In the question and answer period, he was asked directly whether the United States Department of State, on whose contracts most of the major scandals of the Iraq and Afghanistan wars had occurred, had any intention of using the various regulatory initiatives in which it was participating as a prerequisite for its own procurement. He could not respond in the affirmative and was unable to shed light on how the State Department would proceed to incorporate accountability measures.
Two years later, following extensive internal and external discussions, the State Department has said it will incorporate PSC.1 compliance and ICoCA membership into its next major contract, but it has not yet done so.

In contrast, the 2011 US National Defense Authorization Act (NDAA) mandated that the Department of Defense develop and implement business and operational standards for private security contractors. Given that the Department funded the ANSI PSC Standards Series, it is not surprising that conformance to the Standards is now a prerequisite for procurement.

This is a significant change from the approach of the last decade. Lowest Price Technically Acceptable (LPTA) is the regulatory requirement often invoked for selecting contractors on government contracts. In many ways, LPTA contracting is the bureaucratic response to concerns about waste in government expenditure. Ironically, it restricts the focus to cost, rather than quality or accountability, under the guise of “value.” The great advantage of the NDAA 2011 requirement that private security companies be certified to a standard in order to be eligible for procurement is that it mitigates the LPTA requirements. Prior to that requirement, if fifty companies bid on a contract, under the LPTA metric the government might have been forced to choose the contractor technically able to perform most cheaply, but likely to perform badly on other important but harder-to-measure dimensions, such as incorporation of international law and human rights norms into operating procedures. Today, on an identical contract, there may only be three or five companies that have managed to go through the certification process to even be able to bid. The legal requirement of NDAA 2011 has infused quality and accountability into the procurement process while still emphasizing “value.”

This schism between US State Department and Defense Department contracting brings up the first issue that the next wave of wartime contracting will face. Governments are not homogenous entities. So while a country may be participating in the Montreux Document, may hold a spot on the Montreux Document Forum, may hold a seat on the ICoCA and may publicly advocate the UN Guiding Principles, differences of process and priority among different government departments may lead to a cluttered battlefield with higher price, higher quality, more accountable contractors alongside low cost, low quality, unaccountable contractors working for the same government.

The second issue, as has been noted, is that these initiatives do not comprehensively address all the issues that have arisen to date. The various initiatives have been and will continue to be extremely helpful in raising the professionalism, quality, accountability and reliability of the industry, but they will not resolve murky areas of legal twilight. Even under the accountability initiatives, there is still a chance that issues will arise that are simply not covered. There is the potential, therefore, that incidents involving “certified” contractors will carry substantial backlash against all the accountability initiatives. Legal issues not addressed by the regulatory initiatives could lead to some or all of the initiatives being tarnished or even abandoned for ineffectiveness, reverting the process of selection back to a simple determinant of lowest cost.

Finally, many of these regulatory initiatives were designed to address what happened in Iraq and Afghanistan between 2001 when the Coalition entered Afghanistan and 2010 when the ICoC was completed. They do not address future issues that may arise. As noted, the current initiatives form a disconnected patchwork plagued by gaps and uncertainties. As new operations unfold, the initiatives will need to be revisited to make sure that the standards being set match the operation of the industry. Otherwise, a government may be selecting based on quality, but quality for the wrong job.

TO BE CLEAR

The proliferation of private armed contractors in zones of armed conflict was followed by a proliferation of initiatives aimed at establishing accountability for the industry. Some of those initiatives, paired with new procurement rules for government departments in several countries, have shifted the focus from cost to accountability in selecting companies to provide armed security.

As the world faces a likely upsurge in this sort of contracting, it remains to be seen whether the extensive regulatory, governance, and oversight efforts of the last decade will prove effective in ensuring higher quality, more responsible armed contractors, or whether gaps in the system will lead to the rejection or circumvention of those accountability measures in favor of the lowest priced contractors. Failing to address these foreseeable complications may prove detrimental to the private security industry, to the credibility of governments employing armed contractors, and to the overarching aims of international security.

Article by: Dr. Ian Ralby is a recognized expert on the regulation, governance and oversight of private security companies and has been advising governments on the subject for over five years — "Accounting for Armed Contractors" at FLETCHER SECURITY REVIEW

Addtional Sources: Ike Skelton National Defense Authorization Act of 2011, Pub. L. No. 111-383, available at http://www.gpo.gov/fdsys/pkg/PLAW111publ383/pdf/PLAW111publ383.pdf