This sounds like a big deal:
The Project On Government Oversight (POGO) Blog: Contractual Error
The Washington Post reports that private contractors have played a role in alleged detainee abuses at Guantanamo, sometimes even directing Army personnel to perform such abuse. This information was obtained from a 2004 survey of FBI agents who visited the detention facilities and is the latest addition in a long series of reports on contractor misconduct.
If the allegations are true, the Dept. of Defense would be in violation of Subpart 7.503©(3) and (7) of the Federal Acquisition Regulations, which states that direction of federal employees and military forces is an “inherently governmental function” not to be performed by contractors.
These episodes of misconduct shed light on fundamental questions about the proper role of private contractors in service to the federal government.
Peter Singer highlights this debate for DefenseTech and argues that a new provision of the FY 2007 defense budget could force security contractors in Iraq and Afghanistan to comply with the Uniform Code of Military Justice. However, security contractors outside of conflict areas, such as those at Guantanamo, would still remain outside the bounds of legal obligation.
There's more, and it's worth reading.