In a September speech, President-elect Obama said that he would cut billions of dollars of funding for private contractors. As a senator, he advocated for greater accountability for the military contractors in Iraq and Afghanistan. But he has not called for an end to the use of contractors, saying that they are necessary in some form to the current U.S. military operations.
Here are a few of the things he has said.

On reducing spending during the financial crisis by cutting contractors

9/22/08Speech in Green Bay, Wis: I will also save billions of dollars by cutting private contractors and improving management of the hundreds of billions of dollars our government spends on private contracts, and I will end the abuse of no-bid contracts for good. One employee of a former Halliburton subsidiary actually admitted that he was ordered to put his company’s logo on towels provided to U.S. troops because our government – our tax dollars – would pay for it no matter how much it cost. That is wasteful, that is wrong, and that will end when I am President.

What role should contractors play in the military?

7/7/08Interview with Defense News:
When it comes to private contractors, there is room for private contractors to work in the mess hall providing basic supplies and doing some logistical work that might have been done in-house in the past. I am troubled by the use of private contractors when it comes to potential armed engagements.

The consequences of contracting with private security companies

7/7/2008Interview with Defense News:
I think it puts our troops in harm’s way. I think it creates some difficult morale issues when you’ve got private contractors getting paid 10 times what an Army private’s getting paid for work that carries similar risks.
When it comes to our special forces, what we’ve seen is that it’s a potential drain of some of our best-trained special forces, and you can’t blame them if they can make so much more working for Blackwater than they can working as a master sergeant. That, I think is a problem.

[I]f… you start making decisions on armed engagement based on the availability of private contractors to fill holes and gaps that over time you are, I believe, eroding the core of our military’s relationship to the nation and how accountability is structured. I think you are privatizing something that is what essentially sets a nation-state apart, which is a monopoly on violence. And to set those kinds of precedents, I think, will lead us over the long term into some troubled waters.

On reducing the government’s dependence on private security companies

5/26/08Forum in Las Cruces, N.M.
[W]e’re not going to be able to immediately bring out all those private contractors because they have essentially served as a stopgap for the inadequate numbers of troops that were originally sent… And part of it also then means that we will have troops instead — and U.S. military personnel as opposed to private contractors in these positions.