The profliferation of dual use platforms with military and civilian application has not only improved warfighting capabilities, but also brought the economies of scale approach to defence systems manufacturing and service support. It is evident, as we witness the speed with the technologies reach their obsolence, within the span of a decade. In such scenario, the dilemma is whether to pursue technology development from scratch, or to modify an existing system to meet operational requirement.
In 2019, Pentagon awarded Microsoft with a 10 billion USD cloud computing (Joint Defence Enterprise Infrastructure) contract to deploy and manage an overarching cloud infrastructure connecting all components of the Department of Defense. The department-wide general-purpose cloud infrastructure was conceived to provide highly flexible and secure cloud services that extend from the home front to the forward operating areas to support warfighting. The primary objective of the cloud strategy was to harness the technological capabilities and data security offered by commercial cloud service providers such as Microsoft, Amazon and Oracle. The outsourcing of support and sustainment functions of defence communication infrastructure to commercial entities shows the level of confidence of the United States (US) government on the defence industry.
In the following analysis, I discuss the evolution of defence oursourcing, and the role of private military contractors and services providers in enhancing the overall national warfighting capbilities.
The Emergence of Defence Outsourcing: From Private Military Contractors (PMC) to Private Military Services Providers
The use of private military contractors and services as a support element to extend diplomatic reach, maintaining hard power capabilities and expansion of political-military influence beyond physical borders became a norm since Eisenhower’s era in the US. However, the concept is an old practice and has only evolved. In India, the concept of an army for hire was an ancient practice and remains part of Chanakya’s Arthashastra. One could find the account of such corporations from the southern Indian state of Kerala to the eastern Indian kingdom of Kalinga. The modern-day concept of military outsourcing involves a wide range of services including management of facilities, collaborative research partnership and staffing and recruitment services to armed forces of sovereign nations.
The evolution of defence outsourcing occurred in two phases — cold war and post-cold war. During the cold war, most outsourcing was technical and logistical. The private companies like Booz Allen Hamilton, Northrop Grumman and DynCorp International provided specialised services working alongside their US military counterparts. The second phase began after the fall of the Soviet Union with a massive reduction in conventional force structure and simultaneous decline in defence budgetary allocations. The unconventional, uncertain and localised nature of war required occasional surge, than maintaining a standing army of hundreds of thousands of soldiers. More than the numbers, the complexity and lethality of technology became a decisive factor across emerging conflicts. However, at the end of the cold war, the release of trained human resources and the availability of excess weapon systems further opened up new avenues for outsourcing. By the late 1990s, the defence outsourcing comprised both technical and non-technical support services under its ambit. In the UK, the development of defence outsourcing began with procurement reforms by the Ministry of Defence in the early 1980s. Moreover, by the end of the 1990s, the UK had already gained experience in employing private military services providers in support of its politico-security interests.
Is Defence Outsourcing a Viable Alternative to State Control?
Outsourcing involves contracting out specific tasks, earlier procured from in-house agencies to qualified external agencies, mostly private defence services providers. Control over supervisory rights forms the fundamental difference between privatisation and outsourcing. In the case of outsourcing, the contracting authority holds control over final acceptance and supervision of the contracted task or service.
Defence outsourcing contracts are of two categories—system support services or contingency support services. System support service contracts cover manufacture and maintenance of various technology platforms. Whereas, the contingency support service contracts include provisioning services for troops deployed in their designated area of operations (A0). The decision to categorise and outsource specific tasks to the private service providers is subject to the level of acceptance among the political-bureaucratic leadership because the paradigm shift driven in a national security architecture has an inherent top-down character. In such systems, more than the choice of individual armed services, rational decision-making with a consultative approach are driven by the government. The US Department of Defense, as early as 1994, recommended a reduction in budgetary expenditure by outsourcing support functions to private industry. In the UK, a shift towards private defence outsourcing began in the early eighties and have developed into an integral part of its defence procurement system over the years.
The change of world order in the post-cold war era, the emergence of localised conflicts, and implicit political interests of major powers facilitated the participation of private military service providers in the restrictive space of defence affairs. The need for technologies enabling strategic mobilisation of troops in the battlefield took precedence over resource-intensive forward deployments. Meanwhile, a rapid progression in defence technology landscape narrowed the shelf-life of the technology in use. Soon, the life-cycle of a technology platform became an essential factor in deciding capital and revenue allocations within the defence budget. In countries such as the UK and the US, the desire for capability-based development of the armed forces within budgetary confines opened up outsourcing opportunities to the private industry. During the cold war, contractual on-site teams provided mission support and depot level maintenance to the US Airforce. Both the US and the UK governments adopted methods and techniques, developed and used by the private industry, as best practices to streamline their defence planning, management and procurement processes. The openness to harness the best commercial practices in order to manage budgetary pressures and improve defence capabilities prompted the growth of military outsourcing.
However, not all countries were able to move their dependency onto the private military service providers. In those countries, the decision to outsource is directly proportional to the confidence of the civil-military leadership on their private industry capability and the country’s relative position within the broader international political system—either as a competitor, neutral spectator or an ally. In the case of India, the restrictive approach followed by the government, concerning defence and security, led to investments into developing state-owned defence enterprises at the cost of private sector investments. As a result, the state-owned ordnance factories and technology enterprises were insulated from foreign competition and became the primary source of defence outsourcing for the Indian armed forces. However, despite government support, the products and services from the state-owned defence industries continue to be of low quality with frequent cost overruns. The cumulative effect resulted in under-investment in private defence industry and subsequent lack of confidence from political and military leadership on the effectiveness of the private sector to provide necessary support functions.
On the contrary, Australia’s relative ease within the US alliance system in the world order shaped its procurement policy of outsourcing defence support functions to international players, despite an under-developed domestic defence industry. Thus, factors such as foreign policy, domestic defence industrial capability and strategic culture are a function of a policy decision affecting defence outsourcing. At times, these factors solely influence the national security concerns of a country in its decision of procurement of weapons from the international market and dependence on original equipment manufacturers (OEM) for various life cycle support services.
Defence Outsourcing as a Collaborative Approach
The rich spectrum of defence outsourcing comprising of services, products and technologies have been viewed from the reductionist lens of private military contractors a.k.a mercenaries. However, outsourcing enables sovereign nations to ramp up their operations during a crisis such as humanitarian missions or violence inflicted by non-state actors. The force multiplier effect catalysed by private military service providers supports government policies through a collaborative approach. Various collaborative service models such as government-owned contractor-operated (GOCO), contractor-owned contractor-operated (COCO), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS) models have been developed to facilitate outsourcing. In the event of private military contractors deployed overseas, project performance and monitoring are important to ensure accountability. In such a scenario, policies such as contractor on deployed operations (CONDO) provides a contractual framework that governs both national citizens and foreigners supplying support functions as part of the contractual agreement.
Conclusion
The primary task of the armed forces is to concentrate time and effort in planning and preparing for war. Investing energy and resources into support functions will fritter away valuable resources. One of the foremost benefits of outsourcing non-core functions to defence industry is that it frees up trained human resources towards combat readiness. It also provides the government with the flexibility to meet logistical requirements necessary for surge operations utilising the private sector capabilities. If the “Whole of Government” approach were to mobilise collective effort in pursuit of a mission, the use of private military service providers would make “Whole of Ecosystem” approach possible, in which every component is engaged to extract optimum results in pursuit of national security.
Disclaimer: The views expressed in the article are personal.
Debasis Dash is a risk analyst, with an inter-disciplinary background in engineering and defence studies. He has worked in defence industry consulting firms and think tanks on defence technology and security issues.
