An important but often controversial part of the post–World War II defense establishment was the contracting‐consulting industry, which grew apace amid deteriorating relations with the Soviet Union and rising levels of Cold War military spending. Traditionally, contracting denoted mainly construction and procurement functions, while consulting involved the occasional services of individuals (usually skilled professionals) outside the military. However, from 1945 on, as national security came to rest on expensive high‐tech weaponry, the military's need for outside expert advice and technical evaluation services increased dramatically. Demand was heaviest in the areas of science and technology, though cost‐effectiveness, logistical, and operations analyses figured prominently as well.
During the 1950s, as the military competition between East and West intensified, the use of consultants hired by the Department of Defense (DoD) on a contractual basis became increasingly institutionalized through the establishment of nonprofit “think tanks,” later known as federally funded research and development centers (FFRDC). These organizations owed their principal source of funding to annual contract subsidies from the DoD. Most engaged in research and development of one sort or another; rarely did they actually produce a manufactured item. FFRDCs had two distinct advantages: they bypassed low government pay scales in the hiring of expert technical and scientific personnel; and they provided relatively easy and direct access to the industrial, academic, and scientific communities which had the knowledge and expertise the military services needed. Two early examples of such collaboration were the development in World War II of the proximity fuse, a joint endeavor of the navy and the Applied Physics Laboratory of the Johns Hopkins University; and the systematic application of operations research to air warfare through Project RAND, started in 1945 by Douglas Aircraft and reconstituted as a nonprofit corporation funded by the air force in 1948.
The next decade witnessed a veritable explosion in the number of FFRDCs, reaching a total of thirty‐nine by the early 1960s. Among the larger and more prominent were the Institute for Defense Analyses (IDA), founded in 1956, to help support the Weapons Systems Evaluation Group under the Joint Chiefs of Staff; Analytic Services (ANSER), created in 1958, to provide specialized operations analysis for the air force; MITRE (1958), another air force–sponsored technical organization, which grew out of the Lincoln Laboratory of the Massachusetts Institute of Technology; Aerospace Corporation (1960), which initially specialized in ballistic missile systems; Research Analysis Corporation (RAC), the 1961 successor to the Operations Research Office (ORO), which had performed technical evaluations for the army since 1948 under contract with Johns Hopkins; and the Center for Naval Analyses (CNA), established in 1962 to consolidate scattered navy‐sponsored technical research activities.
Accompanying the growth in FFRDCs was an increase in the number of for‐profit contracting and consulting firms in the private sector. The greatest opportunities generally awaited contractors involved in hardware development and production, but a growing number of profit companies also emerged in direct competition with the FFRDCs. Many of these new companies moved into the burgeoning field of “systems analysis” that Secretary of Defense Robert S. McNamara introduced in the 1960s in an effort to streamline and improve Pentagon planning and fiscal management through the application of computerized models.
Criticism by Congress and public interest groups that the Defense Department was becoming overly dependent on outside consultants and contractors led to periodic investigations and calls for reform. Initially targeted were the FFRDCs, whose activities their rivals in the private sector often strenuously lobbied to have curbed. At one point Congress imposed a funding ceiling on FFRDCs, until DoD agreed in 1972 to exercise closer controls and to shed all but ten FFRDCs from the military budget. In 1976, a task force of the Defense Science Board concluded that consulting arrangements with profit and nonprofit companies alike were an essential part of the Defense Department's operations. However, a year later, amid continuing controversy, President Jimmy Carter ordered a governmentwide crackdown on what he termed “the excessively large volume of consulting and expert services.”
Over the years Congress frequently debated legislation to curtail the use of consultants and contractors and the jobs they could perform. Congress tried to halt one alleged abuse—the so‐called “revolving door”—when in 1985 it barred presidential appointees for two years from taking related jobs in the private sector. But as a rule efforts to legislate reform produced few dramatic changes in the system, due largely to the difficulty of finding workable definitions for terms like consulting and consulting services. Though it was clear that the number of consultants and contractors had increased enormously since World War II, no one was ever able to say with certainty how many there were, who they were, or how much DoD was spending on their services. According to a General Accounting Office audit in 1988, the Department of Defense devoted anywhere between $2.8 and $15.9 billion for consulting services in fiscal year 1987, excluding individual consultants earning under $25,000 per year.
Despite criticism, consultants and contractors performed functions that the military departments found difficult and expensive to do on their own. One appealing feature of “contracting out” was that it was less costly and more efficient in certain cases—small jobs especially—than doing the work in house; and in 1994, responding to recommendations from a task force headed by Vice President Albert Gore, Jr., Congress enacted legislation relaxing the rules and paperwork so that DoD and other government agencies could make freer use of contractors.
[See also National Laboratories; Science, Technology, War, and the Military.]
Bibliography
- H. L. Nieburg, In the Name of Science, 1966.
- Daniel Guttman and Barry Willner, The Shadow Government, 1976.
- James A. Smith, The Idea Brokers: Think Tanks and the Rise of the New Policy Elite, 1991.
- David M. Ricci, The Transformation of American Politics: The New Washington and the Rise of Think Tanks, 1993
