A major reason for the growing American military use of contractor personnel is because, for competent commanders, the contractors are better led, more effective, and reliable subordinates. Although the U.S. military, especially the army, attracted higher quality personnel after conscription ended 40 years ago, there remained the problem that all these troops were government employees. While everyone takes a dim view of the capabilities of government workers, especially their managers, the military is often seen as different. For combat units it often is different because of the life-or-death situations that weed out the inept. Some support functions have similar incentives. But being a bureaucracy, there is the tendency for many officers and NCOs to avoid risk and keep their heads down. This is particularly the case in the last few decades, where the “zero-tolerance” (for a whole bunch of stuff) mentality has taken hold. Officers who can get things done are cut some slack in the combat zone but otherwise it’s all about avoiding bad publicity. It is better to appear competent than to actually be competent.
Contractor firms have the advantage of hiring former officers and NCOs on the basis of their ability to get things done. A contractor of any rank who does not perform can be fired immediately. All the contractors understand that they either perform or they are gone. Contractors can also quit at any time (with some financial loss for breaking a contract). Contractors put up with these demands because the pay is better than they would get in the military (or civilian jobs) for the same kind of work and the people they work for are higher quality. That is all because the contractors are not a bureaucracy (or at least not as much) like the military.
There are two general kinds of contractor jobs: combat and support. Both apply pressure to employees to get it done but on the combat side (mainly security and intelligence) performance standards are very high. This is why security for high ranking American officials (military and government) was so good in places like Iraq and Afghanistan. Despite all the media criticism (most of it ill-informed or simply untrue) for State Department security contractors, the State Department never got rid of their contractors. The reason was simple, no diplomats were lost while these contractors were on duty.
Meanwhile the military itself is a very different environment. The better senior commanders try to avoid taking the many “bureaucrat” officers sent their way. Those that arrive anyway are usually shunted into some minor (and usually useless) job just to keep them out of trouble. A civilian company would have fired a lot of these officers, but in the government, even the military, you have to be very incompetent to get sacked. Although the military uses an “up (getting promoted after a certain number of years in a rank) or out (forced to retire)” system, this means most can hang in for 30 years (at which point all who have not reached the rank of general must retire). This resulted in the stereotype of the “dumb colonel” because at that rank you can stay in for 30 years and get a larger pension. There are a lot of excellent colonels but that’s the rank where all the very cautious and usually very unimaginative officers are. These colonels give all colonels a bad name. It’s the same drill with NCOs (sergeants and petty officers). The contractors use former military personnel but screen out all these drones. In Iraq and Afghanistan the performance differences between troops and contractors were pretty stark. The media didn’t notice this but the military and government people there certainly did.