All in a day's work for Blackwater

Four of the five government contractors in line for portions of a $15 billion Pentagon contract to counter "narco-terrorism" have operations in Arizona.

The Department of Defense program aims to develop new technologies and applications to combat international illegal drug trafficking and its ties to terrorism and anti-American groups

Lockheed Martin, ARINC Inc., Raytheon Co., Northrop Grumman Corp. and Blackwater USA are the private contractors lined up for the work, according to the Defense Department's contract announcement.

Blackwater USA is the only company of the five that does not have operations in Arizona.

ARINC is based in Annapolis, Md. and is part of the Carlyle Group private equity firm. ARINC has operations in Scottsdale, Phoenix, Tucson and the U.S. Army base at Fort Huachuca.

Los Angeles-based Northrop has various operations in Yuma, Tempe, Sierra Vista, Fort Huachuca and Phoenix.

Raytheon Co. has its missile division and 10,000 workers in Tucson. Lockheed Martin also has operations at Fort Huachuca as well as Prescott Valley.

But apparently the megamillion dollar companies that Prince runs are small businesses...
Think Progress:

An audit by the Inspector General of the Small Business Administration found that private security firm Blackwater “obtained dozens of small business contracts worth more than $110 million even though” the company “may have exceeded size limits for a small business”:

The Inspector General of the Small Business Administration said Blackwater, based in Moyock, N.C., obtained 39 contracts set aside for small businesses from 2005 through 2007. Of these, 32 contracts worth $2.1 million were set aside for companies with annual revenues of $6.5 million or less.

Blackwater’s revenues have exceeded $200 million each of those years, according to federal contracting data.

The report said that Blackwater “may have improperly classified Blackwater guards in Iraq and Afghanistan as independent contractors rather than employees.” It’s a tactic other private contractors have used to avoid paying taxes.

Blackwater might drop the protection of diplomats but consider warring with drug cartels

Either way, it's a megabillion dollar industry that's NOT going away:

WASHINGTON — Troubled military contractor Blackwater USA is likely to be eased out of its role of guarding U.S. diplomats in Iraq in the aftermath of a shooting last month that left 17 Iraqi civilians dead, U.S. officials said Friday.

While no decisions have been finalized, Blackwater's role in Baghdad is likely to be taken over by one of two other contractors who provide security for the State Department in Iraq, the officials said. They are Triple Canopy and DynCorp International.

"There will be some sort of disengagement process, but it won't be that they're shown the door," said a State Department official. "As one builds down, another builds up."

He and other U.S. officials spoke on condition of anonymity because Secretary of State Condoleezza Rice hadn't received an oral report from a four-person team led by Patrick Kennedy, the department's director of management policy. The team reviewed State Department security operations in Iraq.

[snip]

In a related development Friday, Rep. Henry Waxman, D-Calif., who's been investigating State Department operations in Iraq, said in a letter that Blackwater attempted to transport two Iraqi military aircraft out of Iraq without official permission.

In the letter to Blackwater founder Erik Prince, Waxman said that an unnamed military official told his House Oversight Committee that "the Iraqi ministry of defense attempted to reclaim the aircraft, but that Blackwater would not comply."

Waxman also alleged that Prince had misled the committee in testimony earlier this month. Prince had said that the company's early contracts with the Coalition Provisional Authority in Iraq and the State Department were competitively bid, when in fact they were sole-source contracts.

Waxman demanded that Prince turn over a wealth of company information to the committee, including contract documents, Blackwater's profit data and information about Prince's compensation.

In the letter, and in a separate one to Rice, he asked for details about payments that the company has given to the families of Iraqis Blackwater killed.

Will this hurt Blackwater's business? No:

The U.S. Defense Department has invited five contractors to bid on elements of a new multibillion-dollar effort to combat the global flow of illegal drugs allegedly used to finance terrorism.

Awarded by the Pentagon’s Counter-Narcoterrorism Technology Program Office (CNTPO), Dahlgren, Va., the contract vehicle has a potential value of $15 billion over five years. One participant is ARINC, a Maryland-based provider of airline communications systems.

“This gives us the opportunity to bid on this work,” said Linda Hartwig, an ARINC spokeswoman. “We don’t have a lot of details yet, but we do know that this is an expansion of what [the United States] is already doing to fight drug trafficking, and that 80 percent of the work will be overseas.”

Hartwig said the other participating vendors are defense giants Lockheed Martin, Northrop Grumman and Raytheon, and security contractor Blackwater USA. Blackwater confirmed its participation, but the other three vendors did not respond to inquiries.

The vendors will compete for a series of task orders covering a wide range of products and services. These could include anti-drug technologies and equipment, special vehicles and aircraft, communications, security training, pilot training, geographic information systems and in-field support.

According to ARINC, training elements could include instruction for border police, the construction of shooting ranges and the integration of aircraft-mounted drug-detection systems.

ARINC has assisted U.S. drug interdiction efforts since 2002, when it joined the State Department’s Air Bridge Denial program.

Within the Pentagon, the CNTPO is the lead agency for developing new technologies to “disrupt, deter and deny” narcoterrorism. Much of this work relates to prototyping new communications and sensor systems.