Abstract
Contractor support is an overlooked aspect of Army operations. This article outlines the conditions where Army can best use the considerable capability provided by deployed contractor support, highlights the pitfalls if implementation of this support is not conducted in a comprehensive and integrated manner, and details the management considerations necessary if this support is to be successful.
... the US, and to a lesser extent the UK, now rely extensively on private firms to provide logistics support in operational areas ... Where there have been problems, they can usually be traced back to inadequate oversight rather than any intrinsic problem with contract support.1
- Dr. Mark Thomson
The Australian Defence Force (ADF) has made some progress over the last five years in formalising the process for using contractors on operations. Departmental Instructions OPS 05-3 - Civilians in support of Australian Defence Force operations and ADFP 4.2.1 - Civilians in Support of Australian Defence Force Operations both provide sound guidance on the topic. However, the inescapable fact remains that Army currently lacks a training process to ensure we can optimise this capability—in short, Army needs to become more commercially capable on operations.
Contractor Support
To some extent Army now has a basic commercial understanding in most units. However, there is a range of options for the use of commercial resources on operations and a better understanding of the roles and implications of these options is important. Considering contract support in a tiered manner may assist in understanding roles and responsibilities at different levels.
At the tactical level, the local purchase of items using Commonwealth regulations is a daily occurrence and it is a sound method of engaging a local community. Such practices form the first tier of contract management practices and in the right circumstances can alleviate short-term sustainment issues on operations. The purchase of basic foodstuffs, office supplies or fuel at the tactical level is a good example of Tier One support.
More significant contracting practices—where a comprehensive contract or standing offer2 is established—involves formal tendering, a selection and negotiation process and the subsequent implementation of support by a commercial entity. This second tier of commercial support forms an enduring sustainment capability and can add flexibility to an operation. It may involve more complex capabilities, such as medical support, and will normally require contract management staff to be deployed. The provision of vehicle maintenance and the cleaning and redeployment of vehicles in Timor-Leste and the contractor support provided to the Regional Assistance Mission to Solomon Islands (RAMSI) by a prime contractor are examples of this Tier Two support. In recent history this type of support has been organised at short notice and is known as ‘on occurrence support’ (OOS). With some advanced notice such support could also be implemented as ‘prearranged support’ (PAS).
Tier Three support includes operational- or strategic-level contracting. It is most often prearranged support. The engagement of commercial shipping or aircraft for deployments, the establishment of contractor maintenance obligations in major equipment acquisitions or a support contract established as a contingency measure are examples of this level of contracting.
None of the tiers of contracting support should be considered in isolation. The establishment of Tier One arrangements must be done in the knowledge that a more comprehensive Tier Two contract is likely to be implemented within ninety days of an operation commencing and local expectations should be conditioned to such a change. Similarly, staffs need to forecast the implications of Tier Three arrangements, particularly the deployment of civilian maintenance staff.
When is Contractor Support Viable?
... in Iraq and Afghanistan it appears that, for the most part, contractors have stayed the course in the face of kidnappings and deaths.3
- Dr. Mark Thomson
Army has undertaken a series of demanding operational deployments over the last decade and commercial contractors have been used to supplement (or as an alternative to) military capabilities in some form on all deployments.
In-theatre contracted services worked well in Timor-Leste (specifically during 2002-04) and in Solomon Islands for a number of reasons. On both operations Army faced a relatively benign tactical environment—this allowed each party to establish its own processes in the contract relationship and allowed the contract to evolve as new requirements were determined. As well, a viable military option was readily available to minimise the risk of contractor non-performance, and this ensured a value-for-money outcome in the selection/negotiation phase of establishing a contract. Competition was present in the commercial marketplace that allowed the Commonwealth to have a choice in the way that services were to be provided, and this allowed a comparison of costs to occur and very good value-for-money solutions to be provided.
Thomson’s ASPI paper noted that contractors in Iraq had shown commendable resilience in the face of considerable threats. From the author’s perspective, contractor support within major bases in Iraq was excellent. In a protected environment, when set services are required, contracted support can provide tremendous benefits. Difficulties in securing contracted support in Iraq occurred in various situations, including when services needed to be expanded or replicated in different locations quickly, specifically in less than ninety days. When local providers were involved and these contractors were subjected to intimidation, including death threats and kidnappings, the provision of services such as tentage or a labour force was unreliable or non-existent. Only one or two companies bid for contracted work outside well-established bases and this resulted in grossly inflated costs and often left no mechanism to compare proposed costs. Further to this, unscrupulous contractors took advantage of poor contract management and failed to perform the contracted services.
None of these situations would jeopardise an operation unless a military force is left without the capacity to provide alternative support. The lessons for Army are that contracted services work most effectively in a benign environment or in situations where significant protection is available. In the complex environment, contracted services do not provide tactical flexibility. There is benefit in having a number of contractors engaged in the process and the availability of a military alternative is a clear risk mitigator. Contractors are not the panacea for a lack of military service support nor should mission-critical support be reliant upon them.
The Contracting Process
Understanding of the contracting process is the most basic step for Army on the path to being commercially capable. This understanding encompasses three elements: the formal process in accordance with complex procurement requirements, knowledge of commercial capabilities, and a clear idea of where the integration of contracted support fits into the planning cycle for operations. An understanding of these elements should span the three phases of a contract: the establishment of a contract, the implementation of a contract and the ongoing management of a contract.
Establishing a Contract
Ideally, the possibility of contracting support is acknowledged at the operational level during initial planning. ADFP 4.2.1 provides a comprehensive overview of the process and factors to be considered,4 and Joint Logistics Command (JLC) staff can provide specific guidance. The following points are important:
- The strategic intent for contracting support needs to be established and a timeframe for engagement needs to be confirmed. This guidance will trigger planning on the type of services to be sought.
- Funds need to be sought through normal appropriations mechanisms, which allow the contracting process to be initiated. Careful wording of tendering documentation may permit indicative costs to be provided early in the contracting process, assisting staff to more accurately assess the funds required.
- In consultation with deploying elements, the specific contractor support requirements and indicative timeframes need to be determined. This will confirm the type of services and usage rates—both are critical to formulating a pricing schedule that can be used to compare contractors. However, deploying elements need to be guided through this process to ensure that realistic and commercially viable expectations are created. In Iraq, some supported elements expected transit camps to be established with beds and pebbled paths in a seven-day period, five kilometres from Fallujah—the actual contractor capacity was markedly different.
- The formal contract process needs to be undertaken (noting that currently the ADF does not have the standing logistic arrangements enjoyed by the United States and United Kingdom). This requires the availability of trained staff coupled with good legal advice on commercial matters.
The ADF has taken a significant step in addressing timeliness in engaging contractor support by establishing a strategic planning partner within the JLC staffed by commercial contractors engaged to provide advice on what options are commercially possible and the subsequent implications for the ADF. This support has the potential to hasten the contracting process.
Defence has not sought the option of establishing a service support PAS—as the United States and United Kingdom have done—which is one of the ASPI recommendations. The speed of contracting response has to be balanced against the stand-by costs and the fact that the tendering process engenders competitive proposals. This issue was addressed by the Chiefs of Staff Committee in 2004 and 2005, and the strategic planning partner concept was endorsed as the preferred course of action.
Implementing Contract Arrangements
In most circumstances a phased roll-out of contractor support—that is, the establishment of services over a period of time—allows deployed forces to make provision for the arrival of contracting staff, enables any initial problems to be rectified before they are compounded by new requirements and ensures that contract management staff are in place.
Contracts for the provision of support are a living document. Recent experience suggests that initial requirements can change, particularly as a better understanding of the tactical situation develops. In Solomon Islands, the operating requirements of the police element were determined well after the support contract was signed. Established contractors understand that personnel numbers, locations and the rate of effort on an operation can vary markedly between planning and execution.
A note of caution—deployed military staff need to have an understanding of what the initial contract requirements were before raising concerns about contractor performance in meeting subsequent short notice, unforecast requirements. Usually you are getting the service that was requested and contracted for. Capable contract management staff will assist this process and amend the contract.
Contract Management
It would be wrong for personnel to go into contract relationships deeply suspicious of contractor motives. Instead, contract management should focus on collectively improving the level of service delivery. Difficulties are encountered when there is a shortage of personnel at the tactical level who can:
- verify contractor performance,
- with a knowledge of the capabilities of the on-site contractor, tailor the inevitable changes in a form that meets the requirement of the deployed force,
- evaluate contractor initiated efficiency proposals, and
- direct concerns to a cell that can formally hold contractors to account.
A number of implications flow from this in-theatre requirement. Trained staff are required to undertake this contract management role, formalised as the Commonwealth’s Representative, and a lack of trained staff is an Army weakness. Secondly, when staffing is being considered at HQ Joint Operations Command (HQJOC), an allowance must be made for the inclusion of contract management staff in the figures. A shortage of staff supporting the Commonwealth’s Representative may limit the effectiveness of contractor support and may lead to some of the oversight problems faced in Iraq.
The current ADF experience suggests that in-theatre contract management should be supported by contract support outside an area of operations. JLC operates a small contract management cell based in Melbourne that provides general advice on contracting options and establishes contracted support for deployed forces. Such a cell allows legal issues to be resolved, noting that commercial legal advice may need to be sourced from outside the ADF. It also allows for accounts to be independently verified, especially important when dealing with foreign exchange differences. Such a management cell acts as a conduit for concerns about contractor performance to be formally raised with company executives. Further, contract change proposals can be staffed for legal and financial determinations.
In the Australian context this management process has worked well and has freed deployed forces from the burden of establishing contracts and managing complex issues. The challenge for HQJOC is to coordinate the various types of contractor support and ensure that measures are in place to verify that support is consistent with the operational intent and ADF directives. HQJOC should ensure that contract proposals are tabled and discussed as part of the initial operational level planning process.
Army's Tasks
ADFP 4.2.1 notes that a range of staff are necessary to make the contracting process viable and ‘Training of personnel to be assigned to these positions is also the responsibility of HQAST and JLC [sic]’.5 This is an unrealistic requirement. If Army is going to provide timely and sensible input into the establishment of contracts for deployed services, and be in a position to oversee an orderly implementation of contracted services as well as manage the ongoing support, then a range of training needs to be provided. Interestingly, neither of the other uniformed Services has a contract training regime in place, although some on-the-job training does afford more exposure for junior personnel.
A Deployable Contract Mangement Capabiltiy
Within Land Command there is a requirement to establish a deployable contract management capability, specifically personnel to act as the Commonwealth’s Representatives. Determining the optimal form for this capability is a challenge because there is a practical requirement to train a variety of staff to act as subjectmatter experts for the differing contract services—catering, medical support, facility maintenance and aviation to name a few.
No unit has a wealth of such individuals, nor is it feasible to dedicate personnel to this speciality in a fulltime capacity. An expedient solution has seen 17 Combat Service Support Brigade establish a small cell to oversee the training and development of staff who can, subsequently, undertake the Commonwealth’s Representative role or provide subject-matter expertise. Notably, a number of Reserve personnel possess excellent contract management experience gained in civilian employment and these skills will be used for Army’s benefit.
Contract Training
Some general contract management knowledge would benefit a cross-section of personnel who need to provide planning input at all levels. Consequently, three levels of contract training, focused on support services, should occur:
- Introduction to Contracting. A WO2/officer-level introduction is required, focused on principles and processes with an emphasis on deployed contractor support. This should be conducted at Army Logistic Training Centre (ALTC) as part of the Logistic Officer Intermediate Course/Warrant Officer Logistics Course. This would be a two- or three-day commitment.
- Contract Management Processes. A senior captain-level course focused on the implication of contracting on the planning of, and implementation into, operations is needed. This should be conducted at ALTC as part of the Logistic Officer Advanced Course. Again, this would be a two- or three-day commitment.
- Contract Management (Commonwealth’s Representative). An interim solution will require personnel in 17 CSS Bde to be dualroled and identified to undertake training in simple and complex procurement; an example is the Phillips Fox (legal firm) introduction to contract management, tuition in negotiating and influencing and then practical work experience. The practicum could be achieved with an attachment to JLC or by undertaking some contract establishment for small tasks in Australia. In total, six to eight weeks of distributed training would be involved. This training could evolve into a formalised course or in part as a module at ALTC.
Conclusion
Commercial support to deployed forces should now be a standard consideration in planning operational support. There are complexities involved in this contractor support that some commentators do not appreciate. Recent operational deployments have highlighted some areas of weakness that need to be addressed. Mark Thomson’s ASPI paper explored these issues but sometimes neglected the complexity of some contracting environments, particularly those in the Middle East. Recent developments in the JLC have ameliorated many of the threats to operational flexibility and effectiveness, yet further work is required.
Despite a range of experience in using contractors over the last decade, Army has yet to formalise any process for educating or training personnel who not only have to plan the implementation of this support but who should be managing the support on operations. Of greatest need for Army is to raise, train and sustain a deployable contract management capability. Without being commercially capable, Army risks a sub-optimal performance on operations.
Endnotes
1 Mark Thomson, War and Profit: Doing business on the battlefield, Australian Strategic Policy Institute, Canberra, March 2005, p. 3.
2 Standing Offer - refers to the establishment of a ‘menu’ of contracted services that a deployed force can choose to use. The Commonwealth incurs nominal costs until services are requested.
3 Mark Thomson, War and Profit, p. 24.
4 Department of Defence, ADFP 4.2.1 - Civilians in Support of Australian Defence Force Operations, Australian Defence Headquarters, February 2004.
5 ADFP 4.2.1 - Civilians in Support of Australian Defence Force Operations, Chapter 7.17, p. 7-7.
