How many private security contractors were in Iraq and how much did they cost?

"...[P]rivate security contractors have become a factor in the types of conflicts the United States confronts in Iraq and Afghanistan. As the insurgency in Iraq grew, more security contractors were brought in to protect support force and reconstruction contractors. As much as 25-30 percent of the $18.1 billion for U.S. reconstruction spending has been dedicated to such security. In many instances, problems of cost growth in contracts for work in Iraq and Afghanistan reflect the need for private companies to hire security forces to protect their workforces and installations. There is no current, accurate count of contractors, as defined above, in and near theater, though rough numbers are as many as 100,000 support and 20,000-plus security contractors."

"There has been growth in the private security industry in Iraq. In our 2005 report, we reported that the Department of Defense (DOD) estimated at least 60 private security providers were working in Iraq with perhaps as many as 25,000 employees. In March 2006, the Director of the Private Security Company Association of Iraq estimated that approximately 181 private security companies were working in Iraq with just over 48,000 employees...

Despite the significant role played by private security providers in enabling reconstruction efforts to proceed, neither the Department of State, nor DOD, nor the USAID—the principal agencies responsible for Iraq reconstruction efforts—had complete data on the costs associated with using private security providers. As of December 2004, the agencies and contractors we reviewed had obligated more than $766 million for security services and equipment, and by reviewing invoices that providers of security services and equipment provided to the contractors, we found that security costs had accounted for more than 15 percent of the contract’s costs in 8 of the 15 contracts we reviewed.

We cautioned, however, that our estimates did not reflect security-related costs incurred by subcontractors or lower tier suppliers, or attempt to quantify the impact of the security environment on the pace of reconstruction efforts caused by security-related work stoppages or delays or the costs associated with repairing the damage caused by the insurgency on work previously completed.

[Note: See the Private Security Company Association of Iraq's list of 177 private security contractors working in Iraq as of May 24, 2007]

"Q: How many private security firms are working in Iraq?

No one knows the exact number of private security contractors that rushed into Iraq following the war. In April 2004, in response to a request from Congress, the Coalition Provisional Authority (CPA) compiled a list of 60 different firms employing a total of 20,000 personnel (including U.S. citizens, Iraqis and third-country nationals).

Before handing over power to the newly elected Iraqi government in January 2005, the CPA established 'Memorandum 17,' a notice that called for all private security companies operating in Iraq to register by June 1 and established an oversight committee led by Iraq's Ministry of the Interior.

According to Lawrence Peter, a former CPA official and the director of the Private Security Company Association of Iraq, as of June 21, 2005, 37 security contractors have registered with the Iraqi Ministry of the Interior. One is awaiting approval, and at least 18 additional security companies are in the process of registering."

"Q: Any idea what kind of money we're talking about in terms of the amount of contracts being signed?

Peter: ...Contracts are, as you know, company proprietary information. They don't want to give out the amount of business that they do, because it may provide a competitive edge to someone else. So no, we don't discuss that actually, and I can't really categorize it.

The supplemental, when that was passed, $18.7 billion, which after various taxes turned out to be about $12 billion plus or minus, originally had programmed, I think, about 10 percent as a ballpark figure what was going to be required for security. Now, I don't know if it was less than the 10 percent or more than the 10 percent, but it was somewhere there, which I think was an initial estimate 18, 20 months ago."