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Private contractors are crucial to helping Afghans improve crop production.

Behind the Contractor Myth:
In Harm’s Way at a Fraction of the Cost

By Ann Jocelyn

They’ve been demonized and caricatured beyond recognition. They’re losers and assorted misfits who can’t get real jobs back home. War profiteers who delight in human misery. Detractors accuse them of unspeakable, systemic crimes, from bilking the taxpayer to murder-for-fun. Their congressionally approved salaries and industry-standard profit margins provoke ire and scandal among the senators and representatives who appropriated the money in the first place.

“They” are the contractors who deliver food, medicines, supplies, building materials, and the endless convoys of goods to support the troops fighting insurgents and terrorists, and the civilians working to rebuild Iraq and Afghanistan. They are teachers, accountants, paramedics, nurses, doctors, architects, engineers, electricians, and managers—people from all walks of life, offering their expertise and skills to create or restore shattered infrastructure and combat disease, ignorance, and fear.

When the media talk about “contractors,” they focus on private contractors who provide security and military services, but the contracting world is endless in its diversity. Contractors range from migrant workers who pick fruits and vegetables in American orchards and farms to white-collar professionals who serve government and industry with their unique talents and skills.

They share a common trait: they are paid for their work only when they are needed. In the case of unskilled workers in the farm sector, opportunities for advancement are few. But in occupations that require education, training, and experience, opportunities can be unlimited. Skilled contractors may be paid as much or more than their salaried counterparts in government and business, but they are economical overall because—in contrast to those on salary—they are not paid for work they don’t do.

Miguel Ortiz works on his greenhouse tomato harvest in El Salvador. The U.S. Agency for International Development has relied on private agricultural contractors in that country for decades.

“Contracting gives me the flexibility to see my children off to school and be home for them six hours later, and work at night if I must, after they’re tucked into bed,” says Amanda Perez, an immigrant mother of three in Prince George’s County, Maryland. “It allows me to be a mom—something I couldn’t do very well with most salaried jobs.” Her bilingual skills help her earn $26 an hour—four times the minimum wage of many workers in the service sector.

From the dust of Iraq to Afghanistan to outer space, contractors serve practically every sector of the global stability environment. Many have been killed in the line of duty (see Memorial and Dangerous Duty: Private Contractors Killed in Iraq). The National Aeronautics and Space Administration (NASA) has relied on contractors for years. Fifteen thousand contractors support 2,000 NASA employees on the space shuttle program alone. The United Space Alliance (USA) is a Houston-based contracting company founded in 1995 by Boeing and Lockheed Martin; it calls itself “NASA’s primary industry partner in human space operations, including the Space Shuttle and the International Space Station.” USA says, “Our vision is to be a world leader in space operations on Earth, in orbit, and beyond.”

Cost Controversies

The United States leads the world in providing contractor services, both for-profit and nonprofit, to promote global stability. Doctors and nurses take leave from their jobs at home to treat HIV/AIDS victims in Africa. Some go as volunteers, receiving only token pay or none at all; others serve on contracts at competitive wages. They work for the same cause, often side by side. Few Americans would criticize the civil engineer on contract to design safe roads and bridges in typhoon-wracked Bangladesh or the financial advisor contracted for a six-figure sum to advise peasants in Latin America on how to set up a system to seek financing for their micro-businesses.

Contractor reimbursement was not an issue until the politicization of the war in Iraq, when people who previously had been admired for putting their professional skills to work in a war zone suddenly became pariahs. Contractors who work in unrelated areas for about the same pay elicit no opposition at all.

For example, as Serviam went to press, employment agencies were taking applications for a federally funded contractor job with a North Carolina company that pays up to $200,000 a year. The job, with the nonprofit Research Triangle International (RTI), involves promoting economic development around the world. Applicants should have management experience in government and the private sector, and need only a bachelor’s degree. With more than 85 percent of its annual $612 million budget coming from the U.S. Agency for International Development (USAID) and other federal agencies, RTI is an effective innovator and disseminator of knowledge.

A $200,000 job comes out to about $800 a day—the daily rate of a seasoned contract helicopter pilot who risks his life to protect U.S. officials from insurgents in Iraq. If the pilot is on duty for a 12-hour shift, he’s making about $67 an hour, yet we think nothing of paying a contract lawyer four times that amount.

Contractors Versus Salaried Employees

Fareba Miriam is the first woman to enroll in a para-veterinarian training program that USAID is running in Afghanistan.

Comparing salaries is an inexact science. Industry sources tell Serviam that the average private security contractor (PSC) working for the State Department in a war zone, with 8 to 12 years of military experience in a special operations force or police SWAT unit, is paid about $500 a day. PSCs often work long days. Serviam traveled around Afghanistan with guards who worked 14 hours a day or more, a 70-hour work week that translates to $36 an hour. Since most PSCs only work 80 days a year because of the on and off nature of the job, the average pay is $90,000 annually. Reports that PSCs are earning $300,000–$400,000 a year are not based on real data.

Some senators and representatives are scandalized that a few PSCs in Iraq are earning more than the nation’s military leaders. The Department of Defense monthly basic pay table says the base pay for a four-star general is $172,200 a year. This amount doesn’t include their tax-free housing and subsistance allowance, nor the value of their benefits—all types of compensation that contractors don’t receive.

But are contractor wages really out of line? Congress has established laws that set the salaries of State Department officials and aid workers. A State Department senior consultant or attorney earns between $93,822 and $143,471 a year in Washington, D.C., according to the 2007 Foreign Service Pay Scale.

Tony Spakauskas, coordinator of the State Department’s Iraq Staffing Unit, says Foreign Service officers and civil servants get a 70 percent pay increase for volunteering in the war zone: “Diplomats and staff receive a 35 percent bonus for serving in a hardship post, and another 35 percent bonus as danger pay.” With these bonuses, the annual basic salary in Iraq bumps up to $159,497–$243,900. And the salaries do not include premium pay for working overtime, at night, or on Sundays and holidays. State Department workers in Iraq are entitled to 45 days of paid leave per year and other benefits. Thus, contractor salaries are well within the parameters that Congress has set for State Department personnel.

U.S. sponsorship of work programs gives displaced women in Colombia hope.

In an internal State Department publication, Ed Warner, a longtime Voice of America journalist said that some career civil servants want to transfer into the Foreign Service and go to Iraq because it is a way to climb the federal pay ladder. Warner writes that “because Civil Service employees cannot fall below their previous pay rate, their pay is permanently boosted by at least one step after they return.”

But extra pay isn’t the main motive for either government civilians or contractors to volunteer in Iraq. Many sign up to support the nation in time of war, to help rebuild a destroyed society, or to answer a call to service. Some take the mission as a personal challenge.

Labor unions don’t like contractors because the workers’ independence has a corrosive effect on union membership, which is the source of Big Labor’s political power. Some people don’t like the business model because the very nature of contracting is to provide services when—and only when—they are needed. When the job is done, so is the contract. That unnerves people who prefer the security of a predictable paycheck to the flexibility and volatility of contracting work.

Some critics object to the fact that the contractors have to pay double the Social Security tax, making up for what a traditional employer would have paid. Others, including some in Congress, say that private contractors are not afforded the same job site protections as full-time or unionized workers, even though Congress exempts itself from the federal labor and safety laws it imposes on the private sector and the rest of the government.

While contracting lacks the job security of a salaried corporate or government position, it allows people to focus their talents and energies where and when they are needed. Contracting is a choice that affords people the flexibility to serve their families and their own needs, while serving higher purposes for their country and humanity.

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From the May/June 2008 issue of Serviam.