Comparisons and Conclusions
In this chapter, we briefly compare progress in the United States with that in the United Kingdom across the three types of initiatives described in Chapter 2: outsourcing and privatization initiatives, internal reforms, and contracting process changes. We then conclude with a summary of lessons learned from the U.K. and U.S. experiences with outsourcing and privatization.
Generally speaking, the DoD has implemented similar internal reform and contracting process initiatives but has lagged behind in moving from publicprivate competitions for support services to more innovative contracts that involve private-sector investment in assets used to provide those services. To make more effective use of the private sector and to gain broader political and military support, the DoD should apply some of the lessons learned from U.K. and U.S. experience.
The DoD's A-76 public-private competition process is similar to Market Testing as practiced in the MoD in the 1980s. Although some “whole base” studies have been proposed in the United States, competitions are primarily aimed at single functions and allow the public-sector organization to streamline itself to compete with the private sector. The DoD has not moved toward comparing private-sector bids directly with the costs of providing existing inhouse services, as the MoD did under Competing for Quality.
For the most part, contractors provide defense support services using DoD assets and facilities. The DoD does not have a program comparable to the Private Finance Initiative, under which contractors invest in assets based on a long-term contract for services. One exception is in housing, where the Military Housing Privatization Initiative allows for contractors to finance investment in housing based on income from rental payments. Nor has the United States privatized any major assets or facilities, as the MoD has done with its married quarters housing and the Royal Dockyards. However, the DoD does have some parallels with Trading into Wider Markets. For example, DoD arsenals and ammunition plants are able to rent spare capacity to private-sector firms.
The DoD has created several defense-wide support organizations that are comparable to MoD Executive Agencies, such as the Defense Logistics Agency, the Defense Finance and Accounting Service, and the Defense Information Systems Agency. Many of these organizations, as well as the services' wholesale logistics organizations, are financed by working capital funds, which are broadly equivalent to trading funds in the MoD. Although this funding mechanism should make DoD supplier organizations more accountable to their customers,