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:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


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