Posts Tagged Report

Publications: Freedonia Report On Global Demand For Security Services

This publication is very expensive, but you can buy bits and pieces of it at your own choosing. I am not getting any kickbacks or anything from this group, and I am only putting this out there as information for the readership to check out.

To go along with my post on crowdfunding, the global demand for security is increasing, and the factors driving the demand are evident in this report.

Factors such as rapid gains in economic activity, rising personal incomes, foreign investment activity, and concern that public safety forces are overburdened, corrupt, or unable to provide sufficient protection will boost gains. Furthermore, increasing regulation and a trend toward greater professionalism in many of these local security service markets will improve public trust in security service businesses, thereby driving gains.

I have seen these trends and talked about them here on the blog. China is blowing up when it comes to security services. Africa will definitely need services, and thanks to the cartels in Mexico, security will continue to be in high demand.  The US continues to be the largest consumer of security services in the world, which is interesting. Also, the progression towards ISO certification for maritime PMSC’s–which will probably carry over to land based PMSC’s in the future, is a sign of this ‘professionalizing’ of the industry. Check it out. -Matt


Global demand for security services is driven by rising urbanization, the real and perceived risks of crime and terrorism, and a belief that public safety measures are insufficient.
World demand to 7.4% annually through 2016
Global demand for private contract security services will increase 7.4 percent annually to $244 billion in 2016. In general, demand for security services is driven by rising urbanization, the real and perceived risks of crime and terrorism, belief that public safety measures are insufficient, and growth of a middle class with assets to protect and the means to pay for supplementary security measures. The security service market will also be supported by an improved economic environment and building construction activity.
Developing areas to see strongest gains in demand

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Publications: IG Review Of Best Value Contracting For DoS Local Guard Programs

After reading the latest report on the Benghazi attack called Flashing Red: A Special Report On The Terrorist Attack At Benghazi, I came across another really cool report they referenced in regards to Best Value contracting. I thought it was pretty interesting and worthy of some attention here.

Here is the quote about it from the Benghazi report.

Though a few members of the February 17 Brigade and the Libya Shield militia assisted the Americans on the night of the attack, the security that these militias and the local police provided to U.S. personnel was woefully inadequate to the dangerous security environment in Benghazi.
The unarmed local contract guards also provided no meaningful resistance to the attackers. The Department of State’s Inspector General had previously found that concerns about local security guards were not limited to Libya. A February 2012 Department of State Inspector General (IG) report found that more than two-thirds of 86 diplomatic posts around the world surveyed reported problems with their local guard contractors. Of those posts that reported problems with their contractors, 37 percent said there was an insufficient number of local guards and 40 percent said there was insufficient training. The IG found that overseas diplomatic posts, particularly those in high-threat situations beyond Iraq, Afghanistan, and Pakistan urgently needed best-value contracting, which takes into account the past performance of contractors.
Recommendation: When it becomes clear that a host nation cannot adequately perform its functions under the Vienna Convention, the Department of State must provide additional security measures of its own, urgently attempt to upgrade the host nation security forces, or decide to close a U.S. Diplomatic facility and remove U.S. personnel until appropriate steps can be taken to provide adequate security. American personnel who serve us abroad must often work in high risk environments, but when they do, we must provide them with adequate security. That clearly was not the case in Benghazi on September 11, 2012.
Recommendation: The Department must conduct a review of its local guard programs and particularly the use of local guard contractors at high-risk posts who do not meet appropriate standards necessary for the protection of our personnel or facilities.

Did you read that highlight? Urgently needed Best Value contracting….. and this is the IG saying this. lol Myself and others have been promoting the concept for awhile now and at least the IG get’s it. It sounds like DoS is starting to see the light as well.

The one interesting point that was discussed is the 10 percent price preference rule and how local guard force companies were just partnering with US companies in order to qualify. Here is a quote:

U.S. companies or qualified joint ventures “shall be evaluated by reducing the bid by 10 percent.” Based on an examination of contract competition documents for 35 local guard contracts, OIG found that the 10 percent price preference given to qualifying U.S. companies had no effect on the outcome of the awards. OIG further determined that it is easy for foreign companies wishing to take advantage of the price preference to become eligible by simply forming a joint venture with a U.S. company, thus largely negating the purpose of the preference.

So private industry found a loophole and exploited it to win contracts. With that said, I agree with the IG’s take on the 10 percent rule, and that it needs to be changed in order for it to be effective. Here is their suggestion.

Review the need for a 10 percent price preference given to U.S. companies bidding on local guard contracts because the preference has not been demonstrated to be a factor in recent local guard competitions.

Check it out below and it will be located in my Scribd or here on the blog for future reference. -Matt


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Maritime Security: The Security Costs Of Piracy For 2011?

Below I have posted this report that One Earth Future Foundation put together, and have also posted an article that describes a lack of reporting from private security companies that stopped attacks, due to liability reasons. My simple question here is how can we truly tally the cost effectiveness of armed security on boats, if we do not have accurate data inputs?

In the report, I went to page 16 to catch anything that perked me up. One figure talked about the cost of security equipment investments made by all the ships mentioned. Razor wire was the most preferred out of all of the security equipment listed. They averaged the value of all of the razor wire purchased last year at about $434,552,160! Wow, razor wire is quite the business. Acoustic devices like the LRAD came in at second costliest at $133,717,500.

Here are two quotes that I combined for further analysis of the statistics.

Average ransoms increased 25% from approximately $4 million in 2010 to $5 million in 2011…… In 2011, Somali pirates attacked 237 ships and successfully hijacked 28.

So that is 1.158 Billion dollars that shipping companies could have lost potentially if those 237 ships had actually been taken. Not to mention the costs of ransoms, medical care, transport, rescue or lawsuits for every hostage taken, and the rising costs of insurance premiums because of all of those potential hijackings. In other words, these statistics are misleading and they do not show the cost if security measures were not taken.

The other part of the report was the percentages of armed security on boats. Here is the quote.

Varying sources estimate that the additional costs of armed guards are anywhere between $30,000 and $100,000 per transit through the HRA. According to the Independent Maritime Security Association, the use of a private armed security team generally costs around $50,000 per transit. We have estimated that approximately 25% of vessels transiting the HRA employ armed guards. It is important to note that this figure of 25% is an estimation of the entire year of 2011. From discussions with leading shipping industry representatives, we understand that the proportion of vessels employing armed guards increased rapidly throughout 2011, and by the end of the year this figure was closer to 50% of vessels.
If there are approximately 42,450 transits through the HRA each year, then around 10,612 transits employ armed security. At an average cost of $50,000 per transit, the total costs of private armed security are estimated to be in the region of $530.6 million per year.

So here is the question. How can anyone say that if only 25% of the ships last year were covered by armed security, that armed security is not successful? Get back to me when 100 percent of the ships have armed security, and then we can talk about effectiveness.

Also, how many armed guards on boats were the primary reason why any of those 237 ships attacked were not taken, and how many of these hijackings were prevented because of navies? Because if  we want to get technical, only 25% of the boats had armed security, yet the navies of the world with all of their might were involved as well, then who here is truly effective at preventing attacks? Whose cost is more justified?

Which brings us to the other article in my little collection below about the lack of good reportage by private security companies on the attacks they prevent. In order to prove effectiveness, then accurate figures on attacks prevented by private armed security on boats is crucial. Who knows how many actual attacks were prevented by armed security over the last couple of years? Are all the companies from all over the world reporting their actions, or are they not reporting because of fear of liability issues?

“Security teams are shaping this on-board decision-making for reasons of liability, because of the action they may have taken to defend ships against attack,” said Church, who works at a counter-piracy base in Northwood, England……
As many as half of all ships sailing through the region now use armed guards, the foundation said at the forum. That’s up from 25 per cent earlier this year, and companies providing security earn $530.6 million annually, it estimated. A total of 42,450 vessels pass through the region annually, it says.
Church cited a “disconnect” between the number of attacks expected last year, based on military intelligence assessments of pirates’ strength, and levels in 2009 and 2010. A “plausible argument” can be made that the increase in armed guards was the cause, he said.
Somali pirate attacks rose to 237 in 2011 from 219 in the previous year, according to figures from the London-based International Maritime Bureau. No legal framework exists to establish how armed guards should interact with pirates and what happens if any attackers are killed or injured, Pottengal Mukundan, the bureau’s director, said at the forum.”

So those are just a few thoughts on security costs and where we are at. I also like to bring this up to bring some balance to the discussion about cost effectiveness. Most of all though, these statistics and estimations add to the overall picture. If only 25 % of the ships transiting through the HRA had armed security in 2011 and we are now just at 50%, then we have a market with room to grow. -Matt


Security Equipment and Guards: A notable trend in 2011 was the rapid escalation in the use of private armed security. The total cost of both security equipment and armed guards in 2011 was between $1.06 and $1.16 billion.

One Earth Future Foundation Page 16
3. The Cost of Security Equipment and Guards
An increasing number of ship owners are seeking to protect their vessels against pirate attack when transiting the HRA with security equipment and/or private armed (or unarmed) security guards.
a) Security Equipment
According to the latest (fourth) version of Best Management Practices for Protection against Somalia Based Piracy (BMP4), a number of security measures should be taken by vessels to prevent and defend against a pirate attack. BMP4 describes these ship protection measures as “the most basic that are likely to be effective,” and ship owners are encouraged to conduct a full risk assessment prior to entering the high risk area. Suggested measures include (but are not limited to): Enhanced watch keeping/lookout/ and vigilance, maneuvering practice, enhanced protection of/and controlling access to the bridge, closed circuit television , upper deck lighting, razor wire, alarms, water spray and foam monitors, citadels/safe muster points.

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Afghanistan: Petraeus Gives His Assessment On Progress To The Senate Armed Services Committee


What I did here is to read through the good General’s report and statements, and bring out some of the quotes of stuff I thought was cool. The first quote came from a question that Petraeus answered in regards to private security contractors in Afghanistan. This quote only reconfirms the idea that contractors will continue to be used in the same way, and until Afghanistan can square away their project. The statement hints to this concept of an ‘Afghan public protection force’ through the Ministry of Interior. We will see how that goes?

The other quotes speak for themselves. The bottom line assessment basically states that the Taliban momentum has been halted in Afghanistan. That is awesome, but it also mentions how fragile this is–which is a common theme with many of Petraeus’ assessments during war time. Always giving a cautionary thumbs up…

I was also intrigued by the Afghan Local Police Initiative, and it seems like this is an area that Petraeus is really enthused about.  It would make sense that this is working, just as long as it was being done correctly.  If villages have the ability to protect themselves, then the Taliban is limited in using their default mechanism of control–and that is fear and intimidation.  We just have to make sure that we are not giving up any moral or mental ground, strategically speaking, when it comes to this battle over the local populations. Thats fine that we arm them, but we still need to be working on keeping them on our side.  Good stuff though.

And along those lines, the Taliban reconciliation efforts sound promising. With ‘turned enemy combatants’, we have the ability to possibly create some pseudo-operators?  I would have to think that out of the 700 or so turned Taliban, that there would be a few that we could use to penetrate into Pakistan and get bigger fish? Progress in Afghanistan is great, but I say use these guys to go after the big prize called Osama Bin Laden and his irhabist scum bag friends.

Under the purchases quote, the thing that I clued in on were the blimps and aerostat towers.  Lots of eyes in the sky, to include the drones, really help in our decision making loops or OODA. (the observe portion) With blimps and tower systems, you don’t have to depend upon fuel or electricity to keep it constantly flying.  You just put it up in the air or raise it, and put eyes on the areas of importance. This observation capability is a night and day operation, and that is a huge advantage on the battlefield.

I also liked the mention of the CERP or Commander’s Emergency Response Program.  This was used to great advantage by commanders in Iraq, and it is great to see that it is useful in Afghanistan.  It is simply using money as a strategic asset to local operations. A commander could pay for a ditch to be dug, or pay some blood money to the parents of a lost child.  They can do all sorts of interesting things with this money to positively impact relations between the locals and that military unit.  The Taliban uses money to impact relations with the locals as well, and this is just one area a commander can compete in and even dominate in, to deny the Taliban any advantage.

The way I see it, is that this is a ‘all politics is local‘ issue, and you could frame this as the foreigner versus the local thug (with emphasis on local). CERP at least allows a commander to be competitive, and help to make him a better idea than the other guy. -Matt

Private Security Contractors

(In regards to a recent agreement that would allow the Afghan government to continue to use private contractors for a specified period.)

“My deputy commander e-mailed me this morning right before this and said there had been an agreement on the ability to continue the use of private security contractors for a specified period, as a bridge to achieving what, I think, President Karzai understandably wants to do – which is to bring these kinds of forces underneath the oversight of the Afghan public protection force, an element of the Ministry of Interior, so that they are not in a sense armed elements that may be working for a former warlord or another,” he said.

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Publications: OIG MERO Kabul Embassy Security Force Performance Evaluation–Sept 2010

OIG MERO Kabul Embassy Security Force Performance Evaluation, Sept 2010

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Industry Talk: AGNA Report News–Sloppy Reporting And Range Violations By The IG In Afghanistan

     A senior level review of the misconduct allegations against AGNA personnel, combined with AGNA’s history of contract compliance de?ciencies, led DS, AQM, and Embassy Kabul to conclude that it was in the best interests of the Government to compete a new contract. In light of recent legislation, the KESF contract has been combined with the Baghdad Embassy Security Force and Worldwide Personal Protective Services II (WPPS II) contracts into one base Worldwide Protective Services (WPS) contract.  The new WPS contract is a multi-award, inde?nite delivery, inde?nite quantity (IDIQ) contract that will be awarded on a best value basis. Individual requirements, such as the KESF, will be awarded as task orders under the base WPS contract. The current KESF contract with AGNA expired on June 30, 2010, but performance has been extended until the end of December 2010 to allow for the completion of the acquisition process for the new WPS contract and KESF task order and to provide for an orderly transition to the next provider. -From the Bureau of DS Comments in Report 

     What I wanted to do here is give the former contractors and managers of Armorgroup North America a chance to voice their opinion of the latest report. My inbox is filled with numerous emails from former employees and managers of AGNA, all wanting to tell their side of story. Partly because Congress, State or the IG really could care less about the little guy on the ground, and partly because the report is sloppy. So call this a rebuttal from the little guy.

     This particular email was from a former manager at AGNA, whose identity I will refer to as ‘former manager’. I would hope that this would have some significance to those that are reading this, and that what he has to say pretty much conflicts with what the IG is reporting. Specifically that the weapons issue pointed out in the report was lacking some key points, and that the IG violated the range rules during their inspection.

     I might also add that there is nothing in the report that discusses how AGNA came to be contracted in the first place. The Commission on Wartime Contracting came out with an excellent and damning report about how Lowest Priced, Technically Acceptable contracting is what created the environment that forced State to contract with the lowest bidder.

     It is also interesting to me that Danielle Brian of POGO still asserts that LPTA is a legitimate contracting mechanism for security contracting in war zones, when there has been several reports presented that have identified the horrific secondary affects of this type of contracting in war-zones.

     Best Value contracting would have given State more choice and flexibility in the matter, and they could have gone with the best company for the job and not with the cheapest or technically acceptable. It would not have been a race to the bottom, but a race to the best value company for the job.

    Furthermore, why is POGO so silent about the TWISS program, another example of the failure of LPTA? (did I mention that companies are now considering Sierra Leone contractors as guards because they are cheaper than Ugandans?) I know POGO reads the blog and I have directed everyone that has complained to me, to go to POGO and voice their concern. I would like to think that POGO would actually listen to what the guys on the ground have to say about such things?

     Or why is the Army using LPTA for FOB security in Afghanistan, when the CWC is so opposed to it? I posted a ton of contracts flying that were all LPTA, and here we are trying to convince Karzai to not ban PSC companies. With LPTA, we are giving him more ammunition by putting our lowest bidders, ‘junior varsity squads’ out there. Pffft.

     The other thing that pisses me off about LPTA, is that the troops see the direct result of this on the FOBs. How would you feel if you were being protected by the lowest bidder? It is a simple question, that pisses off most when they come to the conclusion that they don’t like it. Especially if their base has been attacked, like what has happened frequently in Afghanistan.

     LPTA doesn’t work for picking a doctor to cure your sick mother, and it doesn’t work for picking a company to protect your people in a war zone. LPTA is great for picking a company to rake your leaves though. lol You get what you pay for, and that is the lesson I got out of the reports.

    Thats not to say that State or AGNA doesn’t share any fault here, but Congress must take more blame, and all because they insisted on lowballing the security for Embassy protection in the first place.

    Finally, this post is about the guys on the ground who were contracted to operate in this environment. They are the ones that take on the task of trying to make this mess work. No one signs on to a contract to do bad. They sign on so they can be employed and pay their bills/feed their family at home. They sign on because they care about participating in the war. They are also sacrificing by being away from family, or facing death and injury in war-zones–and all for their country and for the war effort. We should support them, not hate them.

     Most guys whom have done the contracting thing for awhile have also worked for numerous companies. A contractor could have worked for Xe, Custer Battles, Erinys, Aegis, AGNA etc., and that is not abnormal nor does that mean the contractor is a bad guy. They are going where the work is so they can continue to earn a living and serve in the war. I am sure when EODT takes over this contract in Kabul, AGNA guys will be ‘switching t-shirts’ and transition under the management of this new company.

     I want to make sure that Congress, State, AGNA, and now EODT knows that these men need leaders who can manage a ‘properly funded, staffed, and equipped’ contract at all levels. These men are not the bad guys, and they deserve the best management we can give them.

     This work force will move mountains for you, if you actually apply a little Jundism to your management principles as well. Know your stuff, have the courage to do what is right, and take care of your people. Trust, but verify. Lead by example. Lead from the front. Your people will support what they help to create. Obtain feedback gold. Create a learning organization and gain a shared reality. Continuous improvement and customer service and satisfaction. Have fun.  All of this stuff is important, and all of it should be geared towards results and getting the job done. -Matt


From Former Manager at AGNA

     “Sorry I cannot be more forthcoming with dates and witnesses, most have left. A number of the team in Kabul are upset as great progress has been made and this is rarely acknowledged, we just get the old issues regurgitated and inaccurate reporting. No organisation, or individual, is perfect and mistakes will be made, but, this report is poor and has an impact on individuals and corporations. How can organizations be expected to work with the IG if they produce sloppy reports, it is counter productive. Instead of working on ways to improve the contracting process and performance; it erodes it – people do not put things in writing, everyone tries to cover their backs all the time, every decision takes a long time/ or make poor ones, as people try to assess what an inspector or congressman (who has to be re-elected every two years) might say three years from now and with 20/20 hindsight.”

From IG Report In Regards To The Firing Range

      AGNA does not adequately maintain training records. AGNA firearms instructors failed to sufficiently instruct guards to help correct firing errors. Instructors also qualified guards who did not achieve the minimum qualifying score at the firing range.

From Former Manager at AGNA

     “There are other areas that need to be looked at – such as the statement that AGNA fails to conduct weapon training properly – how can they make this a key finding from a visit to one range? The same range the inspector is removed from the firing line by a former ranger chief instructor for moving in front of the firing line. The same inspector who, in front of the project manager, grabbed an M4 from a guard to check the serial number, not checking the weapon status/ clearing it and muzzle sweeping personnel in the process – we would be disciplined for handling a weapon in this way. How can they say AGNA put guards on post who failed the weapons qual, without checking the source documentation? (which they found difficult to navigate but did not ask the training staff to assist them in finding). Have you looked at the equation they used with regard to rifle quals? It makes no sense to me and I believe the two personnel they say failed actually had passed if you looked at the source document, not the spreadsheet where results are collated. They say guards were on post for 8 months without training, yet they interviewed some of these guards, I would imagine that they should have asked them if they had undergone training and when? If they were trained prior to standing post (which they were) then it is an issue of maintenance of records, which is still a problem to be highlighted and resolved, but does not effect the security of the Embassy.”

From IG Report In Regards To Weapons

     AGNA’s current control of U.S. Government-furnished property is generally satisfactory, but AGNA cannot account for 101 U.S. Government-furnished weapons that have been missing since 2007. Additionally, from July 2007 until September 2009, AGNA used U.S. Government-furnished weapons to train guards when contractor-furnished weapons were required by its contract. OIG calculates that AGNA’s loss and misuse of these U.S. Government-furnished weapons cost the government $431,000.


     OIG found that AGNA cannot account for 101 U.S. Government-furnished assault ri?es of a lot of 116 that was to be returned to the U.S. Government in July 2007 under a contract modi?cation. OIG found one missing assault ri?e of this lot under a desk in an AGNA of?ce. The photo on the right in Figure 3 shows the assault ri?e as found under the desk. DS was able to locate an addition 14 weapons that had been transferred to other State Department of?ces and US Government agencies. Neither AGNA nor DS could provide documentation verifying the return or location of the remaining 101 assault ri?es. OIG calculates this assault ri?e lot is worth approximately $50,000.

     According to correspondence between the Department and AGNA management, from July 2007 until September 2009, AGNA did not provide a suf?cient number of contractor-furnished weapons to the KESF guards. Instead, AGNA used U.S. Government-furnished weapons for training, although the contract required contractor-furnished weapons (U.S. Government-furnished weapons are to be used for guard duty). AGNA and the Department negotiated a ?nancial settlement in which AGNA was to reimburse the U.S. Government $381,000 for the use of these weapons. However, OIG reviewed invoices and found that AGNA has not yet reimbursed the Department. DS of? cials con?rmed that AGNA has yet to reimburse the Department.

From Former Manager at AGNA

     “The original contract and mod 1 contained 116 soviet block weapons that were used on the previous contract, before the Govt supplied US weapons. As these weapons were not going to be used on the program DoS moved them to their own storage unit prior to 1 July 2007 (when AGNA took responsibility for the contract). Consequently these weapons were never part of the equipment handover and AGNA did not sign for them on handover. Because of this the contract was modified in mid July 2007 reflecting this. How can AGNA provide handover documentation for items they were never responsible for? It seems as if the IG assumed AGNA was responsible because the contract mod was mid July, but that is a poor assumption, and the IG was informed of the situation by DS.”

     “From what I understand DoS then gave AGNA some of the weapons (7 or so) to use for identification training (they were generally kept on the training/ briefing room in full view), but they were demilitarized (welded bolt, soldered and bent barrel etc). One of these weapons is the one seen in the photograph in the report. Other weapons were sent to the US for use at DS facilites and the rest were disposed of, although I do not know how. Most of the people involved in this are DoS personnel who oversaw the program handover. Those from AGNA have since left the company. However, with all the scrutiny on this program you would think that DoS would have mentioned AGNA ‘losing’ 100+ weapons before now…”

Comments from the Bureau of Diplomatic Security in Report

     A senior level review of the misconduct allegations against AGNA personnel, combined with AGNA’s history of contract compliance de?ciencies, led DS, AQM, and Embassy Kabul to conclude that it was in the best interests of the Government to compete a new contract. In light of recent legislation, the KESF contract has been combined with the Baghdad Embassy Security Force and Worldwide Personal Protective Services II (WPPS II) contracts into one base Worldwide Protective Services (WPS) contract.  The new WPS contract is a multi-award, inde?nite delivery, inde?nite quantity (IDIQ) contract that will be awarded on a best value basis. Individual requirements, such as the KESF, will be awarded as task orders under the base WPS contract. The current KESF contract with AGNA expired on June 30, 2010, but performance has been extended until the end of December 2010 to allow for the completion of the acquisition process for the new WPS contract and KESF task order and to provide for an orderly transition to the next provider.

Link to report here.

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