ABSTRACT
The UK Ministry of Defence and the Armed Forces have considerable experience of military outsourcing. This involves the transfer to private contractors of activities which traditionally were undertaken ‘in-house’ by the Ministry and the Armed Forces. The result is private firms replacing public sector organisations. representing a substitution of private organisations for public enterprises and activities. The chapter starts with a review of definitions and concepts. Military outsourcing is analysed as a public procurement problem and consideration is given to whether the public sector is inefficient. There follows a review of UK experience with military outsourcing. It describes the development of policy and presents an analysis of its economic justification. The current policy emphasis on the Private Finance Initiative (PFI) and Public Private Partnerships (PPP) is also explained and critically evaluated. Consideration is given to competition, contracting and pricing. together with the arrangements for the management and monitoring of contracts.
