopy and Goldberg Lindsey & Company. (Reliable figures for 2012 are not yet avail- able, since USAspending. gov is a live data stream.) Admittedly, these fig- ures do not tell us exactly how large outlays for contracts influence direct-hire staffing levels at USAID and the State Department. But all the avail- able evidence suggests that entrusting the private sector with a larger proportion of the government’s daily work eventually undercuts the case for the unique contribution of employees wholly committed to serving the public interest, rather than a bottom line. To put it another way: If contractors and full-time employ- ees are deemed interchangeable in most situations, then contractors will almost always appear to be the most desirable choice, especially when revenues are scarce. Contractors can be hired for specific tasks, and when they are done, they do not remain on the payroll or accrue benefits; no long-term finan- cial commitment need be made. Similarly, if the choice in tough financial times is framed as between investing in the private sector and infrastructure abroad, or doing so here at home, Congress is unlikely to sup- port an adequate level of staffing for USAID and State. Such short-term tactical choices have strategic ramifications further down the road, however, as we have already seen in Libya, Egypt and Yemen. Security Spending Spikes The QDDR report did not formulate concrete recommenda- tions about one major aspect of contracting: How should State and USAID safeguard their personnel and facilities in fragile states? Both in Iraq and Afghanistan, private security contractors have been deployed at unprecedented levels and for every con- ceivable security function for much of the past decade. Such operations account for a significant portion of the exponential increases in spending on contracts at State and USAID over that period (523 and 945 percent, respectively). That trend is almost certain to continue in Afghanistan with the ongoing drawdown of uniformed personnel. In 2011, more U.S. civilian corps by about 17 percent over the same period. In the wake of the financial crisis, however, the hiring pendulum began to swing the other way in 2011. State now anticipates its goals will not be met until 2023. Meanwhile, the Government Accountability Office reported in July 2012 that significant Foreign Service mid-level staffing gaps persist at both agencies despite the increases in hiring. Taken together, State’s Diplomacy 3.0 initiative and USAID’s Development Leadership Initiative have added more than 4,000 positions over the last three years, of which around 1,200 are FSOs. Despite repeated requests for data, State has not released statistics indicating how many of the remaining posi- tions are held by contractors and how many by Civil Service members. Further complicating efforts to analyze the extent of outsourcing, Congress requires that funding requests for additional staffing be divided between the base budget and a category for Overseas Contingency Operations (covering posts for Iraq, Afghanistan and Pakistan). It does not stipulate how the latter funds are to be spent, however. At the time of this writing, it is unlikely that these gains in additional positions are in any way locked in, since so much of State’s and USAID’s activities and staffing have been funded by supplemental appropriations targeted toward Afghanistan, Pakistan and Iraq. (An October 2011 GAO study identified fully 40 percent of these new Foreign Service positions as based in those three countries.) As the United States draws down military forces in Afghanistan, and Congress further tightens the purse strings, severe staffing deficiencies camouflaged by a decade of emergency improvisations are likely to grow apparent. The picture on the contracting side is beginning to change at USAID. According to USAspending.gov, USAID spent $4.5 billion on contracts in 2011, a reduction of more than $2 billion from 2010 outlays, and a reversal of what had previously been a steady upward trajectory. The top five recipients that year were Chemonics, Partnership for Supply Chain Management, Devel- opment Alternatives, Tetra Tech and John Snow Incorporated. In comparison, State expended $9.2 billion on contracts in 2011, an increase of 13.6 percent over the previous year. The top five prime award contractors for the State Department that The tragic loss of four American lives in Benghazi should be a call for State to reconsider security arrangements in dangerous locations.