Defense says extensive outsourcing on Iraq linguist contract is jacking up costs

Subcontracting by DynCorp's Global Linguist Solutions to provide language specialists in Iraq could cost the U.S. government millions of dollars, witnesses told the Commission on Wartime Contracting on Wednesday.

According to Defense Contract Audit Agency Director April Stephenson, GLS has awarded $2.9 billion -- or 64 percent -- of a $4.64 billion contract to 18 subcontractors. Twelve of those subcontractors perform payroll functions for GLS linguists exclusively and have received almost all of that money.

"These 12 subcontractors do not hire, manage or interact with the linguists other than to pay the amount stipulated by GLS," Stephenson said.

So far, GLS has billed the government for $816 million of the contract. Of the money billed, $81.8 million represents add-on costs such as fringe, overhead and general administrative profits attributable to the subcontractors. If that trend continues, DCAA expects that as much as 12 percent -- or $556 million -- of the total contract could go toward add-on expenses for subcontractors performing payroll functions.

Given the cost-plus award fee structure of the contract, members of the commission questioned the need for this extensive subcontracting structure.

"There is certainly nothing wrong with a prime contractor calling in subcontractor assistance for a surge in work or for special skills, capabilities or support," said commission co-chairman Michael Thibault. "In the case of GLS, there is the question whether the contract's extensive outsourcing of administrative work represents business necessity or some other consideration."

Stephenson said she has never before seen this degree of prime-subcontractor integration to perform primarily payroll functions.

"If you look at the numbers and the functions that are being performed by the subcontractors, one does have to ask what is the value … the numbers do jump out and you have to ask, 'Is that an appropriate amount to pay for that function?' " Stephenson said.

While commissioners criticized GLS for what commissioner Charles Tiefer, a professor at the University of Baltimore's law school, called the "ridiculously set up subcontracting structure," government representatives said their main concern is keeping costs down.

"I don't care if they subcontract all the work out, but they're going to stick to the cost deemed fair and reasonable at the time of the award, or something similar to that," said John Isgrigg, deputy director of contracting for the Army Intelligence and Security Command, which manages the linguist contract. "That's the only way I have to manage this monster."

GLS President and General Manager John Houck said the way the contract has been set up minimizes the risk of conflict between subcontractors and linguists, which could endanger U.S. troops.

"If a subcontractor was to not pay their linguists, if they were to not manage the linguists properly and a linguist decided to leave the contract, that would have a direct impact on the mission," Houck said. "This is why we've adopted this unique, somewhat unorthodox, management approach, to mitigate the risks to the warfighter on the ground."

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.