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Translating For Dollars

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In my Sep. 14 post I wrote about what I considered to be false accusations against Mission Essential Personnel, which provides translators and interpreters to the U.S. military in Iraq and Afghanistan, as well as other government agencies.

However, that is not to say that everything in that industry is fine. In fact, one would have to assume simply on the basis of the money that has been shoveled into the language translation and interpretation sector since the 9/11 attacks that there has been some waste and fraud. Like so many other aspects of private military and security contracting when you scale up your operations several fold and do not have proper oversight and accountability procedures problems are inevitable.

Now as I am not particularly familiar with this sector I would normally not try to provide further detail. But fortunately for us there is Common Sense Advisory an independent Massachusetts-based market research company. Among its goals it helps innovate industry best practices in translation and interpreting. Last December it produced a report "Language Services and the U.S. Federal Government: A Detailed Look at Uncle Sam's Translation Spending Habits."

The report analyzed 20 years of federal government data, from January 1, 1990 through December 11, 2009. One of its very first points makes it easy to understand why doing proper oversight is easier said than done.

Many large contracts fall under the "wrong" codes. The embedded linguists contract (W911W4-07-D-0001) to provide interpreting services in military settings, capped at US$4.6 billion for a five-year period to end in 2013, does not appear under typical translation and interpreting codes. The US$703 million contract (W911W4-07-D-0004) and the US$66 million contract (W911W4-07-D-0002) awarded for interpreting services in Afghanistan do not appear either. Instead, these contracts are listed under codes for "program management services" and "other management support services."

Federal government agencies spent a total of US$4.5 billion on translation and interpreting services from 1990 through 2009. However the bulk of that is clearly attributable to what happened after 9/11. The massive amount of spending on language services by the U.S. government is a relatively recent phenomenon - 92 percent of this expenditure (US$4.2 billion) took place in the past decade alone, from 2000 to 2009. In fact, 47 percent of this money (US$2.1 billion) was paid out to language service providers in the past two years.

In 2001, the amount spent on language services more than doubled from the previous year, from US$67.6 million to US$160.51 million. Language services contracts continued to grow - in size and number - in the years that followed. Another dramatic increase took place in 2008, when total federal spending on language services doubled yet again, from US$453.69 million in 2007 to US$1.96
billion in 2008.

Who were some of the top spenders? The top twenty included:

Agency Amount spent on language services

Department of the Army 2,587,428,206

Virginia Contracting Agency 385,380,319 *

Drug Enforcement Agency 259,079,703

Department of the Air Force 146,783,605

U.S. Special Operations Command 140,192,216

Department of State 108,142,963

Department of the Navy 38,989,968

Agency for International Development 19,381,630

Federal Prison System 17,919,454

Defense Logistics Agency 14,367,629

* The Virginia Contracting Agency buys language services for the Defense Intelligence Agency.

On average, these 20 organizations spent a cumulative amount of US$217.71 million per year on outsourced language services. However, if we remove the Department of the Army from the equation, the average amount drops to less than half that amount - US$92.99 million annually. In other words, the Department of the Army accounts for more than half (57%) of the federal government's translation and interpreting spending.

Historically, the Department of the Army has held the number one spot in terms of language services expenditures more years than any other organization - a total of 13 out of the 20 years reviewed.

Thirty companies earned US$17 million or more by providing language services to the U.S. federal government over the past two decades. Very few of these companies operate in the commercial market. Some firms, such as Berlitz and Bowne Global, were absorbed into other Language Service Providers (LSP) through mergers and acquisitions. Others had multiple points of participation through other entities such as McNeil's partner share in Global Linguist Solutions.

Companies Contracts Obtained Amount Awarded

1 Global Linguist Solutions, LLC 55 1,051,646,448

2 Aegis Mission Essential Personnel, LLC 167 520,678,259

3 BTG, Inc. 164 303,879,709

4 TRW, Inc. 24 219,839,926

5 SM Consulting, Inc. 78 148,348,254

6 Shee Atika Languages, LLC 90 131,662,819

7 Berlitz International, Inc. 66 125,626,424

8 Allworld Language Consultants, Inc. 1,479 121,676,792

9 Northrop Grumman Corp. 203 114,704,525

10 Chenega Federal Systems, LLC 72 110,093,518

11 Techtrans International, Inc. 95 97,055,726

12 McNeil Technologies, Inc. 1,049 90,949,937

13 Bowne Global Solutions, Inc. 45 89,559,211

14 Metropolitan Interpreters & Translators, Inc. 3,319 82,710,784

15 Calnet, Inc. 177 73,549,486

16 BDM International, Inc. 30 67,181,105

17 Comprehensive Technologies, Inc. 1,793 53,544,848

18 Torres Advanced Enterprise Solutions, LLC 1,435 44,114,173

19 Worldwide Language Resources, Inc. 78 41,162,120

20 SOS International, Ltd. 1,927 38,742,384

21 Schreiber Translations, Inc. 507 27,799,608

22 ZKD, Inc. 23 27,727,100

23 Nangwik Services, LLC 13 26,800,435

24 Miscellaneous Foreign Contractors 2,583 26,013,382

25 Diplomatic Language Services, LLC 1,048 20,854,433

26 Thomas Computer Solutions, LLC 103 19,843,274

27 Stuart B. Consultants, Inc. 512 19,233,858

28 AM General Corp. 59 19,140,476

29 Lionbridge Global Solutions 31 18,096,563

30 MPRI, Inc. 18 17,742,553

Just to pick a few years at random, after a slight dip in 2002 compared to 2001, the government experienced an enormous increase in language services spending in 2003 to US$394.4 million, well more than triple the amount spent in 2002 (US$106.3 million). Nearly US$270 million of the 2003 total was generated by the Department of the Army, and another US$37.4 million came from the Virginia Contracting Agency

By 2005, the word was out - more companies than ever were hovering like bees around the hive of federal government language services opportunities. Thirty-three companies earned more than one million dollars in language services.

The final year of the two-term Bush administration ended with a bang - the federal government spent more than one billion dollars on language services in 2008. The Department of the Army spent the most (US$833.6 million), followed by U.S. Special Operations Command (US$51.6 million). These two agencies issued 827 contracts - on average, worth more than one million dollars each.

The analysis by Common Sense Advisory shows that after the attacks of September 11, 2001, there was a sharp increase in spending on language services, followed by a decrease in 2005, after which the numbers rose again from 2006 through 2008. One of the most dramatic rises in the overall federal budget took place between 2007 and 2008. Interestingly, this was also by far the largest increase in the language services budget. Meanwhile, the defense budget grew at a more predictable and steady pace... Language services expenditures appear to be linked to both overall federal and defense spending.

Those who believe in spending U.S. tax dollars in America can take heart that there is a strong tendency to "buy American." Just over US$17 million in federal contracts were awarded to non-U.S. vendors from 1990 through 2009.

Although buying American is a bit geographically restricted. Federal agencies tended to buy from U.S. suppliers, and the majority of these have offices right in the Washington, DC area or in neighboring Maryland and Virginia. In total, 52 percent of all contracts (24,727) over the 20-year period we analyzed went to DC-area providers.

How does the future look for the industry? Quite good. The report says, "The lessons of the past 20 years are clear. For the most part, spending goes up every 12 months. Under Republicans, more of that outlay traditionally underwrites defense- and intelligence-related activities, but President Obama's embrace of the "just war" theory anticipates at least equal spending in these areas for years to come."

There are lots of business opportunities for the canny company. The report concludes, "In summary, the past 20 years of federal government spending have been very kind to the world of language service providers. Globalization guarantees that the next two decades will be equally beneficial."

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