Purchasing Power: Explaining Variation in the Canadian Armed Forces’ use of Contracted Services

The 2012 decision to cut service contracts in Canada therefore presents a puzzle that has been acknowledged in the literature, but not explained.11 The existing explanations for previous variation in Canada's use of PMSCs, detailed below, offer little that would explain DND's decision to reduce its use of service contracts in 2012.Most suggest that service contract use would continue to increase steadily, although one, the functional explanation, indicated that the overall use of service contracts might have declined naturally with the end of Canada's operations in Afghanistan.Canada's combat operations there, which ended in July 2011, relied extensively on operational support contracting, as detailed in Chapter 7. As a result, when that mission ended in 2011, the overall use of contracted services by the Canadian military would have declined somewhat as the operational support contracts tied to operations came to an end.The literature therefore offers a explanation that can partially explain why Canada's use of service contracts has declined in consecutive years since 2012.12 The literature, though, does not explain why DND announced a $445 million reduction in its use of service contracts a year after combat operations in Afghanistan ended.The literature therefore offers an explanation for the increase in the use of defence service contracts in Canada, but cannot account for decisions to decrease their use.As the subsequent section details, service contracting is a critical component of Canadian defence policy and defence procurement as well as the Canadian defence industrial base.A better understanding of the variation in the use of Canadian defence service contracts by the Canadian military that accounts for both increases and decreases is therefore needed.This topic warrants further study for several reasons.Simply put, the service contracts provided by PMSCs are a crucial component of Canada's national defence.They 11 Spearin, Canada and Contracted War, 525-541.12 Canada.Minister of Public Works and Government Services Canada, Public Accounts of Canada, See Figure 2 in Chapter 3.became one of the only means of reducing the defence budget after DND lost the ability to save money in the short term by cutting expenditures on Capital.The hypothesis that will be tested is as follows: Variation in the use of PMSCs by the Canadian military has been driven by changes to the defence budget and constraints on how it can be allocated.The direction of that variation is attributable to the nature of the constraints on how it can be allocated. Literature ReviewA significant degree of attention has focused on variation in private actors' involvement in conflict over time.18 The origins of the private military industry have been 18 Renée de Nevers, "(Self) Regulating War?" Security Studies 18, no. 3 ( 2009)

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