Stratfor: Morning Intelligence Brief - November 3, 2006
Geopolitical Diary: Iraq Without Bechtel
Bechtel Corp., a global engineering firm, announced Thursday that
it is wrapping up its work in Iraq and not seeking any further
contracts (its last contract expired last week). According to Cliff
Mumm, who heads up Bechtel's infrastructure projects, the security
situation in Iraq has deteriorated to the point where continuing is
not possible. Bechtel's decision follows the decision by Kroll
Security International to sell or abandon -- it was not clear which
from media reports -- its operations in Iraq following the loss of
some of its personnel.
When companies like Bechtel and Kroll begin to withdraw from Iraq,
the situation has clearly reached a new level of instability. These
firms are used to working in unstable environments, and security
threats are simply a part of the business they are in. When they
have to start calculating that the threat is greater than the
potential profit, the situation is indeed serious.
There is a deeper aspect to this. The U.S. Army was designed,
during the 1990s, to be a force that was dependent on the private
sector to operate. Put another way, the standing Army was not
designed to go into combat without integrating Reserve and National
Guard components and without outsourcing support services to the
private sector. It was not an Army that could undertake combat
operations without this support.
During the 1990s, it appeared to some that the world had reached a
new level of stability, and that economics had replaced
geopolitics. The assumption was that there would not be extended
combat. It made sense to depend on the Reserves and the National
Guard for additional manpower during short combat situations, and
to use contractors to provide many of the services that the
military had provided for itself in the past.
The force structure was not designed for multi-year,
multi-divisional combat. The Reserve and National Guard components
were not expected to sustain the regular force for years. And the
contractors did not expect to have to operate in a world of extreme
The combat capability of the U.S. Army is therefore breaking in two
ways. First, its manpower base is being exhausted through multiple
deployments. Second, it is now going to find that the contracting
support it relies on won't be there if the security risk becomes
too extreme. Unlike combat support drawn from the ranks of the
military, the contractors can't be ordered and expected to carry
out their duties in high threat circumstances. But the Army is not
built to operate without them.
The decision to outsource key support functions made sense in the
1990s. It shifted the cost of standby capabilities to private
companies, and allowed the military to focus on its core mission.
In the course of the Iraq war, the challenges have gone beyond
feeding the troops to include rebuilding infrastructure, providing
security to the firms doing the rebuilding, and so on. The Army
could not provide security to engineering companies, so private
companies like Blackwater were bought in. As the situation
developed, the dependency on these contractors expanded, until the
war effort -- understood in the broad sense of nation-building --
became enormously dependent on these contractors.
But they have a different appetite for risk than the military. They
are free to leave, and they are leaving. It is unlikely that a
decision reached by Bechtel and Kroll is so unique that others
won't follow. They will. And that now poses a new problem for the
U.S. effort: It does not have the military capability of filling in
for the contractors. There are just not the numbers or skills. That
means that if the security situation worsens, we will see a spiral
in which contractors withdraw, the security situation further
deteriorates and more contractors withdraw.
Given the structure of the force that has been fielded, the level
of deployment cannot be controlled by the Department of Defense.
When you depend on contractors looking to make money, a lot of them
will bail when the risks get too great. Defense planners in the
1990s did not count on this scenario, when the enablers of the Army
decide to leave the theater of operations. But it seems that that
is what is happening.