Department of Defense and Corporate America: Relationships Types

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Table of Contents

Introduction
Product supply chain
Types of services offered by corporations
Conclusion
References

Introduction

The Department of Defense (DoD) is the largest consumer of contracted products in the country. Consequently, it must forge a relationship with a series of suppliers, contractors and partners in the commercial sector.

Product supply chain

It is quite difficult to classify all the relationships that the Department of Defense has with corporate America. However, one place to start is in the supply chain. When the military requires products such as, vehicles, aircrafts, electronic systems or weapons, it sources for them from the supply chain. The first entity in logistics supply chain of the DOD is the original component manufacturer (OCM). This supply chain often entails the provision of weapons or components required in defense systems. The OCM is in charge of designing, creating or doing both of these activities for the DoD. Such a person will possess intellectual rights over the design of the weapon or device. Therefore, the Department of Defense can work hand in hand with such manufacturers for lengthy periods. As such, it will forge a relationship with them.

The second entity in the supply chain is the franchised distributor. Such a person is contractually obligated to sell products from the original component manufacturer. These types of companies do not sell products from competitors or other firms. If a distributor prefers not be contractually obligated to the component manufacturer, then he or she might be an independent distributor; the third group in the supply chain. The fourth group consists of a broker who is similar to the independent distributor except that he or she will analyze the market in order to find parts for customers after customers have already placed their order. In this environment, he or she will use the just in time approach. Lastly, the military logistics supply chain consists of the aftermarket manufacturer. As the name suggests, such a company redesigns parts from the OCM in order to meet DoD demands without violating the OCM’s copyrights (Solis, 2010).

All these members of the logistics supply chain usually consider the DoD as their only customer. The Department may deal directly with OCMs or may opt to work with distributors and aftermarket manufacturers. This all depends on the prevailing needs within the department. Since the DoD is the only body that purchases certain specialty products, such as war planes, then it can make direct agreements with the OCMs so as to curb bureaucracy. Alternatively, if the part under consideration is slightly insignificant, then the Department may purchase it from other vendors in the market, who may be brokers, franchised distributors or independent distributors. Every single company in the supply chain is a commercial enterprise whose sole aim is to make profits. Through the logistics supply chain, the DoD provides a market for a wide range of businesses in corporate America. In summary, the following relationships exist between the Department and members of the supply chain: DoD-aftermarket manufacturer, DoD-broker, DoD-independent distributor, DoD-Franchised distributor and DoD-OCM.

An example of an OCM is Boeing Company. This firm has worked with the US Defense forces for almost one century. It produces guided missiles, military and bomber aircrafts.

Types of services offered by corporations

The DOD works with suppliers in the acquisition field in order to access various services. In this regard, it has a distinct relationship with service providers who belong to the following categories: base supporters, construction contractors, security providers, linguistic contractors, communication service providers and transportation contractors. These types of relationships are especially useful to the Department when it carries out missions in foreign countries. Of late, Afghanistan and Iraq have created and concretized the relationship between the Department and these companies. In fact, studies illustrate that the DoD has worked with over 190,000 firms between 2003-2007 in the Iraq war. While some of these firms emanate from target countries or other non American states, most organizations are headquartered in the US thus illustrating that a strong relationship exists between corporate America and the Department. Sometimes the DoD may forge these relationships with service firms because US Army personnel are not enough in those countries. The Department only allows a certain number of workers to enter certain regions. For instance in Kosovo and Bosnia, the group could only allow a certain number of US service men to enter there. Consequently the institution needed support from private corporations to handle other tasks. In other circumstances, the military simply lacks the right skills to perform those tasks such as operation of certain equipments or communication with locals (GAO, 2003).

The service firms possess contractual relationships with the US military. Some of them provide base support. In other words, they assist troops in managing personnel or basic tasks such as laundry and maintenance of military bases. Some organizations provide dining services or offer medical services. Most service providers will possess a history with the DoD, so they will be called upon to offer those services frequently. This means that their contracts will be renewed more easily than the new vendors. Base support service providers represent 58% of all the contractors in Iraq. Some individuals may provide construction services. 15% of all firms in Afghanistan take care of this aspect. A detailed examination of translation, communication, security and construction will be examined subsequently.

It should be noted that some of these contractors are given special treatment over others. The Department of Defense gives certain corporations preferential treatment during acquisition. If an organization is owned by a veteran or a woman, then it is more likely to secure a contract with the Department than a business that is not. Additionally, some corporations may come from certain underutilized business zones called byzones. These are usually companies that come from poverty-stricken areas and are not frequently utilized by the military. Such entities will normally offer bids to the Department and get contracts from them.

Perhaps one of the most controversial forms of relationships that the DoD has with corporate America is the one between itself and private security contractors. Analysts accuse these private contractors of acting wrongfully. Since they are not governed by military rules and regulations, some of them pay minimal attention to civilians’ customs and beliefs or their overall well being. Others have used excessive force and even mistreated them (Schwartz, 2011). These accusations were common after the US intervention of Iraq and Afghanistan. However, since the major concern of this paper is to determine the types of relationships between the DoD and corporate America, then only the basics will be examined. Private security contractors are firms that protect particular entities such as facilities, people or places. In the military context, these are organizations that provide armed security for DoD forces. Sometimes, private security contractors may be unarmed; the Department has forged a relationship with these firms in its active war zones. It will use them when there is a need for static security where a fixed area, government building or housing zone needs to be protected. Alternatively some of the contractors can offer convoy security in risky areas.

Others partner with the DoD in order to offer escort services and personal security for high ranking officials. On the other hand, some of these contractors work with DoD in order to train military personnel on security; to control operations centers and also to carry out intelligence analysis. The DoD works hand in hand with private security US contractors by first carrying out a background check on them. With time, it establishes a coalition with the contractors and then keeps working with them. Although US-based security firms are more expensive than corporations from other nations, it is always safer to work with them because foreign ones are difficult to screen. Furthermore, enemy forces may infiltrate these groups (Schwartz, 2009).

Since the Department of Defense often handles missions in non-English speaking nations, then the department is in urgent need of translators or other linguistic services. Because of this, it forges relationships with specialist contractors who either translate or interpret for the military. The work of interpretation requires great attention to detail and exceptional mental alertness. Once the DoD finds a translating firm that performs this task well in a particular region, then it often maintains a working relationship with them. In this area of service, the government has worked with INSCOM for linguistic services in Iraq. However, competing firms such as GLS brought charges against the former corporation. As a result, the government awarded GLS the contract and then later divided the tasks between these two organizations. Firms such as GLS often subcontract linguistic work to other firms. Other contracting firms that have a strong relationship with the Department include SOS International and Northrop Grumman. SOS assisted in Arabic training for members of the DoD prior to deployment in Iraq and Afghanistan while Northrop has supported the department in Bosnia, Kosovo, Haiti, Somalia and Operation Desert Storm.

The DoD also woks hand in hand with construction contractors in various missions. Sometimes the partners may carry out minor repair work or may build new facilities in target areas. Alternatively, the group may be in charge of temporary shelters in the area. The Department may be too busy to work on these jobs alone so it often collaborates with experts in the field. An example of a corporation that built almost 85% of all DoD buildings in the Vietnam war is Halliburton Company. In fact, this firm is one of the top 10 contractors of the Department. The US Army often requires transportation services during field missions. The DoD often outlines its requirements from contractors and thus increases chances of compliance. The military also requires communication services through surveillance as well as radar systems. A company that has partnered with the Department of Defense since the 1920s is Raytheon. The organization takes care of missile guidance systems and radar systems.

Conclusion

The relationships that exist between the DoD and corporate America in acquisitions result from the services and products required by the Department. Some companies act as manufacturers or distributors while others provide various services. Since most of the firms are specialist organizations, then the DoD is their only consumer. This makes their relationship mutually reinforcing.

References

GAO (2003). Military Operations: Contractors provide vital services to deployed forces but are not adequately addressed in DoD plans. United States Accountability Report, GAO-03-695, 40

Solis, W. (2010). Defense supplier base. United States Accountability Report, GAO 10389, 6.

Schwartz, M. (2009). Department of Defense contractors in Iraq and Afghanistan: Background and analysis. Web.

Schwartz, M. (2011). Security contractors in Afghanistan and Iraq. Congressional Research Service Report, R40835, 1-22.

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Department of Defense and Corporate America: Relationships Types

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