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outsourcing the mission

There are tens of thousands of private contractors living and working in Iraq. They have provided logistical support to the military -- building and running the bases, including supplying food, water, electricity, and laundry services. They have protected U.S. diplomats, including former head of the Coalition Provisional Authority, Ambassador Paul Bremer. And they have contributed to and provided security for Iraq's reconstruction. But they operate outside the military command structure and have been criticized for their rough treatment of Iraqi citizens. Has their presence become a liability? And which parts of the U.S. military's mission are appropriate to outsource? Here are the views of Col. Thomas X. Hammes (Ret.) and Col. John Toolan, both of the U.S. Marines; Steven Schooner, a professor at The George Washington University Law School and an expert on government contracting; and Peter Singer, the author of Corporate Warriors: The Rise of the Privatized Military Industry.

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Col. Thomas X. Hammes
U.S. Marines (Ret.)

… What is the usefulness of contractors in a war zone? When is it appropriate to use them? When is it not?

I think contractors are best used for mundane, repetitive tasks that are clearly defined with a legal structure; for instance, running a training facility in Kuwait. MPRI runs a superb training facility with retired NCOs [non-commissioned officers] -- vast experience, but it's not a combat zone. Very clearly defined regulations, rules, very clearly defined product which [it is hired to] deliver.

You get into trouble when you put them in a situation -- for instance, the security forces guarding Ambassador Bremer. Blackwater's an extraordinarily professional organization, and they were doing exactly what they were tasked to do: protect the principal. The problem is in protecting the principal they had to be very aggressive, and each time they went out they had to offend locals, forcing them to the side of the road, being overpowering and intimidating, at times running vehicles off the road, making enemies each time they went out. So they were actually getting our contract exactly as we asked them to and at the same time hurting our counterinsurgency effort.

Their interests are different than --

Their interests are fundamentally different than ours. You may lose an ambassador in an insurgency -- that's a fact; the British did in Malaya -- but you have other ambassadors. You don't get another shot at the insurgency. But if Blackwater loses a principal, they're out of business, aren't they? …

So it puts Blackwater in an impossible position. They will be as aggressive and as muscular as they need to be to fulfill what we contracted them to do. They did a superb job doing exactly what we told them to do. The problem is what we told them to do hurt the counterinsurgency effort. ...

… Why are we contracting so many of these functions out?

I think assumptions. We've had an assumption that contracting is inherently a good thing. That was a going-in position at the Pentagon as near as I could tell, and it is for some things. We get a little carried away, and then we gold-plate. For instance, in the Green Zone, we always had three different main courses, three vegetables, three kinds of ice cream, dessert -- way beyond any necessity, but they could do it, so they did, because it's just money. And in the Green Zone that's not a bad idea. You don't need a soldier to take care of the trailers or to make sure they're cleaned or to refill the water towers for the showers and things like that. But when you start moving him around among the population where decision-making becomes very, very important, and your [interaction] with the Iraqis becomes very important, then I think you don't want contractors. …

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Col. John Toolan
U.S. Marines

The preponderance of security teams in an environment where there is a conflict, naturally there's going to be some conflicting ways of doing business.

We have a tendency to want to be a little bit more sure about operating in an environment. We're going to do the risk analysis, and we will, in most cases, opt to reduce the amount of violence. Whereas I think some of the contractors are motivated by the financial remuneration and the fact that they probably want to get someplace from point A to point B quickly, their tendency [is] to have a little more risk.

So yes, we're at odds, but we can work it out. But it requires, as I stated earlier, having a joint coordination center where everybody is aware of the rules. And somebody has to be the big dog, and that needs to be us. ...

Have we outsourced too much? Are we providing too much in terms of lifestyle? Are we just outsourcing too much and not maintaining sort of the lean, mean fighting machine that we should have out there, protecting our own vital assets? …

I think the question for us in the military is that we don't have unlimited resources, and there are trade-offs that we need to make all the time. That's part of our business; that's part of my job. I make trade-offs all the time.

But if I just looked at the tasks that I had in my area of Al Anbar, where I really needed three essential tasks, I had to secure the MSRs, the major supply routes; couldn't allow infrastructure to be blown up. I couldn't allow oil trucks or contractors or any of those things from being interrupted. Secondly, I needed to make sure that I established an influence in and among the cities and the city governments to see how they were going, to provide some training and assistance to the security forces. And then thirdly, I had to combat terrorism; I had to combat the insurgency. But if I looked at [the tasks] I gave you in priority, the major supply routes and maintaining some influence in the key cities, I really didn't have a whole lot left to really combat the insurgents.

I took assets from a variety of different things to plug in. I could have used more forces, and I think any commander would tell you that he could have used more forces and done a better job. So the trade-off is, as the Marine Corps provides more logistics and supply and those kinds of items, it's going to take away from those operating forces that you need to do the job. And so if the contractors can do it without drawing too much of the military resources away, that's a plus. But by the same token, they shouldn't be operating in an area where by extension, by them operating, they now draw us further into problems.

So there's a paradox there that I'm not sure I can resolve for you. There are pluses and there are minuses.

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steven schooner
Professor, The George Washington University Law School; expert on government contracting

So what does [outsourcing] accomplish?

Well, one thing theoretically that it accomplishes is it gives you more flexibility. It gives you greater surge capacity. You don't have to have a tremendous number of troops stationed at installations all over North America waiting for the next big military action.

So if we decide we need to invade Iraq, we can go out and hire contractors very, very quickly at a rate we'd never be able to recruit otherwise. And then after we successfully quell an insurgency, we should be able to draw it down to a much less expensive troop level, because we simply tell the contractors to let the people go. It's much easier than doing the decline of reduction forces we saw, for example, after the Vietnam War.

Does it work?

It's an interesting question. Let's think: So does it work? There are some things that outsourcing does very effectively -- for example, provid[ing] surge capacity gives the military the ability to move more quickly, potentially gives the military the ability to do certain things they couldn't otherwise do.

For example, the military has a limited amount of transport capacity. There's only so many planes and so many ships. And moving troops and equipment can be very, very slow. But if you only have to move the troops, and you have contractors moving the equipment or contractors taking care of the food and the water and the other essential services, you can move your troops more quickly and, more importantly, be ready to fight, and fight more effectively much more quickly if you can rely on the private sector to fulfill all your needs. …

Is there any danger of the military becoming overly dependent on the private sector?

There's no question that the military has become overly dependent on the private sector. When I was a young Army officer, as I learned the military doctrine, … the military relied on contractors on the battlefield only to the extent that they could fight without the contractors.

That's simply no longer the case in the United States military. The United States military can no longer fight effectively without contractors on the battlefield, and that has to be an item of great concern both to commanders and to the public. If we are faced with a legitimate foe that could in fact compete with us in terms of competence on the battlefield … this pervasive presence … of contractors could be potentially disastrous.

When you say that we are overly dependent, in which services? Where do you draw the line?

Well, I think that particularly in terms of ground warfare, the military, the Army, is totally dependent upon contractors. They're dependent upon them for food; they're dependent upon them for water, housing, laundry, the basic services.

But in addition, we have contractors ferrying ammunition to the battle area at this point. That's pretty significant. Also, if we look at almost every high-technology weapon that we're employing on the battlefield, we do not have sufficient numbers of skilled operators to operate many of these systems without contractor assistance. Very, very scary situation.

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paul singer
Author, Corporate Warriors: The Rise of the Privatized Military Industry

The challenge is that we've looked at privatization as something if you can do it, you should do it. That's been the mantra in the privatization discussions across government.

That is actually the wrong lesson if you look at the lessons of outsourcing within regular industry, what corporations who have thought about outsourcing -- they say: "No, it's not just if you can do it, you should do it. It is first decide whether you should do it or not. Decide whether it's appropriate or not. Decide whether it's part of your core mission or not. If it's not part of your core function, then it's OK to outsource it. And if you're going to outsource it, do it in a way that will save you money," all these sorts of things.

The problem is the Pentagon picked up the wrong lessons from the regular business. And the result is sometimes they've outsourced things that infringed upon the core function of the military. And that's when you see all these kind of questions of accountability, all these kind of questions of how the heck did we get contractors in that role, where it's not only the public that's surprised, but people in the military themselves who are surprised and offended by it.

Then you get into the whole separate question, just separate from that, which is has it saved us money or not? And that's the irony of it. …

We are, though, now in a position where it's not like we can institute the draft overnight. We were already facing problems with finding enough National Guardsmen or reservists to fill the gap, so we're stuck with this solution of using private contractors. So what do you do?

Yeah. The challenge is that the government has to start thinking like a smart client. It is entering into business with these guys. It's got to start thinking like a business. …

Any kind of good business would say: "You know what? Let's get our books in order." And one of the great things of getting your books in order is not only what it does for your public policy side, but then you can start making comparisons. ... You can say: "We paid this much for this guy here doing role A, and we're paying this much for this guy here who's also doing role A? That doesn't make any sense." You can start seeing whether you're saving money or not. You can start figuring it out. You can start catching these cost overruns.

Second thing you do is decide for yourself what areas are your core functions and what areas are appropriate to outsource. That's what any business would look at. That's a lesson from industry over the last couple years. That was a lesson from the Internet boom. A lot of these companies that over-outsourced at the end of the day didn't have much substance there. So the military needs to decide what's right to do for itself and what should contractors do, and then stick to that.

Then you get to the third thing, which is for the areas that you decide are appropriate to outsource, have a good competition. Treat it like a business. Ensure that you're getting the best price. Ensure that you have good management. Ensure that you have good oversight of these contracts. Ensure that, if they screw you, you screw them back; that is, if they overbill you, you fire them. And so you send a lesson out on the field. Treat it like Economics 101. Let the market work for you rather than having the market take you for a ride.

Then you get to the final thing, which is finally create some clarity to the legal structure here. Decide what are the mandates and regulations that you want to put in place, very basic things like, who can work for these companies? Who can these companies work for? What types of rules and standards do they have to meet in the course of their operations? ...

So OK, so we run all these things. Is a smaller military heavily dependent on the use of contractors a bad thing, or necessarily a bad thing?

It's not necessarily a bad thing. It may be the reality that --

After all these things you've said about it, it's not necessarily a bad thing?

I'm not saying it is something that is inherently bad. It's that we've been quite stupid about it, and the result is we're paying the price for our stupidity.

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posted june 21, 2005

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