Central Intelligence Agency - Outsourcing and Privatization

Outsourcing and Privatization

Many of the duties and functions of Intelligence Community activities, not the CIA alone, are being outsourced and privatized. Mike McConnell, former Director of National Intelligence, was about to publicize an investigation report of outsourcing by U.S. intelligence agencies, as required by Congress. However, this report was then classified. Hillhouse speculates that this report includes requirements for the CIA to report:

• different standards for government employees and contractors;
• contractors providing similar services to government workers;
• analysis of costs of contractors vs. employees;
• an assessment of the appropriateness of outsourced activities;
• an estimate of the number of contracts and contractors;
• comparison of compensation for contractors and government employees,
• attrition analysis of government employees;
• descriptions of positions to be converted back to the employee model;
• an evaluation of accountability mechanisms;
• an evaluation of procedures for "conducting oversight of contractors to ensure identification and prosecution of criminal violations, financial waste, fraud, or other abuses committed by contractors or contract personnel"; and
• an "identification of best practices of accountability mechanisms within service contracts."

According to investigative journalist Tim Shorrock:

...what we have today with the intelligence business is something far more systemic: senior officials leaving their national security and counterterrorism jobs for positions where they are basically doing the same jobs they once held at the CIA, the NSA and other agencies — but for double or triple the salary, and for profit. It's a privatization of the highest order, in which our collective memory and experience in intelligence — our crown jewels of spying, so to speak — are owned by corporate America. Yet, there is essentially no government oversight of this private sector at the heart of our intelligence empire. And the lines between public and private have become so blurred as to be nonexistent.

Congress has required an outsourcing report by March 30, 2008.

The Director of National Intelligence has been granted the authority to increase the number of positions (FTEs) on elements in the Intelligence Community by up to 10% should there be a determination that activities performed by a contractor should be done by a US government employee."

Part of the contracting problem comes from Congressional restrictions on the number of employees in the IC. According to Hillhouse, this resulted in 70% of the de facto workforce of the CIA's National Clandestine Service being made up of contractors. "After years of contributing to the increasing reliance upon contractors, Congress is now providing a framework for the conversion of contractors into federal government employees—more or less."

As with most government agencies, building equipment often is contracted. The National Reconnaissance Office (NRO), responsible for the development and operation of airborne and spaceborne sensors, long was a joint operation of the CIA and the United States Department of Defense. NRO had been significantly involved in the design of such sensors, but the NRO, then under DCI authority, contracted more of the design that had been their tradition, and to a contractor without extensive reconnaissance experience, Boeing. The next-generation satellite Future Imagery Architecture project "how does heaven look", which missed objectives after $4 billion in cost overruns, was the result of this contract.

Some of the cost problems associated with intelligence come from one agency, or even a group within an agency, not accepting the compartmented security practices for individual projects, requiring expensive duplication.