‘Fundamental shift’ in post-9/11 era shifted trillions of dollars to major defense firms

The post-9/11 era brought permanent changes to U.S. military strategy.

For defense contractors, it also sparked a significant cash windfall as the wars in Afghanistan and Iraq, and conflicts in other hot spots in the Middle East and beyond, funneled trillions of dollars away from the rank-and-file military and toward profit-driven companies.

That reality has fueled questions about whether the Pentagon has become too reliant on private industry for critical missions, potentially opening holes in national security and even compromising the world’s greatest military, some critics say.

As defense spending exploded in the 2000s, so too did the profits of defense firms. Of the $14 trillion in total Defense Department spending since the U.S. invasion of Afghanistan in October 2001, at least one-third has gone to contractors, according to a recent study published by the Watson Institute for International and Public Affairs at Brown University and the Center for International Policy.

At least $4.4 trillion was spent on weapons purchases and research and development, and the vast majority flowed to well-known defense firms such as Raytheon and Lockheed Martin. Private-sector companies have assumed an irreplaceable role atop the U.S. war-fighting machine. Long-term deals and service contracts for weapons, vehicles and other military tools make it difficult, if not virtually impossible, to shrink that role.

Analysts and defense insiders say the shift has accelerated in the past two decades. Ten years earlier, defense companies began searching for new services to provide and other avenues to make money as the threat of a U.S.-Soviet world war faded away.

“There’s been a fundamental shift. I think that shift goes back to the ‘90s,” said Michael Brenes, a Yale University historian who studies the defense industry.

“The end of the Cold War brought a crisis point. There’s a period of crisis, or concern, for the defense industry and for defense contractors overall,” he said. “There’s no more Cold War, and they’re concerned about profitability in the long run and where they can go to obtain further profits.”

The landscape changed before arriving at the post-9/11 partnership between the Pentagon and industry. In many ways, the military now can call on companies to do virtually everything except fight the war itself.

“To me, there is no discernible line beyond the fact that the use of kinetic force is primarily under the purview of officers of the Marine Corps, the Army, the military,” Mr. Brenes said.

Industry leaders largely attribute the rapid expansion of the defense industrial base to better personnel management at the Defense Department. Military leaders, they say, zeroed in on the best, most efficient ways to use highly trained soldiers, sailors, airmen and Marines.

“There was a shift. … Post 9/11, you got into a new paradigm,” said retired Air Force Col. Wesley Hallman, now the senior vice president of strategy and policy at the National Defense Industrial Association.

In years past, he said, “DoD could just throw people at the problem. People didn’t cost a lot. They were, frankly, cheap.”

Service members sometimes painted buildings and performed landscaping and other jobs for which highly trained military women and men were essentially overqualified.

“You never see that anymore because of … the skills that we demand out of them in the military, the all-volunteer force,” Mr. Hallman said. “We’ve invested a lot into it, and they’re not cheap. We’ve developed a system that we retain people and their skills. We retain the investments. Because of that, they’re not cheap.”

Money and controversy

Indeed, while most media attention over the past 20 years centered on contractors with firms such as Blackwater that provided armed security in war zones, the vast majority of industry work in-theater was much more routine.

Many logistical duties related to food, housing, infrastructure and other domains fell to defense contractors. For short-term missions, officials and analysts say, it can make sense for service members to handle relatively mundane tasks. But if the U.S. intends to maintain a large presence for any considerable time, as it did in Iraq and Afghanistan, outsourcing jobs to private industry makes sense, specialists generally agree, assuming that the civilian contractors are kept safe and don’t hinder the military mission.

Critics say the involvement of more individuals and companies in military missions dramatically increases opportunities for waste and fraud.

“The Pentagon’s increasing reliance on private contractors in the post-9/11 period raises multiple questions of accountability, transparency, and effectiveness,” reads a portion of the Brown University study, authored by William Hartung, director of the Arms and Security Program at the Center for International Policy.

“This is problematic because privatizing key functions can reduce the U.S. military’s control of activities that occur in war zones while increasing risks of waste, fraud and abuse,” the study says. “Additionally, that the waging of war is a source of profits can contradict the goal of having the U.S. lead with diplomacy in seeking to resolve conflicts.”

Large defense firms have played central roles in the U.S. military for more than a century, but the money flowing to those companies today is staggering.

From 2001 to 2020, the five leading Pentagon weapons contractors — Raytheon, Boeing, Lockheed Martin, General Dynamics and Northrop Grumman — pulled in $2.1 trillion in defense contracts, according to the Brown University study.

Those companies are often targets on Capitol Hill for the outsized roles they play in national security, but they provide weapons and vehicles, not armed personnel in war zones.

In the years after 9/11, security firms essentially redefined the role of a defense contractor. Blackwater provided security and other services in Afghanistan and Iraq and was viewed by critics as a mercenary American force not bound by the same rules that applied to the military.

“This is the greater problem for how the DoD has relied on private contractors — that they’re unaccountable,” Mr. Brenes said.

Industry officials, however, say security contractors are bound by military rules of engagement and subject to commanders on the ground.

Blackwater gained much of its notoriety after a September 2007 incident in Baghdad’s Nisour Square, where four Blackwater employees were convicted of killing more than a dozen Iraqi civilians. The Blackwater employees said they were defending a U.S. military convoy.

President Trump pardoned all four in December.

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