Beyond Headcount: Contractor Support, Organic Sustainment, and the Economics of Permission

This paper proposes a dimensionless framework for comparing contractor and organic (government) sustainment labor for military systems. Its thesis is that the choice between a government technician and a contractor is not a headcount question and cannot be settled by comparing two hourly rates. It is decided by three things together: how much maintenance work the fleet generates, whether that work is enough to keep a technician busy or can be pooled across other systems so that it is, and whether the government's people are authorized, in data rights, security access, and contract terms, to do the work at all. Maintenance authorization is treated as a feasibility gate rather than a cost term, with a task-level admissibility model that yields the fraction of the workload the organic workforce may perform. The framework is built in three layers, demand, labor cost, and authorization, with a total cost accounting model as the parent of every ratio, and includes whole-person staffing, a pooling efficiency, fixed and transition cost terms, a contestability premium, and a constrained decision rule in which readiness enters as a constraint. The framework is demonstrated on the U.S. Army's AN/VLQ-12 CREW Duke using FY2026 military composite pay rates, GSA contract-awarded labor rates, DCSA investigation rates, the 2026 General Schedule, Army budget justification books, and the Federal Procurement Data System record of the prime contractor, with every input flagged as reported, secondary, estimated, or assumed and a 200,000-draw scenario propagation with variance decomposition. The modeled median bare labor-rate ratio is about 1.8 in favor of organic labor, but the installation-level result is dominated by utilization and authorization: a dedicated technician is below the cost crossing in a third of draws, a pooled one above it in nearly all, and pooling requires authorization on every system in the pool. A civilian technician variant, three bounded scenarios, a contestability record showing the Duke's sustainment awards moving from eight bidders in 2008 to sole-source justifications from 2021, a five-system comparator table with a classification sensitivity test, a timeline of the 29E and 17E career field as two natural experiments, an identification strategy with rival hypotheses, and a limitations section are included. The paper does not estimate total Department of Defense savings, does not establish that organic sustainment is generally cheaper, and does not establish that the fall in the Duke's contractor obligations was caused by the new specialty. The Monte Carlo script, the Appendix A procurement classification script, the figure scripts, the raw USAspending exports, and the classified procurement tables are included so that Tables 4, 5, and 13 and Figures 1 to 3 can be reproduced. Text and figures are released under CC BY 4.0; code under the MIT licence; the USAspending exports are U.S. Government works in the public domain.