The Department of Defense (DoD) is implementing a Revolution in Business Affairs (RBA) with the purpose of freeing resources for the Revolution in Military Affairs (RMA). The goal of the RBA is to transform how DoD conducts business. As part of this RBA, DoD has undertaken outsourcing studies using the Office of Management and Budget (OMB) Circular A-76 and related initiatives. The objective of these initiatives is to generate the cost savings needed to fuel the RMA. Survey responses indicated a high degree of dissatisfaction with A-76 and other cost-based outsourcing initiatives. However, it should be noted the sample population was quite small and was skewed toward installation commanders, the executors of current outsourcing policies. Thirteen hundred surveys were sent out and 234 responses were received. Of these 234 responses, 111 identified themselves as being in a position of command (30 Army, 63 Air Force, and 18 Navy/ Marine Corps). The nature of the responses received indicates that there are significant issues the Department must address. In the course of their research, the authors have noted that DoD focuses almost exclusively on efficiency when conducting business operations. Almost no emphasis is given to devising effective business strategies or examining efficiencies in terms of a value proposition. This drive to the "bottom line" assumes DoD already has an effective business strategy and it merely needs to fine-tune the operation. Rather, DoD should garner the most performance for every dollar spent rather than spending the least amount of dollars. In complex integrated systems, aggregate and not isolated efficiencies must be the focus. By ignoring this, there is an inherent risk that tactical pursuit of cost reductions at the business unit level will drive adverse strategic outcomes.

Among other topics, the Commission on Roles and Missions of the Armed Forces considered whether the Department of Defense (DoD) should contract out--outsource--support services that DoD now produces in-house and, if so, (1) which services DoD should outsource and (2) what DoD can do to make outsourcing more cost-effective. This report reviews a set of issues relevant to these questions. The report first reviews barriers and objections to outsourcing that have been raised by earlier studies and government commissions that have addressed outsourcing. It then reviews insights from commercial-sector experience with outsourcing that DoD could use to guide its own actions on outsourcing. Finally, it offers suggestions about how to structure an implementation plan for large-scale outsourcing of support services. In particular, it identifies the attributes of support activities that DoD should consider outsourcing first and how DoD could facilitate an outsourcing program.

"The United States has long utilized private military contractors to augment regular military forces in support of its national foreign policy and security needs. Commonly referred to as Private Military Companies (PMCs), contractors employ and manage civilian personnel from the private sector in areas of active military operations. Frequently, regular troops become dependent on the services contractors provide a situation that may negatively impact military effectiveness. Since 1991, contractor support on and off the battlefield has become increasingly more visible, varied, and commonplace. Given the current manpower and resource limitations of the national military, the US will likely continue its extensive use of PMCs in support of military operations. This work addresses historical precedents and trends in American logistics, the current scope of contractor involvement in support of regular military forces, and the challenges posed as traditional military institutions integrate increasing numbers of civilian workers and privately owned assets into the battlespace. These problems increase the risk to US personnel and can induce budget overruns rather than savings, disrupt civil-military relations, and have detrimental consequences for the American economy and society. The work concludes by proposing a useful rubric to evaluate this new American way of war. This work considers PMCs and their interdependence with regular and reserve military units in a broad sense. It derives from unclassified material widely available; understandably, these sources limit the analysis. Lessons learned from the Operation IRAQI FREEDOM (OIF) and Operation ENDURING FREEDOM (OEF) theaters may alter findings. However, this study endeavors to frame the continuing dialog concerning the appropriate use of PMCs to support regular troops."--Abstract from DTIC web site.

This study of US military benefits “offers a disturbing view of the armed forces as a high-value target in political clashes over public assistance” (The Nation). Since the end of the draft, the U.S. Army has prided itself on its patriotic volunteers who heed the call to “Be All That You Can Be.” But beneath the recruitment slogans, the army promised volunteers something more tangible: a social safety net including medical care, education, housing assistance, legal services, and other privileges that had long been reserved for career soldiers. The Rise of the Military Welfare State examines how the U.S. Army’s extension of benefits to enlisted men and women created a military welfare system of unprecedented size and scope. In the 1970s, widespread opposition to the draft led to the establishment of America’s all-volunteer army. For this to succeed, a new strategy was needed for attracting and retaining soldiers. The army solved the problem, Jennifer Mittelstadt shows, by promising to take care of its own. While the United States dismantled its civilian welfare system in the 1980s and 1990s, army benefits continued to expand. Mittelstadt also examines how critics of this expansion fought to roll back its signature achievements, even as a new era of war began.

In this study outsourcing is defined as the organizational practice of contracting for services from an external entity while retaining control over assets and oversight of the services being outsourced. In the 1980s, a number of factors led to a renewed interest in outsourcing. For private sector organizations, outsourcing was identified as a strategic component of business process reengineering-an effort to streamline an organization and increase its profitability. In the public sector, growing concern about the federal budget deficit, the continuing long-term fiscal crisis of some large cities, and other factors accelerated the use of privatization measures (including outsourcing for services) as a means of increasing the efficiency of government.