The privatization of military training would benefit U.S. (Viewpoint).

While everyone recognizes the importance of training for military forces, the case could be made, however, that the actual procurement of training systems is not always a smooth and timely process.

Military forces around the world are continuing to face budget constraints, human resource shortages and shifting priorities. These issues sometimes result in less-than ideal training capabilities.

To help address current training shortfalls, the military services should consider a novel approach to training armed forces called "privatized training." This new way of conducting training procurement has evolved in recent years.

The United Kingdom was a pioneer in the use of privatized training. The U.K. Ministry of Defence, over the past five years, has implemented what is known as the Private Finance Initiative (PFI). A case in point is the Medium Support Helicopter Aircrew Training Facility and the Astute Class Submarine Training Service.

The helicopter aircrew training facility represents the first PF1 contract awarded by the United Kingdom, involving defense-specific assets. It also represents the first contract of this type for simulator-based training services.

Both the Ministry of Defence and CAE, the contractor, have learned several lessons through the process. Additionally, the military customers should address some valid concerns before considering privatized training services.

Privatization is not necessarily the right approach for all types of military training. But for some services, such as basic flight training, it is definitely a viable option.

Potential advantages and obstacles to privatized training should be assessed, particularly in the United States, where the concept is gaining momentum, even though it still faces legislative and perception barriers.

The first issue to address is funding. Both government program managers and defense industry executives know that funding is always a top issue in all military programs, not just training efforts.

From the perspective of the government, funding for privatized military training is typically faster, since the upfront capital costs are the responsibility of the contractor. The military customer is agreeing to buy a defined training service. Until that service can be delivered, the government incurs little expense.

At the same time, the contractor has a significant incentive to deliver on time and on budget, in order to satisfy financing obligations. The upshot is that military customers are likely to get the training that they requite much faster than a conventional procurement could ever deliver.

Under a private-funding initiative, not only can training be delivered faster, but it can cost less than conventional training programs. Conventional wisdom suggests that the private sector can be more efficient in operating a training service, and this wisdom generally is proving true in the U.K. programs.

The Ministry of Defence recently conducted a detailed analysis of the Medium Support Helicopter Aircrew Training Facility contract. Officials determined that the payments due under the PFI approach over the initial 20-year contract term would be 15 to 20 percent below the costs of owning and operating the facility themselves.

Some of the other lessons learned include the importance of communication at all levels with the customers. It's not enough to simply address end-user requirements for the training service. As one senior official from the U.K. Defence Procurement Agency suggests, "Significant effort must be invested to ensure that teamwork involves all stakebolders on the public side of a PF1."

Customer subject matter experts can be valuable contributors. And the ability of both customer and contractor to manage expectations is vital--they need to view the entire project as a partnership.

CAE hired an independent research organization to conduct a survey of military customers, prospects and industry partners involved in simulation and training. The respondents--the majority of which were U.S. military representatives--were asked to comment on their views regarding the privatization of training services and whether they thought it would become more common in the near future.

More than 70 percent of the respondents believed strongly that privatized or outsourced training would become more prevalent in the defense industry. The most common reasons that would spur acceptance were "money-saving pressures and spending cuts," and "manpower shortages and downsizing of the military".

While the majority believed more privatized training was on the way, there were two clear issues or obstacles that respondents identified: How does the military maintain control over training quality? How does the military ensure concurrency?

According to one U.S. Army official, "We need to get green-suiters back in the field, but there has to be some continuing government role in quality assurance of the training."

For any privatized training program to be successful, both the contractor and the customer need to recognize that the content and acceptance of a commercially delivered training service rests with the military end user. At the U.K. Medium Support Helicopter Aircrew Training Facility, CAE employed ex-military, top-of-their-class helicopter instructors. However, the contract stipulates that active-duty Royal Air Force personnel are the ultimate authority over the training syllabus and program.

The need for concurrency between the weapon system platform and the training assets is a topic heard often in the training industry. It could be argued that the privatized training approach actually does a better job of ensuring concurrency than traditional procurement practices.

With a commercially run training service, the company will be responsible contractually for ensuring concurrency with platform systems as well as evolutions in doctrine and operating procedures. Too often in today's environment, the training system is procured and, once it is fielded, it is always competing with the actual weapon system for budget and resources. Guess who wins that battle more often--the weapon system or the trainer?

Obstacles to more widespread use of privatized training remain in the U.S. market. Any contractor needs to have a solid business case to justify the capital expense required. Typically, such a case can be made over a long period. However, U.S. laws prohibit--or at the very least discourage--long-term contracts such as those common with U.K.-style PFI programs.

While incumbents many times have an advantage when pursuing military programs, the lack of a long-term contract with usage guarantees and termination liability makes it difficult for private industry to secure the necessary financing from banks and lenders.

Some creative approaches appear to be emerging in the United States for the procurement of training services. Examples are the U.S. Army's ongoing Flight School XXI procurement and the U.S. Air Force's recent commissioning of a new E-3 flight crew-training facility.

It's clear, however, that privatized military training would accelerate in the United States with legislative changes permitting long-term government contracts.

It's important to stress that nor every military training program lends itself to privatization. The military services always will need to conduct the "sharp end" training, such as actual mission preparation.

The U.K. experience in the private-funding initiative, however, suggests that privatization can be a win-win proposition for both the military and the contractor. It would make sense for other governments to seriously consider this approach to procuring military training.

Donald W. Campbell is group president of CAE Military Simulation and Training, in Tampa, Fla.