Stability Operations Industry: Opportunity and Risk

President Obama's recent reaffirmation of a timetable for Iraqi troop withdrawal means new business opportunity for the stability operations industry.
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For one not uncontroversial sector of the defense industry, President Obama's recent reaffirmation of a timetable for Iraqi troop withdrawal means new business opportunity, accompanied by heightened scrutiny -- and predictably severe penalties for failure to comply with professionally, as well as politically, dictated operational standards.

The industry in question is called "stability operations," a broad term that denotes activities by private contractors to support military, peacekeeping missions and disaster relief. To ensure safe and secure environments outside the United States, their multifarious deliverables include protecting vital infrastructure, training indigenous military and non-military forces, responding to emergencies, body-guarding key personnel, overseeing project logistics, assuring medical provisions, demining hazard zones -- and so forth.

During the Iraq War, unwanted attention fell on a few such companies amid allegations of fraud and abuse. Now that the West's role in the war is largely ending, and the role of the industry in Iraq will grow apace, those past mishaps are going to have a strong continuing influence on public perception. Fairly or not, the bigger the future role of the contractors, the more mistrust they can expect to engender.

By the end of August, U.S. forces will number 50,000 -- a 15,000 deduction. The last withdrawal is slated for the end of 2011. While the President stated that the U.S. initiative in Iraq will be led by diplomats, someone has to protect those diplomats. As Grant Green of the Commission on Wartime Contracting told

NPR , "On security contractors alone,

the Department of State's estimate is that they will increase from about 2,700 today to six or seven thousand. That doesn't take into consideration all the other missions that the State Department will assume..."

From a business development standpoint, it's certainly welcome news to stability operations companies that can now work within the framework of a cohesive Iraqi legal system, which simply did not exist in 2003. Doug Brooks, President of the

IPOA -- The Association of the Stability Operations Industry, the industry's 10-year-old trade association, points to the benefits widespread deployment will yield in terms of cost-effectively implementing U.S. foreign policy.

But industry leaders are under no delusion as to the pitfalls ahead. Politicians are acutely sensitive to how past waste, fraud and abuse, however idiosyncratic, have tinged public perception. "Very few in Congress are willing to stand up and say there's a rational reason why we use contractors," says Brooks. Instead, the system has degenerated into what he calls "vengeance contract management," rewarding those who find the most minimal of mistakes and abuses but offering no incentives to ensure that governmental policies succeed.

It's a significant dynamic: bullish growth for an industry that provides a necessary service, yet simultaneously increased liability for everyone in it. No wonder there are so many law firms among the IPOA's

members.

How the stability operations industry handles itself will provide a dramatic study in adversity management with salutary lessons for other industries beset by recurrent crises, none more so, of course, than those that contract with the U.S. government. In this not-so-friendly environment, the ongoing task confronting the stability operations industry will require comprehensive communications strategies to disseminate the right messages in the right venues, in the right way. While it may be fair to say that these companies, like companies in other defense industry sectors, are not overly prone to proactive communications, that's precisely what Doug Brooks, for one, advises.

First, there can be no sweeping of incidents under the rug. As the number of contractors in Iraq increases exponentially, so does the likelihood that mistakes will be made; that incidents will raise questions; that some individuals will commit sins of omission or commission. If the government can no longer use national security as a tool to justify the suppression of information, the chances are slim-to-none that private sector companies can do so.

Instead, the contractors must be constantly prepared to say exactly what and why an untoward event or apparent malfeasance occurred. There must be well-articulated and credible reasons why the occurrence was anomalous. Such constant preparedness may be a burdensome challenge but there is no choice considering the hostility that shadows this industry in Iraq and, importantly, the fact that the contractors are likely to be the only "story" coming out of Iraq as troop numbers steadily reduce. Reporters will simply need to write about them.

Second, the contractors must in certain situations assume responsibility for situations that are the government's fault, not theirs. As Brooks advises, you do not want to publicly criticize or advise the media that "your biggest client" may have "contractually obligated you to do something stupid." Stability operations companies must understand in advance that they will be unjustly tarred. "They just have to suck it up," says Brooks.

Third, contractors must be willing to volunteer any help they can to support government efforts to patrol the market. "90% of the waste, fraud, and abuse can only be controlled by better government policies and enhanced contract management, but we as an industry we have to do what we can to proactively address these issues as well," says Brooks.

Such responsiveness defines the leadership this industry requires in the months and years ahead. Equally definitive, an industry oversight entity can provide a self-regulating tribunal of sorts, to codify performance standards and gather all the companies that adhere to those standards under a single roof. Membership in the group is contingent on continued adherence.

The very existence of such self-regulation provides a tangible measurement tool for clients. First, does a company have a formal code of conduct? Second, does the company belong to an organization that does?

To a great extent, the IPOA already fulfills this function and its role can be expected to grow as thousands of contractors fan out through Iraq. All members must endorse the association's

Code of Conduct, a wide-ranging set of principles that include transparency and accountability, guidelines for rules for use of force, employee training and fitness standards, rules regarding subcontractors, and more. The IPOA also has a process for lodging complaints against member companies.

Not all the world is receptive to these messages of good faith. But when the passions still aroused by the Iraq War begin to fade, an industry committed to effective accountability at this crucial juncture in its own history will reap significant benefits now and in the future.

Disclosure: We do not have a business relationship with the IPOA - The Association of the Stability Operations Industry, which is the group cited and quoted in this piece.