Update: Blackwater Air goes lighter than Air

Artist rendering of the Blackwater BlimpBlackwater USA is a prominent, and possibly cutting edge, private military contractor. The only private firm with air resources (side note, they've taken casualties... one was shot down last April with fatalities) will expand into remotely piloted craft:

Blackwater Airship's initial focus will be the development and deployment of small remotely piloted airship vehicles (RPAVs) that can operate from 5,000 - 15,000 feet, move and hover, and stay aloft for up to four days. The airships will be equipped with state-of-the-art surveillance and detection equipment that can detect, record, and communicate in real time to friendly forces the movement and activities of terrorists.

Gary Jackson, president of Blackwater USA said, "This project is in keeping with Blackwater's support of peace and security throughout the world."

Follow-on phases of the project will include larger airships that will carry tons of payload in support of remote humanitarian and peacekeeping missions. Blackwater, who is already involved in stability operations throughout the world, continues to innovate in support of peace and security, and freedom and democracy everywhere.

Personnel provider expanding into vehicles, blimps:

The Moyock -based company has established a subsidiary, Blackwater Airships, to market a blimp that can hover over dangerous areas and detect trouble ahead. Together with an armored vehicle called the “Grizzly,” the company is expanding beyond its usual stock and trade of personnel and tactical gear.

The belief that private enterprise can provide services quicker and at lower cost than public enterprises is rooted in the American corporate experience. In the distant past, private armories and outfitters developed independent armies for hire by the Crown because of insufficient funds to maintain a standing army or navy (most recently in the American experience consider Jefferson gutting the US Navy when he came into office forcing a greater reliance on American privateers during the War of 1812). In the modern economy, it may be that on its face private providers can deliver at lower cost, but this may not be a true net cost savings. when the entire package is factored in.

Consider the value of military procurement when the two options are private firms or public agencies and the private pitch is high efficiency at a lower face value than public agencies. Not included in this first level of analysis is the loyalty and trust of the public agency, for example the US Marine Corps and soldiers on kitchen duty. Additionally, dollar for dollar comparisons oversimplify long-term costs of private markets which fail to be perfectly competitive with hidden and substantial transactional costs. Hidden costs of the private-public partnership include higher finance costs (the government can always can borrow money at lower rates), vendor incentives to skimp on quality or adhere to the letter of the contract not the spirit, future public costs to return outsourced skills in-house, and transactional costs of writing, enforcing, and monitoring contracts. Most important is a lack of committed loyalty to the project or consequences of under-performing. Further, the private business may seek contractually-allowed alternatives when uncertainty is likely in any war situation when other outcomes are desired by the client. This, along with unpredictability of warfare, results in expensive cost-plus contracts.

Ok, regardless of the perceived or real contract costs, there are other non-monetary value to PMCs. With the question of a PMC / PSC providing their own air support, the PSC becomes more capable of operating independently in a greater variety of operational environments with greater capabilities (intel, fire control, etc). Will a PSC acquire and operate their own (not on behalf of the USG) UAVs? UGVs? How do we, if we do, distinguish between Tim Spicer and Gary Jackson run operations? How about the other firms who operately quietly and under the radar? How are moral codes enforced?

Press release available here and WashingtonPost article here.