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Contractors on Deployed Military Operations: United Kingdom Policy and Doctrine

Authored by Professor Matthew Uttley. | September 2005

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SUMMARY

Since the Cold War, the U.S. and UK armed services have undergone significant transformation in response to the radically altered threat environment, new operational demands, and reduced defense budgets. Central to this transformation in both states is an expanded role for private contractors in providing deployed support functions traditionally conducted by uniformed personnel. Despite the similar direction of military reform, the U.S. armed services? approach to battlefield outsourcing has undergone extensive public scrutiny and debate, whereas UK Ministry of Defence (MoD) initiatives have hitherto attracted comparatively little independent assessment. Close U.S.-UK military cooperation over recent years in Afghanistan and Iraq, and the likelihood that both states will remain close allies in future interventions, suggest that the UK MoD?s approach to deployed contractor support is a salient issue for U.S. military planners. This monograph analyses the MoD?s outsourcing strategy and identifies those aspects of UK policy and doctrine that warrant consideration by the Department of Defense (DoD) and U.S. armed services.

The monograph surveys the evolution and content of the MoD?s ?public private partnership? program. This reveals the scale and scope of MoD initiatives to date, and the managerial, operational, and technological factors that have shaped the MoD?s approach to organizing and managing private sector involvement. It also surveys why, despite the DoD?s and MoD?s widespread use of contractors on deployed operations, military outsourcing remains a controversial aspect of defense policy in the United States and UK. The DoD and MoD have been keen to articulate the financial and operational gains that the private sector can provide. Correspondingly, this ?government orthodoxy? has been under sustained attack from those critics claiming the UK and U.S. armed services have gone ?too far? with ideologically motivated privatization policies, and others who argue they have done ?too little? to harness private sector capacity. The utility of this survey of claims and counterclaims is that it generates testable hypotheses against which the financial andoperational performance of MoD and DoD outsourcing policies can be evaluated.

Evaluation of the performance of MoD outsourcing policy and doctrine against these testable hypotheses reveals two broad observations. On the one hand, the MoD has developed a number of novel command and control mechanisms that have succeeded in rationalizing and removing the risk in commercial battlefield support. On the other, the data necessary to evaluate the real impact of deployed outsourcing have yet to enter the public domain. Despite internal MoD reforms intended to ensure in-house and contractor alternatives are assessed on a ?level playing field,? limited information has emerged on how this works in practice. Similarly, questions remain about the relative cost-effectiveness of organic military provision and contractor alternatives, and whether purported savings from contracting out are actually being reinvested in additional front-line capability. Moreover, the MoD confronts a range of personnel issues before it can optimize the management of deployed contractor assets and ensure that outsourcing does not erode military cohesion.

Comparative analysis indicates that there are no fundamental differences in overarching MoD and DoD outsourcing philosophy. To the extent that variations do exist, this reflects differing national military structures, contractual practices and legal frameworks within which deployed contractor support has been engaged. Despite the similarities in overall approach, the analysis points to specific MoD initiatives that could enhance the U.S. armed services? ability to manage their deployed contractor support.

The monograph generates three primary conclusions and associated recommendations. The first is that military outsourcing will remain a controversial element of defense transformation unless the MoD and DoD release more detailed information policy on performance into the public domain. Second, given the current U.S. and UK commitment to outsourcing, the MoD and DoD need to address a range of implementation questions to ensure that contractors are engaged on deployed operations in the most efficient and cost-effective manner. And third, there are aspects of outsourcing ?best practice? that the MoD and DoD have developed, and both organizations have specific lessons to learn from each other.

CONCLUSIONS

The author identifies three major conclusions and associated recommendations for consideration by MoD and DoD officials. The first is that the use of contractors on deployed operations is likely to remain a controversial aspect of UK and U.S. defense transformation unless steps are taken to address a range of unanswered questions. On the one hand, MoD and DoD officials claim that contractor support reduces defense costs and provides a crucial ?force multiplier? to meet contemporary operational needs. They assert that the policy agenda has become one of refining procedures to engage private firms in the most cost-effective and operationally advantageous manner rather than any further questioning of the utility of contractors per se. On the other, ?too far? critics continue to argue that MoD and DoD have a flawed ideological preference for outsourcing, and ?too little? critics raise concerns about bureaucratic barriers to more extensive private sector solutions. This analysis suggests that controversies, myths, and emotions will remain unresolved until MoD and DoD release more data on the performance and impact of deployed operational outsourcing into the public domain. On this basis, the first recommendation is that MoD and DoD provide greater clarification by releasing more information, with accompanying assumptions, on:

  • The detailed mechanisms employed to evaluate the relative financial and operational implications of in-house and outsourced provision of deployed operational support, including the treatment of transaction costs.
  • The internal MoD and DoD policy guidance, organizational arrangements and institutional incentive structures under which officials evaluate the merits of in-house and private sector delivery.
  • The precise mechanism employed to ensure that private contractors are precluded from extracting ?excessive? profits on defense support contracts.
  • The financial and personnel resource redistribution and reinvestment implications of deployed support outsourcing. The detailed methodology adopted by MoD and DoD in differentiating between force ?augmentation? and ?replacement? resulting from outsourcing on a contractby-contract basis, and in terms of cumulative force posture impacts.
  • The mechanisms in place to measure and evaluate the impact of defence outsourcing on the morale, cohesion, ethos, and professionalism of the armed services and the contractors? personnel supporting them. Greater transparency on these issues will enable independent appraisal of the full range of benefits, limitations, and trade-offs associated with contractor support and a better-informed public policy debate. The survey of MoD policies and doctrines indicates that sophisticated mechanisms are in place to manage contracting for UK deployed operations. The CONDO policy codifies contractor support and deployed C2 arrangements, the CONLOG Contract has rationalized contractor supply chain management, and the SR Concept provides commanders with an interim option between regular military and civilian contractor personnel. Despite these innovations, the second conclusion is that there are still implementation issues that MoD needs to address and that ?much needs to be done to better exploit commercial capability.?220 These implementation issues are equally relevant to future DoD reviews of the coherence and effectiveness of U.S. policies and doctrines towards deployed cyontractor support. The recommendations that emerge are that MoD and DoD should:
  • Review the coherence of current guidance provided to individual contracting authorities when entering into commercial deployed support arrangements to ensure consistent contractor support arrangements are in place for military commanders. This should include analysis of the robustness of frameworks intended to regulate the approaches adopted by individual contracting authorities and the ?endto-end? effectiveness of existing contracts.221
  • Review the states of ?availability and readiness? for existing contractors and their sub-contractors to deploy, the extentof ?planned and unplanned? contractor surge capacity, and the measures that contractors can expect MoD and DoD to provide to prepare them for deployed operations.
  • Review key MoD/DoD and contractor risks on deployed operations in the areas of personnel security and safety and insurance and corporate reputation.
  • Identify and review all operational capability gaps currently met by contractors as a basis for understanding and managing the cumulative risks associated with relying on commercial capability.
  • Review the current and longer-term ability of MoD and DoD contracting authorities to act as ?intelligent customers? when contracting for deployed support. At issue is whether commercial officers are receiving appropriate training for deployed support contracting, whether contracting authorities have the ability to determine where and how best to use contractors, and whether they understand the operational environment and have the skills to develop ?imagination and flexibility in determining an appropriate contracting solution.?222
  • Review the current and potential longer-term ability of the U.S. and UK armed services to remain ?intelligent managers? of contracted deployed support. This should include analysis, for example, of the extent to which current and future commanders are educated in contractor management issues during their command and staff courses and precommand training.
  • Review the scope for joint risk assessments and greater ?habitualization? with industry when planning long-term commercial support arrangements.
  • Review and clarify the distinction between benign and nonbenign operational conditions where contractor support options are under consideration.
  • Identify the relative strengths and weaknesses of CONDO and SR-type arrangements for foreseeable deployed operational contingencies through the use of cost-benefit analysis.
  • Review and quantify the likelihood and risk of contractor withdrawal on the armed services? ability to meet mission objectives.

    The third conclusion is that the DoD and MoD have developed innovative mechanisms to harness private sector capability for contemporary operations, and that both organizations have scope to learn from each other. On the one hand, the U.S. armed services? triedand-tested approaches to contracting for deployed operations over a number of decades suggest that MoD policymakers and practitioners have much to learn from DoD processes and procedures. On the other hand, though MoD?s practical experience in employing contractors on deployed operations is more limited, it has developed coherent concepts that potentially have applicability with U.S. armed services. A final recommendation is that U.S. officials evaluate the content and performance of MoD?s CONDO policy, CONLOG Contract, and SR Concept in terms of their potential utility for the U.S. armed services.

    Officials at the DoD and MoD claim it is inevitable that all future UK and U.S. military operations will rely on a degree of contractor support. From their perspectives, the debate is no longer about whether there will be private firms on deployed operations; rather, the issue is when and where contractor support offers the most cost-effective solution in financial and operational terms. As this analysis shows, complex economic, operational, and policy implementation considerations are likely to dictate the future scale and scope of contractor involvement. This suggests the need for ongoing policy and doctrine refinement by defense officials, as well as greater independent scrutiny of developments, not least because the use of contractors on deployed operations has an important impact on government expenditure choices, public accountability, the efficiency and effectiveness of the military establishment, and the conduct and outcome of armed conflict.

    ENDNOTES

    220  Indications are that MoD?s Defence Logistics Organization has recently recognized that reform in this area is required, and potential mechanisms to ensure greater regulation in contracting for the ?Support Solutions Envelope? are now being evaluated. MoD Chief of Defence Logistics, The DLO Mission: To Deliver Logistics for Operations, Presentation at the DMA MoD Contractors? Support to Deployed Operations Seminar, London, March 15, 2005.

    221  A. Higginson, MoD Contractors? Support to Deployed Operations (CONDO) Post Seminar Summary, unpublished, March 18, 2005.