War-Zone Contractors Draw Senate Scrutiny

By AUGUST COLE
2/25/2010
The Wall Street Journal

Democratic lawmakers on Wednesday called for stricter oversight of what they described as "reckless" government contractors operating in war zones including Afghanistan, and assailed the way big defense companies use smaller firms to perform high-risk work.

A Senate Armed Services Committee investigation into the oversight of military contractors in Afghanistan is looking into Raytheon Co.'s use of a Blackwater Worldwide affiliate, named Paravant LLC, to train Afghan forces. Paravant was set up in 2008 to provide training personnel because Raytheon, which makes everything from Patriot missiles to cyberwarfare systems, doesn't have employees skilled to do this work.

Blackwater's parent company renamed itself Xe Services LLC early last year and has instated new senior and midlevel management.The rebranding, the company says, was an effort to distance the firm from a 2007 shooting incident in Baghdad involving Blackwater guards, in which at least 34 Iraqi civilians were killed or injured.

Xe's chief sales officer, Fred Roitz, told lawmakers at the hearing that Raytheon asked Blackwater to come up with a new name, other than Blackwater, for the firm that would handle the subcontract.

Brian McCracken, a former Paravant supervisor now employed by Raytheon to oversee the training work in Afghanistan, told Senate investigators that Paravant was created to avoid the "baggage" of the Blackwater name. He testified on behalf of Raytheon at the hearing.

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While big defense firms typically steer clear of contracts that require their workers to carry guns in hotspots or engage in interrogating detainees, they frequently hire subcontractors to perform such risky tasks as part of larger umbrella of contracts.

At the Senate hearing Wednesday, Sen. Claire McCaskill (D-Mo.), who has pushed to ratchet up control of battlefield contractors, said layers of subcontractors made oversight much harder for the U.S. government.

"What's the point of putting Raytheon in the middle other than making this chain of command and accountability a little less clear?" she asked. "Raytheon failed ... in overseeing this contract." She added: "The American people have a right to be outraged that we're playing this kind of game with contracting."

Training is big business in Afghanistan because it is a cornerstone of the U.S. counterinsurgency strategy. Defense firms will play a frontline role. In its 2011 Defense Department budget request, the Pentagon is seeking to spend $11.6 billion to train and equip Afghan forces.

Senate investigators unearthed problems with the Paravant contract including poorly vetted workers, possession of unauthorized weapons, and shooting incidents that resulted in the deaths of Afghan civilians. Investigators also found incidents of alcohol use by Paravant employees in Afghanistan—a violation of company policy for war zones.

Mr. Roitz said Xe's new management was unhappy with the Paravant team's performance and was making changes. He also expressed condolences for the deaths and injuries caused by its contractors.

Paravant's contract didn't authorize trainers, who often were working with heavily armed recruits in Afghanistan, to carry weapons. The Senate report noted a Sept. 2008 incident, in which a Blackwater employee signed out more than 200 Afghan National Police assault rifles from a national storehouse, under the name "Eric Cartman"—that of a character on the animated television show "South Park." Paravant confirmed the account and said it had no contractors by that name, according to committee staffers.

The Paravant subcontract was valued at approximately $20 million over two years. This was part of a much larger training contract Raytheon has with the U.S. Army valued at as much as $11 billion over 10 years.

Raytheon and Paravant had a close relationship in Afghanistan until a May 2009 shooting in which two Paravant contractors killed two Afghan civilians and injured a third.

In a June 15, 2009, memo to Raytheon appealing its decision to terminate the Paravant contract, Paravant wrote that Raytheon couldn't cite alcohol-policy violations as a reason for termination because Raytheon and Paravant personnel had on at least one occasion been drinking together in Afghanistan.

"Paravant's ability to monitor and enforce its own no-alcohol policy has been undermined by the actions of RTSC's [Raytheon Technical Services Company] management personnel in Afghanistan," wrote a Paravant executive.

In its Wednesday statement in response to the hearing, Raytheon said it terminated the Paravant subcontract last year because of contractual violations. Raytheon "has been working closely with our customers to enhance controls, procedures and oversight of contractor and subcontractor personnel," the statement said. A company spokesman declined to comment further.

Raytheon now employs trainers from MPRI, a unit of L-3 Communications Holdings Inc., instead of Paravant.

Sen. Mark Begich (D., Alaska) said the use of the Paravant name "looks like a scam" in order to do the work of Blackwater "under a phony name."

Asked by Mr. Begich about the use of Paravant, Steven Ograyensek, a contracting officer at the U.S. Army program executive office for simulation, training and instrumentation, said that Pentagon officials reviewed Raytheon's proposal and that there seemed to be no problem at all with the use of the subcontractor.

"There was no indication they were part of Blackwater," said Mr. Ograyensek.

Xe's Mr. Roitz said the company has gone to great lengths since then to improve its internal controls. "The company of 2008 is not the company of today," said Mr. Roitz,

Write to August Cole at august.cole@dowjones.com