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Government Contract Performance Challenges
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THE LEXWERX LAW FIRM, LLC
The Lexwerx Law Firm, LLC (“Lexwerx”) provides government contracting, finance, and asset protection law advice and services to businesses in support of the national defense.
Admitted to the Federal, New York and New Jersey bars in 1989, founder, attorney, Certified Public Accountant, Certified Fraud Examiner and decorated war veteran, Paul Ferreira has served from the battlefield to the boardroom. He has practiced locally since 2016.
A first generation American, Paul was born and raised in the tight-knit, working-class predominantly Portuguese neighborhood known as the “Ironbound” in Newark, New Jersey. “Growing up in that community, you were taught family, integrity, and work ethic mattered most.”
Paul earned a Bachelor of Science in accounting from Fairleigh Dickinson University because that was the family business. “It was my plan “B” if I did not make it into law school.” After earning his Juris Doctorate from the Benjamin N. Cardozo School of Law in New York City, Paul began his career as a Prosecutor.
“I thought I’d never practice accounting again except to balance my check book. I was wrong” Assigned financially motivated white-collar crime matters because of my “accounting background”, I discovered I loved the “got you” aspect of those cases. I continued to conduct complex financial fraud investigations for foreign and domestic insurance companies after transitioning to the private sector. Eventually, I also became a Certified Public Accountant to better understand the underlying financial transactions I investigated.
On September 10, 2001, Paul was an accomplished attorney/CPA practicing in the New York Metropolitan area. He was also an officer in the United States Army Reserves. “The next day, I watched the towers come down from the New Jersey side of the Hudson River and realized my professional life was about to go on a serendipitous detour.”
Between 2003 and 2017, Paul spent over eight nonconsecutive years on active duty including two tours in Iraq, a mission to Africa, a tour in Afghanistan, and a two-year stint working for the Joint Chiefs of Staff. Some of my most purposed filled professional moments happened during my service. I met the most amazing Americans and developed lifelong friendships. Together, we accomplished things I never imagined. I cherish those memories and would not change a thing.
Paul came to Tampa in 2015 in uniform and immediately fell in love with the city, especially its edgy entrepreneurial vibe, and decided to stay when he ended his tour at MacDill Air Force Base. After completing the Veteran Florida’s Entrepreneurship Program and being admitted to the Florida bar in 2016, Paul served as Chief Legal and Chief Financial Officer for a not for profit organization helping solve challenging Warfighter problems.
I became captivated by how government, academia, and the private sector can come together relatively quickly under non-traditional authorities and regulations to provide our Nation with the tools it needs to fight today’s wars and tomorrow’s wars.
Lexwerx was created to help guide the businesses and organizations that support our National Defense through the complex web of federal regulations to get our service members what they need.
Outside of his legal practice, Paul is still serving as a Colonel in the United States Army Reserves and serves on the Board of Action Zone a not for profit helping Veteran-owned businesses transform the strength and growth of the community.
This document was prepared by information provided by the Congressional Research Service (CRS), which serves as nonpartisan shared staff to congressional committees and Members of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. This article is not legal advice. The complete report can be found at https://fas.org/sgp/crs/natsec/IF10600.pdf
Following the Cold War conclusion, the U.S. military—in line with a government-wide trend—embraced privatization, increasing reliance on contractors instead of using military servicemembers or government civilians to perform specific tasks.
A defense contractor, as defined by the Code of Federal Regulations, is “any individual, firm, corporation, partnership, association, or other legal non-Federal entity that enters into a contract directly with the DOD to furnish services, supplies, or construction” (see 32 C.F.R. 158.3, “Definitions”).
In Fiscal Year (FY) 2018, DOD obligated more money on federal contracts ($360 billion in current dollars) than all other government agencies combined. In FY2018, 52% of total DOD contract obligations were for services, 40% for goods, and 8% for research and development (R&D). While DOD contracts with many companies for all kinds of goods and services, its contract activities are dominated by five companies. In FY2018, these companies together received 30% of all of DOD’s contract obligations for the year. These five companies are often referred to as the primes, signifying their frequent role as prime contractors who subcontract to other companies.
Individual DOD contractors fulfill a wide variety of organizational roles and functions from logistics and transportation to intelligence analysis and private security
Analysts have highlighted numerous benefits of using contractors. Some of these benefits include freeing up uniformed personnel to focus on military-specific activities providing supplemental expertise in specialized fields, such as linguistics or weapon systems maintenance, and providing a surge capability to deliver critical support capabilities tailored to specific military needs quickly. Because a contractor can be hired when a particular need arises and released when his or her services are no longer needed, some have argued that meeting immediate personnel needs through surges in the use of contractors by the federal government is more cost-effective on a long-term basis. Just as the effective use of contractors can augment military capabilities, the ineffective use of contractors can prevent troops from receiving what they need, when they need it, and can lead to wasteful spending. Contractors can also compromise the U.S. military’s credibility and effectiveness and undermine operations, as many analysts believe occurred during operations in Iraq and Afghanistan.
How Many Contractors Does DOD Employ?
Under 10 U.S.C. §2330a, DOD is required to collect and report data for each purchase of services in excess of $3 million within four service acquisition portfolio groups: logistics management services, equipment related services, knowledge-based services, and electronics and communications services. In the report, DOD must also provide the number of contractor employees associated with these services. The report does not include the total number of individual contractors. Instead, it estimates full-time contractor equivalents (FTEs) for direct labor, a measure referring to the estimated numbers of person-hours contracted. According to the FY2017 ICS Defense Primer: Department of Defense Contractors https://crsreports.congress.gov report, DOD contracted about 464,500 FTEs within the four defined service portfolios during that year. Of that number, the Department of the Army contracted nearly 37%, the Department of the Air Force about 28%, and the Department of the Navy about 22%.
What Role Do Contractors Play In Overseas DOD Operations?
Overseas contingency operations in recent decades have highlighted the role that contractors play in supporting the U.S. military, both in terms of the number of contractor personnel and the type of work being performed by these individuals. Since 2008, U.S. Central Command (CENTCOM) has published quarterly contractor census reports, which provide aggregated data – including elements such as mission category and nationality – on contractors employed through DOD-funded contracts that are physically located within the CENTCOM area of responsibility.
During the first quarter of FY2020, CENTCOM reported ~50,000 contractor personnel working for DOD within its responsibility, including Afghanistan, Syria, and Iraq. A reported 26,545 contractor personnel were located in Afghanistan, while 6,586 contractor personnel were located in Iraq and Syria.
In Afghanistan, as of the first quarter of FY2020, about 40% of DOD’s 26,545 reported individual contractors were U.S. citizens. An ~39% were third-country nationals, and ~22% were local/host-country nationals. In Iraq and Syria, about 44% of the reported 6,586 DOD contractors were U.S. citizens, with 38% third-country nationals and 18% local/host-country nationals.
In Iraq and Afghanistan, armed and unarmed private security contractors have been employed to provide services such as protecting fixed locations, guarding traveling convoys, providing security escorts, and training police and military personnel. The number of private security contractor employees working for DOD in Iraq and Afghanistan has fluctuated significantly over time, depending on several factors. As of the first quarter of FY2020, DOD reported 4,924 private security contractors in Afghanistan, with 3,017 categorized as armed private security contractors. DOD reported 244 private security contractor personnel in Iraq and Syria during the same period, none of whom were identified as armed private security contractors.
10 U.S.C. Part IV: Service, Supply, and Procurement.
CRS Report R43074, Department of Defense’s Use of Contractors to Support Military Operations: Background, Analysis, and Issues for Congress.
CRS Report R44116, Department of Defense Contractor and Troop Levels in Afghanistan and Iraq: 2007-2018.
Other Resources Defense Pricing and Contracting, Inventory of Services Contracts:
Office of the Assistant Secretary of Defense for Sustainment,