International Peace Operations Association president Doug Brooks, whose organisation is the peak body for military contractors, said governments could save a lot of money, especially in logistics and security, by outsourcing the jobs. For example, the United States spent about $US20,000 ($A23,000) a month on each soldier in Iraq, when a local security guard would cost about $600.

''Why use combat trained soldiers to guard a warehouse full of bricks or whatever? You can use local security for that ... if you have a soldier peeling potatoes, take him off that. If you have a soldier cleaning toilets, don't let them do that. Driving trucks; they don't need to do that. All that stuff can be outsourced. And that allows us to really focus on the big stuff,'' he said.

''It gives policy-makers a much more effective tool, because the soldiers in the military can really focus on the policy stuff and not on the crappy jobs ...''

Mr Brooks, who spoke at a Canberra forum on private military companies yesterday, said any military that wanted to be relevant beyond its national borders would have to work with the private sector.

''In Iraq and Afghanistan, you have the best-supported and best-supplied military operations ever. That is because of the contractors supporting this operation,'' he said.

However, contractors have also been in the news for the wrong reasons. Despite reports Blackwater employees unjustly killed at least 14 Iraqi civilians last September, no charges have been laid.

Mr Brooks said 95per cent of the 190,000 contractors in Iraq were not involved in security and governments could set the rules in contracts.

Bob Hunter, from contractor OAM, said there were incentives not to breach those rules.

''The ramifications if you breach the contract in simple terms for me is I lose the job, and whatever revenues and costs that have been incurred to that point,'' Mr Hunter said.