Australian Maritime Issues 2007 - Royal Australian Navy

Have Navies Gone Too Far in Outsourcing
Services and Support to External Contractors?
Warrant Officer (ET) Simon Kelly
Royal Australian Navy
2007 Winner Sailors’ Section
With a sort of weary, dull surprise, many who have overseen some outsourcing
and to a lesser degree, privatization projects, are discovering that these ‘new
ways of doing business’ amount only to old wine in new bottles. Contractors
bid for outsourced work claiming substantial savings, government employees
are surplused or RIFed, then (once the indigenous labor source is shuffled off or
absorbed) the contractors run up the bill. Uncle Sam then has nowhere else to go,
since the in-housers have been benched in the name of saving and efficiencies.
It is the charge and duty of the Government employee to ensure that taxpayers
don’t get fleeced – but the contractor’s first duty is just to charge. 1
The use of private companies to provide support to navies could be considered a modern
phenomenon; terms like ‘tooth to tail’ are becoming more common when describing
governments’ efforts to introduce cost savings into naval operations. 2 The Australian
Defence Minister Brendan Nelson used the ‘tooth to tail’ description to explain how
government policy was to redirect defence resources into combat and direct combat
support positions. 3
Despite the perceived recent emphasis on utilising contractors to provide services
or support, the concept is not a new one. Arguably contractors have almost always
provided support to military forces, particularly in the logistics field; however, the
use of some form of outsourced support is becoming more prevalent, and in most
Western navies it is mandated by government legislation. Essentially, to place the
Australian Defence Minister’s comments into perspective, the theory behind the
increased emphasis on outsourcing is so that naval personnel can concentrate on the
primary functions of naval capability delivery. The rationalisation behind this argument
is that the companies engaged in providing the outsourced support can provide the
services ’cheaper, provide greater flexibility, and allow the military to focus on its
core mission’. 4
In his theory of why organisational accidents occur, Professor James Reason proposes
that these accidents are a result of a ‘Swiss cheese’ principle. 5 He argued that the checks
and balances that are in place to prevent accidents/failures were not perfect, or had
holes like the aforementioned cheese. Consequently, the instant that these ‘holes’ were
aligned, it allowed the accident to eventuate. Reason’s proposition, while not directly