Rebuilding Iraq

Privatization and the role of contract services

Fighting the war in Iraq has entailed an unprecedented use of private contractors in military operations. Several recent articles examine how this is both reshaping military operations and raising new challenges.

The key issue is that while using contractors allows our military unprecedented flexibility and greater and more focused capabilities, many have wondered if the systems were in place to manage the contractor workforce and make sure the contractors did not impede military operations. Though so far as the fighting has unfolded there have been no stories of such problems.

Now, rebuilding Iraq is going to be a major undertaking, dwarfing that in Afghanistan and the Balkans. And, as it has been throughout the modern era, private contractors will do the heavy lifting on rebuilding infrastructure and re-establishing basic services.

That is already raising a lot of questions. Who will pay for the rebuilding? It looks like a lot of the burden will be paid for with Iraq’s own oil, at least initially, but how much is the US going to pay for rebuilding after already paying for the war?

A lot of people are also worried about favoritism and other problems in the contracting process, worries that are a more urgent version of worries that are often raised about privatization. A big issue is that most of the potential contractors are big contributors to the Administration. That can be a problem in a contracting process, but I suggest two answers.

First, giving money is not per se a problem. Just about everyone who gets money from the government lobbies for it in some way, from contractors to public employee unions. What is the alternative to avoid this? No one has suggested any competent companies that don’t lobby. Really, the issue is more prosaic, and is that contracts need to be issued in a transparent process that lets the public see that the best companies are being picked for the job.

Second, the same principle applies to the contracts themselves. The various federal agencies involved need to be sure they are not writing blank checks, but that they are getting what they are paying for and demanding proven results for at a competitive price. It will be important to focus on real needs and priorities and spend the money wisely.

It is interesting to me that in the very articles that raise myriad concerns about private firms profiting from the rebuilding of Iraq repeatedly highlight how vital their role is. The private sector is the only realistic means to rebuild Iraq.

The debate is really only beginning. Is this a role the US should play? Is it a chance to see how US private industry can help the government establish a more developed and market-based economy in Iraq? What do you think the opportunity or risk is?

I think there is an opportunity here to use smart contracting in the rebuilding as a catalyst to creating infrastructure and services built on property rights that, combined with a rule of law, will lay the foundation for Iraq to find its own democracy and prosperity.

Adrian Moore is Vice President of Reason Foundation.

Adrian Moore

Adrian Moore, Ph.D., is vice president of policy at Reason Foundation, a non-profit think tank advancing free minds and free markets. Moore leads Reason's policy implementation efforts and conducts his own research on topics such as privatization, government and regulatory reform, air quality, transportation and urban growth, prisons and utilities.

Moore, who has testified before Congress on several occasions, regularly advises federal, state and local officials on ways to streamline government and reduce costs.

In 2008 and 2009, Moore served on Congress' National Surface Transportation Infrastructure Financing Commission. The commission offered "specific recommendations for increasing investment in transportation infrastructure while at the same time moving the Federal Government away from reliance on motor fuel taxes toward more direct fees charged to transportation infrastructure users." Since 2009 he has served on California's Public Infrastructure Advisory Commission.

Mr. Moore is co-author of the book Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry said, "Speaking from our experiences in Texas, Sam Staley and Adrian Moore get it right in Mobility First." World Bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

Moore is also co-author of Curb Rights: A Foundation for Free Enterprise in Urban Transit, published in 1997 by the Brookings Institution Press, as well as dozens of policy studies. His work has been published in the Wall Street Journal, Los Angeles Times, Boston Globe, Houston Chronicle, Atlanta Journal-Constitution, Orange County Register, as well as in, Public Policy and Management, Transportation Research Part A, Urban Affairs Review, Economic Affairs, and numerous other publications.

In 2002, Moore was awarded a World Outsourcing Achievement Award by PricewaterhouseCoopers and Michael F. Corbett & Associates Ltd. for his work showing governments how to use public-private partnerships and the private sector to save taxpayer money and improve the efficiency of their agencies.

Prior to joining Reason, Moore served 10 years in the Army on active duty and reserves. As an noncommissioned officer he was accepted to Officers Candidate School and commissioned as an Infantry officer. He served in posts in the United States and Germany and left the military as a Captain after commanding a Heavy Material Supply company.

Mr. Moore earned a Ph.D. in Economics from the University of California, Irvine. He holds a Master's in Economics from the University of California, Irvine and a Master's in History from California State University, Chico.