Iraq’s Drawdown Drives the Future Overseas Job Market
The most common questions I receive are about what the future holds for contracting. Where are the jobs going to be? What should I do now to prepare for the future?
Stiff competition caused by thousands of experienced contractors steadily downsized, the decline of available overseas jobs, plus official recommendations to hire cheaper local and TCN labor is the future in a nutshell.
And it all starts with the drawdown in Iraq.
Some facts driving changes in overseas contracting
Article 24 of the so-called Status of Forces agreement signed between Iraq and the United States on November 17, 2008, requires that: “allthe United States Forces shall withdraw from all Iraqi territory no later than December 31, 2011.” This draw down is taking place of course and is guided by some hard guidelines.
Christopher Shays, co-chairman of the Commission on Wartime Contracting in Iraq and Afghanistan, held a hearing on March 29, 2010 called Transitions in Iraq: Rightsizing the Contractor Workforce and Moving from LOGCAP III to LOGCAP IV, and made the following remarks in his opening statement:
Conducting the drawdown of forces, however, is not a simple task like turning down a thermostat. Thousands of troops must be redeployed. Thousands of contractor employees must be reassigned or released. Hundreds of military bases have to be closed or handed over to the Iraqis. The bulk of this work will fall to contractors, who have been a vital part of U.S. operations in Iraq from the outset.
The Department of Defense expects that contractor employees in Iraq will exceed 70,000 in August 2010. That would be about half the contractor count of January 2009 – but still nearly one and a half times the U.S. troop-strength target for August.
KBR expects to have about 30,000 employees in Iraq by late summer of this year, compared to more than 60,000 in March 2009. The military needs the right number of contractors in the right places as the drawdown continues. But taxpayers need assurance that contractors don’t have unnecessary staff hanging around—accidentally or by design—without work, but still drawing pay.
Work continues under LOGCAP 3, but the intent is to transition new work to the LOGCAP 4 contract, which has three vendors—KBR, Fluor, and DynCorp—each of whom must submit an offer for every new task order issued under the contract. The aim is to sharpen competition on price and performance. On February 26, KBR won the first task-order competition for logistics support, postal service, and theater transportation.
During the same hearing, James Loehrl, Executive Director of U.S. Army Contracting Center said:
“ On 31 January 2009, General Odierno issued a letter directing all contractors, including LOGCAP, to draw down by 5% a quarter. The LOGCAP III operating contractor is currently drawing down ahead of that goal.”
Patrick J. Fitzgerald, Director, Defense Contract Audit Agency gave testimony that included comments on KBR drawdown plans:
On February 23, 2010, KBR submitted and briefed the Army and ASC on its revised drawdown plan. KBR still considers the plan to be draft, or pre-decisional, as they believe that additional input from the Army is necessary.
According to their plan, KBR is proposing overall staff reductions of 38% (direct and non-direct hires) between November of 2009 and August of 2010. Over 60% of KBR’s planned staff reductions occur within the final month of the current period of performance (i.e., from July 2010 to August 2010).
Fitzgerald also said that the DCAA was planning audits in other areas including:
Third Country Nationals/Host Country Nationals/ExPat Labor Mix (Follow-up Iraq) which will evaluate whether KBR implemented prior recommendations that KBR could reduce labor costs by increasing the percentage of local and foreign nationals as compared to expatriates.
Douglas Horn, VP Operations for KBR, also gave testimony that included interesting comments.:
On February 26, 2009, KBR received Contracting Officer direction to freeze hiring and staffing of all personnel in Iraq (including subcontract workers). This direction required KBR to freeze hiring and staffing of Task Orders 159 and 151 at the existing Basis of Estimate (BOE) levels and fill all open, valid personnel requisitions first by reutilizing personnel displaced by base closures, then through use of in-theater job postings, and lastly via recruitment and mobilization. KBR has complied with this directive.
During the Iraq drawdown, KBR has three simultaneous and overlapping lines of operation: continuing services, base closures, and transition to other performance contractors falling under a variety of contracting vehicles, including LOGCAP IV, the Air Force Contract Augmentation Program (AFCAP), and Joint Contracting Command, Iraq (JCC-I) contracts.
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6 Responses to “Iraq’s Drawdown Drives the Future Overseas Job Market”
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Here we are with unemployment in the US over 10% and we have the DCAA, a US Gov’t agency, directing the hiring of LN’s and TCN’s. How about hiring Americans, even if at less than current rates, and placing American Taxpayer Dollars into American’s pockets and the US economy instead of into foreign pockets and economies.
I watch this everyday as TCN’s, primarily Indians, DEMAND their $20 bills be converted into $100 bills so they can send them home to India and watch my employer and others proudly state they want to get rid of ex-pats and hire more Indians…..to save taxpayers more money or increase profits by shedding expat labor. You choose.
How about letting Iraq pay the TCN’s and LN’s – and relieve the USA from that burden entirely. …
As a contractor in kuwait it pisses me off that the government would allow companys to hire more fn with no experiance to work on our military equipment just for they can keep upper manangments bonuses
This is soo crazy
When the mission is on the line the FN’s will lay down on you. The USA means nothng to them except what they can stick in their pocket or steal. Nation Security is worth the extra pay for American workers and just ask the soldiers who they would prefer. Yes let us also pay the Arabs and Indians for our homeland security protection while we are at it. We are always worried about nickels and dimes but will always throw billions away. We need to take discernment and thinking ability to a new level.
Somewhere down the line some C level exec. figured that profit outweighed the risk of hiring these FNs.