Services contracts lead in Iraq funding

Contractors providing the government with administrative and management services in Iraq took the major share of federal contract dollars obligated between 2003 and 2007, according to a report released today.

In analyzing federal contract data, the Congressional Budget Office found government agencies obligated 80 percent of the $85 billion in contracts spent in Iraq on services contracts. Specifically, contractors offering administrative and management services received $26 billion, or approximately 30 percent of the money. Most of those dollars went to contracts classified as “logistics support services,” a broad subcategory of services contracts that can include equipment and property maintenance, according to the CBO’s report, “Contractors’ Support of U.S. Operations in Iraq.”

The CBO also found that agencies obligated more than $1 billion in each of 11 separate product and services categories. For example, the government spent more than $7 billion on the construction in Iraq, primarily buildings. And contracts for “fuels, lubricants, oils and waxes” received more than $6 billion, the CBO wrote.

The CBO noted that its figures rely in large part on the government’s Federal Procurement Data System (FPDS), the only governmentwide system tracking federal spending. The database has limitations such the timeliness and accuracy of the data. The database also lacks details on how federal employees who enter the data into FPDS classify various contracts, CBO wrote.

In Iraq, private security contractors have been prominent presence alongside the  military. The CBO estimated the government has obligated between $6 billion and $10 billion for those services from 2003 to 2007. A security trade group estimated approximately 30,000 private security contractor personnel were in Iraq in 2008, an increase from the Government Accountability Office’s estimate of 25,000 security personnel there in 2005, the CBO wrote.

Meanwhile, private contractors in Iraq may equal the number of military personnel there, as the government relies more than ever on the private sector for help. Roughly 190,000 contractors are working in Iraq, CBO wrote.


The historically high ratio results from reductions in the military and a greater emphasis on outsourcing duties that are not considered inherently governmental functions — or work that only a government employee can do, such as award a contract. The high ratio also reflects the United States’ effort to begin reconstructing the country now, instead of waiting until hostilities have subsided, CBO wrote.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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