Private security is pricey

WASHINGTON — It costs the U.S. government a lot more to hire contract employees as security guards in Iraq than to use American troops.

It comes down to the simple business equation of every transaction of every company along the way aimed at making a profit.

Blackwater Security Consulting signed a contract in March 2004 with Regency Hotel and Hospital of Kuwait for a 34-person security team.

Blackwater was a subcontractor to Regency, which was a subcontractor to ESS Support Services Worldwide, which was a subcontractor to Halliburton’s KBR subsidiary, the prime contractor for the Pentagon.

Under the contract, Regency was to pay Blackwater $11,082,326 for one year to put together a 34-person team that, among other duties, would provide security services and run round-the-clock command centers in Kuwait and Iraq that were to control ESS security operations.

Regency was to provide Blackwater personnel with housing and necessities, including meals, as well as office space and administrative support. In addition, Regency would provide basic equipment while Blackwater was responsible for purchasing individual weapons and ammunition.

The average per-day pay to personnel Blackwater hired was $600. According to the schedule of rates, supplies and services attached to the contract, Blackwater charged Regency $1,075 a day for senior managers, $945 a day for middle managers and $815 a day for operators.

Regency charged ESS an average of $1,100 a day for the same people. How the Blackwater and Regency security charges were passed on by ESS to Halliburton’s KBR cannot easily be determined.

Halliburton’s KBR blended its security costs into blanket costs passed on to the Defense Department.

An unmarried sergeant given Iraq pay and relief from U.S. taxes makes about $83 to $85 a day, given time in service. A married sergeant with children makes about $170 a day.

Army Gen. David Petraeus, the top U.S. commander in Baghdad overseeing more than 160,000 U.S. troops, makes roughly $180,000 a year, or about $493 a day. That comes out to less than half the fee charged by Blackwater for its senior manager of a 34-man security team.