The killing last month in Baghdad of 17 Iraqi civilians, allegedly by security guard contractor Blackwater USA, has lifted the lid off a major management failure within the Department of State.

Over the past four years -- the time of the Iraq war -- State Department contracts awarded to companies to provide protection to American diplomats, train foreign police forces and assist with drug programs have risen from $1 billion to $4 billion per year. The two major beneficiaries have been Blackwater, with $1.2 billion in contracts, and DynCorp International, formerly a Texas company now headquartered in Falls Church, Va., with $2.1 billion.

The problem is that, as the number of contractors overseen by State has grown to 2,500, with 1,200 guards in Iraq alone to protect U.S. diplomats, the department has failed to increase its own staff sufficiently either to supervise the activities of contractors and their employees, or to keep track of the government funds spent on their work. As a result, not surprisingly, there has been some weak contract performance, large overruns and, in the case of the security providers, a certain amount of unmonitored violence. The Iraqi government has requested that Blackwater leave the country by March and that its employees be subject to Iraqi law.

Secretary of State Condoleezza Rice is ultimately responsible for the performance of her department, including in the critical dollars-and-cents areas of waste, fraud and mismanagement. She has asked for two reports on the situation, including recommendations for repairs, although the horse is long out of the barn. Assistant Secretary of State for Diplomatic Security Richard J. Griffin resigned on Wednesday, perhaps the first step in fixing the problem.

What is needed as quickly as possible is, first, to determine what happened -- how the contractors got out of control in their behavior and their cost. Second, a thorough review is needed of what actions U.S. diplomats should be taking in war zones like Iraq, where protection is required. Third, who should provide that security? It used to be handled by a small number of highly professional Department of State regional security officers. How did the United States get from that to hundreds of trigger-happy Blackwater employees? Is that approach even cost-effective?

Much study and work needs to be done, with Ms. Rice's attention. A lot of taxpayer money -- as well as the lives of Americans, Iraqis and others -- is at stake.