Year of Publication

2010

College

Martin School of Public Policy and Administration

Executive Summary

The Department of Defense is one of the highest costs to the United States government at any given time. However, as two foreign wars have been going on for nearly 10 years, the amount of resources needed is significantly higher than usual. This increase in required funds is necessary for military personnel salaries, military equipment, government personnel supporting the Department of Defense, along with support services provided by private military contractors. There have been several recent studies reviewing the effectiveness of contractors on the battlefield, but most overlook those supporting the warfighter at home. While there are many different factors to consider when evaluating the cost effectiveness of private military contractors, this study attempts to find the best use of taxpayer dollars in order to provide the most efficient support for the soldiers in the field. Security is something that everyone values, but is something that is difficult to assign a set value.

This study relies on data gathered regarding annual compensation rates for contractor and government civilian personnel, annual oversight costs, issues regarding fraud and mismanagement of funds, as well as the flexibility of the workforce. An extensive literature review is completed in order to understand some of the benefits that are provided by contractors that are difficult to place a monetary value on. This capstone focuses on contract specialists and system administrators in both government and private industry in order to get a broader analysis of how two different career fields are uniquely affected by outsourcing. The findings suggest significant cost savings with civilian personnel, but the other factors must be considered based on customer requirements, length of project, and type of work to be performed. Overall, the findings suggest that domestic support of the warfighter is most cost efficiently provided by the government civilian personnel. The data also suggest that there needs to be greater funding put into oversight of contractors to ensure that taxpayer dollars are not vulnerable to fraud and abuse. Further analysis of lifetime costs is recommended in order to better understand how private military contractors may be able to provide a more cost efficient service to the federal government.

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