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More Troops In Afghanistan Means More Contracting and Contractors

The United States Defense Department and its Allies serving in Iraq and Afghanistan as well as in older deployments such as Bosnia and other parts of former Yugoslavia are heavily dependent on contractors for logistics support. This has come about due to the shrinking in the size of the services which limits the amount of soldiers available to store, move and distribute supplies as well as provide housekeeping services.

Several large companies often with a history of supporting the oil industry such as KBR (KBR), Agility DGS and Halliburton (HAL) have been able to gain a great deal of work and profit because of this trend. There efforts while at times controversial have been key to providing the necessary transport and logistic support to the U.S. and its Allies deployed overseas.

Agility DGS due to its location in Kuwait has been able to secure contracts that support the U.S. troops in Iraq from their bases in Kuwait. It is currently being charged by the U.S. with overcharging on a contract to supply food and a court date is pending. Because of this case it cannot get any new contracts but it is working to fulfill its current ones.

KBR has also been accused and investigated for mismanaging the large omnibus contracts (LOGCAP) issued by the U.S. in Iraq. The most recent award specifically excluded them. These though are difficult contracts to issue and manage as they provide a wide variety of services and are very large in value.

Because of these kind of situations the Congress and Defense Department has been working hard to establish more levels of scrutiny and audit. The ideal situation of course would be to eliminate the contractor and use military personnel. This though would require a massive expansion of the military to a size not seen since Vietnam. That approach is not feasible or cost effective so there will continue to be a strong reliance on contractors to provide necessary services.

In Afghanistan due to the shortage of helicopters and tactical transports as well as the hazards of moving supplies by the poor roads there are even contracts to provide heavy lift helicopters. These are primarily Russian aircraft operated by a variety of contractors. The U.S., U.K. and Canada who are most heavily involved in Afghanistan are all increasing their investment in CH-47 Chinook helicopters for just those requirements. At the same time it may be easier and cheaper to continue to use the contract lift.

What this all means is that more troops are deployed to Afghanistan in alignment with the U.S. plan to increase their forces there will be a requirement for more logistical support. This will have to come from contractors meaning their footprint will have to increase at a time when there is a movement in the U.S. against using them. There currently really is no choice but to do this as the organic support does not exist in the current U.S. force structure.

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