On the use of DSS and MPs for security: DSS employees are civil service, once hired they are almost impossible to get rid of and Congress does not like to cut spaces; thus given a relaxed security requirement -- which will occur (as everything goes in cycles) -- the USG would have yo pay for far more security than it needed. MPs could not be used in many locales due to their military affiliation and the Army is generally short of MPs in any event. The benefit of contractors is that their numbers can be swelled to meet a need and those numbers can be reduced when that need disappears.

They suggest:
"Move away from reliance on the flawed and widely misunderstood term “inherently governmental” in deciding how and when to use private contractors, and instead focus on the issue of core competencies and mission success..."
Excellent idea. But.
"...Congress should identify red-lined activities that must not be outsourced and require the military to maintain a “resident capacity” for any function it outsources, particularly as it relates to the ability to conduct proper contractual oversight.
Congress is not best suited to do that; they have to and will respond to lobbyists and vested interests.

The services investigatory arms, CID, ONI, OSI and DoD already have contract audit, complinace and investigatory powers, they generally work well, understand the requirements and they are able to call on the FBI when needed. The FBI does some things well, some not at all well. It has a bad habit of overdoing investigations; more importantly, it has plenty on its plate right now plus it does not know or understand the environment or requiremnts as an in-house organ does. I could make a strong case for the fact that it is doing many more things than it should be doing but that is irrlevant -- it has been tasked to do them. I guess the thing that strikes me about this is the old saw; "If it ain't broke, don't fix it." This aspect is not broken, the current system works.