Feds: Blackwater Saves Taxpayers Money

March 12, 2010 — -- The government's use of private security contractors in Iraq and Afghanistan has been blasted as costly to the image of the U.S., and to the country's bottom line, because a company like Blackwater can charge as much as $1222 a day for a hired gun.

But a new government report says they may actually have saved U.S. taxpayers money.The State Department saves roughly $900 million a year using private firms to protect American diplomats in Iraq rather than relying on U.S. government employees, according to a recently published review by the non partisan Government Accounting Office.

The review found a number of reasons for the difference in price.

The state department did not have to pay overtime or provide benefits or vacation time to the contractors. They were not saddled with extensive travel and housing costs. And they did not have to outfit them with weapons and gear.

In several of the cases reviewed by the government accountants, the private contractors were employing foreign nationals, a key factor in holding down costs. Of the nearly 2000 contractors providing security at the U.S. embassy in Baghdad, for instance, 89 percent are foreign nationals. Eight percent are US citizens. The report noted that the State Department would have been "reluctant to hire third country nationals to provide security in Iraq because the department does not want to be perceived as hiring mercenaries."

Still, the State Department saved $785 million in 2008 alone by hiring contractors to provide for embassy security, according to the report. If the State Department had hired and trained its own guards, the cost would have exceeded $858 million. Instead, private security cost roughly $78 million.

The report analyzed five different contracts the government has put out in Iraq to protect State Department employees and facilities. Of the five, four showed savings with contractors. The only outlier dealt with bodyguards for State Department employees in Baghdad. Hiring contractors for that cost $140 million more than had they used their own people.