Correction to This Article
The article said that a 2005 State Department contract for security services in Kabul was awarded to McLean-based Global Strategies. The award went to a Dubai-based branch of Global Strategies.
State Department's Oversight of Security Contractors Is Scrutinized

By Mary Beth Sheridan
Washington Post Staff Writer
Sunday, September 13, 2009

In 2005, the State Department hired a Northern Virginia company to provide security for the U.S. Embassy in Afghanistan. Diplomats quickly became concerned about whether the new guards, who barely spoke English, could protect such a sensitive site. "They had serious problems," recalled Ronald E. Neumann, who was ambassador at the time.

The department then brought in another security contractor, ArmorGroup North America. But the difficulties didn't cease. In recent days, evidence of ArmorGroup's failings has burst into public view -- photos depicting its guards in semi-naked hazing rituals and official documents showing persistent staff shortages.

Harold W. Geisel, the acting inspector general of the State Department, told Congress last week that his investigators are checking for possible criminal conduct by ArmorGroup, and a congressional hearing is scheduled for Monday. Lawmakers and watchdog groups are questioning how the department could have continued to employ a company that, in addition to tolerating bullying and understaffing, failed to ensure that its guards had proper security clearances and sufficient equipment -- or that they spoke English.

The criticism is particularly intense because the State Department had promised to improve oversight after a 2007 shooting incident in Iraq involving bodyguards from security contractor Blackwater that left 17 Iraqi civilians dead.

"State's management of these contracts has been self-evidentially abysmal," said Peter W. Singer, an expert on government contracting at the Brookings Institution.

ArmorGroup's efforts to guard the Kabul embassy were troubled from the start, according to congressional hearings, internal State Department documents and interviews. The McLean-based company submitted "an unreasonably low price" in 2007 for the contract, said Samuel Brinkley, an official with Wackenhut Services, the firm's parent company, at a congressional hearing in June. Former ArmorGroup supervisors have said in interviews that the company slashed guard staffing so it could squeak out a profit.

State Department officials have expressed outrage about the lewd behavior shown in the photos. Still, they defend their selection of ArmorGroup, saying they are legally required to award such contracts to the lowest qualified bidder and noting that ArmorGroup was well-regarded. They also insist that the embassy was never endangered by the guard problems -- even though internal department documents say it was.

"The fact you find something is wrong means something is wrong. But you find it," the department's undersecretary for management, Patrick F. Kennedy, said in an interview. He emphasized that many of the guards' failings emerged in documents written by department officials. "There was oversight present," he said.

The troubles at the Kabul embassy raise questions about how authorities will manage what is expected to be a surge in the number of contract guards at U.S. facilities in Iraq as the American military presence declines. The scandal has also given new impetus to a debate over whether too many government wartime jobs are being outsourced.

"The State Department should consider whether the security for an embassy in a combat zone is an inherently governmental function, and therefore not subject to contracting out," Danielle Brian, executive director of the Project on Government Oversight, wrote to Secretary of State Hillary Rodham Clinton this month.

Brian's group released the photos of what it called near-weekly sessions of hazing and sexual humiliation of ArmorGroup guards at their camp.

The State Department has for years used local contract guards to secure the perimeters of its embassies, while generally keeping a modest Marine contingent for interior access. But in Iraq and Afghanistan, the department decided not to use local guards because of vetting concerns, officials say. Instead, as the military withdrew forces from around those embassies in recent years, the department turned to contractors such as ArmorGroup. But the department, which suffers from a shortage of contracting staff, has had a rocky history of managing such guard contracts. Each of its three contracts in Kabul has come under fire.

The first was awarded to McLean-based Global Strategies, to replace a Marine combat force withdrawing from the U.S. Embassy in March 2005. The department justified the $6-million-a-month sole-source contract by saying it had received late notification of the Marines' departure. But the inspector general found that the Defense Department had given six months' official notice, and scolded the State Department for poor planning.

By July 2005, the State Department had signed a contract with MVM of Ashburn, cutting its guard costs to less than $2 million a month, according to the inspector general's report. But MVM could not provide enough guards, partly because it was paying much less than its predecessor, according to Neumann. And, he said, the guards spoke so little English that they could not understand instructions.

"We went back to the State Department and said, 'These people are unacceptable,' " Neumann said. State canceled MVM's contract and kept on the Global guards temporarily. MVM's chief executive, Dario O. Marquez, did not return a call seeking comment but told the Wall Street Journal last year that the State Department did not give him enough time to fix the problems.

Neumann said the department was handicapped in selecting guard companies because of regulations stipulating that the contract go to a qualified U.S. firm that offers the lowest bid. "People low-bid, and then they're not competent," he said.

Finally, in March 2007, the department turned to ArmorGroup. The firm, which also guarded the British Embassy in Kabul, was one of only two bidders deemed technically qualified by the department's acquisition and security specialists. Its price was about $3 million a month, officials say.

"ArmorGroup was not a small, undercapitalized, underfunded, fly-by-night organization," Kennedy said. "They put forth a proposal that met every requirement."

But within weeks of the company starting work, the State Department sent ArmorGroup a warning that its deficiencies -- including shortages of guards and armored vehicles -- were so serious that "the security of the U.S. Embassy in Kabul is in jeopardy," according to the House Subcommittee on Contracting Oversight. State Department officials issued eight more warnings to the company over the next two years, including one last September threatening to terminate the contract.

Despite the problems, the department stuck with ArmorGroup, agreeing this summer to extend its contract for a year. State Department officials have said that the company appeared to be making progress and that changing firms would be disruptive. A spokeswoman for Wackenhut, which took over ArmorGroup North America last year, declined to comment.

In a lawsuit filed last week, former ArmorGroup supervisor James Gordon accuses the company not only of failing to properly staff the embassy but also of lying to the State Department about its capabilities.

The operation "was a complete shambles," he said.

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