Military Outsourcing and US Overdependence Public Policy and Management Final Paper Spring 2014

Written by: Leonidas Ocampo

I. Introduction:

In times of war and peace, nations face many issues that revolve around

technology, information and knowledge. Some countries lack certain up-to-date and top

tier technology that is key for military efforts or the efforts of revamping a certain

industry domestically. Some countries lack the proper resources to acquire information

for better navigation in business endeavors. Others lack the proper skills base within their

country’s ranks to carry out tasks that are constantly developing in the international

community. Contracting out is an option many nations turn to when in need of resources

and services in a relatively quick fashion. Although not birthed, contracting has grown in

prevalence within the past 20 years and especially since the attacks on 9/11. The

involvement of PMF’s in war since the middle of the 20th century from 1950-1989 was

about 15 times as opposed to 1990-2000 where there was an estimated 80 cases.1 The US

government has been at the forefront of this movement by outsourcing endless tasks to

PMF’s (Private Military Firms) for assistance in both combative and supportive roles of

war.

1 Isenberg, David. Private Military Contractors and U.S. Grand Strategy (PRIO: International Peace Research Institute, 2009)

In todays world the line between a “mercenary” and a “contractor” are one in the

same in the publics’ eye. There have been instances in the theatre of war that have

allowed the distinction between both to become blurred due to atrocities performed to

civilians or obvious breaches in scope of practice. A well-known example is the cruel

conduct involving US Military personnel as well as foreign contractors towards prisoners

in Abu Ghraib. As it currently stands the 1977 Protocol 1 Geneva Convention Article 7

holds 6 criteria to what a mercenary is and how it is usually distinguished from a

contractor.2 In essence, a mercenary is a foreign, usually armed (not necessarily though)

combatant that takes part in hostilities and receives substantial overcompensation from

the host Party for services provided. There are generally three categories that distinguish

the Private Military Firms and they are as follows:3

Military Combatant Companies: Tiny percent of all PMF’s, but receive the most public

attention. They provide the forces capable of combat.

Military Consulting Firms: Usually deal with training and advising as well as personal security

and bodyguard services.

Military Support Firms: Provide non-lethal aid and assistance with “weapons maintenance, tech

support, explosive ordinance disposal, intelligence collecting and analysis.”

2 Ibid3 Ibid

Understanding the private military firm definition is important when trying to

understand what scope or skills they work under and why they are appealing to

governments around the world. A private contractor provides the host with a set of skills,

equipment, team and efficiency that is more difficult to obtain within country. Whether a

government is in need of a support structure for missions with delicate tactical demands,

or personnel to operate very advanced technologies, contractors can provide people that

do those particular jobs for a living. If a government needs an organized base camp with

all necessities provided to house, feed and care for a battalion in Iraq they are able to

provide the employees to work for building the camp itself, catering, housing, linen

cleaning etc. Sometimes governments aren’t able to provide these requirements due to

issues with international laws, target country laws, lack of skills or employees within

government structure. As quoted in Martha Minow’s article, “The US can further own

policy through private contracts while technically maintaining it does not have US

involvement in said countries.”4 In exchange for this end-to-end service and organization,

governments pay money for these to be outsourced and organized through another firm

that “specializes” in this field and even larger amounts of money for employing them in

danger zones.

4 Minow, Martha. Outsourcing Power: How Privatizing Military Efforts Challenges Accountability, Professionalism and Democracy. (Boston College Law Review, 2005)

5 Schwartz, Moshe, and Joyprada Swain. Department of Defense Contractors in Afghanistan and Iraq: Background and Analysis. (FAS, Congressional Research Device, 2011) CENTCOM Quarterly Census Reports; Joint Staff, Joint Chiefs of Staff, “Boots on the Ground” monthly reports to Congress.

The problem that arises with contracting is the issue of knowing when a

government is becoming over-dependent and the problems that come with frequent

outsourcing, specifically, mismanagement and accountability. This paper raises the

question; is the US government too dependent on the military use of foreign contractors?

How does outsourcing management affect accountability in military affairs? This study

looks to establish a firm understanding of what points to over-dependence and what steps

can be taken in balancing out contracts. In the coming pages I will present the results

other authors have come to as well as the framework for my study on various different

scholars that deal with outsourcing military efforts, what leads to mismanagement and

accountability issues and how that can be seen as over-dependence? To conclude this

6 Ibid “Quarterly Census Reports; Troop Levels in the Afghan and Iraq Wars, FY2001-FY2012”

study I will present alternative solutions that have been made clear by different authors as

well as my recommendations and concluding remarks to summarize my ideas and the

rationale behind them.

II. Literature Review

Outsourcing can be seen as a very appealing option to a country with the appropriate

amount of money to make the arrangement. There are many benefits to outsourcing

military efforts such as the direct light it takes off of the host country when policy goals

don’t necessarily coincide with international laws or the status quo of international

community. The US military retaliated to the attacks on 9/11 in New York by entering

Iraq and “claiming” to end a war on terror and to restore peace and stability to the Iraq

and Afghanistan governments. Whether this policy goal is true is not the main concern,

however the use of outsourcing allowed them to have a greater presence within those

nations. By hiring private contractors in more supportive roles such as staging, camps,

security and transportation the government was able to decrease the amount of military

personnel being deployed out to these dangerous states. Although the US government had

enough money to outsource jobs to PMF’s, it wasn’t solely because they had the

economic resources. Various scholars are in contention on the reasons behind the ever-

increasing position the US takes in outsourcing but one thing that is common is that

outsourcing en masse can be harmful to the government in terms of domestic skills and

management levels and accountability issues for the many contracts in progress.

7

Losing the skill base domestically is a growing concern among scholars because it

shows that the government is over-dependent on outsourcing jobs. An idea of just how

many contractors the US government, specifically the DOD and the DHS employ is

reflected by the ratio between government and contractor personnel. In 1991 the

personnel to contractor ratio was 50:1 and in 2010 it became 10:1.8 If that is not

convincing enough take another example from the Government Accountability Office

(GAO) of the United States that is responsible for tracking all reports from US contracts

and domestic work. Armed contractors that weren’t dealing with security in Iraq were at

7 Ibid US CENTCOM 2nd Quarter FY2011 Contractor Census Report8 Lavallee, T. M., Civil-Military Integration: The Politics of Outsourcing National Security (Bulletin of Science, Technology & Society, ProQuest, 2010)

15,278 and 70,000 in Afghanistan which added up to a total of $254 billion on contract

services alone.9

As noted in the graph above, the acquisition workforce saw a considerable decline

in just one decade of the 1990’s and plateaued for the next decade. This drop in

acquisition workforce was directly related to the budget reallocation as well as the

downsizing in government to rely on commercial services more heavily. As the US

government freed up the acquisition workforce, DOD spending skyrockets at the turn of

the century and maintained a climbing rate into the middle and end of the 2000’s.

Working in a blended workforce means that government personnel work directly

alongside contracted employees. This creates a few problems when the government

9 Ibid---GAO, 2008, Schwarts 2009)10 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008) See, e.g., Gansler Commission, supra note 24, at 91.

workforce is understaffed or undertrained and they are working alongside professionals

who do specific contracts for a living. It splits the government employee thin across

many different jurisdictions of work. However, because the lack of government workers,

contract employees are allowed to make decisions in this blended workforce environment

that normally a government official would be doing. This causes issues in

implementation when guidelines, goals, procedures, rules, ethics etc., aren’t specifically

outlined. Government employees then have to overcompensate at some time to keep up

with foreign professionals.

With the change in reliance from workforce to services there has been a neglectful

attitude towards the procedures needed to counter balance such a change.11 For example,

training new specialists and retaining skilled professionals within country all to manage

incoming long-term contracts is of big concern.12 Incentive structures favor the contractor

personnel far more than government personnel as they get more rewards and benefits for

services. There is more focused and specialized training as well as compensation, travel,

benefits etc., all while government officials are restricted to a standardized government

payroll, benefits and training that fluctuate with every congressional meeting, bill and

policy decision. Due to a lack of skilled and experienced personnel within government,

many people decide to move towards the private sector and work as a contractor. In some

senses it is more profitable at the risk of stability and health. This creates a problem for

the average worker looking to be employed for their knowledge and expertise because it

makes the government’s restricted benefits less appealing.

11Ibid 12Ibid

Poor management over contracts is yet another problem widely accepted by scholars

because the US has been involved in problems regarding humanitarian rights, money

fraud/laundering and lack of oversight awareness out in the field. For example, at the

prison known as Abu Ghraib there was a serious lack of transparency when looking at a

top down structure of authority. Military personnel were working in cohesion with

contractors and didn’t have any idea of how to proceed in their duties. What were they

allowed and not allowed to do with the contractors, what was the scope of the contractors

contracts and their specifics duties on this certain objective? According to the Fay Report,

which essentially analyzed the scandals that occurred at the prison by contractors and US

military personnel alike, reported; “Military personnel did not receive guidance about

how to use contracted personnel and did not know the terms of the contracts nor their

procedures.”13 This demonstrates clear malpractice in one of the most essential parts of

military operations, which is communication. The military is run by commands and

objectives and if two groups of professionals get dropped into a location and know

nothing of the former and latter’s specifics, then it is obvious why this resulted into a

scandal and failed objective.

The Government Accountability Office (GAO) has been trying to put emphasis on the

financial and operational failures the US government has had over the past decade

regarding contracts.14 Problems in these two sectors are responsible for a massive amount

of money being put at risk for every contract being formed. Financial burdens make the

13 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008) Schooner, supra note 18, at 563-64 (discussing the Fay Report).

taxpayer suffer the most if lessons in failed contracted aren’t reflected upon and

improved in the future. Departure from standard protocol within contracts is common and

often not tracked properly due not only to states of emergency but for convenience sake

because there are no clear divisions aforementioned between government and contractor

functions.15

Another factor heavily contributing to mismanagement is the regulation of contracts

from within the US government. The AECA (Arms Export Control Act) is just one act

that was set to regulate the sales of arms during contracts. However this particular act

wasn’t designed for the long-term commitment of management but for the immediate

classification and tracking of contracts. According to Isenberg, PMF’s use the Foreign

Military Sales program to commence contracts with the US government and the AECA is

in charge of regulating such trades as well as offering the information for public

knowledge unless the president deems it necessary to withhold.16 The AECA “was

drafted primarily to regulate one-time arms sales contracts” which in one sense is a good

step towards more stringent regulation however, the scope of this act is far too narrow for

the amount of contracts the government is dealing with. 17 This highlights a problem of

the US government taking steps in the right direction but not with enough expertise or

foresight to compensate for the massive outsourcing industry they’ve created and

ineffectively been managing for a decade.

14 Minow, Martha. Outsourcing Power: How Privatizing Military Efforts Challenges Accountability, Professionalism and Democracy. (Boston College Law Review, 2005) 100615 Ibid16 Isenberg, David. Private Military Contractors and U.S. Grand Strategy (PRIO: International Peace Research Institute, 2009) 17 Ibid

The graph above is another example of fiscal responsibility being handled in a

poor manner. This shows the US government annually increasing in procurement

expenditures and it’s compared to the Consumer Price Index (CPI). As clearly noted

within the table, Federal Procurement Spending’s far exceed that of the CPI

expenditures per year which leads to the question of responsibility of taxpayers

money as well as the sheer amount of contracts around each year.

All issues reviewed highlight the inability for proper management, accountability and

oversight and it is evident because the results are always brought to light by media outlets

when it comes to the conflicts in the Iraq and Afghanistan. Although many problems

spawn from absurd behaviors by US military personnel and contractors, there lies a

greater problem in the background. The entire practice of management and oversight of

18 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008)

contracts is at fault because of the lack of transparency between policy decision makers

and agencies in charge of supervising the administrative and managerial functions of

personnel below them. With a proper system in place being directed top bottom, and with

time going by without serious restructuring and innovation, the expertise of contract

management in today’s evolving environment is being lost or used improperly in the

DOD (Department of Defense) and DHS (Department of Homeland Security). “The U.S.

government has only twice as many personnel overseeing contractors in Iraq, for

example, as it had during the l990’s for its Balkans contracts-even though there are now

15 times more contracts and the context is much more challenging.”19

III. What is causing the problem?

19 P. W. Singer, Outsourcing War, (Council on Foreign RelationsJSTOR, DOI: 10.2307/20034280)

20 Avant, Deborah, and Lee Sigelman, Private Security and Democracy: Lessons from the US in Iraq, Tess Experiments. (Routledge, 2010) Graph depicting the New York Times articles published on record comparing Military and PSC’s (Private Security Company) between 2003 and 2007 alone.

The problem at this time lies with the US government in the fields of accountability,

management and oversight, the lagging acquisition workforce and the competition that

spawns for a blended workforce environment. All these issues are interrelated and all can

be traced back to each other. For example with a poor management system there is very

little one can do if a scandal occurs with money laundering during contract approvals,

humanitarian rights violations on a mission with contractors or the poor construction of a

base in Iraq. Why is there poor management and oversight? There is a lack of acquisition

workforce regulators and auditors, skilled personnel adept to contract management and

seasoned agencies in charge of different fields of contract and military services. As a

result of this small workforce and skilled personnel, the US is forced to have a more split

work environment with many involved being contractors, which is referred to as a

blended workforce. Within a blended workforce, who is in charge? At what times? Under

what circumstances and under what power authority? What is the personnel’s jurisdiction

and expertise level in a certain position of finance, construction or military and support

service training? These issues all lead to accountability and who is rightly responsible,

who ends up taking the blame and who ends up being brought to court to face justice.

As the time goes by, technology advances, political situations change, and different

skills are required to continue satisfying foreign policy decisions which means the US is

lagging behind. During the Clinton Administration, Vice President Al Gore suggested a

strategy of reducing the amount of “government payrolls” and contracting out services of

support roles to increase efficiency.21 In 1995 the Defense Science Board noted a

21 Isenberg, David. Private Military Contractors and U.S. Grand Strategy (PRIO: International Peace Research Institute, 2009)

possibility to save up to $12 billion a year in outsourcing roles to PMF’s. By 2000 private

companies were competing for government work of over 450,000 jobs and by 2001 the

“Pentagon contracted workforce exceeded civilian defense department employees for

first time.”22 Now that the US experienced a significant downsizing in government,

specifically acquisition force reductions in the 1990’s, a trend of decline in skill as well

as management would occur.23

Although contracting out proved to be an ideal policy decision when speaking in

economical terms, the government and its experts failed to notice the problem in

outsourcing many of its supporting jobs to foreign countries. As Secretary Thomas E

White warned, there was not enough basic info to effectively manage these contracts.

Shortly after this statement in 2003 the Army reported to Congress that it had between

124,000 and 605,000 service contractors in employment. This brings up a shocking idea

of the mere confusion in estimates that ended up proving Secretary White’s warning to be

true. The US government was not prepared to be contracting out in such masse. With the

reallocation of money towards these contracts they were unable to continue providing

significant and up-to-date training to their government personnel in the United States.

The Acquisition workforce in the US is seen as those personnel who are involved in

the contract management process by means of auditors and regulators.24 Whether they are

22 Ibid23 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008) 24Ibid

of government-hired personnel or outsourced personnel doesn’t make a difference until

the management of contracts becomes better outlined and successful. As claimed by the

Department of Homeland Security Inspector General (DHS IG), “part of the problem

stems from DHS never having conducted a comprehensive assessment of the proper

balance between its employees and contractors.”25 The DHS IG then went to conclude the

worst answer to this particular finding, “Instead, DHS, like other federal agencies, simply

hired contractors to supervise other contractors.”26 This is a clear breach in the command

structure and responsibilities of the people bringing in outsourced personnel. Without a

proper preliminary assessment of the benefits and risks of each contract, there will be less

information to base future decisions off of. Without informed decisions from practical

studies and research, the US government puts upon themselves a huge risk of failure by

diving headfirst through a closed door hoping to get to the other side in one piece. In

order to benefit most for US citizen tax dollar as well as the dollar of the DOD and DHS,

more attention needs to be focused on the contract itself, what is to be gained, in what

way, when, how and why all prior to making contracts. It all comes down to a solid,

mutually equal and beneficial plan for a successful and economically sound investment.

Another issue regarding the management of contracts comes from the simple

classification of commercial and “inherently” government functions. There are some

services where efficiency, quality of service and price are negotiable within different

companies that offer them. It is important to have a business sided mind-set when

privatizing however because the government is outsourcing and it is a matter of national

25 Ibid 1426 Ibid 14

defense, there should be a cohesion between the business and the military side of

services. For instance, the government sought to become more transparent, simple to

manage and easy to record, therefore they resorted to “paperless contracting, ceasing

printing of voluminous instructions for the DOD, and implementation of government

credit cards…”27 Companies and governments around the world have changed and/or are

still in the process of changing into paperless entities for the sake of keeping up with

technology and its uses data storage within hard drives.

An added example lies within American defense firms and the US government’s

policy goals towards them.28 It is common knowledge that quality over quantity comes

frequent in the mind of an informed businessperson. In the private sector, certain people,

businesses, nations etc., specialize in products and their sale. The US government hoped

to get American defense firms to consolidate their services, technologies all to better help

the military goals of the nation and national defense.29 This did occur, but with the

realization that going completely commercial puts the government at risk of becoming

too reliant and less skilled. By consolidating services, key business practices will be

blended with other businesses and their methods of operating. Original ideas will be lost

and the competition among defense firms will decrease. When the defense firms found

competition was declining they moved towards the commercial market and found a

greater market up for grabs with the requirement of less people and more technology to

be used instead. Through commercialization, in an effort to fulfill their contract, larger

27 Lavallee, T. M., Civil-Military Integration: The Politics of Outsourcing National Security (Bulletin of Science, Technology & Society, ProQuest, 2010) 19228 Ibid 29 Ibid 193

defense firms are able to subcontract to smaller defense firms and miscellaneous other

firms for their skills and expertise. This is beneficial for the government as they find a

defense firm that can get the job done, but through the contract and subsequent sub-

contracting, costs rise and its difficult to continue management oversight in an

“inception” of contracts.

The US government is making up for a reduced skill base and number of government

employees by contracting out many different positions to PMF’s around the world. At

first it was seen as a policy decision well suited in the long term to save money when

thinking about “legacy costs” government incurs through government employees.30 A

“legacy cost” in basic terms is the amount of money you are paying your civil servants

and veterans for working for the government such as health care, pensions etc. However,

they later realized that their skill base at home would suffer a hit because PMF’s were

doing their jobs for them.

Another problem when referring to a blended workspace is of ethics and value

systems. In a study done over privatization of schools and religious organizations it was

suggested to keep a central public value system in order to steer in the right direction.31

This allows goals to be created and guidelines to be administered all around a certain idea

or way of thinking. Privatization is a unique service as it gathers professionals from all

30 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008) 31 Minow, Martha. Outsourcing Power: How Privatizing Military Efforts Challenges Accountability, Professionalism and Democracy. (Boston College Law Review, 2005)

walks of life, with immeasurable amount of experience when put together to achieve one

task. This is a direct line to success and results when used, administered and overseen

properly. Innovation and efficiency are stated to be among the benefits, however

immediately after these claims exclusionary practices, fraud and religious coercion comes

to play.32

While these are related to privatization of schools and religious organizations, any

kind of privatization is one in the same. There are reoccurring tendencies that happen in

any environment, such as the difference in logic and rationale when it comes to

proceeding with a task. In privatization of military services, value systems and attitudes

greatly affect the chain of command when you put a uniformed military person to work

next to a contracted individual. Unfortunately within the US government and its military

outsourcing ventures, there isn’t a common transparent view on how to achieve these

goals. Contracts should be based around the United States Constitution and abide by

international laws, however not much oversight is placed in the management and

execution of these contracts. When dealing with a classified assignment, generally it is of

national security or of great concern to the current state of affairs; which is why

discretion and results usually measure out more than values and a code of conduct.

The US government is in need of many reforms to battle their problems in

oversight and management. This is the core to where all other problems spawn.

Accountability in its essence is a result of management and oversight because the

leadership is what is questioned when tasks are accomplished successfully or not. What

32 Ibid 998

happens as a result of poor management in a top-to-bottom command structure in this

case can be directly blamed by the authority figures. Instead of doing research and

conducting an in depth internal review on proper methods of creating, administering and

closing contracts, he US is improvising in its military outsourcing game. In order for the

subsequent issues of a blended workforce, issues of ethics, the lack of an acquisition

workforce and presence of a low-skilled workforce to be fixed, there needs to be a

consistent methodology in US to Foreign contracting. In the following section I will go

over alternative solutions that authors have come up with that could significantly change

the way contracts are created, interpreted and implemented.

IV. Alternative Solutions

There have been many opportunities to change and alter the current system of

outsourcing within the US government for military services in order to make it more

transparent and efficient. Those opportunities haven’t been taken advantage of but it

doesn’t mean these options aren’t available at any time. The US government must adapt

to the changing environment of warfare in this world. Technology grows everyday, with

this technology less people are needed to be out on the front lines compared to wars of a

century before us. Although technology allows us a buffer in human physical

confrontation, natural and manmade law cannot be bypassed. A human rights violation

remains the same regardless of the context of which it was infringed. Little transparency

that causes mistakes down the road (days, weeks, months or years later) in

communication, implementation or results should still be accountable by the policy

makers in charge and not been scapegoated to the uninvolved. The resolutions and

recommendations proposed are those that address the issues of transparency within

contract management, accountability over contracts and their outcomes, the blended

workspace of contractors/uniformed personnel and lastly the acquisition workforce that

was reduced significantly in the 1990’s.

On the contract management and transparent dealings, there should be steps taken in

addressing financial caps. In privatization there is a practice called share-in savings

contracts where the private firm provides service and in exchange, shares in the money

saved when compared to the previous method of delivering the service.33 For the US

government, this can be helpful in terms of saving money however left unchecked can be

a burden when checking the validity of the accounts and payments due as well as the

number of active share-in savings contracts. As Minow states “The lack of caps in these

contracts exposes the government to potentially limitless demands for payment by the

contractors.”34 In this recommendation, contract monitoring is key. By forcing contractors

to maintain records and accurate accounting figures (for accountability purposes) as well

as enforcing contracting tracking and monitoring by US government officials, the amount

of financial mistakes and frauds can be lessened.

Another key step towards successful contract management comes from informed

decision-making and analysis of the market and how the US government can come into

play in a safe but beneficial way. A market with competition is a market the US

33 Minow, Martha. Outsourcing Power: How Privatizing Military Efforts Challenges Accountability, Professionalism and Democracy. (Boston College Law Review, 2005) 100834 Ibid 1008

government would benefit from getting involved in, unfortunately its not the case with

PMF’s today. The market today is seen as “quasi-monopolistic” because PMF’s are able

to control every aspect of contracts.35 The New York Times study compared “new

contracts and payments to existing contracts” and determined “48 percent were

competitive in 2005, down from 79 percent in 2001.”36 This shows a great danger with

PMF’s and agencies that are looking to outsource. The power is leaning heavily towards

the PMF’s, which can explain why there is so much mismanagement and debauchery

with military contracts.

Military contracts are generally procured for either contingent or support purposes to

accomplish objectives that otherwise would be handled by the government or agency

applicable. There is no question that when the US government outsources, it’s for

important objectives that help their foreign policy, which is why paying the top dollar is

not an issue once or twice. However when outsourcing becomes more frequent and

PMF’s have this kind of unregulated market power, they can gradually alter contracts to

better suit them and raise the prices exponentially for services that require delicate and

unique arrangements. A two-part recommendation was to first work towards creating a

transparent market where “clients can pick and choose among different suppliers.”37

Second was to have transparent bidding processes, competing offers to be “systematically

compared” and the performance of suppliers to always be monitored.38 This is extremely

important when contract progress, quality of service and delivery are taken into account

for a formal report afterwards, in the event there is a need for measures to be taken

35 Isenberg, David. Private Military Contractors and U.S. Grand Strategy (PRIO: International Peace Research Institute, 2009) 36 Ibid37 Ibid 2338 Ibid 23

against the supplier. Sanctions and formal reports will help greatly in creating a more

honest and efficient market with greater competition and transparency.

Creating a contract from scratch can be a difficult job, especially because you must

think of everything that will happen with regards to the services being offered, and put it

into the contract. It’s essentially a document that highlights the who, what, when, where

and sometimes the why of using a service. Although a difficult task, it is essential when

referring to finances and goal results. The US government is lacking a streamlined

approach to obtaining, and implementing contracts and therefore should take

recommendations from all over to find one that works after trial and error. There is a

seven- step guideline that was given as a recommendation for better organizing,

planning, creating and implementing the contract. It breaks down contracts into properly

researching the service in question, designing scope and limits of the contract, service

provided and finances. It then goes on to the drafting and contact stage with the

contractor. Once in play, it gives key points to look out for while invested in the contract

for efficiency oversight and quality assurance.

39

In addition to managing contractor performance, the author recommended the specific

considerations in “advice and guidance, quality assurance, compliance through

appropriate oversight, facilitation of invoicing and payment, the proper handling of

contingencies (and related modifications and terminations), the closing out of contractual

relationships and generally ensuring appropriate stewardship of the public’s scarce

resources.”40

To think of solutions that are more focused towards accountability issues lets have

a look the Status of Forces Agreement (SOFA) which allowed Iraq to “have the primary

39 Schooners, Steven L., Daniel S. Greenspahn, Too Dependent on Contractors? Minimum Standards for Responsible Governance. (GW Law Faculty Publications & Other Works, 2008) 1740 Ibid 17

Plan

Identify Requirement

s

Conduct Market

Research

Draft Specifications

and Solicitations

Manage Competitions

Draft, Negotiate and

award contracts

Manage Contractor

performance

right to exercise jurisdiction over United States contractors and United States contractor

employees. “41 There is more substance within the fine print that narrows the jurisdiction

and clarifies what the United States contractor is, but the point of this recommendation

was not for its rhetoric but for the principle it has. It is allowing the target country to

exercise its legal jurisdiction to contractor personnel entering its country. This measure

has been in place for sometime with varied success due to jurisdictional confusion of one

contractor hailing from country A, hired by country B but working from a firm in country

C.42 That is a difficult line to trace, however improving upon the judicial space within

military outsourcing is key not only for accountability sake on the governments part but

for the media attention it can garner from the public.

Although SOFA’s recommendation on adapting this Iraqi legal jurisdiction is not

well structured or developed at this time, the US and the international community should

put resources into developing this. By adapting contract law and creating a task force of

sorts for legal purposes, it will help expose any atrocities, acts of corruption and fraud in

the contracting network. This can then be held against the contractor service provider, not

only securing a legal means of prosecuting but also establishing a sense of control from

the consumers that place “reliable” stamps upon firms that are and aren’t. With an influx

of responsible and financially secure contracting, the scandals and heinous crimes can be

slowly stopped and brought to light by the media. Furthermore, money spent towards

contracts can be seen as more justifiable to the nations constituents. Outsourcing is a

41 Cotton, Sarah K., Ulrich Petersohn, Molly Dunigan, Q. Burkhart, Megan Zander-Cotugno, Edward O'Connell, and Michael Webber. Hired Guns: Views About Armed Contractors in Operation Iraqi Freedom. (RAND, 2010) 1542 Ibid 15

topic not many Americans are savvy with, however knowing that there is justice being

brought and knowing exactly where a big chunk of the defense budget is going will help

calm down American citizens that are becoming restless with their governments spending

habits.

In regards to the acquisition workforce and the blended workspace US

government and contracted personnel face there is a recommended solution that

addresses both issues, and it is found within the John Warner National Defense

Authorization Act. This act created the Joint Contingency Acquisition Support Office

(JCASO), which then established the requirement where the DOD has to “create a team

of contingency contracting experts that can be deployed to support military operations.” 43

According to this office it will allow these teams of contingency contracting experts to

support contracts out in the field in regards to planning and logistics that corresponds

appropriately to the current policy of the DOD. It helps it from the planning; organizing,

implementing and review stages to better analyze the whole situation and learn for the

future. This is an important initiative to have in place as it directly reflects the correct

steps the US government should be taking in order to streamline and make military

outsourcing more efficient.

On the note of specialized personnel with a knowledge of contracts, there is a

suggestion of “pre-deployment training” that would allow military personnel to learn the

43 Schwartz, Moshe, and Joyprada Swain. Department of Defense Contractors in Afghanistan and Iraq: Background and Analysis. (FAS, Congressional Research Device, 2011) 21

contractor functions, and recommendations on how best to work together and understand

each other.44 There is predisposed thought among military personnel of either lust,

jealousy or envy towards contracting personnel due to the fact that in some cases, they

make more financially then the military uniformed personnel. This causes problems both

in and out of the workplace and can really infringe on the objective at hand. Also

questions of loyalty, ethics and motivation come into play, which is why a pre-

deployment training program can be very beneficial to US government personnel. It helps

increase morale; it clarifies objectives, risks and rewards as well as outlines the reason

why there are contractors in the first place. For the military personnel, this is invaluable

information as it allows them to play strengths and weaknesses of the contractors; they

are able to understand the situation in a more goal-oriented way that can really make the

difference. Not only is there is need for informed and skilled personnel both uniformed

and contracted but there is an even greater need for absolute cohesion between the two

parties in any military endeavor hoping for success.

V. Conclusion

Privatization of military services is no easy task although in times of war and peace, it

can be necessary for the purposes of important foreign policy goals. Should the

government not have the capabilities at home there is a growing market of PMF’s for hire

that is always working with the most advanced and up to date technologies and skilled

experts. The culmination of experience PMF’s hold within their employees is too great to

44 Cotton, Sarah K., Ulrich Petersohn, Molly Dunigan, Q. Burkhart, Megan Zander-Cotugno, Edward O'Connell, and Michael Webber. Hired Guns: Views About Armed Contractors in Operation Iraqi Freedom. (RAND, 2010) 64-65

measure. However within this great power lies a very one-sided market of PMF’s that

have been known to exploit potential clients. This study isn’t to confirm the corruption

behind the PMF industry however it does well to point out ways in which it has in the

past. It has also provided recommendations for the US government in specific to follow

for it to benefit from outsourcing in the best possible way.

The problem this study addressed was factors that pointed to an over-dependence of

outsourcing on the part of the US government and the implications it held as well as ways

it could come back from this. So far I’ve managed to support the arguments made by

various authors that all pointed to problems within the acquisition workforce or lack

thereof. When outsourcing en masse there tends to be a lot of cooperation between the

contracted personnel and US military personnel which leads to a blended workspace of

different values, motives and objectives that all play together towards the final goal in

that particular contract. This generally creates problems when both parties aren’t on the

same page. Contract management and transparency issues are another issue that trickles

down to the previous arguments. Thinking in terms of constructing a house, you can have

the best construction workers, architects and city planners on the job but if all parties are

unaware of the others job description, entitlements and requirements, the house will have

a very poor infrastructure and it will lead to a sloppy end result of a house. Organizing

the way contracts are managed, outlining desired outcomes and also figuring out how

best to show accountability all through a transparent environment is key for the success

of a contract or the metaphorical “house” built earlier.

In observance to the various authors studied and reviewed I’ve come up with one

recommendation that can help rationalize the goal of improving the current privatization

of military services within the US government’s foreign policy goals. There needs to be a

consistent mentality within the US government foreign policy and dealings with

contractors. Regardless of authority changes and the different mindsets of policy makers,

a pre-determined, long term reform plan should run its course without interruptions for a

successful rejuvenation of the privatization of military services. The revamping of this

industry, in my non-professional, strictly theoretical view, requires credibility to be built

up from both the clientele and the suppliers alike. Neither party will ever be in the mood

to deal with humanitarian scandals, issues dealing with tracking finances or the

corruption of either party, unless there is mutual trust and an equal sense of

responsibility.

In order to create an even playing field with both clientele and suppliers

conducting simple and organized contract transactions, firstly there must be a level of fair

competition within the market. A monopolistic market will do no public good. Although

PMF’s have many different reasons for competing within the market, there needs to be

some way to provide these services in a more just way. Privatized military services,

regardless of the time period, will always be a high demand and high income industry

therefore there is no risk in the future of potential revenue. In times of peace and war this

is a highly sought after service as it deals with an important natural and human law/right

which is protection of oneself and the people; therefore it runs no risk of being lost to the

ages

Organizing the industry, in specific, the way contracts are created,

monitored/tracked and eventually the quality of service provided is the first and most

crucial step towards having a successful and less troublesome outsourcing environment.

An idea is to “provide external endorsements of personal conduct” as mentioned by

David Isenberg.45 I agree with his belief that credibility amongst PMF’s and clientele

need to be transparent in the market environment so as to ensure the best quality service

is provided with the appropriate amount of money being exchanged. This may seem

unappealing to the PMF’s because they are enjoying a very underdeveloped industry and

some are exploiting its management complications very well. However for the benefit of

the international community and for the general public good, it would be a good idea to

focus on credibility similar to the way there is a Fair Trade stamp of approval for local

grown food supplies competing with big corporations. Not only does the Fair Trade

stamp of approval bring focus to the quality of service and the name of the supplier, it

allows the public to address problems themselves against the corporate elite who exploit

contract service. The average American citizen is just as involved with this credibility

fight as the US government is because it’s the taxpayers hard earned money at stake.

For the benefit of the US government and its constituents, starting a process with

the help of the international community would greatly benefit sovereign nations

everywhere. Although its important to address the problems at home prior to trying to

45 Isenberg, David. Private Military Contractors and U.S. Grand Strategy (PRIO: International Peace Research Institute, 2009)

save the world and solve the worlds problems, it doesn’t hurt to partake in an

international movement, where in the long run will benefit not only nations but the

people they protect. Creating a more transparent and accountable privatized military

service environment will be a step in the right direction away from overdependence of

outsourcing services. I conclude that the US government is over-dependent on the

services of private military firms and it has greatly reduced the capacity and potential for

immediate change and reform.

The US, over the period of about 15 years has delved into the private military

service industry without properly preparing and doing market and environment research.

It shows with the constant reminders in the media of US related contractors or even

military personnel screwing up in missions, leaking information or committed crimes

because of the lack of transparency and knowledge from the hierarchical system of

command the US government’s DOD provides in the military and towards contracts

themselves. There has been a clear neglect of oversight and management of contracts,

with continued disappointing results because of a lack of monitoring contracts overtime.

The situation resembles a client so rushed that they ignore the contracts parameters being

spoken to them, send money towards the supplier and expect excellent results; all while

the supplier realizes its just another uneducated client whom they can take advantage of.

It is apparent that the lack of contract management and the contracting en masse has lead

to the US government military personnel to be held at a shocking disadvantage to their

privatized counter parts. Not only is there a lapse of 15 years where personnel could have

been training and learning from contracts being created, implemented and closed, there is

a clear divide between the US military personnel and the contractor personnel in the

workspace. With incentive structures favoring the contracted personnel, the US

government faces an issue of ongoing military enlistment and the benefits they can

provide to their own constituents prior to them deciding to go into the privatized work

force.

The US has dug itself a deep hole but has managed to maintain some sort of

control over its military capabilities at home. The first obstacle in its course is an internal

review to judge its faults when it comes to contract management and accountability. Once

the problem is addressed and it is common knowledge the self is in need of reform, all

problems will find solutions slowly thereafter.