WASHINGTON (CNN) -- The United States spent $85 billion on contracts in Iraq and other countries in the first four years of the war and is relying on contract employees at a greater rate than in any other war, according to a government report released Tuesday.
A report by the Congressional Budget Office says that a fifth of spending on the Iraq war has gone to contractors. Between 2003 and 2007, 70 percent of $85 billion in contracts were for work inside Iraq. The remaining 30 percent went to contracts in surrounding countries such as Kuwait, Bahrain, Qatar and Saudi Arabia, the report said.
The Government Accountability Office says the United States has spent $435 billion on operations in Iraq.
Based on war contract spending patterns since 2004, the United States could spend more than $100 billion on contractor operations in Iraq by the end of 2008, according to the report.
The U.S. military has used contractors in all of its recent conflicts, from the Gulf War to the Balkans. But military leaders are using contractors to a greater extent in Operation Iraqi Freedom, according to the report, reflecting a reliance on contractors to fill jobs held by military personnel in past conflicts.
Contractors in and around Iraq help serve food, clean and provide security for the U.S. and Iraqi governments, according to the report. Most of the contracts were for logistics support, gas and diesel fuel, and food.
The report says that about 40 percent of the contractors are Iraqi citizens and 20 percent American civilians.
Former Secretary of Defense Donald Rumsfeld argued that using contractors freed troops up for more combat roles when the military was short on personnel for deployment.
But the United States' dependence on contracting companies has also led to questions about corruption and overcharging of the government.
Major companies, such as Halliburton and its former subsidiary KBR, have been found guilty of bilking tens of millions of dollars from the government because of a lack of oversight or political favoritism.
Contractors in various roles have been criticized for the quality of their work, but companies handling security for the U.S. and Iraqi governments have become the most scrutinized contractors in Iraq.
Between 25,000 and 30,000 security contractors are believed to be operating inside Iraq, the Congressional Budget Office report says, about as many as as a division and a half of U.S. military forces.
The future of using security contractors in military roles has come under question, both legally and politically, in large part due to the lack of direct authority that U.S. military commanders have over their actions.
According to the report, between 2003 and 2007, the United States spent $6 billion to $10 billion on security contractors, about as much as it would cost to have U.S. military units performing the same mission.
U.S.-funded contracts employed an estimated 190,000 contractors in Iraq in 2007, about 40,000 to 50,000 more than the number of U.S. troops in the country.
The report says that during peacetime, the contractors would not be renewed; the duty would return to military units.
The use of contractors in war zones also has enflamed members of Congress, who have called for numerous hearings.
The war contract business has become so large and complicated that one U.S. senator proposed a special war-contracting committee to watch over it.
"I believe that we need to create a special committee in the U.S. Senate to exercise oversight over contracting abuses related to reconstruction and the wars in Iraq and Afghanistan," Sen. Byron Dorgan, D-North Dakota, said in April.
Dorgan's proposal of an oversight committee on government contracting would model itself after the waste and corruption hearings held by Sen. Harry Truman in 1941 in the buildup to World War II.
"I still believe that we need to establish a bipartisan Truman Committee, with subpoena power, to exercise the oversight that these abuses demand," Dorgan said.