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Sunday, February 18 2018 @ 08:15 PM CST

For every taxpayer dollar spent on Federal programs, over 40 cents now goes to private contractors

Our Government now outsources even the oversightof the outsourcing. At home, core Government functions like tax collection and emergencyresponse have been contracted out. Abroad, companies like Halliburton and Blackwater have made millions performing tasksthat used to be done by our Nation’s military forces.  This 2007 full document in PDF format

What has been missing is a serious evaluation of whether thepromises of privatizing are actually realized. Inside our Government,it has been an article of faith that outsourcing is best.Today, we are going to examine the impact of privatization onour military forces. We will focus on a specific example, theoutsourcing of military functions to Blackwater, a private militarycontractor providing protective services to U.S. officials in Iraq.

We will seek to answer basic questions. Is Blackwater, a privatemilitary contractor, helping or hurting our efforts in Iraq? Is theGovernment doing enough to hold Blackwater accountable for allegedmisconduct? What are the costs to the Federal taxpayers? I want to thank Erik Prince, Blackwater’s founder and CEO, forhis cooperation in this hearing. As a general rule, children fromwealthy and politically connected families no longer serve in themilitary.  Mr. Prince is an exception. He enlisted in the Navy in1992 and joined the Navy SEALs in 1993, where he served for 4years. We thank you for that service.In 1997, he saw an opportunity to start his own company andcreated Blackwater. He has said, ‘‘We are trying to do for the nationalsecurity apparatus what FedEx did for the Postal Service.’’ There may be no Federal contractor in America that has grownmore rapidly than Blackwater over the last 7 years. In 2000,Blackwater had just $204,000 in Government contracts. Since then,it has received over $1 billion in Federal contracts. More than halfof these contracts were awarded without full and open competition.Privatizing is working exceptionally well for Blackwater. Thequestion for this hearing is whether outsourcing to Blackwater isa good deal for the American taxpayer, whether it is a good dealfor the military and whether it is serving our national interest inIraq. The first part of that question is cost. We know that sergeantsin the military generally cost the Government between $50,000 to$70,000 per year. We also know that a comparable position atBlackwater costs the Federal Government over $400,000, six timesas much.Defense Secretary Gates testified about this problem last week.

He said, Blackwater charges the Government so much that it canlure highly trained soldiers out of our forces to work for them. Heis now taking the unprecedented step of considering whether to askour troops to sign a non-compete agreement to prevent the U.S.military from becoming a taxpayer-funded training program for privatecontractors.There are also serious questions about Blackwater’s performance. The September 16th shooting that killed at least 11 Iraqis is justthe latest in a series of troubling Blackwater incidents.


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