Contractors on the battlefield: outsourcing of military services.

• Author: Chamberland, Denis
• Position: VIEWPOINT

* Contractors have a long history of supporting national armed forces on and off the battlefield. The last decade, however, has witnessed a sharp increase in the scale of outsourcing of military services to third parties, emphasizing the importance of integrating contractor support into military operations and generating efficiencies.

It is an area where the U.S. defense sector needs to improve. Undersecretary of Defense for Acquisition, Technology and Logistics Ashton Carter last year announced new rules to guide the Pentagon's $400 billion-a-year procurement process, including a focus on better managing contractors and increasing "real competition."

The Defense Department spent more than $212 billion on services in 2009--amounting to more than half of the department's contracted work. The funds were applied to such things as technology support, facilities upkeep, weapons maintenance and transportation. Outsourced services are big business.

The reasons for contracting out services are many and include cost cutting, access to new technology, force multipliers and moving to a more flexible, variable costs, financial model, among others. On the battlefield, the rationale may be that contractors are sometimes allowed to fight wars that national armies would normally have assumed, but could not because of the anticipated public condemnation.

It is estimated that in 2005 the Departments of Defense, State and Homeland Security combined spent a total of $390 billion on services provided by the private sector, and that the value of logistics contracts over the next decade will exceed $150 billion.

The type of military services provided by private companies is broad and includes basic research and technology development, strategic research and consulting, threat analysis, war gaming and simulations, software development, information technology systems support, operation of military equipment and systems, intelligence gathering, surveillance, interrogation, counterterrorism, destruction of weapons and unexploded ordnance clearance, clearing of firing ranges, weapon collection and destruction, demining, protection of diplomats, company sites and civilian convoys in conflict zones.

The outsourcing of any service or function previously performed in-house or carried out by a national army raises a number of concerns about the quality of the services and control over the contractor. Because successful outsourcing is about finding just the right balance of control over the contractor but in a way that allows it the flexibility to perform those tasks for which it has been entrusted, some key areas need to be dealt with...