This Post article from Monday reports on the phase-out of private contractors in Iraq, partially by converting from contractor personnel back to government. Much of it is due to Blackwater's being no longer welcomed by the Iraqi government. And to the fact the agreement between the US and Iraqi government doesn't cover private contractors, so their possible use of force is not protected.
Thus, the US is moving some work (and the experts) back into government. That way, the people are government employees protected under the US-Iraq agreement.
As I've said before, there's always trade-offs, in this case the flexibility of private contractors has both bad and good aspects.
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