Blackwater Worldwide: Small Business?

Blackwater Worldwide is the subject of yet another report, this time regarding the security company's claims of small business status.

Like companies across the land, Blackwater sought to be designated as a small business to win contracts more easily from the State Department or other agencies. But is it also possible that government procurement officials wanted to apply the designation to Blackwater to make it easier to award the contracts?

Don't laugh. It happens all the time.

You contracting folks -- in and out of the government -- know well that the designation of a company can change everything when it comes to awards. Apply the correct code from the North American Industry Classification System, and a drawn out procurement can suddenly become a snap. (Note to NAICS gurus: feel free to send cards and letters; I want to know more.)

Anyway, the report by the Small Business Administration's Office of Inspector General raises some intriguing questions about how the State Department awarded small business contracts to Blackwater and affiliated companies.

The IG report stops shy of accusing Blackwater of wrongdoing, in part because auditors did not have enough information. But it concludes that the SBA did not do near enough to try to find answers to a variety of questions.

In Government Inc.'s experience, these kinds of unanswered questions appear to hover over many "small business" contracts that are routinely awarded to companies that, to the rest of us, look pretty big indeed.

By Robert O'Harrow |  August 8, 2008; 10:32 AM ET
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It's even more interesting.

Yes, Blackwater has gotten lots of lucrative contracts, up to a billion dollars worth, with the phony small business designation. There were a lot more advantages to the faulty SBA interpretation of Blackwater's employees as "contractors". The designation as well as the liberal use of offshore front companies allows Blackwater to escape paying tens of millions in taxes.

Perhaps must important of all Blackwater has been able to convince the Justice Department that because it's employees are "contractors", again relying solely on the SBA designation, Blackwater has been able to, so far, escape any corporate responsibility for it's actions in Iraq and elsewhere.

Posted by: marc | August 9, 2008 4:21 AM

blackwater is a great company

Posted by: missbelle | August 9, 2008 10:21 AM

I had an interesting conversation with a PR Officer who served in Iraq, and now in Kabul, Afghanistan. She summed Blackwater up well. She learned their true nature the afternoon she had to take care of a 9 year old girl whose parents' vehicle died in front of a Blackwater vehicle. It was legal for them to kill said parents, but atrocious none the less.

I will not put any accusation of wrong beyond this group of mercenaries.

Posted by: John | August 9, 2008 2:22 PM

Blackwater is the result of efforts by Donald Rumsfeld to outsource to the private sector, America's war-waging cap[-abilities. Its emphasis is on covert actions, sophisticated weapons systems and intelligence gathering resources.As Secretary of Defense, Donald Rumsfeld nad it classified as an officual part of the US military forces.It presently has more than 2300 private soldiers deployed in nine countries, including the US; with a data base of 221,000 former Special Forces members,soldiers and retired law enforcement personnel, ready for immediate activation. It has a fleet of more than twenty aircraft,including helicopter gunships and a surveillanceblimp division. Its heasdquarters are located on 7,000 acresin North Carolina, and it constitutes the world's largest private army. It trains tens of thousands of federal and local law enforcement agents a year, as well as troops from foreign countries.. It has its own Intelligence unit, now headed by Cofer Black, the former head of the CIA's Counterterrorist Center (CTC); as well former Swenior military and Intelligerence experts. It has some $50,000 million in government contracts, not inclufding "black budget" operations for US Inetelligence agencies aqnd private corporations and individuals. It is in all respects a privsate army , controlled by a single person. See: Scahill," BlackWater, The Rise of the World's Most Powerful Merc- enary Army ".

Posted by: tao99 | August 12, 2008 2:01 PM

Goons who are attracted to outfits like Blackwater are those who, having been trained by the military, feel they are now qualified to train the military. They are misfits who either won't, or can't make the transition back into civilian life. They feel they should be able to continue their military life style in the civilian world as if it is their birthright.
Whatever "spin" Blackwater puts on its mission, it involves guns primarily. If you strip them of their guns they will dry up overnight. Blackwater has no more right to own and use fully automatic military weapons, than any other of our citizens. They are literally getting away with murder in Iraq and the State Department is covering up for them out of embarassment in not thinking these contracts through well enough. They forgot about a little item called accountability.
There is no place for these bilge rats anywhere in the United States and they should be outlawed immediately.
If their life is so tied up with guns and shooting, let them join or remain in the military, otherwise join civilian life like the rest of the former military personnel. You get one or the other; you don't get to design your own category and call it "security specialists" with military weaponry. What a load of crap!

Posted by: Doubtom | August 12, 2008 3:46 PM

---and missbelle, you are less than a great mind!

Posted by: Doubtom | August 12, 2008 3:48 PM

since the bushies are hard pressed to find troops maybe they should activate all the ex-mil. blackwater troops and pay them army scale. and make them pledge alligence to the constitution and not the GOP. what to do with blackwater et al.(which seem more and more like the SS or SA, is a pressing problem. bush is not C-I-C of this large army that is not sworn to uphold the constitution and is for hire and an apparent arm of the right wing.

Posted by: dave fahey | August 13, 2008 9:04 AM

The really frightening thing about Blackwater is that they are a private army now operating within this country at the behest of right-wing zealots who see an enemy around every corner. They were heavy handed in the fiasco in New Orleans caused by Hurricane Katrina sent in to protect the businesses but not help the poor people that were suffering on the ground. If you are in the military you swear an oath to uphold the Constitution many of the people in Blackwater and the current administration have forgotten that important document.

Posted by: Stoics | August 13, 2008 1:00 PM

From what I am hearing about Blackwater, it sounds like a bad idea for a democracy and will cause the world to think we are thugs.

Posted by: Sandy V | August 13, 2008 1:06 PM

Hey doubtom,,,,,there are warriors and there are the protected class....

Posted by: vikki | August 18, 2008 9:10 PM

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