NCPA - National Center for Policy Analysis


August 17, 2004

While many military police have been shipped to Iraq, the Pentagon has contracted with two private security companies in guarding some 40 military installations in the country, including Fort Bragg and West Point. The companies, Alutiiq and Chenega, are Alaskan native tribal groups that work in partnership with Wackenhut Services and Vance International, respectively.

Some critics, however, question the way the contracts were awarded, the size of the contracts and the quality of the security services:

  • Some have cited a conflict of interest with Vance International, which was started by the former son-in-law of President Gerald Ford, and has provided security for the Bush-Cheney campaign.
  • The contracts are worth $194 million, and if all options are exercised, could be worth as much as $500 million; minority set-aside contracts typically have a ceiling of $5 million.
  • Wackenhut is foreign-owned, which prohibits their employees from working in security-sensitive positions; moreover, the federal government has cited the company repeatedly for security lapses at other institutions.

Federal law requires that 51 percent of the work must be done by the minority-owned companies, but profit-sharing may differ. When the Alaskan tribal companies were floundering in the 1980s, Senator Ted Stevens of Alaska pushed through legislation allowing Alaskan native corporations special benefits that other minority companies do not receive, including lifting the $5 million ceiling on set-aside contracts and abolishing the requirement that Alaskan natives do the work.

In any case, Alutiiq is expected to receive 50 percent of the profit from the contracts. Chenega has said it receives about $233 million per year in various federal contracts.

Source: Leslie Wayne, "Security for the Homeland, Made in Alaska," New York Times, August 12, 2004.


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