Best Practices for Military Joint Contingency Contracting

Introduction

Contract management is the process of actively monitoring and controlling the contract between a procuring entity and the contractor to ensure the delivery of reliable and cost-effective service (Muhwezi & Ahimbisibwe, 2015). Effective contract management helps lower the factor of risk and uncertainty and enhances both financial optimization and operational efficiency (Muhammad et al., 2019). Poor contracting management could result in huge losses for the procuring entity. According to a survey by the International Association for Contract and Commercial Management (IACCM), the average cost of poor contracting — as evidenced by missed milestones and slow negotiations — is 9 percent of an organization's annual income and up to 15 percent of the contract value for large capital projects (IACCM, 2019). Most of these revenue losses can be avoided through improved contract management (IACCM, 2019).

This paper focuses specifically on joint contingency contracting in the military context. The Defense Contingency Contracting Student Handbook defines a contingency as an emergency that involves military forces and is caused by required military operations or natural disasters, terrorism, or subversion (Defense Contingency Contracting Handbook, 2017). The United States has in the past deployed troops to many foreign countries — including Djibouti, Afghanistan, and Iraq — in response to the contingencies identified above. In most cases, these operations are precipitated by unforeseen events, which means that troops must be deployed rapidly. Contingency contracting officers (CCOs) are usually sent out with the military servicemembers as a source of direct support (Defense Contingency Contracting Student Handbook, 2017). They are the only personnel authorized to enter into contracts on behalf of the U.S. government during contingency operations carried out both locally and abroad (Defense Contingency Contracting Student Handbook, 2017). The CCO is responsible for procuring supplies and services that help provide combat support, logistical support, and combat service support to deployed units (Defense Contingency Contracting Student Handbook, 2017).

Contingency contracting is the process of obtaining construction, goods, and services from commercial sources via contracting means in support of contingency operations (Defense Contingency Contracting Student Handbook, 2017). It is the direct contracting support offered to operational and tactical forces engaged in the full spectrum of either armed conflict or non-combat contingency operations (Defense Contingency Contracting Student Handbook, 2017). This paper seeks to identify key best practices for effective defense joint contingency contracting.

Background to the Study

Throughout history, the U.S. military has used contractors to provide direct support to military forces engaged in contingency operations. During the Revolutionary War, for instance, the Continental Army contracted beef suppliers, wagon drivers, and other contractors who provided support through clothing, engineering services, and weapons (Thibault et al., 2009). During the First and Second World Wars, contracted services were provided by forward-deployed contract personnel who were responsible for organizing the shipment of goods and supplies from the U.S. mainland to the various theaters of war while the contractors themselves remained stateside (Kirstein, 2003). This arrangement was, however, marred by delays, shortages, and at times surpluses (Kirstein, 2003).

Contingency contracting operations began to mature during the Korean War, when CCOs were brought into the picture (Kirstein, 2003). The CCOs were responsible for leveraging Japanese and local Korean vendors to provide support to the war effort through local procurement, thus reducing the need for shipments to be flown from the U.S. mainland (Kirstein, 2003). During the Cold War, the Department of Defense (DoD) implemented substantial reductions in support personnel and logistics, leading to increased reliance on contractor support (Kirstein, 2003). Contractor-support services had become a mainstay of U.S. military operations by this time (Kirstein, 2003).

By 2012, the DoD had over 250,000 contractor employees providing logistic support services to U.S. forces undertaking humanitarian relief, peacekeeping, stability operations, and combat missions across Southeast Asia and the Middle East (Thibault et al., 2009). In Afghanistan, Kuwait, and Iraq, for instance, the Army engaged multiple local firms in contractual arrangements to refurbish and repair military vehicles, provide interpretation services, communications services, and base operations support (Thibault et al., 2009). A 2009 report by the Commission on Wartime Contracting in Iraq and Afghanistan, however, identified that despite contractor support proving critical to the success of contingency missions, it was mostly carried out in an ad hoc manner and was inadequately incorporated into the culture and doctrine of the U.S. military (Thibault et al., 2009). For instance, the report showed that contingency planning before operations was inadequate, which necessitated the standardization of contingency contracting processes across the DoD (Thibault et al., 2009). A study of best practices for effective contingency contracting in the DoD is thus warranted and timely.

Literature Review

Researchers have conducted multiple studies to determine the best practices for effective contract management. Muhammad et al. (2019) sought to examine the relationship between contract management and performance characteristics using a sample of 100 professionals drawn from the fields of project management, architecture, engineering, and quantity surveying, among others. The study findings showed that contract length had a significant but negative effect on project quality (Muhammad et al., 2019). The study also found that effective dispute resolution between the contracting parties and mutual acceptance of the product or service were significant influencers of project quality in contracted works (Muhammad et al., 2019).

These findings were replicated in another study by Muhwezi and Ahimbisibwe (2015), which found that the quality of a project depends on the nature of interactions between contract management teams and the contractors of the disposing and procuring agencies. For this reason, the study concluded that one way to improve contractual engagement in public procurement is by adjusting laws to allow reasonable interaction between the disposing and procuring entities (Muhwezi & Ahimbisibwe, 2015). A similar finding was reported in a study by Komakech (2021), which examined the relationship between contract management and service delivery at a local government jurisdiction in Uganda, East Africa. The study found that contract management was more effective when there was good communication between the contracting entities, prompt resolution of disputes, and regular reviews to ensure continuous improvement (Komakech, 2021).

Studies focused specifically on joint contingency contracting in the military are limited. However, the few studies that exist provide insights that align with the broader literature. The Defense Contingency Contracting Student Handbook (2012) posits that clear contracting and command authority is one of the crucial elements of success in contingency contracting. Contracting authority is the legal authority to enter into legally binding contracts on behalf of the U.S., while command authority is the authority and responsibility to use available resources for the support of assigned missions (Defense Contingency Contracting Student Handbook, 2012). The lines of authority (command structure) and the limits of that authority should be clear, allowing contracting officers to exercise sound, unbiased business judgment as well as contract oversight (Defense Contingency Contracting Student Handbook, 2012). This supports the view of Muhwezi and Ahimbisibwe (2015) that the nature of interactions among parties is crucial for effective contractual engagement.

A study conducted by the RAND Corporation analyzing the effectiveness of U.S. Air Force contingency contracting supports the same idea (Ausink, Castaneda, & Chenoweth, 2011). In addition, however, the study found that clear acquisition and reporting policies were equally crucial in ensuring the smooth flow of operations in contingency contracting arrangements (Ausink et al., 2011). According to Ausink et al. (2011), policies need to clearly stipulate what contracting officers are required to buy, how they buy it, and the contractual instruments used in the purchase — including purchase orders, blanket purchase agreements, and vendor contracts, among other things. Further, the study supports Muhammad et al.'s (2019) view that the length of the contracting period has a negative effect on the quality of deliverables. In the authors' view, this is due to stress from the work carried out by contracting officers providing support to the military during contingency operations (Ausink et al., 2011). For this reason, the researchers advise that contracting personnel be deployed for a maximum period of six months, after which they are allowed to return home for six months before they can be eligible to deploy again (Ausink et al., 2011).

Conclusion and Future Research Recommendations

It emerges that as a best practice for effective contract management, the contracting parties need to maintain a reasonable degree of communication and positive interaction and to have mutual acceptance of the product or service. In this regard, it is prudent that the procuring agency conduct due diligence to ensure that the interests of the contractor they select align with their own. This will help to enhance communication and interactions between the contracting parties. Further, there is a need to put in place a system of continuous compliance reviews and dispute-resolution techniques that allow the parties to resolve disputes promptly before they escalate.

For contingency contracting specifically, three fundamental best practices emerge. First, there is a need to maintain positive and healthy interactions by ensuring that command and contracting structures are clear and that all parties understand the nature and extent of their authority. Second, there is a need to ensure that contract length is manageable as a way of minimizing the risk of stress and burnout; toward this end, the DoD could consider offering six-month breaks to contracting officers on contingency assignments. Third, there is a need for clear policies and guidelines regarding dispute resolution, acquisition, and purchases. Policies should offer clear guidelines on what contracting officers are required to buy, the purchase documentation to be maintained, and the process of vendor selection. Effective policies will help ensure transparency and accountability and enable disputes to be resolved promptly before they escalate.

The current study only reviews existing literature without collecting first-hand data from contracting officers and other personnel. Future studies could focus on obtaining qualitative data — by way of interviews — from contracting officers and other relevant personnel on the factors influencing the effectiveness of contingency contracting arrangements. Such primary research would allow scholars to test and refine the best-practice framework identified here against real-world operational experience.

References

Defense Contingency Contracting Handbook (2012). Defense Contingency Contracting Handbook (4th ed.). Washington, DC: Defense Procurement and Acquisition Policy.

Defense Contingency Contracting Handbook (2017). Defense Contingency Contracting Handbook (5th ed.). Washington, DC: Defense Procurement and Acquisition Policy.

IACCM (2019). IACCM Benchmark Report 2019. International Association for Contract and Commercial Management.

Kirstein, J. (2003). A Study of the Efficacy of Unit Contingency Contracting Training. Wright-Patterson Air Force Base, OH: Air Force Institute of Technology.

Komakech, R. A. (2021). Contract management and service delivery in local governments in Uganda. International Journal of Advances in Social Sciences and Humanities, 9(1), 1–23.

Muhammad, K., Saoula, O., Issa, M., & Ahmed, U. (2019). Contract management and performance characteristics: An empirical and managerial implication for Indonesia. Management Science Letters, 9(2019), 1289–1298.

Muhwezi, M., & Ahimbisibwe, A. (2015). Contract management, inter-functional coordination, trust, and contract performance of works contracts in Ugandan public procuring and disposing entities. European Journal of Business and Management, 7(20), 76–84.

Thibault, M. J., Shays, C., Ervin, C. K., Green, G. S., Gustitus, L., Henke, R. J., & Zakheim, D. S. (2009). At what cost? Contingency contracting in Iraq and Afghanistan. Commission on Wartime Contracting in Iraq and Afghanistan — Interim Report.