outsourcing security the rise of private mil

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1. Outsourcing Security: The Rise of
Private Military and Security
Companies
NikolaosTzifakis, Lecturer, Department
of Political Science and International
Relations, University of Peloponnese

2. Growth of Private Security Sector
•World Security Service Market:
•2007: $138.6 billion
•2009: $152.5 billion
•2014: $218.4 billion

3. A very …diverse Sector
•Common tasks
•protection services of assets and/or people
•training, restructuring and modernising of armies and
police forces;
•collection and analysis of intelligence;
•security of military communications;
•operation of technologically advanced military systems;
•military transportation and protection of strategic targets;
•clearing of minefields;
•language interpretation and interrogation of prisoners;
•logistics

4. Typology of Private Military and Security
Companies

5. Private Security Companies
125 countries
657,000 employees
annual revenues:
2004 -£3 billion
2011 -£7.5 billion
51 countries
300,000 employees
2009-2010: acquisition
of 30 companies in
different countries

6. Private Military Companies
40 locations in the
United States and in
several countries
more generals than the
US army in its service
6,000 peacekeepers and
trainers to 11 countries
2010: $3.4 billion (32.2%
increase of annual
turnover)

7. Typical Contract Chain in Afghanistan, Iraq
•Prime Contractors
•US-based subcontractors
•Recruiting countries (e.g. India)
•Companies in the location of deployment
2008: 29 of the top defence contractors of the United States had at least 1,194
offshore subsidiaries.

8. Types of relationships between states and PMSCs
•Contracting States
•States of Operations
•Home States
•Third States

9. Driving forces behind the growth of the private security market
Enabling Conditions
•change in the global demand/supply of security forces
•military interventions in Afghanistan and Iraq
•transformation of the public police and the military in
many countries
Alleged advantages of private security industry
•Cutbacks to public expenditures
•Professionalism, experience, specialised expertise
•Innovative thought
•Adaptability to new threats
•Security gap

10. Private Security contractors in IraqPrivate Security contractors in Afghanistan

11. Security as a good
Non-excludable Excludable
Non-rival Publicgood Clubgood
Rival Commongood Privategood
Types of goods
National security as a good
Public Providers Security is a public good
Private Providers Security is a public good
Sub-state or individual security as a good
Public Providers Security is a common good
Private Providers Security is a club good
Security is a private good

12. Security as a commodity: Political externalities
•It releases states from part of their
responsibility to protect their citizens
•Security is gradually depoliticised
•Strengthens the executive at the expense of
the legislative branch of government
•PMCsan important role over the
determination of security discourses and the
corresponding policies
•supply creates its own demand
•security is militarized

13. Contract management and cost efficiency
•No-bid contracts (60% of US DoD2004)
•Existence of monopolies (67% of non-competitive contracts)
•‘Cost-plus’ contracts
•Poor contract oversight
•US in Iraq: 34,728 contracting actions = $35.9 billion (2003-June
2011)
•1992-2006: dollar value of US army contracts increased 331% and
the number of army contract actions increased 654%
•only 38% of the US Army contracting workforce deployed in theater
operations are certified for the positions held
•2009: the US GAO reviewed 69 audits of the DefenseContract Audit
Agency and found that in 65 of them there were serious ‘deficiencies
that rendered them unreliable’
•Outsourcing contract oversight or self-evaluation
•No disruption in the supply of services
•2004 KBR contract in Iraq, expenses of over $1 billion

14. Frauds, wastes, abuses, mismanagements
•the US DoDInspector General: US paid $160 to $204
million more for the supply of fuel in Iraq.
•Supreme Foodservice charged the US with $454.9
million to airlift fresh fruit and vegetables in
Afghanistan (not required in the contract)
•Blackwaterbilled the US State Department with the
salary cost of a prostitute in Kabul
•Airscanutilized unencrypted commercial television
relays from 2001 to 2002 to transmit U.S. military
intelligence data in Kosovo
•‘Federal Contractor Misconduct Database’ …893
instances of misconduct collectively amounting to
more than $40 billion

15. Illegitimate violence, human rights and impunity

19. From Blackwaterto …Xe

20. In search of norms and regulations
•1977 Additional Protocols to the Geneva Conventions
•International Convention against the Recruitment, Use,
Financing and Training of Mercenaries
•IHL: combatants and civilians
•Draft Articles on Responsibility of States for
Internationally Wrongful Acts
•Draft of a possible Convention on Private Military and
Security Companies
•MontreuxDocument
•International Code of Conduct for Private Security
Service Providers

21. Conclusions –Policy recommendations
•Prevent supply from determining its own demand;
•launch competitive bids for every single contract;
•refrain from awarding cost-plus contracts;
•avoid outsourcing services to monopolies;
•increasing the capacity and authority of oversight institutions;
•evade transferring contract supervision to private agencies;
•calculate the cost of contract management;
•regulate the operation of PMSCs;
•reverse the climate of general impunity;
•explicitly stipulate the responsibility of prime contractors;
•exclude from future contracts seriously misbehaving PMSCs.