Outsourcing military services to German companies

At times of war, a nation would traditionally turn to its military for protection from outside threats. But time and money have brought about great change, with the armed forces no longer solely responsible for defending a country’s citizens. In today’s corporate world, military action represents big business for the myriad private firms that have emerged to offer companies and private clients security in volatile territories.

These firms can be found in several countries around the world where privatization of the military is a familiar exercise. The end of the Cold War and changes in global military affairs – from widespread conflicts to more concentrated social and political tensions in African and Middle Eastern nations, for example – have created a potentially lucrative market for security contractors.

While privatizing aspects of the military sounds relatively simple, the rules under the German Constitution make it a complex affair.

The services offered by such enterprises range from consulting and training over logistics and transportation to combat missions.* This model has been particularly prevalent in recent years, with specific restricted aspects of the German Armed Forces (Bundeswehr) rolled out to businesses.

With some projects having been in operation for several years and others still in their infancy, it is difficult to assess whether rolling out military projects to the private sector has ultimately been successful. For instance, delegating mobility services in Germany has taken place for the past 10 years. In contrast, the IT rollout that began five years ago is ongoing.

While some recent empirical studies have attempted to explain whether public-private partnerships (PPPs) have worked, there is no definitive answer. But despite this ambiguity, there is substance to some of the conclusions reached in those studies and the article considers some of these findings.

Rolling out military services to the private sector has proved lucrative for the companies working with the armed forces. Meanwhile, the Government has reduced its workload by outsourcing tasks to German corporations. But what impact has this strategy had on the state’s military and its personnel?

A greater level of efficiency is one positive outcome from outsourcing services to German companies. Establishing partnerships with the private sector has led to the military adopting business management practices and processes, and corporate objectives, incentives and controls. Offloading non-core services has also allowed the state to focus on prime military activities.

On the downside, efficiency and productivity have suffered in the time that it has taken military personnel to get used to new processes, procedures and modern technology. The Government has invested in PPPs, some of which have failed to take off. In addition, the state relies heavily on outside companies to help maintain high service levels within the German military.

In short, there are several pros and cons to privatizing the Germany military. But whether the benefits outweigh the drawbacks remains open to debate.

* D. Avant, Selling Security: Trade-Offs in State Regulation of the Private Security Industry, 2007 ;T. Jäger and G. Kümmel (Eds.), Private Military and Security Companies. Chances, Problems, Pitfalls and Prospects, Wiesbaden: VS Verlag p421-422.

The complete article was written by:

  • Dr. Gerd Portugall
    former Senior Researcher, Bundeswehr Institute of Social Sciences, Germany
  • Dr. Gregor Richter
    Senior Researcher and Project Manager, Bundeswehr Institute of Social Sciences, Germany

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