Contractor to Continue Work in Iraq Temporarily
WASHINGTON - Underscoring its reliance on outside contractors, the State Department said Wednesday that it had extended a contract in Iraq with a subsidiary of the company formerly known as Blackwater, even though the business was denied an Iraqi government license to operate in the country.
The contract, for aviation services, was to expire Thursday, at which time the company, now known as Xe Services, was to be replaced by DynCorp International. But State Department officials said DynCorp was not ready to take over the work, which involves ferrying diplomats and other American officials around Iraq, mostly by helicopter.
The contract extension comes as the State Department is investigating allegations of mismanagement and misbehavior by employees of another contractor, ArmorGroup North America, which provides security at the United States Embassy in Kabul, Afghanistan. The investigation could lead to the government's terminating ArmorGroup's $189 million contract there, the State Department spokesman, Ian C. Kelly, said Wednesday.
Contractors have become a recurring source of embarrassment for Secretary of State Hillary Rodham Clinton, who pledged in February to reduce the department's reliance on them.
While Mrs. Clinton was aware of long-running complaints about the performance of ArmorGroup in Kabul, according to officials, she did not know about lurid accusations of hazing rituals involving supervisors and Afghan employees until shortly before the details were made public on Tuesday in a report by the Project on Government Oversight, a nonprofit organization. Mrs. Clinton was said by officials to be angered and appalled by the contents of the report.
"There were some things going on in Kabul that we were not aware of, but we frankly should have been aware of," Mr. Kelly said.
Among the steps the department is considering, he said, are putting the ArmorGroup contract up for bid or replacing the civilian security guards and their managers. But he conceded that it would be difficult to sever ties with the company abruptly without putting at risk the safety and security of diplomats.
A spokeswoman for Wackenhut Services, which owns ArmorGroup, said the company would have a response on Thursday.
In the case of Blackwater, the department moved to break with the company after the Iraqi government refused to give it an operating license, following findings that Blackwater guards killed 17 civilians on a crowded Baghdad street in 2007.
The aviation contract is the last Blackwater contract in Iraq, and in late August Mr. Kelly said that when it expired Thursday, "Xe will be out." Yet on Wednesday, Mr. Kelly said that last week DynCorp "asked for additional time."
He said the United States had informed the Iraqi government of the need to extend the contract, which is with Presidential Airways, a unit of Xe Services. He did not say how long the transition would last, though a senior official said it was likely to be about three months.
"It's a matter of them getting the kind of helicopter they need," the official said, on condition of anonymity, because he was not authorized to speak publicly.
It is also not clear how much more the government will pay Xe to keep providing services. The original two-year contract was worth $217 million. Xe Services also has a five-year, $210 million contract to provide security to diplomats in Afghanistan.
A Xe Services spokeswoman declined to comment.
The department has been criticized by the Project on Government Oversight and members of Congress for renewing the contract with ArmorGroup, despite its checkered record.
In a letter to Mrs. Clinton last month, Senator John Kerry, the Massachusetts Democrat who is chairman of the Senate Foreign Relations Committee, urged her to undertake a sweeping review of the department's contracts with Xe Services. He noted reports that the company played a role in a Central Intelligence Agency program of targeted killings of leaders of Al Qaeda.
"These reports raise anew serious questions about the wisdom of outsourcing the most sensitive government responsibilities to private companies," Mr. Kerry wrote.