are currently assisting militaries around the world with
missions that range from training and supply chain management to
fighting in battles. Military contractors are seen as having
inherent advantages over militaries in resource constraints,
manpower, and flexibility. Yet relying on military contractors
has its share of risks, including potential shortfalls in mission
success, concerns over the safety of contractors, loss of resources
because a capability is outsourced, loss of total force management,
and problems of compliance with administrative law.
With the increased use
of military contractors and the advent of privatized military
firms, the question is how to determine the right force mix to
complete a task or mission in the most effective and efficient
manner. Sometimes, military contractors may be the best choice;
however, they are not a perfect fit for every mission or the right
solution for all skill and manpower shortages.
When considering the
use of military contractors, U.S. military leaders should assess
the risks of employing the various options and then choose the best
one. The Department of Defense (DOD) should adopt comprehensive
guidelines for making these decisions, using a risk-based
Contractors on the
As P. W. Singer has
written, "the monopoly of the state over violence is the exception
in world history, rather than the rule." The
presence of military contractors on the battlefield is nothing
new; they have been around in various ways throughout
Most empires from
Ancient Egypt to the British Empire have used contracted troops in
some form. In some cases, these were individual fighters. In
others, a power hired a highly organized entity to fight on its
behalf. When states became the dominant organizing force in the
1600s, the military began to come under the control of the
political realm, instead of princes and kings, and became a
However, the private
actors of the past and even the mercenaries of today differ from
current private military firms. Today's organizations operate as
businesses and are structured according to conventional
business models. In addition, many of them have ties to or are
openly part of broader, multinational corporations.
Types of Military
can be classified based on their location in the battle space: the
general theater, the theater of war, and the tactical theater
(the actual area of operations). Military contractors in today's
privatized military industry can be divided in a similar way. The
types of contractors include military provider firms (MPFs),
military consultant firms (MCFs), and military support firms
firms focus on the tactical
environment. These firms engage in actual fighting as line
units, specialists, or direct command and control for field units.
Examples of MPFs include Executive Outcomes, Sandline, SCI, and
NFD, which have run combat operations in Angola, Sierra Leone,
Papua New Guinea, and Indonesia. Clients will typically use MPFs if
they have comparatively low military capabilities and are
facing immediate high-threat situations. MPFs are the most
controversial type of privatized military industry and often
receive unfavorable publicity.
firms give advice and
training necessary for operating and restructuring a client's
military. Levdan, Vinnell, and MPRI are all considered to be MCFs.
Their clients usually are restructuring their militaries or want to
increase their capabilities dramatically. For example, MPRI lists
its core competencies as security sector reform, institution
building, leader development, military training and education,
and emergency management.
be further divided between firms that offer pure analysis and those
that also provide training and consultation in combination
with recommendations. "The line between advising and implementing,
however, sometimes can be quite fuzzy; often, if a trained
soldier has been hired to teach, it is difficult to duck out
of the way when the opportunity comes to put training into
firms provide supplementary
military services such as logistics, intelligence,
technical support, supply, and transportation. They allow
their clients to focus on fighting and their core mission areas
while they handle the support work. Clients tend to rely on MSFs
where they are involved in operations that are immediate but of
long duration (e.g., standing forces that need surge capacity).
While these contractors do not participate directly in executing or
planning military operations, they fulfill needs that are
essential to combat operations. MSFs comprise the largest
component of the privatized military industry and have the most
Most of these three
types of firms rely on having large, accurate databases of experts
that allow them to put together the types of support called for in
their contracts. For instance:
MPRI maintains and
draws its workforce from a carefully managed and current database
of more than 12,500 former defense, law enforcement, and other
professionals, from which the company can identify every skill
produced in the armed forces and public safety sectors.
All of these firms tend
to have minimal infrastructure, with MPFs having the least. In
addition, they often incorporate where there are favorable laws and
have been known to change their names and business structures in
response to negative press (e.g., Executive Outcomes).
Assessing the Value
Added by Military Contractors
A sensible starting
point for a discussion of when the military should contract with
outside entities to support military operations is to evaluate the
risks and benefits of each decision. A risk-based approach is
beneficial because it helps to avoid unnecessary risks while
incorporating financial and intangible benefits and drawbacks into
the calculation. Risk-benefit analyses are not new in the
defense world. For instance, the U.S. Army field manual on risk
management contains a standardized approach for assessing and
managing risk, which can be applied to all activities.
approach should be applied to contractor sourcing decisions. The
approach consists of five steps:
Assess hazards to
determine risk in terms of probability, severity, and risk
Develop ways to
mitigate the risks and make decisions about risk;
mitigation processes; and
steps depends on knowing the field manual's definitions of "risk"
and "hazard." The manual defines "risk" as "the probability and
severity of loss linked to hazards" and "hazard" as "a condition or
activity with potential to cause damage, loss or mission
degradation and any actual or potential condition that can cause
injury, illness, or death of personnel; damage to or loss of
equipment and property; or mission degradation."
Risk and Risk
The sourcing question
raises some residual concerns, including:
The degree to which
contractor shortfalls could hinder mission success;
Safety implications for
contractor employees and equipment and for the U.S.
Resource tradeoffs or
the effect that money spent on contractors offsets or consumes
limited resources needed to pursue other goals; and
The impact that using
contractors may have on the military's ability to comply with laws,
regulations, and high-level policy guidance and to collect
Obviously, the greater
the hazards and risks, the greater the scrutiny and attention that
is applied to the decision-making process.
In making a sourcing
decision, considering the potential impact of mitigation strategies
is also important. Some considerations that are likely to affect a
sourcing decision include the type of activity, the type and
identity of the contractor, the nature of the contingency, the
location and battle phase for the contractor, and the quality of
government oversight of the contractors.
Once military leaders
have determined through a risk-based process that contractors have
a role to play in a mission, the DOD Inspector General (IG) should
become involved. Military contracts are often lucrative, and
charges of waste, fraud, and abuse are common. Involving the IG at
the beginning ensures that an oversight body is available to
correct problems as they are reported.
The Defense Department
should also create a corps of reserve contracting officers.
Ideally, such an organization would be identified, recruited, and
trained in advance and would conduct regular exercises in meeting
contracting needs, such as in the aftermath of a crisis or conflict
and during reconstruction.
Having a dedicated
reserve component would allow for effective monitoring of
contracts, better document execution, and accurate data collection
during contingencies and crises. Such a component would have been
useful both in the aftermath of Hurricane Katrina and in Iraq. For
instance, the Special Inspector General for Iraq Reconstruction
"found that the shortage of personnel (and the widespread lack of
required skill and experience among those available) affected all
facets of reconstruction assistance."
Dedicated contracting officers and an IG presence would
provide greater transparency regarding where contractors are and
what they are doing-important things to know for contingency
planning and effective management.
When Should the Risk
A RAND report focusing
on Army decision-making and contractors suggests that there
are five distinct organizational venues where and when the
assessments should occur. They include:
military. Decisions to use
contractors are often influenced by Congress's and the
Administration's determinations of the appropriate size and
operational tempo of military forces.
venues. Policies that "the Army
uses to choose contractors, design contracts and quality assurance
plans, and oversee and support contractors in theater heavily
affect the residual risk associated with their use."
Force design and
management issues. For instance, when
reserve component capability is small, contractors may be used more
heavily to avoid continually mobilizing the same group of
plans. Program planners and
leadership may encourage dependence on long-term contractor support
depending on the vision and the need for highly skilled support
personnel. "More generally, officials use spiral development to
field systems early and collect operational data on them from the
battlefield to refine their designs over time. This encourages the
presence of contractors on the battlefield."
contingencies. Where the military
requires a quickly assembled force, it may also require greater
A risk-based approach
is the correct one for answering the question of when the U.S.
military should use contractors, and the next question is when the
assessment should occur. One answer is that "[s]uch assessment
should support decisions that significantly affect Army use of
contractors, wherever those decisions occur."
often either ignore how their decisions in areas such as end
strength will increase the military's dependence on military
contractors or do not use a risk-based model to make their
decisions. Both situations are problematic.
provide vital support to the military in a vast number of ways,
including training, logistics, and security. In many
situations, the decision to use contractors is the correct one.
However, these decisions should be made with great care, using
a process that forces an examination of the risks, mitigation
techniques, and benefits provided. Furthermore, when
policymakers decide to use contractors, the DOD Inspector General
should be involved from the beginning so that there is oversight
and transparency in the contracting process, and a reserve
contracting corps should manage the contracting.
Kochems is a former Policy Analyst for National
Security in the Douglas and Sarah Allison Center for Foreign Policy
Studies, a division of the Kathryn and Shelby Cullom Davis
Institute for International Studies, at The Heritage
P. W. Singer,
Corporate Warriors: The Rise of the Privatized Military
Industry (Ithaca, N.Y.: Cornell University Press, 2003) p.
MPRI, "Our Team," at (March 18,
Frank Camm and Victoria
A. Greenfield, How Should the Army Use Contractors on the
Battlefield? Assessing Comparative Risk in Sourcing Decisions
(Santa Monica, Calif.: RAND Corporation, 2005), p. 11, at http://www.rand.org/pubs/monographs/2005/RAND_
MG296.pdf (April 17, 2009). See also U.S. Department of
Defense, Air Land Sea Application Center, Risk Management, FM
3-100.12, February 2001, p. Glossary-5, at http://www.alsa.mil/documents/current/Risk%20Management%20-%20February
%202001.pdf (April 2, 2009), and U.S. Department of the Army,
Staff Organization and Operations, FM 101-5, May 1997, p. J-1, at
pubs/101_5.pdf (April 2, 2009).
General for Iraq Reconstruction, Iraq Reconstruction: Lessons in
Human Capital Management, January 2006, p. 25, at
(April 3, 2006).
Frank Camm and Victoria
A. Greenfield, How Should the Army Use Contractors on the
Battlefield? (Santa Monica, Calif.: RAND Corporation, Arroyo
Center, 2005), p. xx, at (March