Privatization: Its Benefits

The fall of the Berlin Wall, signaling the end of the Cold War is probably one of the most significant events in our lifetime. In the military, it has changed the way we maintain our force. No longer a race to be the worlds superpower, we then cut our military budgets while maintaining high standards in the performance of our duties. From 1985-1997 the military budget was reduced by 38 percent, our force structure reduced by 33 percent, and our procurement programs reduced by 63 percent. In an effort to save money, the government, including the Department of Defense, has significantly downsized its workforce, eliminated many government jobs, and subsequently increased the number of contracts to civilian providers. This study discusses the positive impacts of various forms of privatization, outsourcing, and contracting-out. This study describes the essential differences among these options. No matter how we choose to privatize, the government is no longer providing either the goods or the services. This study assesses some of the benefits the government is realizing from these new ways of doing business. Privatization or outsourcing has changed the way we do business in the Army. These post-Cold War initiatives are all about value, competition, commitment, and focusing on what makes ours the greatest Army in the world.