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Goodbye DoD, Hello DoS

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The past decade has been a ripe contracting environment in support of Department of Defense (“DoD”) activities in Iraq and Afghanistan.  As of early 2011, the DoD had an estimated 150,000+ contractors in Iraq and Afghanistan.  Spending estimates by the DoD on contractors in Afghanistan from 2005 – 2010 approach $40 billion.

However, as the U.S. draws down its conventional forces, contractors are faced with the challenge to redeploy talent and backfill revenue.  Arrives the Department of State (“DoS”) nation building activities, and the robust contracting opportunities that come with it.  Similar core capabilities needed to be successful in supporting the DoD ramp-up and OCO, appear portable to the DoS activities, namely the ability to recruit, prepare, deploy, maneuver (logistics of people and property), and execute professional services globally.  Clearances also remain a key enabler throughout the professional services stack, ranging from Intel analytics to civil engineering in secure access areas.

While unclear how long the DoS will remain active in Iraq and Afghanistan, general consensus seems to be at least five years.  The 2012 federal budget request included nearly $50 billion for DoS and U.S. Agency for International Development (“USAID”).  An additional nearly $10 billion was requested for OCO in countries such as Iraq and Afghanistan, where counterinsurgency efforts and initiatives such as police training are increasingly managed by DoS. 

A prime example of the DoS contracting opportunity was the Bureau of International Narcotics and Law Enforcement Affairs’ (“INL”) recent award of the five-year, $10 billion Criminal Justice Support Programs indefinite delivery/indefinite quantity (“IDIQ”) contract.  This contract scope is anticipated to cover program management, criminal justice, and life and mission support to countries emerging from conflict or otherwise facing instability challenges. 

Other recent example of DoS awards include the $1 billion DoS Medical Support Service Iraq IDIQ contract to provide primary healthcare and resuscitative surgical care to the approximately 14,000 to 17,000 U.S. government personnel remaining in Iraq.  Notably, of Washington Technology’s “20 largest Civilian Contract Opportunities for 2011”, six were for USAID. 

In summary, while the conventional wisdom may suggest that the OCONUS contracting opportunity is past, the contrarian view of investment in these DoS national building opportunities, both organic and via acquisition, may be the investments with the greatest returns over the next few years.

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