A bipartisan group of senators led by Bernie Sanders (I-VT) asked Defense Secretary Lloyd Austin to look into allegations of defense contractor fraud that 60 Minutes investigators claimed they discovered.
“Lockheed Martin, Boeing, Raytheon, and TransDigm are among the offenders, dramatically overcharging the Department and U.S. taxpayers while reaping enormous profits, seeing their stock prices soar, and handing out massive executive compensation packages,” the senators wrote. “These companies have abused the trust government has placed in them, exploiting their position as sole suppliers for certain items to increase prices far above inflation or any reasonable profit margin.”
In March, Deputy Defense Secretary Kathleen Hicks announced the largest Pentagon budget ever: $842 billion. Almost half will go to defense contractors.
Why We Need Contractors
Ike Eisenhower famously warned of the military-industrial complex in his 1961 Farewell Address. “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
Therefore, to many people, military contractors, especially private military contractors are a necessary evil, at best. But in reality, they are a necessary good.
First and foremost, private military contractors decrease the need for servicemember deployment and increase the likelihood of a short conflict.
Technically, U.S. armed services members are all volunteers. But very few people “volunteer” to go to Iraq or Syria. Servicemembers follow orders. That is what they signed on for. But if they are not entirely happy about those orders, that is understandable. Contractors, on the other hand, sign on for specific deployments to specific places. They are volunteers in every sense of the word.
Contractors make servicemembers a last resort instead of a first option. Therefore, if decision-makers need U.S. military muscle, but they do not want to commit servicemembers, they just have to pick up the phone.
Additionally, contractors flex their muscle before, during, and after a conflict in ways that regular servicemembers cannot do or do not want to do.
Very few private military contractors are aggressive door-kickers. Most are more like extremely well-trained security guards. Before the shooting starts, or at least before the shooting escalates, contractors deter violence. Regular servicemembers are not fond of guard duty, but contractors embrace it.
This backup role continues during active wars, like the recent ones in Afghanistan and Iraq. This issue goes back to the aforementioned morale issue. If regular servicemembers are not 100% happy about their orders, it only makes sense to give them assignments they embrace.
When the parties sign a cease-fire or other such agreement, regular servicemembers typically go home. Contractors stay behind to oversee rebuilding efforts and provide continued security.
Why Contractors are Expensive
Despite the multiple roles they play, many people are upset that contractors make so much money. On the surface, they have a point. Top-flight athletic shoes usually come from the same Chinese sweatshop. There is no reason to pay $300 for one pair and $100 for another one.
Frequently, private military contractors do basically the same jobs as regular servicemembers. Yet contractors often earn two or three times as much. To many, that’s a waste of money. But some other factors apply. We discussed one, the morale factor, above.
Long-term costs might be a bigger factor. Unless their enlistment terms ended, Afghanistan and Iraq War soldiers are still on the payroll. The government is also financially responsible for healthcare and other immediate employment benefits, as well as retirement and other long-term benefits. Additionally, injured servicemembers may be entitled to VA disability benefits. All told, these long-term benefits bring the short-term cost of servicemember deployment to the same level as short-term contractor costs.
Moreover, once a private military contractor’s immediate deployment ends, the government’s financial commitment ends as well. Long-term contractor costs are zero. On a related note, in most cases, contractors receive no employment benefits.
Injury Compensation Available
We mentioned the VA disability system above. Permanently disabled veterans are eligible for these benefits if their illness or injury is service-related.
Injured contractors, whether their disability is permanent or temporary, are eligible for Defense Base Act benefits. In both cases, victims are entitled to monthly cash and medical treatment. But the mechanisms are different.
The VA disability program uses a percentage disability rating system to determine the amount of cash benefits. Assume Jack and Jill both have combat-related PTSD. If Jack can still function pretty well on most days and Jill can hardly leave her house, Jill’s entitled to higher cash benefits than Jack.
The Defense Base Act compensates victims based on their time away from work. Temporarily disabled victims usually receive two-thirds of their average weekly wage for the duration of their temporary disabilities. Permanently disabled victims usually receive payment based on that disability’s effect on their future earning ability.
VA disability claimants get free medical care at VA medical facilities. Defense Base Act claimants are entitled to medical bill reimbursement from any provider as long as those expenses are reasonable.
Both systems use the same service-related definition. The deployment-related injury or illness must substantially cause a disability. But it need not exclusively cause a disability. For example, if Sam has a bad knee because of a football injury and he reinjures it overseas, he is usually entitled to 100% benefits. An attorney must only prove that his service-related injury aggravated the pre-existing injury instead of the other way around.
This point is easier to prove in DBA cases. These victims have the exclusive right to choose their own doctors.
For more information about the DBA process, contact Barnett, Lerner, Karsen, Frankel & Castro, P.A.