CONTRACTORS ON DEPLOYED MILITARY OPERATIONS:

UNITED KINGDOM POLICY AND DOCTRINE

Matthew Uttley

September 2005

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ISBN 1-58487-209-8
iii

FOREWORD

 Department of Defense (DoD) initiatives to use contractors on 

deployed military operations remains a contentious issue in U.S. 

military transformation. Despite the intense debates surrounding the 

benefits and costs of DoD outsourcing, little attention has focussed 

on similar Ministry of Defence (MoD) initiatives underway in the 

United Kingdom (UK). Since the UK and United States are likely to 

remain close allies in future expeditionary deployments, the MoD’s 

approach to contractor support is a salient case study for the DoD 

and U.S. armed services.

 This monograph, by Professor Matthew Uttley, examines the 

controversies surrounding deployed contractor support, the ways 

that the MoD has harnessed private sector capacity, and the lessons 

this provides for U.S. policymakers and military planners. In doing 

so, the author provides important insights into a significant theme in 

contemporary defense and security policy.

DOUGLAS C. LOVELACE, JR.

Director

Strategic Studies Institute 
iv

BIOGRAPHICAL SKETCH OF THE AUTHOR

MATTHEW UTTLEY holds the Chair in Defence Studies at King’s 

College London (KCL). He is currently the Head of the Defence 

Studies Department: a KCL department of 50 academics supporting 

military education at the UK Joint Services Command and Staff 

College, Shrivenham. He has previously held posts at the Royal 

Naval College, Greenwich, the University of York and Lancaster 

University. Professor Uttley has published widely on the historical 

and contemporary dimensions of defence economics, weapons 

acquisition, and UK defence policy. His authored/edited books 

include Westland and the British Helicopter Industry, 1945-1960 (Frank 

Cass, 2001), Britain and Defence 1945-2000 (Longman, 2001, with 

S. Croft, A. Dorman and W. Rees), The Changing Face of Maritime 

Power, (Macmillan, 1999), and The Changing Face of Military Power

(Palgrave, 2002). He has published in a variety of journals including 

Intelligence and National Security, Defense Analysis, Public Policy and 

Administration, and Defence and Peace Economics. Professor Uttley has 

acted as an advisor for a number of UK bodies including the National 

Audit Office, European Commission, the Ministry of Defence and 

the Economic and Social Research Council. 
v

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 and 
vi

operational 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.
1

CONTRACTORS ON DEPLOYED MILITARY OPERATIONS:

UNITED KINGDOM POLICY AND DOCTRINE

INTRODUCTION

 Over the last decade, the use of private contractors to support U.S. 

deployed military operations significantly has increased in scale and 

scope. Private industry’s expanded role is evident from the headline 

statistic that the ratio of military personnel to contract workers was 

10:1 in Iraq during 2003, compared to a ratio of 100:1 in the 1991 

Gulf War.1

 The broadening scope of outsourcing is reflected in the 

extension of Department of Defense (DoD) contracting from domestic 

training and base maintenance functions to include logistical and 

operational support needs during combat operations, peacekeeping 

missions, and humanitarian assistance missions, that have ranged 

from Somalia and Haiti to Bosnia, Kosovo, Afghanistan, and Iraq.2

The perspective of contemporary U.S. policymakers has become 

that:

The use of contractors to support military operations is no longer a 

“nice to have.” Their support is no longer an adjunct, ad hoc add-on to 

supplement a capability. Contractor support is an essential, vital part of 

our force projection capability--and increasing in its importance.3

One outcome is that DoD outsourcing has attracted extensive 

debate and scrutiny from the U.S. policymaking and academic 

communities.4

 In the United Kingdom (UK), the Ministry of Defence (MoD) also 

has contracted for commercial sector support under its “Contractors 

On Deployed Operations” (CONDO) policy and “public private 

partnership” programs. Reflecting DoD trends, MoD’s objective 

is to incorporate the private sector “so firmly into the doctrine for 

deployed operations that Planning Staffs and their Commanders 

will take it for granted that their task force will include a contract 

support element.”5

 However, in contrast to DoD outsourcing, MoD 

initiatives have attracted comparatively little scrutiny or independent 

assessment to date. 
2

 This monograph provides an in-depth analysis of MoD’s approach 

to deployed contractor support, and highlights those aspects of UK 

policy and doctrine that warrant consideration by the U.S. armed 

services. The content and direction of MoD outsourcing is relevant 

to the U.S. armed services for four reasons. First, since the Cold War, 

the UK has been one of the few states to join the United States in 

developing a joint expeditionary power projection capability across 

the spectrum of conflict types, ranging from high-intensity warfare to 

lower-intensity humanitarian and peace support. The MoD has also 

followed DoD trends in seeking to acquire “network centric warfare” 

capabilities that link sensors, command and control, and weapons 

delivery platforms via common digital communications networks. 

These similarities in defense transformation strategies mean all 

aspects of British military reform are salient for U.S. policymakers.6

 Second, the UK and United States remain key allies, as evidenced 

in their close political and military cooperation in Afghanistan and 

Iraq. Britain’s defence policy is predicated on the assumption that in 

“the most demanding operations” in the future, its armed services 

“will be operating alongside the U.S. and other allies.”7 As Britain is 

likely to be a key member of future U.S.-led coalitions, its approach to 

contractor support is directly relevant to DoD operational planners. 

Third, analysis of international defense outsourcing statistics 

indicates that the MoD most closely matches DoD trends. As Figure 

1 shows, the number of UK MoD “public private partnerships” 

(PPP) significantly exceeds those in other European countries, which 

suggests that the U.S. armed services are more likely to draw policyrelevant lessons from the UK experience than from comparisons 

with other allies. 

 Finally, similar controversies and debates surround government 

initiatives to employ “contractors on the battlefield” in the UK and 

United States. According to MoD and DoD, contractor support 

reduces defense costs and provides a crucial “force multiplier” to 

meet the needs of contemporary military deployments. Despite 

this shared “government orthodoxy,” military outsourcing remains 

emotive, and two contending critiques have emerged. One claims 

that MoD and DoD risk going “too far” with “obtuse” forms of 

privatization that could increase defense support costs and erode 

operational effectiveness.8

 Correspondingly, another critique starts 
3

Country Number of Defence 

PPP Projects

UK 1,181

Ireland 62

Italy 55

Netherlands 40

Portugal 21

Finland 7

Spain 6

Sweden 6

France 3

Norway 3

Statistics presented in S-E Bakke, What is PPP About, With Main Focus on Outsourcing, 

2nd Annual Nordic Defence Industry Summit, Oslo, April 27, 2004.

Figure 1. International Statistics on Public Private Partnerships 

(PPP) in Defense.

with the premise that “there are no military core competencies, and 

that all functions (including combat) are candidates for private sector 

involvement,”9 and criticizes MoD and DoD for employing “too little” 

commercial sector support on deployed operations.10 In this context, 

an in-depth assessment of MoD’s approach provides a mechanism 

to evaluate controversies surrounding military outsourcing in both 

Britain and America. 

 This monograph is divided into five sections. The first surveys 

the evolution, content, scale and scope of MoD’s “public private 

partnerships” program. The second analyses the premises 

underpinning the “government orthodoxy” and the counterclaims of 

the “too far” and “too little” perspectives. This generates contrasting 

hypotheses against which the performance of MoD outsourcing 

policy can be assessed. The third evaluates the evidence on MoD 

policy towards battlefield contractor support, and the fourth identifies 

those aspects of the UK approach that warrant consideration by the 

DoD and U.S. armed services. The final section summarizes the main 

conclusions and recommendations. 
4

AN OVERVIEW OF “PUBLIC PRIVATE PARTNERSHIPS” 

IN UK DEFENCE 

 Contemporary commentators tend to assume that defense 

outsourcing is a post-Cold War phenomenon and that the presence 

of “contractors on the battlefield” marks a recent departure from 

a paradigm of military self-sufficiency. In the UK case, neither 

assumption is accurate. As this section shows, MoD initiatives to 

harness contractor support on deployed operations mark the latest 

phase of a privatization program stemming from the early 1980s. It 

was the legacy of 2 decades of outsourcing that provided the impetus 

for contractor battlefield support and shaped MoD’s assessment of 

how private sector involvement should be organized and managed. 

 Until 1980, a key tenet of UK defence policy was that MoD and 

the armed services provided directly all the services for which they 

were responsible and owned the main resources necessary to provide 

those services. Comprehensive in-house self-sufficiency across the 

spectrum of “front line” and support functions was considered 

essential for operational effectiveness, and:

There was little or no scope, or perceived need, for private, commercial 

organizations to contribute to national defence. Moreover, the armed 

forces were increasingly likened to a “total institution,” one in which all 

the functions and activities of those concerned were internally geared to 

achieve the goals of the institution to the exclusion of all else.11

 Between 1980 and 1997, MoD gradually extended the scale and 

scope of competitive tendering and private sector involvement 

in nondeployed defense support under successive Conservative 

administrations. This started modestly in 1981 when governmentimposed Civil Service manpower targets led MoD to consider the 

possibility of “putting work out to contract.”12 By 1983, Defence 

Secretary Heseltine introduced the more systematic approach that 

henceforth:

. . . the only work which is carried out within our own defence support 

organization should be that which is essential for clearly proven 

operational reasons, or where there is financial advantage for the 

taxpayer.13
5

Policy became to “market test” selected in-house defense support 

functions against private sector bids and to contract-out where 

industry offered cheaper alternatives. A more intensive phase 

followed with the 1991 Competing for Quality (CFQ) White Paper,14

which exposed Third and Fourth line logistic support to external 

competition and led to multiactivity facilities management contracts 

where tasks “did not impinge directly on the services’ operational 

roles.”15

 In parallel, after 1992, MoD explored the scope for capital items 

traditionally purchased through the defence budget and run in-house 

to be financed and operated by industry under the UK government’s 

wider Private Finance Initiative (PFI). By 1997, the results of 

outsourcing policies under the Conservative administrations were 

that £2.2 billion, or approximately 25 percent of the defence support 

budget, was market tested and MoD estimates were that CFQ had 

“realized significant efficiency savings.”16

 After June 1997, the new Labour Government criticized its 

predecessor for assuming that the best solution to public sector 

problems was “simply to transfer as much of the activity as quickly 

as possible to the private sector.”17 However, the Blair administration 

actually set about increasing private contractor involvement in 

defence under a banner of government “modernization” and “publicprivate partnerships,” and sought to build “upon the successes of 

contracting out support services that formed the basis of the early 

program.”18

 Launched in 1998, the Better Quality Services (BQS) initiative 

assessed all MoD support functions in terms of whether they should 

be abolished, internally restructured, strategically contracted out, or 

privatized.19 The BQS initiative has formed one part of the Labour 

administration’s pan-government PPP program, which is intended 

to replace “adversarial” relationships between MoD and its suppliers 

with “alignment” of mutual objectives.20 The PPP philosophy is 

predicated on competitive tendering in the allocation of long-term 

contracts, open discussion between MoD and suppliers on the 

allocation of project risk, “framework agreements” that allow MoD 

to place separate tasking orders, and opportunity for “gain-share” 

between MoD and suppliers if contractors can provide innovative 

solutions to requirements. The PPP program emphasises that:
6

With industry increasingly involved in providing long-term services to 

MoD, we have recognized that a partnership approach--building reliable 

links with our suppliers--is often the best way of achieving the required 

performance. This does not mean creating privileged or monopoly 

suppliers: selection of a long-term partner is competitive wherever 

possible.21

The PPP initiative significantly has increased the scale and scope of 

private sector involvement in defence support. In practical terms, 

the program contains five generic types of customer-supplier 

relationships between MoD and industry (see Figure 2). 

The PPP Range

PPP

Outsourcing PFI Wider 

Markets

Prime

Contracting Partnerships Full 

Privatisation

Conventional 

Procurement

Figure 2. Elements of the UK PPP Program.

 The first PPP category covers the outsourcing of support services. 

The trend has been towards new large-scale multiactivity contracts 

with “industrial prime vendors,” typically of 5-7 years’ duration. 

Illustrative is the “Defence High Frequency Communications Service” 

(DHFCS) contract covering operation of long distance strategic 

communication between Army units, Royal Air Force (RAF) aircraft, 

Royal Navy (RN) warships, and UK headquarters.22 

 The second category covers PFI contracts. Between 1997 and 2000, 

the Joint Services Command and Staff College, the Medium Support 

Helicopter Aircrew Training Facility, the Attack Helicopter Training 

Package, the Hawk Training Simulator, and the Tornado GR4 

Training Simulator were contracted for under PFI arrangements.23

During 2000, following the publication of the Ministry of Defence 

Investment Strategy, MoD policy became that “before funds are made 

available for any new investment, private financing must be shown 
7

to be inappropriate, unworkable or uneconomic.”24 Subsequent 

PFI deals have included commercial provision of support vehicles 

(“White Fleet” project), new e-business systems, a Royal Navy 

communications service, Lynx and E3D Sentry aircraft simulatorbased training and Tri-Service Materials Handling services. 

 The third PPP category covers commercial marketing of 

irreducible spare capacity in MoD facilities, which commenced in 

1998 under the pan-Government Wider Markets Initiative.

25 Practical 

developments have included “equity joint ventures” between the 

former Defence Evaluation and Research Agency (renamed QinetiQ) 

and the private sector to market speech-recognition technology,26 and 

the Navy Recruitment and Training Agency’s (NRTA) partnership 

with Flagship Training Ltd. to exploit MoD estate and training 

facilities. 

 The fourth PPP category is “Prime Contracting.” Here, MoD 

retains ownership and responsibility for the full capital costs of 

new facilities, but prime contractors manage entire project design, 

construction, and final delivery supply chains. The fifth category 

covers “partnership agreements” between MoD and “key suppliers” 

under loose contractual frameworks intended to encourage the 

private sector partner to identify the scope for potential innovation 

and value for money improvements in defense support delivery. 

 The PPP program significantly has increased the scale and scope 

of private sector involvement in defence support. By 2000, some £10 

billion, or 45 percent of MoD’s “annual business,” had been reviewed 

for potential private sector involvement under the BQS initiative.27

The MoD currently has 42 PFI projects in operation covering military 

training facilities, logistics functions, and communications that bring 

in £2 billion of private sector investment, and another 40 projects in 

procurement that could ultimately generate £12 billion of additional 

defence investment. By 2000, the situation was that MoD and the 

armed services had assessed most nondeployable nonequipment 

support for partnering potential, and private companies were now:

involved in the management of property, the provision of services to 

military establishments and, increasingly, in the delivery of operational 

support to Forces overseas--a continuum of support from the home base 

in the UK to deployed military units.28
8

 This experience provided impetus for MoD to pursue the next 

logical progression: the development of systematic policies for the 

spatial movement of logistic support already provided by private 

industry nearer to the front line of deployed military operations. 

Though industry supported deployed forces in theatres of operation 

on an ad hoc basis during the 1990-91 Gulf War, and the Bosnia and 

Kosovo campaigns, MoD “lacked a coherent and agreed policy for 

its use.”29 Systematic policies have emerged since the 1998 Strategic 

Defence Review--the UK’s policy blueprint to transform the armed 

services for post-Cold War operational deployments--stated that 

“wherever appropriate” MoD “will consider the use of contractors to 

assist with logistic support.”30 This new imperative manifested itself 

in 2003 with MoD directives to “maximise the use of contractors” 

during UK military operations in Iraq.

 In parallel, weapons acquisition reviews suggested benefits from 

closer “partnering” between MoD and equipment suppliers in the 

“through-life” design, development, manufacture, in-service support 

and disposal of weapons platforms.31 The MoD’s “Smart Acquisition” 

initiative attempts to achieve this through “integrated project teams” 

involving industry at all stages of weapons projects to achieve “faster, 

cheaper, and better equipment.”32 This has provided an imperative 

for acquisition officials to draw manufacturers “further and further 

forward in the operational area in support of their equipment,” as 

prime contractors have assumed greater responsibility for Integrated 

Logistic Support (ILS).33 Building on the PPP philosophy, the trend 

here has been towards “an outsourcing of procurement from MoD 

with the prime taking ever greater responsibility, and risk and 

reward, for what is becoming a service rather than the provision of 

an asset.”34

 Five discrete types of deployed operational support contracts 

have emerged that reflect a combination of MoD’s overarching PPP 

approach, and operational and acquisition imperatives. “Original 

equipment manufacturer” (OEM) and “contractor logistic support” 

(CLS) contracts, signed when new equipment is brought into 

service, cover maintenance and upgrade of deployed equipment. 

The OEM contracts normally specify the provision and maintenance 

of “proprietary” equipment (e.g., combat aircraft, armoured fighting 
9

vehicles); CLS contracts provide the armed services with options 

to contract out some or all aspects of the deployed support and 

maintenance function to a commercial supplier. Available statistics 

suggest that 10-15 percent of the total value of equipment contracts 

is spent on through-life support to make the equipment available on 

deployed operations. Since 2001, some 30 CLS contracts to support 

systems and platforms have been invoked in support of British forces 

in Afghanistan and Iraq.35

 “Urgent Operational Requirements” (UORs) are one-off (short 

term for individual items) and time-limited contracts established 

as circumstances require, and typically cater for logistic functions 

or equipment upgrades not already covered by OEM and CLS 

contracts. Approximately £50 million per annum was spent on UORs 

before the UK’s interventions in Afghanistan and Iraq.36 Of the £800 

million UOR expenditure to meet the UK’s Iraq intervention cost, 

approximately £350-£400 million was spent on deployed contractor 

services.37 These UOR contracts were placed with over 100 UK and 

non-national companies, which deployed 2,500 employees in support 

of UK military forces in the Iraq Joint Operations Area.

 “Equipment-based Private Finance Initiative” contracts, which 

currently include the Army’s Heavy Equipment (Tank) Transporter 

(HET) and the Royal Navy’s Roll-on/Roll-off vessels, cover complete 

private sector provision of deployed equipment.

 Finally, deployed capability is provided through MoD’s 

overarching “Contractor Logistics” (CONLOG) Contract, a “onestop-shop” for packages of commercial support not already covered 

by OEM, CLS and PFI contracts. CONLOG is intended to reduce the 

number of ad hoc UOR contracts38 and has been awarded to Kellogg 

Brown and Root (KBR) under 7-year partnering arrangements. The 

MoD pays KBR £1.5 million per annum to provide planning and 

advice about potential contractor capability, and additional payments 

for specific “task orders” where KBR actually delivers capabilities on 

deployed operations. 

 The current scale of MoD deployed contractor support, and the 

extent to which the UK armed services have shifted from their pre1980 self-sufficiency paradigm, is evident from contracting data. 

Before operations in Iraq during 2003, MoD did not collect statistics 
10

systematically on the value of contracts placed with firms or data 

on contractor personnel deployed on operations. Since 2003, the UK 

Permanent Joint Headquarters (PJHQ)--the organization responsible 

for command and coordination of UK joint operations--has collected 

extensive data intended to inform operational planning and 

decisionmaking.39 PJHQ and Defence Manufacturers Association 

(DMA)40 figures suggest that approximately £11 billion of the 

UK annual £24 billion defence budget is spent with industry on 

support services and the provision, operation, and maintenance of 

equipment. Of this £11 billion, some £2.3 billion of MoD expenditure 

on equipment and services is “contracted for availability and 

capability” on deployed operations. 

 The number of contractors’ employees that have supported UK 

military operations since 1996 also demonstrates the scale in the shift 

from MoD’s traditional self-sufficiency paradigm. Available statistics 

indicate that somewhere between 21,000 and 27,000 contractor 

personnel, including locally employed civilians and locally recruited 

workers, have sustained UK military deployments.41 Of these, 

between 15,000 and 20,000 have supported “service contracts” on 

operations in the Balkans, Afghanistan, West Africa, and the Middle 

East. A further 1,100 to 1,500 personnel have been involved with CLStype contracts, and up to 1,200 have acted as consultants or technical 

advisers. Specific contracts for the Afghanistan and Iraq deployments 

have involved 3,500 contractor personnel.42 An indication of the scale 

of contemporary private sector support is the MoD estimate that 

contractor personnel have accounted for approximately 25 percent of 

the UK’s total deployed force since combat operations commenced 

in Iraq during 2003.43

CONTENDING PERSPECTIVES AND CRITERIA 

FOR EVALUATING MoD OUTSOURCING POLICIES

 As MoD has entered into contracts for deployed operational 

support, it has articulated its rationale for assuming that private 

sector involvement provides benefits for the UK armed services. 

This rationale closely resembles orthodoxies shared by other 

national defense departments pursuing outsourcing strategies. 
11

Correspondingly, this “government orthodoxy” has been under 

sustained challenge from “too far” and “too little” critics. This 

section reviews the contending perspectives and generates testable 

hypotheses to evaluate the performance of MoD policy and 

doctrine. 

MoD Orthodoxies.

 The MoD’s stated justification for employing contractors on 

deployed operations has six main premises. The first is that private 

firms can provide certain military support functions more cost 

effectively than the armed services. The assumption here is that 

military units traditionally have conducted numerous support 

functions with “close civil analogues and where comparisons of cost 

and productivity between Services and the private sector should 

present few insuperable technical problems.”44 Consequently, MoD 

has a range of “make or buy” options to meet its deployed support 

needs. 

 According to MoD, contractor provision may be cheaper than 

military units for several reasons. In-house military provision 

“removes, to a significant extent, the incentives and constraints that 

apply to firms operating under competitive market conditions.”45

Under such monopoly-supply arrangements, there are few 

incentives for in-house units to seek lower cost methods of work 

because operating costs are met from defense budget allocations, and 

policymakers lack comparative cost data on alternative sources of 

supply (“information asymmetry”). According to MoD, competitive 

tendering between military units and private firms should resolve 

these deficiencies because it enables policymakers to compare 

competitively-determined bids from potential suppliers. 

 Private firms may also have particular attributes that enable them 

to provide more cost-effective support capability than military units. 

According to the UK Treasury, the “realities of the private sector 

market place,” the need to generate profit, innovation incentives 

to meet customer demand, and skill in running service delivery 

activities “exert a powerful discipline on private sector management 

and employees to maximise efficiency.”46 Correspondingly, the 
12

“risk averse culture” of the public sector means “these disciplines 

can never be fully replicated,” so in-house provision can be “less 

equipped to challenge inefficiency and outdated working practices, 

and to develop imaginative approaches” to delivering defence 

support services and managing MoD-owned assets.47 Here, MoD’s 

assumptions reflect a wider literature that concludes transferring 

activities to the private sector allows “innovative thinking and 

adjustments, especially about the use of technology and labour, to 

maximise the chances of success, which are not available to the fixed 

hierarchies of militaries.”48

 Finally, MoD assumes that battlefield outsourcing can 

simultaneously be “profitable for the contractor while demonstrating 

value for money” for MoD.49 Central here is the notion that 

“partnership” and “partnering” between MoD and private suppliers 

enables the development of mutual products/services in a relationship where risks, costs, and benefits are shared, and where “mutual 

added value” can be achieved.50 From MoD’s perspective, a combination 

of competitive tendering and “appropriate benchmarking” can 

ensure that private suppliers provide cost-effective deployed support 

solutions. Through mutual trust, the combining of complementary 

assets and the identification of shared objectives, “public private 

partnerships” can draw on “complementary contributions to 

compose a package that makes good business sense and offers 

benefits” to MoD and the contractors.51 The types of “complementary 

contributions” MoD envisages from partnerships are summarized in 

Figure 3.

 The second premise is that MoD can reinvest resources released 

by outsourcing into operational enhancements in the form of 

additional front line military personnel, extra equipment, or access 

to private sector expertise. According to former UK Secretary of State 

for Defence George Robertson, cost reductions from outsourcing 

and other efficiency initiatives form “an integral part of our plans to 

drive down costs to pay for the modernization of our forces.”

 The MoD also assumes the process of substituting uniformed 

combat support units with civilian contractors releases trained 

military personnel for front-line tasks. The MoD’s 1998 Strategic 

Defence Review (SDR)52 marked the first systematic attempt to transform the armed services from their Cold War threat-based posture 
13

Private Sector Contribution Defence Ministry Contributions

Marketing expertise User needs, users “Frontline” knowledge 

Access to capital “Frontline” knowledge and experience

Access to leading-edge technology Property, buildings, equipment, and specialized areas

Operating expertise Operating systems

Increased use of spare capacity Access to restricted zones, passage through restricted 

areas

Scientific expertise, databases, patents

Sharing of communications bandwidth

Source: Adapted from material presented in S-E Bakke, What is PPP About, With 

Main Focus on Outsourcing, 2nd Annual Nordic Defence Industry Summit, Oslo, 

April 27, 2004.

Figure 3. Complementary Contributions 

in Defence Partnering Arrangements.

into a capability-based expeditionary force configured for mission 

types ranging from humanitarian assistance and peacekeeping, to 

high-intensity conventional warfighting.53 The SDR recognized that 

this spectrum of mission types would require UK forces to deploy to 

conflicts over longer lines of communication than during the Cold 

War and conduct concurrent operations, potentially of differing 

intensities. At the same time, the SDR also acknowledged that: 

The increased operational pressures of the last few years have shown up 

weaknesses in our ability to sustain forces deployed overseas, particularly 

where local facilities are limited . . . To remedy these weaknesses and 

ease overstretch, we plan a package of logistic enhancements . . . Where 

this is appropriate, we will consider the use of contractors to assist with 

logistics support.54

In this context, MoD planners assess that outsourcing reduces 

“overstretch” by releasing “those assets, in rouelment, that are still 

army owned to be available for additional operations that may come 

along in the meantime.”55

 In addition, MoD assumes the armed services can acquire private 

sector expertise for support requirements where the generation of 

in-house military capability is less cost-effective. Outsourcing can 

provide access to high-technology skills where small numbers of 

military specialists are required, and where the armed services’ 
14

retention of training infrastructure is uneconomic. In this regard, 

outsourcing is seen as a way for the armed services to “to keep 

pace with technology, retain access to the best that industry can 

offer, and apply increasingly scarce resources to high value combat 

systems.”56

 The third major premise is that contractors can provide deployed 

support functions with no adverse result on operational effectiveness. 

According to Secretary of State for Defence Geoff Hoon, the main 

driver for outsourcing “is the better use of resources in defence 

and the maintenance or enhancement of operational effectiveness.” 

Considerations of private sector involvement must take that aspect 

into account before proceeding to such issues as “the impact on the 

chain of command and service discipline.”57 This premise rests on 

five assumptions.

 1. There will invariably be readily identifiable safe and secure areas 

on any operational deployment where private contractors can operate. 

The MoD draws a distinction between “benign” and “nonbenign” 

areas within theatres of operation that are demarked by a “benign 

edge” behind the “front line.”58 In “benign” areas, “there is minimal 

risk of [contractor] personnel and equipment sustaining injury or 

damage through the effects of . . . hostile activity,” and “adequate 

[security] means are in place to ensure [personnel and equipment] 

safety.”59 According to MoD doctrine, “benign” areas represent a safe 

and secure environment in which contractors can operate. Though 

“benign conditions are found at different geographical locations and 

at different times as an operation develops,” MoD assumes that there 

will always be a range of circumstances where “commercial capability 

could be interchangeable with military capability throughout an 

operation” behind the “benign edge” (Figure 4).60

 2. The MoD assumes contractors can enhance significantly the 

armed services’ logistics and equipment support capabilities up to 

the “benign edge” of deployed operations. Capability enhancements 

can take various forms. Contractors can provide logistics capabilities 

that the armed services do not have that might include temporary 

base and infrastructure provision or the expertise to support new 

and complex technologies on the battlefield. Contractor-delivered 

capabilities therefore: 
15

. . . augment that provisioned by purely military means (as determined 

by extant Defence Planning Assumptions). [It can provide] . . . functions 

that may be required to enable extended operations in Joint Operations 

Areas (JOA), additional (unplanned) concurrency of operations, such as 

the maintenance of more than two deployed Lines of Communication, or 

access to the most modern technologies.61

Figure 4. Contractor Support and the “Benign Edge.”

 3. Contractors providing deployed support can be integrated 

into military operational planning, and command and control 

(C2) arrangements without disruption. The MoD assessment is 

that contractors can effectively “interface with and operate within 

the bounds of military doctrine and the operational commander’s 

concept of operations,” and meet “the requirements of the military 

logistics support plan.”62 Finally, MoD assumes contractor support 

can be harnessed without undermining the armed services’ core 

military capabilities. The MoD has stated that contractor support 

“is not intended to replace core military manpower in the Order 

of Battle,” but rather to augment it.63 Consequently, it is assumed 

that criteria can be employed to ensure that contractors can safely 

be employed to “enhance military capability in a cost-effective 

way, taking advantage of the skills and capabilities available in the 

commercial environment.”64
16

 4. The reliability of private firms to deliver the deployed support 

they are contracted to is ensured by “gain-share.” The MoD assumes 

that its “partnering” philosophy enables relationships with its 

suppliers that build on “trust, confidence, mutual alignment, [and] 

mutual understanding of what each party can and cannot do.”65

Consequently, firms providing battlefield support functions offer the 

same assured service as direct military provision because contractual 

“partnerships” enshrine common “understanding of constraints and 

imperatives faced by all parties.”66

 5. Outsourcing can enhance the morale, cohesion, combat 

effectiveness, and ethos of the armed services themselves. According 

to MoD, these gains accrue on two levels. On one level, contractors 

can relieve military personnel of mundane support missions, enabling 

soldiers to focus on mission critical activities that can improve their 

“quality of life significantly and, ultimately, impact [positively] 

on training and retention.”67 On a more fundamental level, it has 

been suggested that the “corporate ethos” of defense contractors 

themselves leads to close cooperation with the armed services on 

operational deployments. The contention here is that UK defence 

contractors tend to recruit ex-military personnel “predisposed” to 

“ways of acting, based on values drawn from their experiences of 

military service,” and who operate “to the same high standards” of 

the armed services “while exhibiting the same moral values which 

were first instilled in them in the military.”68 Consequently, it is 

assumed that contractors working with military personnel “generally 

share the same experiences, hardships, enjoyment, and problems, 

eroding further any cultural barriers that exist between them” in a 

mutually beneficial relationship where “values pass easily between 

both environments, shaping attitudes and work practices.”69 This 

suggests a new form of “military ethos” transcending the traditional 

military/civilian divide that replicates what the UK government sees 

as a new “public service” ethos and the sharing of “best practice” 

in other areas where the in-house monopoly provision has been 

replaced with a mix of public and private service delivery.70

 The final premise is that because PPPs self-evidently provide a 

cost-effective mechanism to meet defence support requirements, 

then MoD policy is in the vanguard of an inevitable global trend. 

The MoD claims PPPs are successful and proven management tools 
17

that have improved defence support without offending traditional 

military values.71 It has been keen to point out that PPPs in defence 

are adopted only after politically “neutral” cost-effectiveness 

calculations, rather than in response to any ideological commitment 

to forms of privatization. The MoD claims its: 

approach [to PPPs on deployed operations] is pragmatic, with the 

emphasis of encouraging innovations through commercial and in-house 

solutions depending on whichever is better placed to deliver required 

services at best value. There is no predisposition towards either public 

or private sector.72

As such, MoD sees itself at the cutting edge of defence management 

innovation because:

There is huge international interest in the UK’s approach to developing 

partnerships between the public and private sectors. It is an area of public 

policy where the UK leads the world. Over 50 countries have consulted 

the Treasury about the PFI. Some, like Italy, Ireland, Japan and the 

Netherlands are following us in the way we organise within government 

to deliver partnerships. Some are legislating to enable them to happen.73

Consequently, MoD assumes it is a world leader in harnessing private 

sector support to enhance defense affordability and effectiveness 

to the extent that “the pressures of the modern age will eventually 

oblige everyone to follow suit.”74 

“Too Far” Critique.

 The MoD has acknowledged there are “several conflicting points 

of view” about contractor battlefield support, and that some remain 

“cautious about possible impact on fighting capability.”75 This alludes 

to the criticism that MoD risks going “too far” with “unreflective” 

outsourcing schemes76 that fail to reduce defense costs and risk 

degrading combat capability by placing the armed services “at 

the mercy of a private agent[s].”77 This “too far” perspective raises 

concerns about each of the six main premises underpinning MoD’s 

case for deployed contractor support. 

 The challenge to MoD’s assumption that outsourcing is 

necessarily cheaper than in-house military provision employs two 
18

modes of analysis. One is the “Theory of Agency,” concerned with 

understanding conflicting goals between contract providers and 

contract purchasers.78 Because it occurs under nonprofitmaking 

“public service conditions,” direct military provision of support 

functions is assumed to take place in an environment where 

policymakers have full visibility and control over service delivery.79

Correspondingly, the “Theory of Agency” suggests that outsourcing 

introduces inherent tensions between the armed services’ security 

goals and a contractor’s imperative to maximise profits, under new 

circumstances where the armed services’ visibility and control are 

reduced. “Too far” critics argue that opportunistic contractors can 

exploit this reduced visibility and control, in stark contrast to the 

situation when the armed services “had the position of a permanent 

monopoly.”80

 “Too far” critics tend to accept that the scope for contractor 

opportunism is minimised when markets for military contracts are 

“contestable,” namely, where competitive tendering allows military 

customers to select between competitively determined bids, and 

when precise output requirements can be specified.81 Here, MoD can 

agree on fixed price contracts with a chosen supplier and impose 

rigid performance indicators to monitor contractor compliance. 

 However, “too far” critics point out that contestability rarely 

applies to contracting for deployed operational activities. On the 

one hand, the supplier base for battlefield equipment maintenance, 

logistics, and support functions is often limited to original equipment 

manufacturers or a small number of large specialized firms with niche 

expertise.82 On the other, uncertainties about precise requirements for 

future operational contingencies mean that the armed services rarely 

can impose fixed price arrangements when signing contracts.83 The 

concern here is that profit-seeking contractors have scope for “expost rent extraction” by exploiting uncertainties to increase the price 

of service delivery in ways not originally envisaged by the armed 

services at the contracting stage, thereby increasing the overall cost 

of service delivery. 84

 The other analytical perspective employed is “Transaction 

Cost” theory. This emerged to explain why organizations conduct 

functions in-house so extensively, given the widely acknowledged 
19

optimal resource allocating properties of competitive markets. 

Transaction Cost theory suggests in-house production can be more 

cost-effective when any additional “transaction costs” of planning, 

bargaining, modifying, and enforcing a contract with an external 

supplier outweigh the savings from competitive tendering. “Too far” 

critics claim that “hidden” costs, including contractor protection and 

other military support to contractor personnel during deployments, 

are seldom included in MoD comparisons of armed service and 

outsourced provision.85

 Combining Theory of Agency and Transaction Cost perspectives, 

“too far” critics claim there is no systematic evidence to prove 

outsourcing is cheaper than military provision,86 and that military 

provision might be more cost-effective precisely for deployed 

operational support functions where contractors have incentives to 

behave opportunistically, future requirements are uncertain, and the 

number of potential external suppliers is small. These conclusions 

reflect a wider critique of public sector contracting out, which holds 

that the implications of outsourcing are: 

. . . often assumed or promised, but not well-documented. Relations 

between cause and effect are contested; for example, indicators of 

efficiency and effectiveness are often elusive, side effects are hard to 

trace and the methodology used in evaluating . . . [outsourcing] . . . 

is often inadequate. The gap between an emphasis on evaluation and 

performance assessment in the reform model on the one hand, and the 

lack of real evaluation of the reform models themselves on the other, is 

especially striking . . . because their legitimacy is based on results.87 

 Second, “too far” critics question MoD claims that outsourcing 

necessarily releases resources for defense modernization and 

enhances front line capability. In the absence of systematic evidence to 

prove that private firms can provide battlefield support more cheaply 

than military alternatives, it has been suggested that the resource 

redistribution anticipated by MoD is illusory. Critics also challenge 

MoD claims that safe and secure “benign” areas for contractors exist. 

Instead, they claim the reality of the contemporary battlespace is 

“more complex, more dynamic and non-linear” which means that 

there is a less well-defined “front line” or “rear area.”88 Moreover, 

the extended range of contemporary weapons systems and threats of 
20

enemy interdiction suggest the vulnerability of civilian personnel is 

significantly greater than MoD policy implies.89 On this basis, critics 

suggest that the use of civilian personnel on deployed operations is 

more likely to tie up the military with contractor protection rather 

than releasing soldiers for front line duties.90 They also claim that, 

as battlefield support functions are increasingly outsourced, then 

the residual military forces for contractor protection are likely to 

dwindle, further overstretching scarce military assets. 

 Third, “too far” critics question MoD assumptions that the 

private sector can perform battlefield support without undermining 

operational effectiveness. Instead, they contend that outsourcing 

generates inherent risks to mission effectiveness. This concern stems 

from the assumption that “military institutions” are optimized 

to provide combat and deployed support. As legally recognized 

organizations controlled directly by the state, armed services have a 

legal mandate to deliver lethal force and are accorded “combatant” 

status under international law. The armed services’ organizational 

characteristics, that include rank structures, discipline and training 

regimes, military doctrine, and structures that combine formal 

hierarchy and functional specialization (the “line and staff” system), 

are designed specifically to foster group cohesion and “effectiveness 

in battle.”91 Finally, armed service personnel have unique conditions 

of employment that include subjugation to military law and 

“unlimited liability” to obey legal orders.92 From this starting point, 

“too far” critics identify various ways that outsourcing risks mission 

accomplishment by diluting the proven operational benefits of direct 

military provision.93

 Critics point to operational constraints that arise because the 

military cannot “command and control contractors in the sense that 

it commands and controls (C2) military units and soldiers.94 One C2

concern here is that a system of “contract management rather than 

command” erodes the armed services’ ability “to adapt logistics 

structures and procedures to changing situations, missions and 

concepts.”95 Castillo, for example, claims that: 

A commander’s freedom and ability to improvise quickly in using 

tactics, employing weapons, and deploying personnel have long been 

considered essential to victory in combat. A contract--a legal, binding 

document--even when written with the best of intentions, cannot cover 
21

every possible contingency in advance. To stop during wartime, no 

matter how briefly, to rewrite or renegotiate a contractor’s obligations 

severely limits a commander’s ability to accomplish the mission.96

 Another C2 concern arises from inherent difficulties in measuring 

contractor readiness and ability to deploy. Readiness states of 

military units are measured systematically in terms their ability to 

achieve mission tasks, and logistics units maintain excess capacity 

to meet potential surge requirements for unplanned contingencies. 

Conversely, critics argue that contractors are unlikely to maintain 

such excess capacity because it is costly and cuts into their profit 

margins.97 As military commanders lack direct control over 

contractor functions, then deficiencies in contractor readiness might 

be difficult to detect, undermining the commander’s ability to answer 

the question, “How are we fixed for war?”98 Analyses of contractor 

support to British Army combat units, for example, suggest: 

It is unlikely that in a normal situation, civilian production facilities, 

support assets, and transport assets will be available [within the 

deployment timetable of Army units] unless they remain uncommitted to 

other ventures and earmarked solely for MoD use, which in all probability 

will command a premium price. It may therefore be more cost effective in 

certain situations to rely on military assets rather than civilian ones.99

 A further cluster of “operational inflexibilities” identified by 

critics stem from the legal status of contractors, which, it is argued, 

impose constraints that are absent with military provision.100 Military 

commanders have less direct control over a contractor’s workforce 

than military personnel, and contractors cannot be disciplined for 

violations of the Uniform Code of Military Justice.101 Moreover, 

a fundamental difference is that “contractors are not soldiers, and 

they cannot be exposed to the same risks as soldiers.”102 This means 

that contractors are precluded from performing purely military 

functions that include occupying defensive positions or providing 

direct support to hostile operations. 

 According to “too far” critics, these legal factors create a range 

of operational rigidities and C2

 complications that are absent with 

military personnel. For example, a problem for commanders is 

determining the boundaries of “direct support of hostile operations,” 

as:
22

A system contractor employee who travels to the area of operations to 

perform minor technical maintenance on a weapon system that is still 

operational and capable of performing its intended mission may be 

violating the constraints against support to hostile operations. On the 

other hand, the same person performing the same maintenance on the 

same item in a maintenance facility in a safe area may not be in violation 

of the constraint.103

 These complexities generate potential problems that are absent 

with direct military provision: on the one hand, “by having a 

contractor accomplish a particular job, field commanders may be 

asking them to give up their protected status if captured”; on the 

other, the military commander may be violating the law of war by 

having a contractor participate in an activity that is de facto in direct 

support of hostile operations.104

 A final series of operational concerns surround MoD claims that 

contractors are used only to “augment” deployed forces rather than 

“replace” core tasks that must be performed by military personnel. 

According to “too far” critics, MoD’s failure to define “core functions” 

or distinguish between “augmentation” and “replacement”105 has 

meant that “augmentation” merely describes “outsourced functions 

without any reference to potential impact on warfighting.”106 The 

conclusion here is that the armed services may now lack the military 

personnel to fill mission critical roles if contractors are not present.

 Accordingly, the “too far” critics argue that if the armed services 

lack personnel to fill mission critical functions, the MoD premise 

that contractors can be relied upon to deliver these functions is 

questionable. Instead, critics claim the armed services’ reliance 

on private firms can create “critical dependencies” that arise 

because contractors are inherently less reliable than military units. 

Whereas military personnel can be compelled to perform mission 

requirements:

The Services cannot ensure that the contractor will be there when hostilities 

begin. Legally, contractors cannot be compelled to go into harm’s way, 

even when under contract, unless there is a formal declaration of war.107

 The risk that contractors might refuse to service contracts is not 

limited to those firms directly in receipt of MoD contracts, as prime 
23

contractors often rely on an extensive array of potentially unreliable 

subcontractors to meet deployed operational requirements.108 “Too 

far” critics argue this risk is far from theoretical, citing a case during 

the 1990 Gulf War where a contractor, fearing missile attacks against 

its employees, withdrew its personnel from Saudi Arabia because 

“the company alleged that the risk of death or injury to its employees 

outweighed the profit motive for the company.”109 In the same 

vein, a more “insidious” risk is that “in a contractor-rich, deployed 

environment,” multinational corporations contracted to support 

military deployments might decide that the loss of MoD business “is 

less of a business risk than the loss of more vital business interests 

[e.g., contracts with other governments] or personal safety in other 

areas.”110

 The net effect, critics argue, is that the armed services might lose 

mission critical support capability as a result of outsourcing. Equally 

significant, the concern is that outsourcing has left the armed services 

without the capacity to fill in if contractors are not present,111 to the 

extent that the option of “turning to military members in times of 

contractor failure will become less of an option.”112 Consequently, 

in contrast to direct military provision, the “no looking back” 

nature of contractor support means there are potentially significant 

critical capability shortfalls if contractors withdraw their support.113

Consequently, the crux of the “too far” operational concerns is that 

the UK armed services have inadequate mechanisms to evaluate 

whether management by contract rather than command affects the 

delivery of military capability.

 In contrast to MoD assumptions that outsourcing enhances the 

cohesion of the armed services, “too far” critics claim that it erodes 

their morale, combat effectiveness, and professionalism. At the general 

level, the claim is that reliance on civilians for deployed operational 

support appears to threaten “the traditional separation of military 

and civilian society that has been central to the organizational ethos 

of the armed forces,”114 which 

risks turning the military vocation into a trade, thereby eroding the moral 

content of military service and diminishing the serviceman in his own 

eyes. The end result of this process will [be] . . . the destruction of the 

ethos which enables men to fight wars with courage and honour.115
24

A central claim is that by “relying excessively on partnerships and 

by contracting out an increasing portion of what were once in-house 

defence activities . . . there is a danger that the clear division between 

military and civilian spheres may continue to blur.”116

 Concerns about the impact of a blurring of military and civilian 

spheres broadly reflect concerns raised in Charles Moskos’s 

“institution/occupation” thesis.117 According to Moskos, traditional 

notions of military service as a “calling or vocation, to the nation by its 

citizens, legitimated by broadly based national values” [“institutional 

military”] has been giving way to a subjective definition of military 

service as an occupation in the labor market, involving the performance 

of work for civilian types of rewards under specified contractual 

conditions [“occupational military”].” Moskos, and subsequent 

analysts, claim that forms of civilianization have exacerbated a 

relative shift from “institutional” to “occupational” armed services, 

which risks a diminution of their military effectiveness. This erosion 

of military effectiveness, it is argued, stems from a perception that 

if support functions can be transferred to the private sector, then 

there is nothing distinctive about the military function, and “the 

armed services must not underestimate the effect on morale and 

discipline if their personnel see contractors responding to different 

codes of conduct and enjoying a better quality of life in a theatre 

of operation.”118 As service personnel can compare their terms and 

conditions with civilian contractors, then incentives for trained 

military personnel to seek potentially more lucrative employment 

with private firms might increase military outflow to industry.119

 More specifically, critics argue that civilianization of home 

based support functions can have further adverse effects. One claim 

is that contractorization throughout the logistic pipeline means 

that uniformed personnel are “increasingly relegated to militarily 

essential, deployable activities,” and limited homebase posting 

opportunities have negative impacts on force retention and morale.120

Related concerns are that outsourcing erodes the armed services’ 

skills base, reduces valuable training opportunities,121 and erodes 

“core skills and low-level expertise and experience among military 

personnel . . . [that would] would require several years.”122

 Given these concerns about the economic and operational 

implications of outsourcing, some “too far” critics question why 
25

MoD and other defense departments have pursued private sector 

solutions with such vigor.123 Frost is illustrative of those who claim it 

reflects a conspiracy between:

. . . cost-cutting governments enthusiastic to implement innovations 

that have led to greater efficiency in the private sector, but which cut 

across the grain of military culture . . . The accomplices in this process of 

institutional subversion are those at the senior levels within the Armed 

Forces who, for a variety of reasons, have failed to distinguish adequately 

between those reforms which are compatible with the military culture, 

those which are bound to damage it, and those who know perfectly well 

what is at stake but have chosen to remain silent.124

 Other critics argue that because the UK government is ideologically 

committed to an expanded role for the private sector and as officials 

with “a stake in the process”125 are tasked to implement outsourcing 

policies, then there are incentives and opportunities for government 

to overstate the financial and operational gains from military 

outsourcing. Several reasons have been suggested as to why MoD and 

other defence departments might pursue outsourcing strategies that 

“do not necessarily have anything to do with . . . gains in efficiency 

and effectiveness.”126 As Pollitt points out, officials might be required 

to respond to coercive central government imposition of outsourcing 

policies. Where direct coercion does not apply, officials might 

conclude that the safest strategy is to “copy whatever is in fashion” 

within other national defense departments [“mimic isomorphism”], 

or officials responsible for managing support capabilities may have 

been educated to assume outsourcing is more efficient than in-house 

alternatives during their professionalization and institutionalization 

[“normative isomorphism”]. There might also be individual or unit 

incentives for officials to be seen to be in the vanguard of outsourcing 

policy that could take the form of enhanced promotion prospects 

within the armed services or the enticement of subsequent “rolling 

door” employment with private firms in receipt of outsourcing 

contracts.127 Given the political and bureaucratic market place in 

which outsourcing policies have been formulated and implemented, 

“too far” critics conclude that contractors on the battlefield are far 

from being an inevitable global trend. 
26

“Too Little” Critique.

 From the opposite extreme, MoD has also been criticized doing 

“too little” to harness the potential economic and operational gains 

from far more extensive private sector involvement in defense.128

This “too little” perspective starts with the premise that the private 

sector could provide most defense support functions and concludes 

that bureaucratic barriers within the MoD and armed services have 

militated against outsourcing being pursued to its logical extreme. 

The outcomes of these bureaucratic barriers, it is argued, have been 

missed financial and operational opportunities to the armed services 

themselves and, ultimately, to the UK taxpayer. 

 The intellectual basis of the “too little” perspective is the sustained 

attack on government bureaucracy as a mechanism for public service 

delivery mounted by “Public Choice” theories.129 Public Choice 

theorists share the assumption that all individuals and groups are 

self-interested maximizers of their own utility, and that fundamental 

differences in utility maximizing behavior exist between private 

firms and public sector organizations. They identify the motive 

force for managers of firms in competitive markets to be profits’ 

maximization. Correspondingly, it is assumed that, in the absence of 

a profit motive, the instrumental goal for public sector bureaucrats is 

to maximize their bureau’s budget. Public choice theorists claim that 

budget maximizing provides bureaucrats with instrumental gains 

that might include improved promotion prospects, enhancement of 

their agency’s reputation among the bureaucrat’s peer group, and 

the creation of organizational slack that provides extra resources 

that can be used to meet unusual risks or crises when they occur.130

Moreover, bureaucrats are able to pursue budget maximizing 

strategies because they enjoy a near monopoly of information on the 

costs of service provision in their area of public service delivery, and 

because the politicians responsible for their bureau will generally 

support budgetary increases in their area.

 “Too little” critics adapt Public Choice assumptions to assert 

that the MoD and armed services are fundamentally no different 

from all other public sector bureaucracies in that “they are goalseeking and concerned primarily with growth, improvement, and, 

ultimately, their own survival.”131 In doing so, they tend to regard the 
27

“noninstrumental” variables of military organization and culture as 

a disguise for the armed services to maximise the instrumental goals 

of budget maximization and the preservation of monopoly in-house 

delivery of defense capability.132

 According to “too little” critics, the inherent budget maximizing 

tendencies of “military bureaucrats” have a number of implications. 

First, the monopoly of information the “military bureaucracy” has on 

the costs of delivering defense capability enables defense officials to 

lobby central government for funding levels that “characteristically 

produce a radical oversupply of agency outputs.”133 Second, there 

are few incentives for the “military bureaucracy” to seek efficiency 

improvements in defense delivery because any savings could 

lead to overall defense budget reductions. Third, the “military 

bureaucracy’s” budget maximizing opportunities are enhanced 

when the armed services provide defense functions under inhouse monopoly conditions because officials have a monopoly 

on information of delivery costs when negotiating budgets with 

policymakers. On this basis, critics claim that the in-house military 

provision is “axiomatically less efficient than market processes” 

because there are inherent disincentives for defense officials to look 

for cheaper modes of service delivery.

 Consequently, according to critics, any central governmentimposed requirement to outsource defense activities: 

. . . clearly threatens . . . [the “military bureaucracy”] . . . by greatly 

increasing uncertainty and risk for budget-maximizing officials, and 

creating a much more hostile and turbulent environment for them to 

operate in. Competition with private firms forces [military bureaucrats] 

to specify detailed trade-offs between budgets and outputs and explicitly 

to justify previously customary service standards. It enhances sponsors’ 

power and erodes agencies’ capacity to oversupply outputs.134

Under these circumstances, “too little” critics infer that if the “military 

bureaucracy” confronts externally imposed imperatives to outsource 

functions, officials are likely to respond with minimalist policies that 

imply compliance as a strategy to deflect government away from 

genuinely radical budget cutbacks. 

 “Too little” critics point to various manifestations of “façade 

privatization” in MoD’s approach to outsourcing. They claim that, 
28

despite rhetoric to the contrary, MoD has done little to change 

the market structure of defense support provision leading to a 

perpetuation of “excessive” in-house supply monopoly. This 

assessment is indicative of MoD’s Competing for Quality program: 

Despite all the hype and promises, the program has been far too shallow 

in application and has not lived up to the expectations of industry. 

Most of the defence activities under scrutiny have remained on MoD 

premises, under MoD guise in one form or another. . . . Constrained by 

Whitehall rules and regulations the CFQ concept has lacked adventure, 

imagination, innovation and entrepreneurial spirit . . . There has been 

no real privatization, nor meaningful transfer of activities to industrial 

bases . . . [in-house provision flourishes] if without a true comparison 

against industrialization options. . . . This [is] a tragedy, for though MoD 

can point to having met identified financial savings targets, it has failed 

to reach possible and achievable goals that full integration with industry 

might bring.135 

Similarly, others claim that, though competition between in-house 

units and the private sector has occurred:

The opportunities for competition are far from exhausted. The possibilities 

include . . . the greater use of market testing, including its extension to 

activities traditionally excluded from such competition. Ultimately, the 

aim would be to identify those “core” functions of the armed forces 

which cannot be contracted out.136

 In addition, critics claim that MoD exaggerated operational 

“necessities” as a strategy to retain the vast majority of support 

functions within the military chain of command.137 The conclusion 

they draw is that MoD has pursued such a “façade privatization” 

program that has limited the scale and scope of outsourcing, along 

with the economies, efficienciess and operational gains that greater 

private sector involvement could generate. 

 It could be argued that the force of the “too little” critique has been 

eroded by the scale of MoD’s program of market testing and PPPs 

since the early 1980s, and more recent initiatives to use contractors 

for deployed operational support. However, since private sector 

delivery of defence support functions remains the exception rather 

than the rule, and given the “too little” proposition that “anything 
29

not directly involved in warfighting should be outsourced,” then 

analysis is required into whether MoD policies and procedures 

deliberately militate against private sector involvement.138

MoD POLICY IMPLEMENTATION: EVIDENCE AND ISSUES

 The survey of MoD orthodoxies, and the “too far” and “too 

little” perspectives, identify the major claims and counterclaims 

surrounding contractor support to deployed operations. In doing so, 

they reveal the general areas of controversy and the questions that 

need to be addressed if the performance of MoD outsourcing policy 

is to be evaluated (Figure 5). Despite these major controversies, 

no systematic and independent assessment of MoD policy has yet 

emerged. In part, this reflects the newness of contractors on deployed 

operations and MoD’s acknowledgement that it is still “feeling [its] 

way on this.”139 It also reflects the limited amount of information 

on the cost and performance of contractors that has so far entered 

the public domain. However, sufficient detail is available for a 

preliminary assessment of the key issues in the debate.140

The Bureaucratic Dimension.

Have bureaucratic factors within the MoD and armed services 

encouraged or militated against PPPs in UK defence? As the previous 

section demonstrates, MoD has been under sustained criticism from 

those claiming it has pursued ill-conceived privatization schemes 

and others who consider it has failed to exploit outsourcing potential. 

However, actually assessing whether MoD has gone “too far” or done 

“too little” is fraught with theoretical and empirical difficulties. At the 

theoretical level, there is a range of inherent difficulties in producing 

criteria to measure any optimum level of outsourcing that MoD 

should undertake. At the empirical level, “commercial-in-confidence” 

caveats surrounding MoD contracting processes preclude a detailed 

case-by-case analysis of how officials have resolved whether to 

outsource or retain functions in-house. However, what can be said is 

that a broad program of UK defence management reforms since the 

1980s appear to have created structures, a “corporate culture” and 
30

The Bureaucratic Dimension: Have bureaucratic factors within MoD and armed 

services encouraged or militated against PPPs in UK defence?

The Financial Dimension: Are PPPs cheaper or more expensive than direct military 

provision of defence support function? 

Can cost savings be attributed to competitive tendering, contractorization and 

“partnerships” with private sector?

How effective are MoD measures to minimize the scope for ex post rent extraction 

on defence support contracts? 

How are transaction costs factored into MoD assessments of financial effects 

outsourcing?

The Resource Redistribution Dimension: What are MoD assessments of the 

funding and military personnel that have been released/re-directed as a direct result 

of outsourcing?

What form has the redistribution of funds/personnel taken?

Has resource redistribution reduced military “overstretch”?

The Operational Dimension: How effective are MoD C2 arrangements to manage 

contractors on deployed operations?

Has MoD outsourcing “augmented” or “replaced” in-house military capabilities, 

and how effective are MoD measures to manage the operational risks of potential 

contractor withdrawal?

How effective are MoD procedures to evaluate the impact of defence PPPs 

on the morale, cohesion, ethos, and professionalism of the armed services?

Figure 5. Criteria for Evaluating MoD Outsourcing Initiatives.

organizational incentives for MoD officials at all levels to evaluate 

the scope for private sector involvement across the defense support 

sector. 

 Until 1980, MoD’s management philosophy had two key tenets. 

First, as former Secretary of State Malcolm Rifkind observes:

 . . . resources were bid for on a very strong single-Service basis, and 

success in the annual Long Term Costing (LTC) exercise was judged 

on the ability to protect the level of budget, or ideally increase it at the 

expense of the other Services. There was little attempt to measure the 

cost of individual elements of the [UK defence] program and relate this 
31

directly to outputs. Thus we were in no position properly to judge the 

value for money of our annual investment in defence; nor could we assess 

whether everything we did contributed to the delivery of front line 

forces.141

Second, it was assumed that MoD should retain in-house capabilities 

across the spectrum of front-line and defense support functions. 

 Since the early-1980s, MoD concerns about a “funding gap” 

between defence budgets and stated military commitments142 have 

been reflected in programs intended to ensure “more efficient 

management” of defence resources. The MoD’s strategy to 

achieve “more efficient management” has followed a UK central 

government-imposed “New Public Management” (NPM) reform 

agenda, emphasising performance management, devolved financial 

management, greater decentralization of authority and responsibility 

within government departments, greater recourse to the use of 

market-type mechanisms such as internal markets and contracting 

out, and privatization of market-oriented public enterprises.143

 In MoD’s case, the imperative to adopt NPM-style reforms has 

been particularly acute. Inherent difficulties in defining the final 

outputs of defense expenditure, post-Cold War pressures to realize 

a “peace dividend,” and the scale of MoD capital expenditure 

compared to other government departments have created incentives 

for MoD to be in the vanguard of UK public sector management 

reform and a “culture of continuous improvement.”144 As a former 

MoD Permanent Under Secretary acknowledges: 

 

The degree to which we [MoD] can demonstrate efficiency is important to 

us when we make the case for the defence budget in the public expenditure 

survey each year; we have to show that we are spending it wisely. We 

need to continue to pursue efficiency therefore, first, to produce the 

cash savings needed under the government’s wider efficiency program; 

second, to sustain the maximum output within a given level of resources; 

and third, to underpin our budgetary case in competition with other 

government departments, for the scarce resource of taxpayer’s money.145

 Evidence suggests that MoD’s NPM-style reform program has 

created the managerial context, organizational framework, and 

culture to provide incentives for officials to pursue private sector 

involvement when it is assessed to be more efficient than in-house 
32

provision. This has been achieved through MoD’s adoption and 

consolidation of six key central government-imposed NPM-style 

reforms. 

 First was the imposition of a quasi-contract between MoD and 

central government, whereby MoD delivers an agreed defence 

strategy, program, and military capabilities (“defence outputs”) in 

exchange for its budget allocation (“defence inputs”). The MoD’s 

output targets are currently codified in a “Public Service Agreement” 

(PSA), or “a contract between MoD and the centre” which contains 

a 5-year review cycle for all defence activity.146 Responsibility for 

delivering the defence strategy set out in the PSA resides with MoD’s 

Defence Management Board (DMB), the membership of which is 

summarized in Figure 6.

Figure 6. MoD Defence Management Board.

 Second was DMB’s adoption of output-based strategic management planning. In effect, DMB acts as “the main corporate board 

of MoD, providing senior level leadership and strategic management 

of defence,” which is reflected in its responsibility for defining the 

role of UK defence by providing strategic direction, vision, and 

values; setting objectives and targets that establish the key priorities 
33

and defence capabilities necessary to deliver MoD’s departmental 

objectives; resource allocation and strategic balance of investment 

to match defence priorities and objectives; and, performance 

management and “driving corporate performance.” 

 Third was delegation of authority and accountability at all 

levels within MoD and the armed services. Delivery of the DMB’s 

“Departmental Plan,” and the financial resources intended to meet it 

is made to 11 “Top Level” budget holders (TLBs) (see Figure 7), who 

then delegate resources for the implementation of their output-based 

plans to subordinate budget holders. Budget holders at all levels in 

this hierarchy have become “cost-centre” managers with “individual 

accountability and responsibility, and the concomitant authority to 

take decisions within clearly-defined parameters without constant 

reference up the line management chain,”147 in a system of vertical 

customer-supplier contracts between each tier of the budget chain.

Figure 7. MoD Top Level Budget System.
34

 Evidence suggests this delegated management structure has 

generated incentives for all budget holders to pursue private sector 

partnering opportunities within their area of delegated responsibility. 

When delegation was first introduced in the early 1990s:

lower levels of budget holders had the authority to look for value for 

money wherever it could be found. By so doing, they were therefore 

relieved of the requirement of having to go through “authorized” 

channels as in the past. The military were free to use the market place 

to purchase what they needed, and in essence the wider defence market 

began to be opened up to the private sector.148

In essence, the combination of vertical delegation and MoD’s 

stated commitment to greater private sector provision seems to 

have created a framework where budget holders have been able to 

outsource functions in the knowledge they will gain higher-level 

endorsement. Moreover, outsourcing incentives seem to have been 

enhanced in 1998 when MoD policy became that certain receipts and 

efficiency savings from PPPs could be retained by budget holders 

and redirected to meet their management planning targets.149

 Fourth was the creation of discrete “businesses” embedded 

within MoD and the armed services located either within the TLB 

structure, or operating as freestanding trading funds. This stemmed 

from the UK government’s 1988 The Next Steps report, which 

recommended the establishment of semiautonomous agencies to 

carry out the “executive” service delivery functions of government 

departments.150 The MoDs operate under frameworks setting out 

their policy parameters, budgets, targets, and degree of delegated 

authority. Strategic control of agencies remains with Ministers, but 

once the policy and framework are set, agency chief executives have 

the authority to decide how agency objectives are met.151

 The MoD’s “Defence Agencies” currently employ 60 percent of 

MoD’s civilian workforce and 11 percent of total uniformed personnel, 

and their operating costs account for approximately 35 percent of 

MoD’s overall resource cost.152 Each agency is mandated to provide 

defined services that are enshrined in quasi-contractual Customer 

Supplier Agreements (CSA) and Service Level Agreements (SLA) to 

“customers” elsewhere across or vertically within the TLB hierarchy. 

The MoD’s stated rationale has been to ensure that “Throughout 
35

our business, there is an increasing emphasis on defending the 

relationship between internal ‘customers’ and ‘suppliers’ and, in 

doing so, strengthening the hand of the customer.”153

 Like MoD budget holders, defence agency chief executives have 

incentives to meet their CSA and SLA delivery targets by identifying 

partnering opportunities with the private sector.154 For example, 

the Defence Communication Services Agency (DCSA), responsible 

for providing satellite communications and information delivery to 

deployed headquarters, is attempting to meet its financial targets 

by retaining “only those military posts where military expertise is 

essential” and identifying functions “which can be done perfectly well 

and probably more cheaply by industry.”155 The Defence Aviation 

Repair Agency (DARA)—which is responsible for aircraft repair, 

maintenance, modification, and complementary logistic supply 

chain support services—has chosen to meet its financial targets by 

partnering with Agusta Westland and BAE systems.156 The tri-Service 

Defence Transport and Movement Agency (DTMA), charged with 

the acquisition and allocation of freight and passenger movement 

capacity and movement plans and advice to the armed services, 

has extensively engaged contract-based capability and capacity.157

Similarly, the Naval Recruitment and Training Agency (NRTA) has 

developed a comprehensive approach to meeting its performance 

targets that has included outsourcing noncore activities, partnership 

sourcing, and PFI arrangements for capital investment in its training 

estate.158

 The fifth reform area has been in the weapons acquisition 

and logistics fields. Reflecting MoD’s wider management reform 

philosophy, incentives exist for officials to look for private sector 

partnering in initial weapon procurement and the equipment’s 

through-life support. Under the current “Smart Acquisition” 

procedures, responsibility for the acquisition and in-service support 

of individual items of equipment or platforms is delegated to 

“Integrated Project Teams” (IPTs). The IPTs are located in MoD’s 

Defence Procurement Agency (DPA) until new equipment is brought 

into service, then they migrate to the Defence Logistics Organization 

(DLO) to oversee in-service support.159 An outcome of “Smart 

Acquisition” is that individual IPTs are tasked with producing costeffective through-life solutions to capability requirements. Individual 
36

IPTs are required to “seek to harness innovation and industrial power 

to facilitate optimized and integrated commercial solutions” when 

considering in-service equipment support except in cases where this 

would “cause unacceptable risk to the front line.”160 

 The sixth reform area has been MoD’s adoption of a plethora 

of management tools and techniques originally developed in the 

private sector. The most significant has been the introduction of 

“Resource Accounting and Budgeting” (RAB), which measures 

the financial implications of vertical and horizontal “customersupplier” transactions, and the cost to MoD of stocks and capital 

assets ownership.161 The significance of RAB in the context of MoD 

outsourcing is two-fold. First, it has enabled MoD budget holders to 

compare the costs of its in-house activities on an equivalent basis to 

the private sector, and to identify where private sector provision is 

more cost-effective.162 Second, depreciation charges imposed on MoD 

under RAB have created incentives for budget holders to consider 

greater reliance on leasing and other modes of PPP service delivery 

rather than retaining assets and facilities on the Defence Vote. 

 Consequently, at the strategic level, MoD’s management approach 

since the early 1980s has been informed by a belief in the benefits 

of competition and contracting, whether internal or external. The 

overarching theme of MoD internal management reform has been 

to replace “traditional” bureaucratic structures and processes with a 

quasi-internal market of customers and suppliers. Here, 

The intended modus operandi of quasi markets is that central [MoD] 

decision makers determine the output they wish agencies to produce, 

and then “contract” with [its subordinate civilian and military] agencies 

to purchase those outputs for an agreed price. Fundamental to this has 

been the attempt to stimulate a purchaser/provider split, with formal 

“contracts” governing the terms upon which providers receive payment 

for the provision of defined outputs.163

At the same time, MoD’s output-based management planning, 

delegated management structure, and adoption of new management 

tools have provided incentives for defense officials at all levels to 

harness private sector capability. 

 The available evidence suggests that MoD’s NPM-style reform 

program has drawn contractors closer to the front line “in areas that—
37

a few years ago—[were] thought to be the exclusive preserve of the 

Services.”164 However, more information is required before “too far” 

and “too little” concerns about the incentive structures surrounding 

deployed support outsourcing can be fully addressed. On the one 

hand, more data on the precise criteria employed by MoD officials 

in evaluating the relative costs and benefits of in-house and private 

sector alternatives are necessary to evaluate “too far” assertions that 

battlefield outsourcing reflects an ideological predisposition towards 

privatization. On the other hand, the release of information on, for 

example, the relative scale of deployed outsourcing between the 

various TLBs or the criteria employed to declare certain functions as 

“no go” areas for outsourcing is required, if “too little” concerns are 

to be allayed or confirmed. 

THE FINANCIAL DIMENSION

Have PPPs Reduced UK Defence Support Costs?

 Reports by MoD spanning 2 decades all conclude that competitive 

tendering and contracting-out have generated cost savings across 

a range of nondeployed defence support functions. Audits of the 

“Competing for Quality” program and other initiatives suggest 

market testing and strategic outsourcing have produced 23 percent 

gross average savings on previous in-house delivery costs. According 

to MoD, when transaction costs “of the competitive process” are 

deducted, average net savings of approximately 18 percent have 

been achieved.165 These results are similar to the average net 20 

percent cost reductions the U.S. DoD has identified from the A-76 

outsourcing program.166 Evidence suggests that with “Competing for 

Quality” and similar programs, MoD has been able to define precise 

service requirements and contract management regimes prior to the 

competitive tendering process and attract the multiple private sector 

bidders necessary to make genuine “market testing” viable.167 

 Correspondingly, the financial outcomes where deployed 

operational support functions have been outsourced are less clear. In 

part, this reflects that more limited cost data have entered the public 

domain. It seems that MoD contracting procedures generally impose 

“value for money” mechanisms and reduce scope for contractor 
38

“ex post rent extraction.” MoD procedures dictate that contracting 

authorities should select suppliers following a competition process, 

and that subsequent variations to service delivery requirements are 

dealt with through “open book accounting” and at pre-agreed profit 

rates.168 

 However, evidence indicates that de facto contracting processes for 

deployed support sometimes have been less robust. First, difficulties 

have been encountered in imposing rigid contract specifications 

and fixed price contracts for deployed functions where precise 

future deployed requirements are not known. Limited warning 

and preparation timescales for unforeseen operational deployments 

have also meant that MoD contracting authorities have approached 

“preferred suppliers” rather than employing open competitive 

tendering. Second, difficulties in predicting precise deployed support 

requirements have resulted in the award of “indefinite delivery, 

indefinite quantity” contracts, where MoD informs potential suppliers 

of the funds available for a particular deployed support function, 

and the latter submit bids with estimates of profit margins and risk. 

Under these conditions, questions remain about whether MoD has 

adopted the most cost-effective contractual framework and what the 

relative costs of military and civilian provision actually are. 

 Third, wider questions remain about the extent to which MoD 

can exploit competitive tendering to meet its deployed support 

needs. With large equipment-based PFI contracts, which currently 

include the Army’s Heavy Equipment Transporter and the Royal 

Navy’s Roll-On Roll-Off Ferries, the limited potential supplier 

base has forced MoD to estimate the relative costs of conventional 

procurement and private sector alternatives using a “Public Sector 

Comparator” (PSC) rather than market competition. The PSC is a 

hypothetical estimation of what the project will cost to design, build, 

and operate, normally based on historical data, and concludes that 

PFI deals offer a 10 percent saving against the cost of delivering 

services in-house. However, a concern remains that “calculation of 

the PSC is a contentious issue and some commentators claim that the 

difficult task of accurately compiling the PSC leads to [MoD claims 

of cost] savings that are not realistic.”169

 Consequently, no overwhelming evidence has entered the 

public domain to prove that the outsourcing of deployed support 
39

functions necessarily has been cheaper than direct military provision. 

Questions remain about whether MoD is engaging contractors in 

the most cost-effective contractual framework, and also what the 

relative costs of military and civilian alternatives are. Until detailed 

information is released on the methods used by MoD to compare 

the costs of military and outsourced alternatives, including how 

transaction costs are factored into such calculations, then the true 

financial implications of outsourced deployed operational support 

are likely to remain contested. It may be the case, as MoD suggests, 

that deployed support contracting has generated economies and 

that information on the scale and scope of these savings will enter 

the public domain in due course. Until this occurs, however, then 

“too far” claims that MoD has an ideological predisposition towards 

privatization and “too little” concerns about “missed” outsourcing 

opportunities are likely to persist. 

The Resource Redistribution Dimension.

What are MoD assessments of the funding and military personnel that 

have been released/re-directed as a direct result of outsourcing? Whether 

outsourcing has provided additional resources that have enhanced 

the UK’s overall defence capability remains contested. Despite MoD 

claims that resource reallocation has occurred, surprisingly little 

information has entered the public domain. No details have emerged 

on how or where the purported savings from contracting out have 

been reinvested across other defense priorities. Moreover, only 

anecdotal information is available on the redeployment of military 

personnel released from deployed support functions where activities 

have been transferred to the private sector.170

 During Operation TELIC, for example, some 500 KBR personnel 

and its subcontractors were contracted to construct 10,000 units 

of temporary accommodation under a contract valued at £120m. 

However, in this case, it is not clear whether KBR’s involvement 

reflected a calculated decision on MoD’s part to release trained 

military manpower, or whether the UK armed services simply lacked 

any in-house capability to meet the requirement in the first place.

 The resource redistribution dimension is clearly a central variable 

in the overall impact of military outsourcing. Consequently, until MoD 
40

quantifies these aspects of deployed contractor support, controversy 

is likely to remain. This suggests the need for detailed survey work 

within MoD to identify both the extend to which resources have been 

reallocated within defence, and the degree to which any savings have 

been clawed back by UK central government.

THE OPERATIONAL DIMENSION

How Effective are MoD C2

 Arrangements to Manage Contractors 

on Deployed Operations?

 By the late-1990s, MoD had some limited experience in 

using contractors on deployed operations. “Urgent Operational 

Requirement” contracts had been let for military vehicle upgrades 

in the 1991 Gulf War, camp construction and operation in Bosnia, 

and road transport from the UK to the Second Line in Theatre in 

Kosovo.171 However, MoD officials recognized that the approach at 

that time had major deficiencies. In the absence of an overarching 

policy, operational support contracts were let on an unsystematic oneoff basis, and issues including the status and security of contractors 

had not been resolved.172 Moreover, officials recognized that:

Short-term perspectives on contracting can restrict timely delivery of 

operational capability and can be wasteful of resources. This has entailed 

the drawing up of contracts from scratch, with optimistic timeframe and 

quality targets. Where these targets are not met (e.g., Bosnia) the effects 

on the deployed force, particularly on morale and confidence in the 

system of support, can be particularly detrimental.173

 A further limitation was that contracts were generally “limited 

in scope and not buttressed by a solid foundation of policy and 

doctrine.”174 At the same time, industry’s concern was that firms 

were involved in deployed operations on a “pretty ad hoc and frankly 

risky basis. Much of it was policy on the hoof. But worst of all, there 

[was] huge opportunity there for misunderstanding, misalignment, 

and hence failure of the support.”175

 In response, MoD began formulating what were intended to be 

coherent policy and doctrines to codify contractor battlefield support 
41

during 1997. From the outset, MoD sought to ensure partnership 

with contractors in policy formulation. The “Contractors on 

Deployed Operations” Partnering Support Steering Group (PSSG) 

was established which included MoD officials, senior industry 

representatives, and uniformed engineering and logistics staff. 

Policy was developed by three PSSG working groups: “Capability 

Definition and Development,” responsible for identifying the scope 

for contractor involvement and devising mechanisms to measure 

the risks involved in using contractors in-theatre; the “Personnel 

Working Group,” looking at the legal status of contractors and 

their position related to the military commander; and, “Contractual 

and Commercial,” which focused on devising differentiation 

criteria between multifunctional logistic providers and specialized 

equipment maintainers. 

 Three major MoD initiatives have emerged. First is the “Contractors on Deployed Operations (CONDO)” policy, intended to 

harmonize procedures governing all contracts requiring contractors 

to “deploy in support of operations.”176 Second is MoD’s “CONLOG 

Contract,” a single-source enabling commercial support contract 

covering a range of Combat Support (CS) and Combat Service Support 

(CSS) capabilities. Third is the “Sponsored Reserve” (SR) Concept, 

whereby “services normally provided [to MoD] in peacetime by 

contractor staff are provided on operations by staff drawn from the 

contractor’s workforce who are reservist members of the Armed 

Forces.”177 With these initiatives, MoD assumes it has measures in 

place to provide “an assured capability for the military commander” 

under arrangements that are “profitable for the contractor while 

demonstrating value for money for MoD,” that ensure operational 

deployments are “as safe and secure as possible for the [contractor] 

workforce.”178 Evidence suggests that these MoD initiatives have 

identified and addressed many of the C2 concerns raised by “too far” 

critics. 

 Before the CONDO policy, a limiting factor on UK military 

deployments arose from the dislocation between MoD arrangements 

for deployed support contracts and the actual control of contractor 

capability by military commanders in theatres of operation. The 

MoD management philosophy of delegation has “empowered” 

DPA IPTs and DLO Equipment Support Business Units (ESBUs) to 
42

contract for logistics functions or equipment support on behalf of the 

Army, RAF, and the RN, or the Single-Service Front Line Commands 

(FLCs). Before CONDO was developed, MoD’s PJHQ had limited 

visibility or control over deployed commercial support arrangements 

entered into by the various contracting authorities. In theory, the 

PJHQ was the focal point at the “coupling bridge” into operational 

theatres for all commercial capabilities to support the FLCs. In 

reality, the PJHQ was bypassed because the FLCs, via the DPA and 

DLO, maintained direct control over “their” contractor support. The 

outcome was that PJHQ joint commanders lacked an overall picture 

of contractor capability available in theatre, or information on the 

scope of contracts with individual suppliers. Consequently, before 

CONDO, “too little” concerns about operational constraints arising 

from “management by contract” seemed valid. 

 The CONDO policy has introduced various measures to rectify 

these C2 deficiencies that increase the oversight that commanders 

have over contractor capacity at their disposal. In procedural terms, 

the FLCs, DPA, and DLO now pass their in-theatre contractor support 

requirements to the PJHQ Chief of Joint Operations for authority 

to deploy. This now ensures full PJHQ visibility of all contractor 

personnel and assets within the Joint Operating Area (JOA) at any 

one time, and the opportunity to exploit “best value for money by 

avoiding duplication of contracts and personnel within the JOA.”179

The CONDO policy also succeeds in integrating contractor support 

into the PJHQ operational planning process, thereby reducing “too 

far” concerns about measuring contractor readiness and capability. 

The PJHQ’s Logistics Division180 has an embedded and permanent 

“CONLOG Plans” unit that continually identifies and manages actual 

or potential future requirements for all contractor support, and a 

“CONLOG Operations Team” responsible for specific planning and 

implementation of commercial support to particular operations. 

 In addition, CONDO includes mechanisms to standardize 

the treatment of contractors and their personnel that apply to all 

categories of deployed support contracts (Figure 8) to ensure they 

are “adequately prepared for operational deployments.”181 These 

measures include training and briefings for contractor personnel 

on safety and security, discipline arrangements, insurance and 
43

indemnity, and detailed guidance intended to educate commanders 

on the legal aspects of employing contractor capability on 

deployments. Finally, CONDO includes detailed decisionmaking 

algorithms for PJHQ and FLC commanders considering the use of 

contractor support, providing criteria for identifying circumstances 

when commercial contractor support is optimal, and evaluating the 

potential operational impacts of contractor withdrawal. 

CONDO

UORs

Equipment-based 

PFI contracts

Existing CLS/OEM 

contracts

CONLOG

Contract

Figure 8. Scope of the CONDO Concept.

 The MoD claims its “CONLOG Contract” has further enhanced 

operational C2

 by providing “an efficient and cohesive contracting 

process for elements of support on operations.”182 The CONLOG is 

a nonexclusive 7-year contract with KBR to provide advice on the 

employment of contractor capability and to act as a potential single 

source for a broad range of deployed commercial support traditionally 

contracted through ad hoc UORs. Unlike other deployed support 

contracts, the CONLOG is “owned” by the PJHQ,183 and the PJHQ 

“CONLOG Plans” organization includes embedded KBR personnel 

who provide continuous advice on commercial support potential 

and availability.

 According to MoD, the PJHQ’s embedded partnership 

and “mutual understanding” with KBR enhances deployed C2
44

arrangements in several ways.184 The CONLOG Plans organization 

and its “CONLOG Operations Team” are involved in each stage of 

deployed operations from initial “Logistic Estimate” production 

to the direction, deployment, sustainment, and recovery phases. 

Consequently, embedded KBR’s expertise and capabilities can be 

exploited at the earliest possible opportunity to prepare detailed 

schedules of contractor support requirements, to rapidly mobilize a 

coherent package of commercial capability, and to deconflict similar 

military and CONLOG capabilities throughout an operation.185 The 

terms of the CONLOG Contract, which required KBR to provide 

detailed deployed commercial package costings within 90 hours 

of a PJHQ request, ensure operational tempo can be maintained. 

Moreover, according to MoD, the enabling nature of the CONLOG 

contract provides joint commanders with flexibility, as private 

sector support taskings can be added or subtracted at short notice, 

and the “partnership” enables the PJHQ’s to focus on defining its 

requirement and KBR to use its commercial expertise to focus on 

meeting the military needs.186 This close cooperation also extends

 to the theatre of operation. When circumstances require it, the PJHQ 

can form a “Deployed CONLOG Operations Team” to support the 

deployed Force Commander, who manages KBR and subcontractor 

personnel in the theatre of operation. 

 Consequently, the CONDO and CONLOG initiatives do identify 

and address a range of C2 concerns highlighted by “too far” critics. 

Measures are now in place to provide military commanders with 

enhanced visibility of contractor assets that should increase flexibility 

in planning and deployment. Procedures have been established 

that ensure both commanders and contractors understand the legal 

scope and limitations of private sector involvement. Indications 

are that MoD’s decision to engage contractors in the formulation 

of CONDO/CONLOG policy, and to embed contractors in PJHQ 

operational planning and execution, have paid C2 dividends.

 However, evidence suggests important residual C2

 constraints 

remain to be addressed. First, though CONDO and CONLOG have 

introduced more robust protocols, MoD has a complex matrix of 

some 7,000 stand-alone “legacy” deployed support contracts entered 

into by the DPA, DLO, and FLCs.187 Moreover, MoD’s management 

philosophy of delegation means that the plethora of DPA and DLO 
45

IPTs can continue unilaterally to sign deployed support contracts 

on the basis of their individual “value for money” calculations. 

Though CONLOG does introduce a prime contractor to facilitate 

and integrate packages of deployed logistics support, this contract 

currently accounts for just 10 percent of MoD deployed support 

expenditure. Indications are that MoD intends to rationalize these 

fragmented contracts over the next 5 years by clustering together 

under a smaller number of large new prime contracts, but until the 

contractor supply chain is rationalized in this way, it is likely that C2

arrangements will remain suboptimal. 

 Second, analyses into the UK’s 2003 intervention in Iraq suggest 

that “although some positive steps have been taken over recent 

years to define MoD CONDO policy,” there are still areas for 

improvement. One residual area of concern is that CONDO does 

not fully identify and reduce the key contractor risks on deployed 

operations in the areas of personnel security and safety, insurance 

cover, and corporate reputation. Other concerns are that CONDO 

fails to establish systems for addressing the impact of operational 

unknowns on contracts with industry, and that measures to assess 

the contractor’s surge capabilities, availability and readiness for 

deployed operations could be strengthened.188

Has MoD outsourcing “augmented” or “replaced” in-house military 

capabilities, and how effective are MoD measures to manage the operational 

risks of potential contractor withdrawal? The MoD’s stated policy is 

that contractor support “is not intended to replace core military 

manpower in the Order of Battle, but to augment that established when 

circumstances permit and thus reduce the pressure on deployable, 

organic logistic support for all three Services.”189 The MoD’s objective 

is to take contractors “as close to the front-line as possible,” but not 

“in circumstances where the operational effectiveness of the Armed 

Forces would be put at risk.”

 In response to “too little” concerns, MoD claims that mechanisms 

are in place to ensure contractor support is only used to “augment” 

military capability and adequate safeguards to militate against the 

risk of potential contractor withdrawal. The MoD’s first assumption 

is that its CONDO deployment algorithms provide the necessary 

criteria and guidance to ensure that commanders only employ 
46

commercial capability in circumstances where military alternatives 

are available, as a safeguard, throughout deployments. The second 

assumption is that the risk of potential contractor withdrawal is 

minimized through its SR policy, which is intended to provide “value 

for money without an unacceptable diminution of capability [by 

making use of] skills found in the civilian sector to provide support 

to operations in nonbenign areas.”190

 The SR initiative stems from MoD’s 1992 “Regular/Reserve Forces 

Mix Study,” which recommended exploration of the feasibility of 

using civilians with Reserve status for operational support functions, 

and was legislated for in the 1996 Reserve Forces Act (Part V).191 The 

SR concept enables MoD to contract with private suppliers for support 

functions provided by staff working as civilians in peacetime or in 

nonbenign deployed areas, but where the contractors’ employees 

continue to provide services as an integral part of the deployed force 

in nonbenign areas as trained reservists. According to MoD, the 

SR model guarantees an assured and integrated contractor service 

beyond the “benign edge” that is more cost-effective than in-house 

military provision. In C2

 terms, the fact that contractor personnel 

become members of the Reserve forces on operational deployments 

means they are fully integrated into the military chain of command. 

In conceptual terms, MoD views as such, SRs as “the manning bridge 

between the service that a contractor may readily provide routinely 

using civilians, but could not provide routinely using civilians 

during certain operational deployment.” (See Figure 9 and compare 

with Figure 4.)192

 Despite these measures, evidence suggests that MoD has used 

contractors to “replace” military capability, and that “too far” 

concerns about potential contractor withdrawal have not been fully 

addressed. As the House of Commons Defence Select Committee 

has pointed out, MoD has not produced “a clear set of criteria to 

define what constitutes the ‘front-line’ for the purposes of assessing 

the potential for using PFI” and CONDO.193 When pressed on the 

issue of criteria MoD officials have made it clear that:

we do not believe that such an approach would be possible . . . we do not 

believe that such a definition, even if one could be produced, would lead 

to different or better quality decisions on the use of PFI [and CONDO]. 

Decisions on projects need to be taken case-by-case, so that any impact on 

operational capability can be considered on its merits.194
47

Figure 9. Sponsored Reserve Capability.

 When asked what potential “no-go” areas might be, MoD officials 

have defined the “front-line” as “fighting,”195 and the only areas 

explicitly excluded from private sector provision to date are armed 

security, provost, secure couriers, and marine hydrography.

 Evidence suggests that this remaining ambiguity about what 

constitutes “front-line” military capability and MoD’s commitment 

to case-by-case contracting for deployed support does risk a situation 

where military capability may be replaced rather than augmented. 

Under MoD’s delegated contracting regime, the DPA, DLO, and 

other contracting authorities are still required to make “value-formoney” calculations when acquiring new equipment or support 

capabilities. A danger remains that these contracting authorities 

might look for value for money by cutting in-service support 

costs, with little thought about actual deployment implications, 

leading to “real replacement [of military capability with contractor 

capability].”196 Similarly, studies suggest that industry is being used 

to bridge military capability gaps to the extent that “augmentation 

has gone out of the window.”197 In short: 
48

 . . . there is clear evidence that CONDO is not only being used for 

military requirements as a “force multiplier,” such as in the case of the 

CONLOG contract, but it is also being used by many of the Equipment 

Support Business Units to fill military capability gaps, and especially by 

Equipment Support, Contractor Logistic Support contracts within the Joint 

Operational Area, and furthermore, on occasions during armed conflict. 

The extensive use of CONDO has resulted in the creation of additional 

risk for MoD and of a concern to them that the contractor will deliver 

the service on time and that he will remain on contract, irrespective of 

the operational situation, and, above all, that he will provide an assured 

service to the military commander.198

 Despite the operational flexibility and assured capability that 

the SR concept provides, practical developments to date have been 

limited. There are currently just 335 SRs available to the UK armed 

services linked to contracts with the Meteorological Office (Mobile Met 

Unit), crewing for six PFI-procured Strategic Sea-lift RO-RO vessels, 

ground support personnel for 32 Squadron BAe 125 communications 

aircraft with SERCo Aerospace, drivers/maintainers for the Army’s 

new generation PFI-acquired heavy equipment transporters (HET), 

and hydrographic systems engineers for new generation survey 

vessels with Vosper Thorneycroft (UK) Ltd. Though MoD intends 

to increase the number of SRs in response to lessons from the UK’s 

deployment in Iraq, indications are that the future scope will be 

limited to marine salvage support, MoD Fire Services, and the Royal 

Fleet Auxiliary. 

 This reflects various barriers to the more widespread application 

of the SR concepts. One factor has been cost: MoD contracts 

employing the SR models are funded out of the Defence Budget, 

whereas contractor provision through the UOR process is funded 

by the Treasury Contingency Fund at no cost to MoD, creating 

disincentives for MoD to invest in capability that otherwise would be 

paid for by the Treasury.199 Moreover, it has been suggested that DPA 

and DLO IPTs have been reluctant to look for SR-based commercial 

support on new contracts because “there is still a general feeling that 

the SR concept is new and untried,”200 and because there are legal 

difficulties in retrospectively incorporating SR provision into the 

array of existing CLS and OEM contracts. Finally, the armed services 

have been reluctant to replace organic military manpower with 
49

SRs because of concerns that the latter are less flexible and reliable 

on deployments.201 Consequently, despite the assured capability 

that the SR model offers, the bulk of MoD deployed support is 

provided through potentially less reliable CONDO and CONLOG 

arrangements. 

 The MoD has responded to these concerns by claiming that the 

risk that contractors might fail to support deployed operations is 

remote, citing that of the 180 firms employed to support the UK 

armed services in Iraq during 2003, just two refused to deploy.202

However, ongoing concern is that MoD currently lacks mechanisms 

to evaluate the “cumulative effects of the risks” involved in using 

contractors to fill capability gaps and “the impact this will have 

on military operational capability,”203 the limited number of SR 

contracts and evidence that contractors are being used to support 

gaps in military capability, suggests that the ability of commanders 

to rely on an assured contractor service remains questionable. 

 It has been suggested that MoD has various potential courses 

of action to allay the residual “too far” concerns about contractor 

reliability.204 One is the appointment of a high-level “champion” for 

CONDO policy within MoD who is able to identify all the operational 

capability gaps currently met by contractors, and thereby manage the 

cumulative effects of the risks associated with deploying CONDO 

capability. Another is a detailed assessment of which battle-winning 

capabilities should be provided through the less risky SR model, 

rather than CONDO arrangements. Finally, there is a requirement 

for commercial capability to be integrated with ongoing work by the 

DLO into its longer-term logistic architecture and design, “in order 

to maximise the potential of CONDO and thereby reduce the risks to 

MoD and the contractor.”205 

How effective are MoD procedures to evaluate the impact of defence 

PPPs on the morale, cohesion, ethos, and professionalism of the armed 

services? The MoD has addressed aspects of the debate concerning 

the impact of outsourcing on the professionalism, ethos, and morale 

of the armed services. Current MoD policy dictates that the DPA, 

DLO, and FLCs should evaluate the potential effects on military 

personnel when the introduction of commercial support or SRs is 

under consideration. Moreover, acquisition officials are advised that 
50

military trade structures, promotion prospects, and intervals between 

roulement tours for military personnel should be “taken into account 

when putting together the detail of the [deployed support] proposal 

and in making the value for money decision.”206

 However, information on the extent to which these “impact 

on personnel issues” are factored into individual outsourcing 

assessments and how MoD actually monitors the cumulative effects 

of outsourcing on the armed services have not entered the public 

domain. The ongoing controversy surrounding the cultural impact 

of contractors on deployed operations suggests a need for MoD to 

conduct more extensive analysis. This should include officer attitude 

surveys addressing perceptions about the cultural impact on the 

three armed services and specific branches and trades within them. 

Data also might be collected on the effects of outsourcing, if any, 

on the outflow of trained military personnel. Finally, given MoD’s 

“partnering” philosophy, further research needs to be conducted 

into the perceptions of contractors and their personnel working with 

“military partners” on deployed operations. Studies into these aspects 

of civilianization would enable firmer conclusions to be drawn on 

whether battlefield outsourcing has beneficial or detrimental effects 

on military morale, ethos and professionalism.

THE RELEVANCE OF MoD OUTSOURCING 

STRATEGY FOR THE U.S. ARMED SERVICES

 There is close similarity between UK and U.S. military outsourcing 

philosophy. In contextual terms, both countries have transformed 

their post-Cold War defense policies, military doctrines, and force 

postures along similar lines. Moreover, MoD and DoD have both 

adopted NPM-style defense management reform trajectories. The 

MoD’s “Executive Agency” program, for example, shares similarities 

with the DoD’s development of “performance based organizations,” 

of which the Defense Commissary Agency is representative. The 

DoD’s “government-owned contractor-operated” approach affecting 

the U.S. Navy Military Sealift Command closely resembles MoD 

contracting for commercial management of UK government-owned 

dockyards. Similarly, DoD “public/private partnerships” and “joint 
51

ventures” for functions that include the Norfolk Port Facilities are a 

variant of MoD’s PFI initiative.207 

 Outsourcing has become a core defense management tool in both 

countries, and the trend has been for MoD and the DoD to pursue 

closely aligned policies and copy “best practice” from each other.208

The 1966 Office of Management and Budget Circular A-76 required 

the U.S. armed services to subject support activity to private sector 

competition. In the 1980s and 1990s, MoD vigorously applied this 

approach in its “market testing,” CFQ and BQS initiatives during 

a period where the “Nichols Amendment” meant that few U.S. 

competitions were completed. Since the 1997 Quadrennial Defense 

Review—which recommended that the U.S. armed services compete, 

outsource, or privatize functions—the U.S. Army “has outlined 

an aggressive program of public-private competition” that closely 

resembles MoD’s post-1980 agenda.209 Policies on contractor support 

for deployed operations have followed a similar pattern, reflected in 

MoD’s decision to formulate its CONLOG contract with principles 

laid down in the early 1990s by the U.S. Army for its Logistics Civil 

Augmentation Program (LOGCAP).210 

 Consequently, there are no fundamental differences in overarching 

MoD and DoD outsourcing philosophy. Both defense establishments 

share core assumptions about why contractor support is necessary 

in basic policy parameters. To the extent that variations do exist, 

this reflects different levels of practical experience in employing 

contractors on the battlefield, and the differing national military 

structures, contractual practices, and legal frameworks within which 

deployed contractor support has been engaged. It is at this level that 

DoD and MoD policymakers have scope to learn from each other.

 On the one hand, MoD has practical lessons to learn from the 

DoD and U.S. armed services’ accrued experience with deployed 

support contracting. The MoD decided to formalize its policy for 

the employment of contractors on deployed operations in 2000. In 

contrast, the U.S. armed services have routinely employed both 

deployed service and equipment contracts since the 1960s. The U.S. 

Army has relied heavily on its LOGCAP contract and many “original 

equipment manufacturers” during all phases of operations, and the 

LOGCAP program alone is worth between $3-10 billion per year.211
52

Moreover, DoD officials and contractors have stated that “it has 

taken a decade or more to establish their relationship and the ability 

to deliver the precise capability with availability that guarantees 

the service while demonstrating value for money and significant 

savings.”212 This, coupled with the extensive array of operational risk 

analysis tools, contingent pricing regimes, contractor management 

techniques, and doctrine innovations developed by the DoD and U.S. 

armed services,213 suggests that MoD has much to learn from detailed 

monitoring and analysis of U.S. procedures and experiences. 

 On the other hand, MoD has made a series of conceptual, 

organizational, and procedural innovations that offer potentially 

useful lessons for the DoD and U.S. armed services. According to 

MoD officials, strengths of the UK’s approach are that ownership 

and control of the CONLOG Contract resides with joint operational 

commanders at the PJHQ, and that this “reduces the supply chain 

and duplication of activity by contract.”214 Correspondingly, the U.S. 

approach is to maintain three single-service equivalents: the Army’s 

LOGCAP, the Navy’s Construction Capabilities Contract (CONCAP), 

and, the Air Forces’ Air Force Contractor Augmentation Program 

(AFCAP) contract. In 1997, the U.S. General Accounting Office 

(GAO) concluded that “it might be more ‘effective and efficient’ if 

one service acted as the lead executive agent” or that “a joint civil 

augmentation program (JCAP) contract be established that will meet 

the needs of [each service] while eliminating duplication of effort.”215

Similarly, the GAO reiterated its concerns in June 2003 that:

there are no DoD-wide policies on the use of contractors to support 

deployed forces. As a result, there is little understanding among the 

services as to the government’s responsibility to contractors and contractor 

personnel in the event of hostilities. This lack of understanding can cause 

confusion at the deployed location and makes managing contractors 

more difficult because commanders often have contractors from several 

services at their location with different requirements, understandings, 

and obligations.216

These observations suggest that the DoD should analyse the C2 and 

other benefits the U.S. armed services might obtain from a single joint 

overarching contractor support policy based on MoD’s CONLOG 

model. 
53

 Like MoD’s DPA and DLO, the U.S. armed service program 

offices and material commands have delegated authority to write 

battlefield support contracts independently. However, MoD is 

unique in having an overarching CONDO policy that codifies and 

standardizes C2

 and other contractor-related procedures for all 

deployed commercial support. The GAO has recently expressed its 

concern that:

Broader oversight is lacking in key areas, making it difficult for 

commanders to manage contractors effectively . . . Guidance at the DOD, 

combatant-command, and service levels regarding the use of contractors 

to support deployed forces varies widely, and mechanisms for managing 

these contractors are inconsistent, creating challenges that may hinder 

the efficient use of contractors.217

This suggests the DoD should consider adopting a CONDO-type 

policy to enhance U.S. commanders’ awareness of contractor assets 

at their disposal and to codify contractor support arrangements. 

 A key element in MoD’s approach to CONDO and CONLOG has 

been its emphasis on “partnership” as a mechanism to align military 

and private sector expertise and aspirations in policy formulation. 

This philosophy also has extended to policy implementation, 

reflected in the embedded KBR team located at the PJHQ. British 

officials have suggested that a key difference between U.S. and UK 

approaches is that implementation of “LOGCAP is left very much to 

the [U.S.] deployed commander, whereas in the UK, the PJHQ has 

control and the ability to plan and go for reach-back because KBR 

is embedded in the planning process.”218 Consequently, analysis of 

MoD’s approach to establishing “partnerships” could offer valuable 

insights to DoD policymakers.

 Finally, an innovative aspect of MoD policy is the SR concept, 

which is intended to bridge contractor provision and organic military 

capability. Indications are that the U.S. Air Force became interested 

in the SR concept during the mid-1990s, and the U.S. armed services 

continue to monitor MoD policy through the British Defence Mission 

in Washington.219 Though the U.S. armed services currently lack 

dedicated legislation to develop this category of reserve forces, the 

SR concept may provide a useful template for the DoD to extend its 

relationships with the private sector in the future. 
54

CONCLUSIONS AND RECOMMENDATIONS 

 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.
55

 • 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 

contractor 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 extent 
56

of “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. 
57

 • 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 costeffective 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

 1. M. Dobbs, “Iraq: Halliburton Reaping Huge Profits,” Washington Post, 

August 28, 2003.
58

 2. See, for example, H. Keeter, “Army Launches $12 Million Outsourcing 

Review,” Defense Daily, February 11, 1999, pp. 1-2. For a discussion of the U.S. 

Army’s recent decision to contract out as many as 214,000 military and civilian 

jobs, see C. Lee, “Army Outsourcing Plan Decried, Thousands of Jobs Could Be 

Affected,” Washington Post, December 21, 2002; and Military Operations: Contractors 

Provide Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD 

Plans, GAO-03-695, Washington, DC: U.S. General Accounting Office, June 2003, 

p. 4.

 3. G. L. Campbell, “Contractors on the Battlefield: The Ethics of Paying 

Civilians to Enter Harm’s Way and Requiring Soldiers to Depend Upon Them,” 

paper presented at the Joint Services Conference on Professional Ethics, Springfield, 

VA, January 2000, cited in C. Spearin, “American Hegemony Incorporated: The 

Importance and Implications of Military Contractors in Iraq,” Contemporary 

Security Policy, Vol. 24, No. 3, December 2003, p. 32. 

 4. See P. W. Singer, Corporate Warriors: The Rise of the Privatized Military Industry, 

New York: Cornell University Press, 2003.

 5. Speech by UK Minister of State for the Armed Forces John Spellar, Royal 

United Services Institute, February 8, 2000, http://www.news.mod.uk/news/press. 

 6. For an extended discussion, see A. Dorman, European Adaptation to 

Expeditionary Warfare: Implications for the U.S. Army, Carlisle PA: U.S. Army War 

College, Strategic Studies Institute, November 2002.

 7. Ministry of Defence, Defence White Paper: Delivering Defence in a Changing 

World, Cm 6041-I, London: HMSO, December 2003, p. 7.

 8. G. Frost, “How to Destroy an Army: The Cultural Subversion of Britain’s 

Armed Forces,” in A. Alexandrou, R. Bartle, and R. Holmes, eds., New People 

Strategies for the British Armed Forces, London: Frank Cass, 2001, p. 41.

 9. E. Pint and R. Hart, Public-Private Partnerships: Proceedings of the US-UK 

Conference on Military Installation Assets, Operations, and Services April 14-16, 2000, 

Santa Monica, CA: RAND, 2001, p. 42.

 10. J. Stokoe, “A Fine Division,” Defence Management Journal, Vol. 4, Issue 4, 

Autumn 2001, p. 11.

 11. M. Edmonds, “Defence Privatization: From State Enterprise to 

Commercialism, Cambridge Review of International Affairs, Vol. XIII, No. 1, AutumnWinter 1999, p. 117.

 12. Ministry of Defence, Statement on the Defence Estimates 1981, Cmnd. 8212, 

London: HMSO, 1981, p. 68.

 13. Ibid., p. 18.

 14. HM Treasury, Competing for Quality: Buying Better Public Services, Cm. 1730, 

London: HMSO, 1991.

 15. C.R. Pickard, “Competing for Quality in Defence,” Economic Affairs, 

December 1997, p. 35.
59

 16. Cabinet Office, Competing for Quality Policy Review: An Efficiency Unit 

Scrutiny, London: HMSO, 1996, p. 6. 

 17. HM Treasury, Public Private Partnerships: The Government’s Approach, 

London: HMSO, 2000, p. 25. 

 18. Sir Roger Jackling, “Public Private Partnerships in MoD,” World Defence 

Systems, July 2001, p. 93. 

 19. Cabinet Office, Better Quality Services: A Handbook on Creating Public/Private 

Partnerships Through Market Testing and Contracting Out, London: HM Government, 

1998, p. 9.

 20. Jackling, p. 94.

 21. Ministry of Defence, The Smart Acquisition Handbook, Ed. 5, London: HMSO, 

2004, p. 42.

 22. Editorial, “Partnerships in Progress,” Defence Management Journal, Issue 22, 

April 2003, p. 16.

 23. See V. Doyle, “Fresh Private Sector Investment,” Defence Management 

Journal, Vol. 3, Issue 2, Spring 2000, pp. 88-89.

 24. M. Harte, “A New Strategy for Investment,” Defence Management Journal, 

Vol. 4, Issue 3, Summer 2001. 

 25. For more details, see M. Emmerich, “Generating Enterprise in Government,” 

Defence Management Journal, Vol. 3, Issue 2, Spring 2000, pp. 80-81; and J. Williams 

and N. Holland, “Developing Wider Market Opportunities Through Public Private 

Partnerships,” Defence Management Journal, Issue 18, February 2002, pp. 62-63. 

 26. See L. Peace, “A Public Private Partnership for DERA,” Defence Management 

Journal, Vol. 4, Issue 3, Summer 2001, p. 13.

 27. Ministry of Defence, Performance Report 2000/2001, London: HMSO, Cm 

5290, November 2001, Para. 105.

 28. Stokoe, p. 11.

 29. R. Tripp, “Contractors on Deployed Operations CONDO,” World Defence 

Systems, Vol. 3, Issue 3, p. 94.

 30. Ministry of Defence, Strategic Defence Review, Cmnd. 3,999, London: HMSO, 

1998.

 31. For a detailed analysis of the “Smart Acquisition” initiative, see B. Kincaid, 

“Smart Procurement: Revolution or Regression?” in R. Matthews and J. Treddenick, 

eds., Managing the Revolution in Military Affairs, London: Palgrave, 2001, pp. 175-

190.

 32. Summarized from Ministry of Defence, The Acquisition Handbook: A Guide 

to Smart Procurement, London: Ministry of Defence, 1999.

 33. P. Smart, “Support to the Front Line,” RUSI Journal, February 2000, p. 67. 
60

 34. B. Hedley and I. Busby, “The Impact on Industry,” in The Outcome of the 

Strategic Defence Review, RUSI Whitehall Paper, Series 44, 1998, p. 37.

 35. A. Higginson, MoD Contractors’ Support to Deployed Operations: Industry 

Perceptions of Contracting for Availability on Deployed Operations, Presentation at 

the DMA MoD Contractors’ Support to Deployed Operations Seminar, London, 

March 15, 2005.

 36. Interview, SO1 J4 Contractor Logistics CONLOG, Permanent Joint 

Headquarters, January 28, 2004.

 37. Interview, Defence Manufacturers Association CONDO Representative, 

Joint Services Command and Staff College, January 20, 2004.

 38. See “Troops to Get Better Support in the Field,” Preview: The Journal of the 

Defence Procurement Agency, September 2003, p. 10.

 39. Interview, SO1 J4 Contractor Logistics CONLOG.

 40. Interview, Defence Manufacturers Association CONDO Representative.

 41. Higginson.

 42. Ibid.

 43. Deputy Assistant Chief of Staff J4, Permanent Joint Headquarters UK, 

Presentation at the DMA MoD Contractors’ Support to Deployed Operations 

Seminar, London, March 15, 2005.

 44. M. S. Levitt, “Need Defence Costs Keep Rising?” in F. Terry, ed., Managing 

the Costs of Defence, London: Public Finance Foundation, 1985, p. 40.

 45. S. Domberger, S. A. Meadowcroft, and D. J. Thompson, “Competitive 

Tendering and Efficiency: The Case of Refuse Collection,” Fiscal Studies, Vol. 7, 

No. 4, November 1986, p. 69.

 46. HM Treasury, Public Private Partnerships, p. 11.

 47. Ibid.

 48. C. Kinsey, The Rise of the Corporate Soldier: The Role of Private Military 

Companies in International Security, unpublished Ph.D. thesis, University of Wales 

Aberystwyth, September 2003, p. 182.

 49. Ministry of Defence, Contractors on Deployed Operations CONDO Policy, 

JSP 567, November 20, 2003, para. 101.

 50. E-H. Klijn and G. R. Teisman, “Institutional and Strategic Barriers to PublicPrivate Partnerships: An Analysis of Dutch Cases,” Public Money and Management, 

Vol. 23, No. 3, July 2003, p. 137. 

 51. I. Chan, S. Galing, C. Wong, H. Yee, E. I. Axelband, M. Onesi, and K. P. 

Horn, Use of Public-Private Partnerships to Meet Future Army Needs, Santa Monica, 

CA: RAND, 1999, p. xiv.

 52. Ministry of Defence, The Strategic Defence Review, Cm 3999, July 1998.
61

 53. A. Dorman, M. L. Smith and M. R. H. Uttley, “Joint and Combined 

Operations in an Expeditionary Era: Defining the Issues,” Defense Analysis, Vol. 

14, No. 1, 1998, p. 3. 

 54. Ministry of Defence, The Strategic Defence Review, Para 98-99.

 55. Smart, p. 67.

 56. See D. W. Reeve, “Contractors in British Logistic Support,” Army Logistician, 

May-June 2001, p. 3.

 57. MoD, “Public Private Partnerships: Changing the way we do business,” 

http://www.mod.uk/business/ppp/intro.htm. 

 58. Tripp.

 59. Ministry of Defence, “Contractors on Deployed Operations CONDO,” Joint 

Doctrine Pamphlet 4/01, December 2001, para. 107.

 60. Ibid.

 61. Ministry of Defence, JSP 567, para. 101.

 62. Ministry of Defence, “Defence Council Instructions Joint Service, 

Contractors on Deployed Operations,” DCI JS 62 2003, April 11, 2003, para. 6.

 63. Ministry of Defence, “The Current MoD Policy for Using Contractors 

on Deployed Operations,” http://www.ams.mod.uk/ams/contents/docs/condo.htm, 

October 1, 2003.

 64. Ministry of Defence, JSP 567, para. 101.

 65. Smart, p. 69.

 66. Ibid.

 67. J. A. Fortner, “Institutionalising Contractor Support on the Battlefield,” 

Army Logistician, July-August, 2000.

 68. Kinsey, pp. 244, 273. 

 69. Ibid., p. 166.

 70. For a discussion, see M. Brereton and M. Temple, “The New Public Service

Ethos: An Ethical Environment for Governance,” Public Administration, Vol. 7, No. 

3, 1999, pp. 455-474.

 71. A. Gray and B. Jenkins, “From Public Administration to Public Management: 

Reassessing a Revolution?” Public Administration, Vol. 73, Spring 1995, p. 81.

 72. MoD, “Public Private Partnerships: Changing the way we do business,” 

http://www.mod.uk/business/ppp/intro.htm.

 73. HM Treasury, Public Private Partnerships, p. 9.

 74. C. Pollitt, “Convergence: The Useful Myth?” Public Administration, Vol. 79, 

No. 4, 2001, p. 935.

 75. Speech by UK Minister of State for the Armed Forces, John Spellar. 
62

 76. Frost, p. 41.

 77. Singer, p. 158.

 78. For an extended discussion, see Singer; E. Fredland and A. Kendry, 

“The Privatization of Military Force: Economic Virtues, Vices and Government 

Responsibilities,” Cambridge Review of International Affairs, Autumn-Winter 

1999, Vol. XIII, No. 1, pp. 147-164; and, D. Braddon, P. Dowdall and A. Kendry, 

“Organizational Reform, Market Testing and Defence,” in D. Braddon and 

D. Foster, eds., Privatization: Social Science Themes and Perspectives, Aldershot: 

Dartmouth, 1996, pp. 95-127.

 79. On “public service ethos,” see, for example, B. J. O’Toole, “The Loss of 

Purity: The Corruption of Public Service in Britain,” Public Policy and Administration, 

Vol. 8, 1993, p. 3. 

 80. G. Boyne, “Comparing the Performance of Local Authorities: An Evaluation 

of the Audit Commission Indicators,” Local Government Studies, Vol. 23, No. 4, 1997, 

p. 701.

 81. E. Pint and R. Hart, Public-Private Partnerships: Proceedings of the US-UK 

Conference on Military Installation Assets, Operations, and Services April 14-16, 2000, 

Santa Monica, CA: RAND, 2001, p. 53.

 82. J. R. Withers, “Contracting for Depot-Level Maintenance,” Army Logistician, 

January/February 2000, p. 5.

 83. On cost plus contracting and monitoring issues, see Singer, Ch 10. For 

a wider treatment of the difficulties in making rigorous connections between 

quantitative performance measures and the objectives of outsourcing, see Boyne. 

 84. For an extended discussion, see Singer, pp. 155-157; and Fredland and 

Kendry, p. 156.

 85. M. F. Pausch, “Air Force Deployments and Support Services Contracts,” 

Air Force Journal of Logistics, Vol. XXIV, No. 1, Spring 2000, p. 10. 

 86. E. A. Orsini and G. T. Bublitz, “Contractors on the Battlefield: Risks on the 

Road Ahead,” Army Logistician, January-February 1999, p. 1.

 87. T. Christensen, P. Laegreid, and L. Wise, “Transforming Administrative 

Policy,” Public Administration, Vol. 80, No. 1, 2002, p. 154.

 88. D. Moore and P. Antill, “British Army Logistics and Contractors on the 

Battlefield,” RUSI Journal, February 2000, p. 51.

 89. See D. Moore and P. Antill, “Focused Logistics: Holy Grail or Poisoned 

Chalice? RUSI Journal, October 1999, p. 30.

 90. See Reeve, p. 4. For example, it has been suggested that if contractors are 

required for deployments where a nuclear, biological, or chemical (NBC) threat 

emerges, then contractor protection is likely require additional money and force 

structure. See Lieutenant Colonel M. A. Brown, Implications of Outsourcing on 

Network Centric Warfare, USAWC Strategy Research Project, Carlisle PA: U.S. 

Army War College, 2002, p. 14.
63

 91. S. Deakin, British Civil-Military Relations: An Introduction, June 1997, p. 13.

 92. Ibid., p. 12.

 93. Orsini and Bublitz, p. 1.

 94. J. A. Fortner, “Managing, Deploying, Sustaining, and Protecting Contractors 

on the Battlefield,” Army Logistician, September-October 2000, p. 1.

 95. Orsini and Bublitz, p. 2.

 96. L. A. Castillo, “Waging War with Civilians: Asking the Unanswered 

Questions,” Aerospace Power Journal, Fall 2000, p. 3.

 97. Withers, p. 5.

 98. Orsini and Bublitz, p. 2.

 99. Moore and Antill, 1999, p. 32.

 100. Under the Laws of the Hague and the Laws of Geneva, contractors on 

deployed operations are not categorized as “combatants” because they are not 

subject to the armed service’s internal disciplinary system, are not trained to 

conduct operations in compliance with the laws of armed conflict, and are not 

subordinate to the field commanders. Instead, they are accorded a special interim 

status between combatants and noncombatants categorized as “civilians authorised 

to accompany the force.” Like noncombatants, contractors cannot be deliberately 

targeted for military action, but the functions they are supporting can, which 

means that if they are killed or wounded, this is regarded legally as legitimate 

collateral damage. For an extended discussion, see S. J. Zamparelli, “Competitive 

Sourcing and Privatization: Contractors on the Battlefield: What have we Signed 

up for?” Air Force Journal of Logistics, Fall 1999, Vol. 23, Issue 3, p. 8.

 101. Ibid., p. 9. 

 102. Fortner, p. 5.

 103. Ibid.

 104. Zamparelli, p. 9. For a more detailed discussion, see A. Faite, “Involvement 

of Private Contractors in Armed Conflict: Implications under International 

Humanitarian Law,” Defence Studies, Vol. 2, No. 4, pp. 166-183.

 105. See Withers, p. 2; and Zamparelli, p. 11. 

 106. Zamparelli, p. 4.

 107. Ibid., p. 5.

 108. Orsini and Bublitz, p. 2. 

 109. Brown, p. 15.

 110. Pausch, p. 10.

 111. Ibid., p. 9.

 112. Castillo, p. 5.

 113. Ibid., p. 3.
64

 114. D. Detomasi, “The New Public Management and Defense Departments: 

The Case of Canada, Defense and Security Analysis, Vol. 18, No. 1, p. 66.

 115. C. Coker, ‘Selling the Regimental Silver: The Dangers of Privatization,” in 

G. Frost, ed., Not Fit to Fight: The Cultural Subversion of the Armed Services in Britain 

and America, London: Social Affairs Unit, 1999, p. 19.

 116. Detomasi, p. 65.

 117. For a discussion, see C. C. Moskos and F. R. Wood, The Military: More than 

Just a Job? Pergamon-Brassey’s: London, 1988.

 118. Moore and Antill, 2000, p. 50.

 119. Castillo, p. 5.

 120. Pausch, p. 11.

 121. See Orsini and Bublitz, p. 3; and U.S. General Accounting Office, Military 

Operations: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately 

Addressed in DOD Plans, p. 9.

 122. Reeve, p. 4. 

 123. See, for example, N. Brunsson and J. P. Olson, The Reforming Organization, 

London and New York: Routledge, 1993; C. Pollitt and G. Bouckaert, eds., 

Public Management Reform: A Comparative Analysis, Oxford: OUP, 2000; C. Hood, 

“Exploring variations in public management reform of the 1980s,” in H. Bekke, J. 

Perry, and T. Toonen, Civil Service Systems in Comparative Perspective, Bloomington: 

Indiana University Press, 1996; B. Peters and D. Savoie, eds., Taking Stock: 

Assessing Public Sector Reforms, Montreal: McGill-Queens University Press, 1998; P. 

Keraudern and H. Van Mierlo, “Theories of Public Management Reform and their 

Practical Implications,” in T. Verheijen and D. Coombes, eds., Innovation in Public 

Management, Cheltenham: Edward Elgar, 1998; C. Pollitt, “Justification by work 

or by faith,” Evaluation, 1995, Vol. 1, No. 2, pp. 133-54; C. Pollitt, “Is the Emperor 

in his Underwear? An Analysis of the Impact of Public Management Reform,” 

Public Management: An International Journal of Theory and Research, 2000, Vol. 2, No. 

2, pp. 181-99; G. Boyne, “Bureaucratic Theory Meets Reality: Public Choice and 

Service Contracting in U.S. Government,” Public Administration Review, Vol. 58, 

November/December 1998, pp. 474-84; D. Kettl, The Global Public Management 

Revolution: A Report on the Transformation of Governance, Washington DC: Brookings, 

2000; and J. Kelsey, The New Zealand Experiment, Auckland: Auckland University 

Press, 1997.

 124. Frost, pp. 38-39.

 125. Inside the Air Force 1997, cited in J. M. Brower, “Outland: The Vogue of 

DOD Outsourcing and Privatization,” Acquisition Review Quarterly, Fall 1997, p. 

390.

 126. Pollitt, pp. 933-947. 

 127. Ibid.

 128. Stokoe, p. 11.
65

 129. The summary of “Public Choice” economics in this section draws 

extensively from P. Dunleavy, Democracy, Bureaucracy and Public Choice, London: 

Harvester Wheatsheaf, 1991.

 130. Ibid., p. 155.

 131. M. Edmonds, Armed Services and Society, Boulder, CO: Westview Press, 

1990, p. 81.

 132. M. Zafirovski, “Administration and Society: Beyond Public Choice,” 

Public Administration, Vol. 79, No. 3, p. 666.

 133. Dunleavy, p. 159.

 134. Ibid., p. 231.

 135. Pickard, pp. 37-38.

 136. K. Hartley, “Defense Markets,” Economic Affairs, Vol. 17, No. 4, December 

1997, p. 26.

 137. See, for example, E. Mellon, “Executive Agencies: Leading Change from 

the Outside-in,” Public Money and Management, Vol. 13, No. 2, April-June 1993, pp. 

5-11.

 138. Withers.

 139. House of Commons Defence Select Committee, Fourth Report, Session 

2001-02, July 3, 2002, Para. 54.

 140. This section draws from interviews with PJHQ and Defence Manufacturers 

Association personnel.

 141. M. Rifkind, “Front Line First,” RUSI Journal, December 1994, p. 3.

 142. For a discussion, see K. Hartley, The Economics of Defence Policy, London: 

Brassey’s, 1991, Ch. 1; and D. Greenwood, “Expenditure and Management,” in P. 

Byrd, ed., British Defence Policy: Thatcher and Beyond, London: Philip Allan, 1991, 

pp. 36-66. 

 143. See T. Bovaird, “The Changing Context of Public Policy,” in T. Bovaird 

and E. Loffler, eds., Public Management and Governance, London: Routledge, 2003, 

p. 17.

 144. I. Andrews, “Managing Change,” Defence Management Journal, Issue 22, 

April 2003, p. 26. Ian Andrew is MoD’s Second Permanent Under Secretary.

 145. M. Stewart, “Future Resource Management in Defence,” RUSI Journal, 

April 1993, p. 75.

 146. K. Tebbit, “Delivering a Coherent Defence Policy,” Defence Management 

Journal, Vol. 2, No. 4, 1999, p. 10.

 147. Rifkind, p. 3. See also J. Williams and N. Holland “Developing Wider 

Market Opportunities Through Public Private Partnerships,” Defence Management 

Journal, Issue 18, February 2002, pp. 62-63.
66

 148. M. Edmonds, “Defence Privatization: From State Enterprise to 

Commercialism, Cambridge Review of International Affairs, Autumn-Winter 1999, 

Vol. XIII, No. 1, p. 123.

 149. Efficiency Unit, Improving Management in Government: The Next Steps, 

London: HMSO, 1988.

 150. See P. Kemp, “Can the Civil Service Adapt to Managing by Contract?” 

Public Money and Management, Vol. 10, No. 3, Autumn 1990. 

 151. Ministry of Defence, Performance Report 2000/2001.

 152. M. Stewart, “Future Resource Management in Defence,” RUSI Journal, 

April 1993, p. 74.

 153. E. Mellon, “Executive Agencies: Leading Change from the Outside-in,” 

Public Money and Management, Vol. 13, No. 2, April-June 1993.

 154. Chief Executive Rear Admiral Rees Ward, quoted in M. Harte, “Information 

Anytime, Anywhere,” Defence Management Journal, Issue 21, December 2002, p. 

18.

 155. Chief Executive S. Hill, “DARA Spearheads a Radical Change,” Defence 

Management Journal, Vol. 4, Issue 2, Spring 2001, p. 6.

 156. P. Cunliffe, “A Driving Force for Transport,” Defence Management Journal, 

Vol. 3, Issue 2, Spring 2000, p. 27.

 157. Chief Executive Rear Admiral J. Chadwick, “Pioneers of Partnering: 

NRTA Flagship,” Defence Management Journal, Vol. 2, Issue 4, Autumn 1999, p. 92.

 158. Following the 1998 Strategic Defence Review, single-service Land 

Maritime and Air acquisition and logistics organizations were amalgamated into 

the joint Defence Procurement Agency and Defence Logistic Organization.

 159. Ministry of Defence, The Smart Acquisition Handbook, p. 16.

 160. See J. Oughton, “The Defence Logistics Organization—Transforming 

Logistic Support to the Armed Forces,” World Defence Systems, Vol. 3, No. 2, July 

2001, pp. 97-99.

 161. Hedley and Busby, p. 40.

 162. M. Robinson, “Contract Budgeting.”

 163. Jackling, p. 93.

 164. Cabinet Office, Competing for Quality Policy Review: An Efficiency Unit 

Scrutiny, London: HMSO, 1996, p. 6.

 165. Withers.

 166. Cabinet Office, Competing for Quality Policy Review, p. 6.

 167. Interview, SO1 J4 Contractor Logistics CONLOG. Open book accounting 

procedures allow MoD to scrutinize contractors’ receipts for expenditures incurred 

in meeting additional MoD requirements not specified when the contract was 

originally awarded.
67

 168. S. W. Davies, Private Finance Supporting the Trigger: An Examination of the 

Private Finance Initiative to Deliver Operational Capability, unpublished Master of 

Defence Administration thesis, Cranfield University, 2003-04, p. 2-7.

 169. Interview, Defence Manufacturers Association CONDO Representative.

 170. See J. Oughton, “The Sinews of War,” Defence Review, Spring 2002, p. 62.

 171. Brigadier T. Cross, “Logistic Support for UK Expeditionary Operations,” 

RUSI Journal, February 2000, p. 74.

 172. Joint Doctrine and Concepts Centre, Joint Doctrine Pamphlet 4/01, 

Contractors on Deployed Operations, December 2001, p. 1-4.

 173. General Sir Sam Cowans, “Perspectives on Current MoD Policy,” RUSI 

Journal, February 2000, p. 65.

 174. Smart, p. 70.

 175. Ministry of Defence, JSP 567.

 176. http://www.mod.uk/business/ppp/reserves.htm, October 1, 2003. The Sponsored Reserve concept originated from the 1992 “Regular/Reserve Forces Mix 

Study,” and legislation was put in place in the 1996 Reserve Forces Act, Part V.

 177. Ministry of Defence, JSP 567, p. 6.

 178. Ibid., p.12.

 179. The J1/J4 Logistics and Personnel staff are responsible for all logistic 

aspects of the planning, deployment, and sustainment of UK-led operations.

 180. Ministry of Defence, JSP 567, p. 14.

 181. Ibid., p. 21. 

 182. The PJHQ “contract owner” is the Assistant Chief of Staff ACOS J1/J4.

 183. Ministry of Defence, JSP 567, p. 21.

 184. Ministry of Defence, Defence Council Instructions Joint Service, 

Contractors on Deployed Operations, DCI JS 62 2003, April 11, 2003, p. 41.

 185. Interview, SO1 J4 Contractor Logistics CONLOG.

 186. Interview, Directorate of Broadening and Deepening Smart Acquisition—

Sponsored Reserves, Joint Services Command and Staff College, December 19, 

2003.

 187. Higginson Associates, CONDO Risk Assessment: Final Report, March 

2004.

 188. Ministry of Defence, “The Current MoD Policy for Using Contractors 

on Deployed Operations,” http://www.ams.mod.uk/ams/contents/docs/condo.htm, 

October 1, 2003.

 189. Interview, Directorate of Broadening and Deepening Smart Acquisition—

Sponsored Reserves.
68

 190. MoD, Public Private Partnerships, Changing the Way We Do Business: 

Sponsored Reserves, http://www.mod.uk/business/ppp/reserves.htm.

 191. ACDSRP, Defence Policy on Contracting for Sponsored Reserves, July 27, 2000, 

p. 2. According to MoD, the SR model provides the additional benefits of enabling 

commanders to focus regular Service manpower resources on tasks or skills that 

can only be undertaken or maintained by regular servicemen and women both 

in peace and on operations, and the ability to transfer of the risks of equipment 

ownership to the civilian sector.

 192. House of Commons Defence Select Committee, Fourth Report, Session 

2001-02, July 3, 2002, Para. 58.

 193. House of Commons Defence Select Committee, Ministry of Defence 

Memorandum in Response to the House of Commons Defence Committee’s Report 

on Major Procurement Projects, Sixth Special Report, October 16, 2002, Para. 29. 

 194. House of Commons Defence Select Committee, Fourth Report, Para. 55.

 195. Interview, SO1 J4 Contractor Logistics CONLOG. 

 196. Interview, Defence Manufacturers Association CONDO Representative.

 197. Ibid.

 198. Higginson Associates.

 199. Interview, Directorate of Broadening and Deepening Smart Acquisition—

Sponsored Reserves.

 200. Ibid.

 201. Interview, SO1 J4 Contractor Logistics CONLOG.

 202. Higginson Associates.

 203. Ibid.

 204. Ibid.

 205. ACDSRP, Defence Policy on Contracting for Sponsored Reserves, July 27, 2000, 

p. 3.

 206. For detailed discussion of these initiatives, see M. Hynes, S. N. Kirby, and 

J. Sloan, A Casebook of Alternative Governance Structures and Organizational Forms, 

Santa Monica CA: RAND, 2000, pp. 1-10. 

 207. For recent surveys of U.S. defense outsourcing initiatives, see, for example, 

A. Markusen, The Case Against Privatizing National Security, paper presented at 

the 2001 Meeting of the International Political Science Association, University of 

Oklahoma, Norman, OK, March 2001; and Spearing. 

 208. See Pint and Hart, pp. 2-3.

 209. Interview, SO1 J4 Contractor Logistics CONLOG.

 210. Data derived from Higginson Associates.

 211. Ibid.
69

 212. The detailed content of the DoD’s current approach under these headings 

is covered in R. King, DCS G-4 DSN, Sustaining the Transforming Army, presentation 

at the DMA MoD Contractors’ Support to Deployed Operations Seminar, London, 

March 15, 2005.

 213. Interview, SO1 J4 Contractor Logistics CONLOG.

 214. M. J. Dowling and V. J. Fleck, Feasibility of a Joint Engineering and Logistics 

Contract, Wright Flyer Paper No. 7, Maxwell Air Force Base, AL: Air Command 

and Staff College, September 1999, pp. v-vi. See also D. M. Devens, A Jointness 

Concept for the Future: Civilians, Contractors and Soldiers in SYNC, Carlisle Barracks: 

U.S. Army War College, 1998.

 215. U.S. General Accountability Office, Military Operations: Contractors Provide 

Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD Plans, 

GAO-03-695, June 2003, p. 35.

 216. Ibid., p. 3.

 217. Interview, SO1 J4 Contractor Logistics CONLOG.

 218. Interview, Directorate of Broadening and Deepening Smart Acquisition—

Sponsored Reserves.

 219. MoD Director of Logistic Operations, CONDO Policy and Implementation.

 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.