Pentagon Needs to Cut Shadow Contractor Work Force | US News and World Report

William Hartung

As Congressional gridlock continues to keep a lid on the Pentagon’s base budget, it’s long past time to reduce spending on unessential goods and services. One area that hasn’t received the attention it deserves is the Pentagon’s massive shadow work force. According to the Pentagon’s most recent report to Congress, its service contractor work force stands at over 641,000 people, employed by 41 different components within the department. Private contractors perform a wide range of tasks for the Pentagon, from maintaining equipment to providing security at bases to gathering and analyzing intelligence.


There are strong reasons to believe that the Pentagon’s latest tally of contract employees is an underestimate. Robert Gates has noted that when he was secretary of defense, he wasn’t able to determine how many private contractors the Pentagon employed. And in an analysis published in March of this year, the Congressional Budget Office determined that figures on government employment of contractors are only “approximate” due to the fact that the existing database on the subject is “not complete.” Finally, in the latest Pentagon report the number of contract employees in four sub-units was classified, including the Defense Intelligence Agency, the National Reconnaissance Office and the Africa Command.



The Pentagon’s most recent reports on the subject on service contractors have also been inconsistent. Figures for 2012 indicate that the Pentagon employed more than 670,000 service contractors at a cost of $129 billion that year. The tally for fiscal year 2014 is roughly 30,000 fewer contract employees at a cost of $131 billion. In other words, according to the Pentagon’s latest estimates, as the number of contract employees went down significantly, the cost of hiring them actually increased.


Something is clearly wrong here. Either the cost of each contractor increased substantially, or the reported number of contractors for fiscal year 2014 is too low.


These inconsistencies should prompt Congress to ask tough questions. What accounts for the discrepancy in the ratio of contractors to costs? Is it inefficiency, poor counting or an unexplained increase in the cost-per-contractor? These are crucial questions if the Pentagon’s shadow work force is to be brought under control.


So far there is no evidence to suggest that the Pentagon has corrected the situation referred to in a 2014 Government Accountability Office report on the issue: “military departments have not developed plans or enforcement mechanisms to use the inventory of contracted services to inform strategic workforce planning, workforce mix, and budget decision-making processes, as statutorily required.”



Getting an accurate accounting of the numbers of service contractors employed by the Pentagon should be just a first step. The next critical question is what tasks these hundreds of thousands of service contractors are carrying out. If they are performing functions that can and should be done by government employees, their positions should be phased out. The savings would be substantial. An analysis by the Project on Government Oversight estimates that the Pentagon could save more than $20 billion per year if it reduced its contractor work force by 15 percent. Doing so would still leave the department with well over half a million contract employees.


Making adjustments in the Pentagon’s shadow work force is particularly important at a time when the projected costs of the Pentagon’s current plans far exceed the resources likely to be available over the next five to 10 years. Congress and the Pentagon have attempted to do an end run around this problem by stuffing the war budget – known officially as the Overseas Contingency Operations account – with tens of billions of dollars in funding that has nothing to do with any current conflict. Even if this gimmick were to be adopted again this year, the kinds of investments the Pentagon could make with the new funding would be restricted. A far better solution is to find savings within the Pentagon’s current budget to pay for more urgent priorities. Cutting the service contractor work force would help accomplish that goal.


Congress should press the Pentagon to restructure its contractor work force to eliminate unnecessary positions and come up with the mix of contractors and government employees that will be the most capable and cost efficient. It’s time to trim the Pentagon’s shadow work force, in the name of accountability and fiscal responsibility.

Pentagon Needs to Cut Shadow Contractor Work Force – US News.