'NO WITHDRAWAL' — Contractors vow to stay course in Iraq

By ROSEANNE GERIN

Kidnappings, murder, prison scandal focus unwanted spotlight on private-sector role

Jake Kolojejchick expected harsh living conditions when he arrived in Iraq at the end of March to train soldiers to use his company's visualization software.

But when he got to Baghdad, the 37-year-old project manager and co-founder of Maya Viz Ltd., a small, privately held Pittsburgh software firm, was pleasantly surprised by the comfortable living quarters -- an air-conditioned trailer with twin beds, mattresses, pillows and sheets -- at Camp Victory, a military installation near the city's airport.

His only complaints were the thin mattress, produce not as fresh as that at his favorite salad bar back home, and ever-present sand and grit that clogged computer hardware. Kolojejchick even got used to the occasional mortar attacks on the base's periphery about five miles away.

"When I first got there, it was a little shocking, but I got accustomed to it and didn't get stressed out about it because Victory is so large," he said.

Now back in the United States, Kolojejchick will return to Iraq in a few months to train soldiers to use an upgraded version of Maya Viz's software.

"It's been some of the most satisfying work that I've ever done in my life, seeing people use the [software] I created," he said.

Kolojejchick's optimism and acceptance of the risks are typical of government contractors, who find themselves increasingly in the spotlight for their work in the war-torn country.

Critics have accused President Bush of "outsourcing the war" and complained that contractors are exploiting the conflict at taxpayers' expense.

Recently, two long-time defense contractors, CACI International Inc. and Titan Corp., have become enmeshed in the scandal over the alleged mistreatment of Iraqi prisoners. Adding to contractor worries has been a recent upsurge in violence against civilian contractors.

Given these swirling controversies and unavoidable risks, Washington Technology asked contractors whether they are having second thoughts about their work or intend to bring employees home until the danger subsides.

Contractors willing to talk about their work in Iraq said their primary motivation is not profits, but helping their country and the Iraqi people. Government contractors cannot simply walk away from their work in Iraq, executives said.

Companies working for the U.S. government would be subject to monetary penalties if they breached their contracts with quick pullouts, to say nothing of getting poor past-performance ratings the next time they would bid on contracts.

"Contractors do have a legal obligation to fulfill their contract terms," said Harris Miller, president of the Information Technology Association of America, an Arlington, Va., trade association for American IT companies. "These are companies that have longer-term relationships with the military, and if they don't participate ... their chances of getting another contract are almost zero."

Kolojejchick and other officials said they intend to remain in Iraq as long as needed, despite the risks.

Jack London, chairman and CEO of CACI, said his employees, many of whom are retired military, understand what it's like to work in places like Iraq.

"No withdrawal," London said. "We're continuing to staff and to add people here and there."

SIZING UP THE DANGER

The Defense Department does not provide the number of contractors working in Iraq, nor does it tally their fatalities.

But Stan Soloway, president of the Professional Services Council, said that member firms of the Arlington trade group have 25,000 to 30,000 contractors in Iraq, counting Americans, foreign nationals and Iraqis who are performing work.

Soloway estimated that 50 to 75 contractor employees in Iraq have died from violence or attacks.

Kellogg Brown & Root Inc., the engineering and construction unit of Halliburton Co., has lost the most employees, with 34 deaths.

In April, four American civilian contractors working for Blackwater USA, a private security firm in North Carolina, were killed and mutilated by a mob. Recent violence has forced some agencies and companies, such as General Electric Co. and Bechtel Corp., to scale back or suspend some of their operations in Iraq.

The danger that contractors face varies. Kolojejchick trained the Army's 1st Cavalry Division to use Maya Viz's automated visualization software for battlefield communications and analysis as part of a contract through the Defense Advanced Research Projects Agency. Many contractors like him live and work on well-protected Army bases, such as Camp Victory.

For Segovia Inc., a company that provides broadband IP service to the armed forces via satellite, the risk is higher. The Herndon, Va., firm doesn't send its own employees to Iraq, but trains military personnel and subcontractors to install its equipment at various sites throughout Iraq.

Although the installers ride in convoys of six or seven people in two vehicles to minimize the danger, one of the company's subcontractors and a soldier were killed in December when their Chevy Suburban ran over a land mine, said Kirby Farrell, Segovia's executive vice president of sales and marketing.

WINDFALL OF PROFITS?

The government has allocated $18.4 billion for Iraqi reconstruction and development, with $12.4 billion slated for construction and $6 billion for nonconstruction activities, such as democracy building and training.

The Bush administration hasn't put a price tag on the military's costs, but some estimates put that number at $5 billion per month.

Despite these hefty costs, industry officials said their work in Iraq is not providing a windfall to their companies. London declined to say how much money CACI is being paid to support the military in Iraq. The company provides services including intelligence data collection and analysis, logistics, network management services, IT support, program management and contract support.

Maya Viz CEO Steven Roth said his company can generate more revenue through commercial sales than through its DARPA contract for the Army in Iraq, which accounts for about 25 percent of the company's revenue.

The company had about $5.3 million in 2003 sales and has fewer than 50 employees.

Money from Iraq contracts does not represent significant revenue for most contractors, Soloway said.

"The work is not going to make or break their quarterly financial statements," he said. "The margins in government work are considerably lower than in the commercial world."

Many contractors said the dollar value of the contracts is secondary to the satisfaction of supporting the military and helping to rebuild Iraq's infrastructure.

Kolojejchick said the 1st Cavalry Division's commanding general said Maya Viz's software enabled him to stay at Camp Victory and communicate with other battalion commanders online, saving him hours of risky and expensive helicopter travel for face-to-face meetings.

Similarly, Farrell of Segovia said his company provides broadband IP service for troops around the country and the Coalition Provisional Authority at low rates.

Contractors point to removal of debris from public spaces, more reliable electricity, running water and improved IT and telecommunications services as signs of infrastructure development progress.

"It's more of a mixed story than what we see on the nightly news," Miller said.

Although their assessment of the progress in Iraq is more upbeat than many press accounts, company executives said they understand the dangers and risks, which they consider carefully before contracts are signed and company employees head off to deliver services.

"Getting in and out of Iraq is not willy-nilly," said CACI's London. "People just don't go in there, go to the hotel, open their suitcase, set up shop and go over to the Coalition Provisional Authority and try to cut a contract."

From: http://www.washingtontechnology.com/news/19_3/cover-stories/23484-1.html