Secunergy

Abstract

ArmorGroups problems with staff discipline and morale in its Kabul embassy security detail root in the logic of economics applied without proper restraints in a high risk environment. This article traces some of the machinations at work in this well-known case.

A picture from a better past: ArmorGroup employee with UK insignia | CC-BY-SA-NC
The embarrassing accounts of the inadequate and damaging conduct of the PSC ArmorGroup may serve as an example how to do one's best to lose a war over hearts and minds. This article looks back at the developments that led to the fiasko in 2009.

The security giant G4S, created as a merger of Group 4 Falck and Securicor in 2004, bought ArmorGroup in late 2008. At that time, their paramount USD 189 million contract - guarding the US embassy in Kabul - just had vanished. The case illustrates well the risks associated with contracting: ArmorGroup had in the past tried to squeeze the most it could get out of the Kabul contract. Since personel is the most important cost factor these expenses had to come down regardless of any externalities. Shifts were long and staff housing was primitive, not to say squalid. Tim Lynch from the Free Range International blog put his experience with the ever troublesome embassy contract in bold words:

"The first company to win the contract was MVM and their genius plan was to bring in South African passport holding Vamba tribal fighters from Namibia to work as the senior guards and "english (sic!) speaking" junior guards from Peru. The South African plan met the terms of the contract but turned out to be a disaster. When the Peruvians arrived not one of them could speak a word of English. I was there for that too and am thus unable to go into the details. When ArmorGroup won they were heading down the same path as MVM but at the last minute the CEO came in, immediately fired his management team and entered into negotiations with the existing project manager for him and his crew to come aboard. I am hesitant to go into detail due to an acute congenital fear of lawyers. Runs in my family according to my Father, but suffice it say the pay for new joins was low and did not favor Americans who cannot be paid on leave by an American company without becoming an employee with the full benefit and tax load. That lasted a little less than a year until the PM got bored and left which caused the immediate exodus of all the old guards who Armor group wanted to be rid of so they could bring in guys at a much reduced daily rate. You get what you pay for in this industry and Armor Group was not paying much."

The human factor seems to play an important role and taking it into account is not as easy as it may seem due to the jittery nature of predictability and discipline of the employees.

"The main reason why managing these contracts is so difficult is that it is impossible to stay ahead of the stupidity curve your men will generate. There is no way to anticipate it because some of these guys do the most unbelievably stupid things sober; add alcohol and the potential for Darwin Award level stupidity goes up exponentially."

These shortcomings have been on the record before. As early as April 2008 two former employees (James Sauer and Peter Martino)  announced that they would sue their former employer after being fired for raising some of the more pressing issues they encountered. Their lawyer Debra Katz from Katz, Marshall and Banks was quoted by CBS: "This is a clear-cut case of corporate greed taking priority over national security concerns." Since the Government Accountability Project also filed the case, it can hardly have come as a big surprise.

Before, two senior staff members (James Gordon, former director of operations at ArmorGroup, and John Gorman, a former ArmorGroup manager in Kabul) filed a whistleblower retaliation case and alleged shortcomings, failures, misjudgements and outright fraud by the company. According to Gordon, "ArmorGroup’s goal was to maximize their profits, provide a fig leaf of security at the embassy, and pray to God that nobody got killed." In a press conference they alleged ArmorGroup was well aware of its own fraudulent actions. They intentionally employed guards who were not speaking English to cut costs - at the expense of embassy security. They also ran an American shell corporation in order to win contracts intended only for American companies. Even prostitution was not off-limits to them. They also alleged that the State Department knew about at least some of the company’s illicit practices. Not in defense of but in explaining the contractor's behaviour, Tim Lynch aka babatim points out the squalid and wretched living conditions the contractors have to endure:

"The pay thing is a problem which can be worked through with good on the ground leadership and incentives for people who are on their second, third or fourth year of the contract; the real problem is with the living conditions and job requirements of the guard force.  The average living space per man in Camp Sullivan is less than  the square footage required for inmates in federal penitentiaries.  I put that in writing in a memo to the RSO when the camp was being built which may help explain the stained relationship I had with him.  The recreation facilities are inadequate and the gym full of third rate Turkish equipment.  There is no space on the camp for the men to do anything outside of their crammed barracks and they have little ability to get off camp.  When you are designing camps to house hundreds of guards for years at a time you have to pay attention to their morale recreation and welfare needs which is something the military excels at.  If you do not think through what they are going to do off duty as thoroughly as their on duty tasks than you are set up to fail."

For the record: The averade cell in the US seems to have around 50 square feet. Add virtualy non-existant recreational facilities, comparably low pay, long shifts under imminent danger of being shot or blown up and you have at least some of your staff cracking. No time soon is the pain going to end, since it is costly in time, coordination and money to switch contractors in the middle of a hostile environment like Afghanistan. Furthermore, we will probably have some of the "old boys" around, as Frank Schaddelee, deputy project manager at Camp Sullivan explaines in an email to his subordinates:

"When the current contract option year expires on 30 June 2010, a 6 month extension will kick in. This will allow time for the newly selected contractor to be able to stand up by 1 January 2011. [...] What this means to the vast majority of personnel here is that you will have right of first refusal, which means for most of you this change from one contractor to another will be mostly transparent - you will continue your employment but change uniforms."

Sadly, this is not the only incident involving ArmorGroup personel, alcoholic beverages and problems with discipline. Mister Fitzsimmons, who served eight years as a paratrooper in the British Army, seems to have cracked (because of severe PTSD, contracted while serving in Iraq, his relatives claim). While this might be relevant for the Iraqi legal system, it is of no concern to the employer of Mr. Fitzsimmons, since the Defense Base Act only remedies for his condition. Bad for him, that the insurance companies in charge apparently know their turf. It remains to be seen, if Mr. Fitzsimmons is able to uphold his version of the story which he transmitted from jail via nine text messages. At the moment he is tested by Iraqi medical staff for evidence of his PTSD-claims.

Preliminary Conclusion

There are special considerations to be made when supplementing armies or police forces with private contractors. Contracting provides certain benefits (total cost, deployment time, specialisation etc.)But the claim that market forces will inevitably produce a better outcome for the client. No-bid contracts are an obvious possible exception to this rule of thumb. If only very few firms are able or willing to bid for a contract because they try to access an established market, they have to cut costs somewhere. In the security industry, the holy grail is to find decent manpower to a bargain price. But for the american high-value contracts (like training the ANA, guarding the Bagdad green zone or the Kabul embassy) applicants have to have language as well as some policing skills added to their fighting skills. The pool of highly trained individuals with these additional skills is shrinking. Venezuelan commandos trained at the school of the americas were a perfect example. But their price tag is growing for years and profit-orientated companies bargain on employing cheaper staff in even cheaper housing without losing their contracts.

Two important mechanisms come into play:
lock-in: As seen above, it's not trivial to switch contractors - even more those in the more big and sensitive contracts. Keep in mind that every member of a security detail, every trainer and every simple guard has to be checked, trained and vetted for his task. Teams have to be set up and routines to be established. The list goes on and all this can take months.

Information deficit: Fog of war has to be taken into account even if deployment takes place e.g. at the embassy of the U. S. Obviously there is a conflict of interest for the chief of a security detail when it comes to report misconduct. Especially when it does not directly translate to mission impairment (like drinking, hazing and/or generally behaving rude.)

In the long run even minor but consistent abberations may prove dangerous to the long term success of the mission. When weighting efficiency vs. effectivity in security, the advice bare market forces give have to be taken with a big pinch of salt.