Contractors always pursue large profit, the customer – a high-quality end product in due time and at a lower cost. This struggle never ends, but this is natural.
Getting the best results from the ADF’s increasing use of private contractors calls for a deft ability to straddle the intrinsic cultural differences between military protocol and commercial practices.
All Australian Defence Force (ADF) personnel will, at some time, be exposed to contractors in the Defence environment, either as a recipient of a contractor-provided service or in a more integrated role involving ongoing interaction with contractor staff. Because service life creates its own unique culture, working in an environment that includes contractors can sometimes be an unsettling experience for military personnel. Contractor employees are not expected to understand the intricacies of service life, in particular the day-to-day traditions that are second nature to the Services, potentially making their presence in this workplace jarring. In some cases this creates a form of culture shock for both parties.
Various government and ADF efficiency and operational capability initiatives aimed at improving the cost-effectiveness of service provision within the ADF have resulted in increasing numbers of contractor employees in ADF workplaces. Many contracts have been established to release uniformed personnel to serve in ‘frontline’ positions. These decisions have been based on capability reasons. A common misunderstanding is that the ADF only uses contractors to save money – the ADF does it to build and maintain operational capability. It has been estimated that in 2020 as many as 28,632 full-time equivalent contract workers provided ongoing support to the ADF. Of these, 21,000 delivered services on a long-term basis, often in jobs that were once done by the ADF such as mess staff, cleaning staff, deeper maintenance of aircraft, staffing IT help desks, etc.
These contractors are often referred to as ‘outsourced service providers’ rather than contractors. For the purposes of this paper the generic term ‘contractor’ will be used and discussion will focus on the visible and cultural differences between ADF members and contracted staff in the ADF workplace.
This paper addresses some of the cultural differences between ADF, Australian Public Service (APS) and contractor staff in the ADF workplace. It will do this through consideration of the nature of contracts with private industry, the visual manifestation of contractors in the workplace and a focus on the potential rub-points and similarities between the ADF/APS and contractor workforce.
Why the ADF contracts out work
For efficiency and operational reasons, numerous functions that need to be performed in Defence can be more efficiently and effectively carried out by contractors, releasing uniformed personnel for frontline/warfighting roles. Because some jobs do not require a uniformed or APS person to do the work, contractors can be a less expensive and sometimes more flexible option. By using contracted staff, the ADF is able to focus its workforce on warfighting roles. The ADF contracts work so that it can use its limited resources to develop warfighting capability and, as a secondary consideration, hopefully do this at lower overall cost by using contractors.
A contract is a legally binding agreement between the Commonwealth of Australia and a private business to provide a service for an agreed amount of money and for a specified period of time. There are also obligations on the Commonwealth within the contract. For a contract to be awarded to a business it must be demonstrated to the Department of Defence that the contract is ‘value for money’. This often means it is less expensive than an ADF/APS option; although value for money may not be the cheapest option, it may be the option that provides the most effective outcome for Defence. Cheap does not necessarily equal good.
Contracts are generally lengthy legal documents that contain detail on what work is to be done and what services are to be provided, how much will be paid and when it will be paid, provisions for changing parts of the contract, provisions for extending the contract and for solving disagreements between the Commonwealth and the contractor. Contracts for the provision of services are usually signed by high-level representatives of the Commonwealth and the company. However, these people will generally not be involved in the day-to-day conduct of the contract. This role is usually delegated to a Commanding Officer, Senior ADF Officer and his or her staff down to the Warrant Officer and Senior Non-Commissioned Officer level. They act as the ADF representatives for the contractor to ensure that the services provided are meeting ADF requirements on an ongoing basis and to ensure the ADF is meeting its mutual obligations under the contract.
The role of the ADF/APS delegate is not to determine value for money for the Commonwealth – this has already been considered in the awarding of the contract. Their role is one of ‘relationship management’ between the Commonwealth and the contractor to enhance the delivery of the service and, if required, nominate any Contract Change Proposals (CCPs) that may be required due to changing Commonwealth (ADF) requirements.
Contractors in the ADF workplace
Contractors work in and around ADF establishments. They are usually noticeable due to their corporate uniform (Serco, Spotless, Transfield, Linfox, Toll, Bupa, Aspen Medical, ESS Support Services, etc) and sometimes vehicle or office signage. They will have Defence Common Access Cards that indicate they are contractors. So, in effect, they have their own uniform and separate identity to the Navy, Army, Air Force and Australian Public Service. They usually have no visible cues as to the level or status they have within their company.
Almost all contractor staff have a contractor supervisor, often remote from the ADF worksite. It is highly unusual for contactor staff to work under the command and control of Defence staff. This can be a source of friction if their roles are not well understood by both parties and can lead to the development of an adversarial relationship rather than a collaborative one. ADF/APS members need to understand the nature of their responsibilities with respect to the contractor staff and seek to meet these responsibilities. Similarly, contractor staff need to understand their requirement to provide what the contract requires to meet ADF needs and to work collaboratively, but they do not have to adopt the culture of the organisation.
ADF Liaison officer/contract manager positions
Generally, there will be an ADF or APS contract liaison staff member appointed where contactor staff are employed. They manage the ongoing provision of services on a day-to-day basis. Establishing a respectful ongoing relationship with the senior contractor representative in the workplace is vital, as the failure to do so may lead to serious rub-points in the relationship. Contract representatives are not necessarily the contract signatory or contract manager and have no power to vary the contract. ADF or APS staff who have an issue with the service provided by contracted staff should bring their complaint to the relevant ADF or APS contract liaison member rather than approach the contractor or their staff directly.
The ADF or APS contract liaison member will be more familiar with the terms of the contract and the nature of services required to be delivered by contracted staff. Most contracts state ‘what’ service is to be provided but not necessarily ‘how’ the service is to be provided. This provides the contractor with a degree of flexibility in how the service will be undertaken to achieve greatest efficiency for the contractor and lowest cost to Defence. This ‘what’ versus ‘how’ difference can also create rub-points between the contractor and ADF/APS staff who may be used to a service being provided in a particular way in the past and may see no good reason to change.
Private contractors usually work for an Australian business with owners (shareholders) and a legal company structure. For that business to be successful, it must make a profit sufficient to pay its bills and pay shareholders a good return for their investment in the business. Like the ADF, the business will most likely have its own vision, mission, goals, values and performance measures. Contractor staff working for the company are required to adhere to their company’s goals and values.
While on site in an ADF work environment, contractors are required to adhere to relevant customer (ADF) workplace health and safety regulations and relevant workplace behaviour requirements. However, it should not be expected that contractor staff have a predisposition to serve their country in the same way as ADF members. Having said that, most contract staff will be favourably predisposed to working ‘for Defence’. Nevertheless, for some contractors, working for Defence is ‘just a job’ and this needs to be understood. In many contractor workforces there may be ex-ADF and ex-APS staff, and while this can have benefits for the ADF, it can also create its own problems.
It may be asking too much of contractors to fully buy into the One Team initiative of Defence, especially given the profit motive of most parent companies. Senior contractors may have personal performance measures set by more senior bosses. These can be linked to bonus remuneration, sometimes referred to as an ‘at risk’ component of their remuneration. This means that if they fail to achieve their financial or performance targets, they do not receive an annual cash bonus.
A common performance measure for contractors is the reduction of running costs of the contract while, at the same time, avoiding deterioration in the level of service provided to the ADF. This creates challenges when ADF/APS staff attempt to promote cohesion between contractors and ADF/APS members through staging social activities such as unit barbeques or sporting events. Unless stipulated in the contract that such social activities are included in the services provided, it may not be considered reasonable for Defence to expect the contractor to absorb these costs to align with unit team-building activities. Contractor staff are likely to be told by their supervisors that participation will be in their own time and they will not be paid to attend. If not handled sensitively, this can set up an ‘us and them’ barrier. If the Commonwealth sees value in including contractors in the One Team initiative, then reasonable allowances should be made to enable this without adversely impacting the contractor staff or the Commonwealth.
Contractor staff pay rates are not aligned to those of the ADF or APS members and staff. Contractor staff will have an employment contract with their employer setting out the terms of their employment. These contracts are usually considered confidential, particularly in terms of remuneration. Direct comparisons are rarely made due to variation in contractor staff conditions of employment (like ADF Conditions of Service). Some contract staff are covered by award wages, especially if their workforce is unionised. However, their pay will not always reflect the monetary value of the contract. Where there is a union, union officials are entitled to request access to the worksite to speak with union members. This is something which should be managed by the ADF/APS contract supervisor.
Contractor staff generally do not have the same level of job security as ADF/APS members. Their career may last only as long as the term of the contract. It is not unusual for contractor staff to be unsettled around the time of contract renewal or retendering as their job security may be compromised. Contractor staff tenure can also vary considerably. Some contract staff have served decades in the same position at the same establishment, albeit for different companies. Other staff appear to change with the seasons! Hiring and firing mechanisms may appear to be more flexible than those of the ADF/APS, and, generally, staff who do not ‘fit in’ are ‘let go’ promptly by the company. Contractors are still bound by workplace regulations and must comply with legislation and company employment policies.
When a contractor loses a bid for renewal of the contract there can be considerable job losses amongst outgoing contractor personnel. Contractors losing their bid for renewal may facilitate their employees gaining employment with the incoming contractor. Even so, these employees may be asked to accept variations to their employment contract with the new contractor, such as taking on extra duties which were not required under the previous contract for no extra remuneration. The incoming company can also take the opportunity to reduce wages or not renew employment contracts with certain staff members. ADF and APS staff need to be aware that this can be understandably stressful for contractor staff around the time of contract change or renewal.
Where ex-ADF members become contractors, there is a risk of cultural friction. Compared to staff who have never served in the ADF, an ex-serving contractor employee may be more sensitive to the differences between ADF service and contractor employment conditions. This can be particularly difficult if a person of a lower rank in the military is employed in a more senior position as a contractor, or the reverse. A more casual approach to relationships by contract staff does not absolve ADF members of maintaining the correct ADF forms of address, protocols, and requirements of saluting, etc, but it can make these traditions seem more antiquated or strange when they don’t apply to everyone equally. ADF members and APS staff should note, however, that if they set low standards in the workplace, the contractor will respond in kind to that standard. If ADF personnel drink brews and remain in PT kit all day then the contractor is going to slowly adopt similar standards to those being displayed – whether that is performance, productivity or attention to detail.
Most contractor staff ‘go the extra mile’ when requested to meet ADF requirements, especially in emergency situations and often without extra payment or leave entitlements. This is especially the case if there has been a history of respect and understanding between the organisations.
Leadership and Supervision of Contractors
Leadership of contactor staff requires more nuanced influence skills rather than directive command skills. As mentioned earlier, contract staff are not ‘subordinates’ in a military sense, even though they may be subordinates in the positional hierarchy. The relationship is more one of a liaison relationship rather than directive. Therefore, direction often takes the form of requests. The ability of a leader or supervisor to achieve ADF requirements is dependent on the influence skills of the ADF member. This can be a challenge for ADF personnel who rely on ‘command’ to get things done, as this is unlikely to work with contractor staff. Arguably, any ADF/APS leader who relies solely on their position or rank to ‘command’ personnel to get things done, whether it be when leading contractors or uniformed personnel, does not have a mature or sustainable leadership style.
It is essential for ADF managers and supervisors of contract staff to be at least familiar with the services that the contractor is required to deliver. These services are likely to be articulated as part of the contract, perhaps in an annex to the contract. The contract will, in almost all cases, not stipulate how the service is to be provided – this is up to the contractor to ensure the intent of the contract is met.
ADF and APS contract managers need to put effort into developing sound personal relationships with their contract site managers. This will ensure that when they need make a special request, which arises from time to time, it can be approached in a positive way. Explaining what the ADF needs, rather than suggesting how it should be delivered, will give the contractor maximum flexibility to achieve the ADF’s needs. This empowers the contractor to find a local solution without needing to resort to a formal Contract Change Proposal or to refer the request ‘up the line’ to their supervisor.
With a sound relationship, and with both parties acting in good faith, solutions can be found in almost all situations. ADF/APS supervisors also need to be aware that contractors are often limited by what they can provide in terms of time (which the ADF rarely considers or values) and money (staff wages). If an ADF/APS supervisor requires a change to a service that is not included in the contract, then they should not expect it to be undertaken at no cost or to be absorbed by the contractor. While there is some local flexibility, if a significant or outof-scope request is required, it should be resourced. If the ADF/APS supervisor is not able to justify the extra resources, then the need for the extra work to be undertaken by the contractor should be reassessed. If the ADF/APS supervisor is unable to obtain the extra resources required, then this is not a negative reflection on the contractor or the contract.
Regular communication between the contractor and ADF/APS supervisors is highly recommended. In particular, informing contractors of upcoming ADF tasking should be communicated well in advance wherever possible to ensure the contractor is fully prepared for a sudden surge in workload. Most contracts will have formal engagement requirements, such as daily, weekly or monthly meetings; these formal engagements should not limit frequent and positive communications between the ADF supervisor and the contractor.
Contractor staff Discipline
The senior contractor is responsible for the discipline of contract staff. It is not the role of ADF nor APS personnel to get involved in discipline issues with contractor staff. This is not dissimilar to discipline in the ADF where it is often inappropriate to discipline another supervisor’s staff. Any concerns that an ADF or APS contract supervisor has with contractor staff should, in the first instance, be taken up with the senior contractor or supervisor. Contractor staff, besides being given a mandatory Health and Safety brief on commencing employment, are not required to devote time and effort into learning about the ADF and APS system, so ADF members and APS staff need to bear this in mind when interacting with contractor staff. A junior contractor calling a senior ADF person by their first name or ‘mate’ does not necessarily imply insubordination, but if the ADF leader would prefer to be referred to by the rank (e.g., CMDR Bloggs) they should inform the contract staff of this preference.
Contractors on Operations
Like other military forces, it is common practice for the ADF to employ contractors on operations. The services that they provide range from Base support functions, like catering, through equipment maintenance and employment to, in some instances, combat operations. For Base support functions, the ADF remains responsible for the protection of contractors from environmental and hostile threats and contractors cannot carry weapons or take part in hostilities. The engagement of contractors in an area of operations is a matter for the Chief of Joint Operations (CJOPS) and his staff.
The use of private military companies (PMCs) in combat/security operations by other Government agencies and the status of national armed forces can still be a source of serious confusion. The reputation and reliability of PMCs, the applicability of the laws of armed conflict, national laws, accountability, command control and interoperability are all areas for potential friction on deployment. Again, the issue of PMCs operating in the same theatre as ADF personnel is a matter for the Task Force commander and CJOPS.
The use of contractors by the ADF in garrison environments, and also on deployed operations, has become a normal way of doing business in the Department of Defence. It is the result of a number of government initiatives designed to contract out roles that do not require a person to be in uniform, and as an operational effectiveness and cost-saving measure by the Commonwealth. ADF and APS staff cannot rely on directive leadership techniques to effectively manage contractors; instead ‘negotiation’ and relationship building are more important to getting the job done. The development of leadership through influence will help to ensure Defence has the people to maintain its capability while at the same time benefiting from the efficiency and flexibility of contracted services. By establishing and maintaining positive relationships between ADF/APS and contractor staff, all parties will benefit from contracted solutions.
About the Author
GPCAPT Brown is a now a Reserve officer who serves in the Centre for Defence Leadership and Ethics at the Australian Defence College. Numerous postings throughout his career in the Permanent Air Force have necessitated the supervision and management of contracts. His interests are organisational culture, human behaviours, leadership, and ethics.
The author wishes to acknowledge the significant input from Colonel Andrew Constantine CSC in the development of this paper. Andrew has commanded Joint Logistics Units and also worked as a contractor.
 Discussion on the three specific Service cultures of the ADF can be found at: How to Survive a Posting to a joint Unit: The Three Services’ Cultural Approaches to Leadership and Discipline | The Forge (defence.gov.au) accessed 04 Jun 2021.
 Constantine, Andrew. 2021. Notes on initial draft to paper. Email Constantine/Brown. 16 Apr 2021.
 Hellyer, Marcus. 10 Dec 2020. External workers behind only army as Defence’s second biggest branch. and 11 Jan 21. An Australian public service reserve? ASPI. www.aspistrategist.org.au accessed 30 Mar 2021
 A Defence Contract is not a Master-Slave relationship. It is a commercial relationship and Defence could benefit from increased awareness of the business needs of their contractors. A mature relationship is when Defence is able to hold contractors to account for their performance through relevant KPIs and continuous engagement while acknowledging the reality that the contractor needs to make a profit.
 These steps can include; informing employees about other contractors, advertising available positions and encouraging them to apply; allowing employees to attend information sessions with incoming contractors during work hours and in some cases allowing these sessions to be conducted on site; providing assistance to employees with their applications and online submissions as well as submitting applications to contractors on behalf of the employees; assisting in scheduling job interviews and medical assessments and allowing employees to attend these sessions during work hours, and; acting as a conduit between employer and incoming contractors, after offers of employment have been made to employees by providing letters of acceptance to the incoming contractor and allowing employees to attend inductions sessions and uniform fittings.
 Wing, Ian. 2010. Private Military Companies and Military Operations. Land Warfare Studies Centre. Working Paper no. 138. Commonwealth of Australia. p.1 Wing’s paper focuses more on the use of contractors in providing lethal force rather than merely service provision in an area of operations.