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I don't quite get the exact difference. I know the mercenaries act with less oversight, but are also quite expensive. So, I wonder why the US Military used mercenaries in Iraq and Afghanistan so extensively.
I would like to know the main operational differences. Issues like cost, political impact, etc.
For the US involvement in Iraq and Afghanistan, relevant factors include (but are not limited to):
It is generally understood that uniformed troops serve out of patriotism; and in return, the government owes them a duty of care. Death, injury, post-traumatic stress, or simply long deployment away from homes and families, is politically sensitive for national armed forces. Mercenaries, by definition, are working purely for money rather than love of country, so these considerations do not apply.
The US government is committed to medical care of veterans. Modern medicine and body armour enable soldiers to survive incidents which in a past era would have been fatal, but such incidents can still result in very severe injuries. Medical care for a wounded solider may be very expensive, and continue for decades after the war is over. In the case of mercenaries, all such costs fall upon the company which employs them, which will not necessarily have a lifetime commitment to wounded employees.
The Pentagon is notorious for wasting money, and for making spending decisions based on political factors. The decision to hire mercenaries may not be based on an objective cost/benefit analysis.
The upfront cost for combat mercenaries is quite high. Non-combat support staff may be considerably less expensive than uniformed troops, especially once the costs of training, pensions, and medical care are taken into account. They can perform tasks such as catering or cleaning, freeing up uniformed service members for other activities.
The USA has all-volunteer armed forces. Expanding their numbers is therefore difficult; this was especially so during the long and unpopular wars in Iraq and Afghanistan. The use of conscription would have been extremely unpopular, and increasing pay and benefits for all existing troops would have been very expensive. The use of mercenaries enabled the US forces to expand their numbers while avoiding these obstacles.
Mercenaries are "unlawful combatants" and are thus do not gain the right of becoming a prisoner of war. The United States rejects that treaty and that definition.
"Private Military Companies" is the term used for mercenaries in the West. Such companies are generally exempt from legal oversight and gain their contracts via no-bid personal relationships with government officials. The sister of the founder of Blackwater is the current Secretary of Education of the US. The US military answers to Congress and the people of the US. Private military companies do not.
If you think of them as contractors (albeit with guns) then the reasoning for having them becomes clearer.
Say you were a manager of a cyclical business. You wouldn't keep the peak number of employees on your books all year round. It wouldn't make financial sense. So what you do is, for example, employ temporary workers through the holiday period.
Essentially the same thing is happening here. The US make long term decisions about what the size and capability of their standing military should look like. Then, for individual engagements, they will determine what capability that requires and what can be made available from existing commitments. Any short term discrepancy between the two may be made up with contract staff. If the discrepancy requires military expertise (as against requiring architects or cleaners) then they will likely fill with what you're calling mercenaries.
As with temporary staff, although the short term cost of mercenaries may be high, the alternative of hiring the equivalent in standing troops is likely to be much higher in the long term as you aren't just paying for that tour.
In a similar vein, there may be certain functions where it is decided that an outsource contractor may provide a better or cheaper service. For example, guard duty. The pros and cons here are mostly the same as any privatisation decision; private civilian prisons, say. This will have both economic and political factors as with their civilian equivalents.
As to whether this leads to less oversight or not, I'm not qualified to comment.
It's about denying responsibility and liability, in order to avoid retaliation. While a mercenary and a contractor (which is the correct word in this context) and a soldier all do more or less the same thing, it is not the same thing from the bigot point of view that hostile nations at war and hostile nations not at war have been taking for at least the last 500 (probably rather 1,000) years.
It is the same difference as historically between a pirate, a privateer or a freebooter, and a marine.
If a captain of Her Majesty's Marine sinks a Spanish ship, it's an open act of war, and retaliation is to be expected. That's not a good thing.
If a pirate captures a ship, it is a capital crime, and the pirate may see legal action.
If a privateer does the same, no legal action takes place since the privateer owns a letter of marque which somehow legitimates his actions, but does not command anything in particular. It is thus not Her Majesty's fault if this Mr. Morgan or that Mr. Drake sinks a couple of Spanish ships or burns down a settling or two. Nobody told him to do that.
Similarly, when a filibuster does yet the same thing, it is not anyone's fault either because he doesn't even own such a nice piece of paper, and thus he is just a criminal not under anyone's command or control. Either way, as long as that Mr. Teach predominantly sinks French and Spanish ships, there's no urgent reason to send armed forces to hunt him down, yet.
Transferred to recent events, if a Russian computer hacker attacks hospitals in the UK or brings down most of Ukraine, it's not Putin's fault. They may do their best to arrest him, but chances are not good they will succeed.
To add my 5c:
Plausible Deniability
Many countries wouldn't mind helping one side or another, but would face political ramifications domestically. For Americans, the Blackwater Security (now Academi) organization would be familiar as private bodyguards in Iraq. These "contractors" can and have done things in Iraq without having any oversight or political ramifications in America. This would be useful in cases where Iraqi officials require something to be done in secret that otherwise would be viewed negatively.
Many countries don't have a decently trained standing army, so would prefer to hire outsiders at a cost. A good example of this is Colombian solders fighting in Yemen (800 "contractors" - I can only do 2 links so this is from the Wikipedia page about the Yemeni Civil War). The current UAE force in Yemen is led by an ex-SAS Australian citizen.
In the case of Australia in this instance, there is very little reporting domestically on their role in the Civil War, but as per the article the Australian Government tacitly approves a fairly contentious (human rights-wise) military force, without having any direct connections to the operations there, as well as no connection to the political ramifications of the soldiers involved
What is called a 'mercenary' today is more like what used to be called a privateer: someone who is not a member of a nation's official military, engaged in military action for profit, with the approval of a soverign nation, and almost always the same nation the privateer calls home. Examples today include Blackwater/Xe, who provided security for US companies doing business in post Hussein Iraq, and also provided the initial security units for the post Hussein Iraqi leaders. Not as glamorous as Sir Francis Drake, but still very profitable. An ex special services soldier can make upwards of $250k/year in that dangerous business, if they don't mind running the risk of being lynched and strung up on a bridge in Baghdad.
Today, these hired guns can also be found on ships in the Indian Ocean, providing security against Somali pirates. The leaders of some of the oil rich nations also employ ex western special services mercenaries for their personal guard detail.
In general, mercenaries today provide security and occasionally intelligence gathering, as opposed to being used as units on offensive missions in years past. In the case of the US, they also fill in necessary gaps in military capability caused by budget constraints. For example, the security men who died in the Benghazi attack were ex SEAL/Delta soldiers, hired on to provide diplomatic security, as apparently there were no Marines available to fill that traditional role.
What used to be thought of as a mercenary was a freelance gun for hire, such as the ex WW2 soldiers who hired themselves out during the 1960's African wars that brewed up as the European nations abandoned their former colonies. Think Forsyth's 'dogs of war'. Back then, private companies were assembling small armies to attempt to seize control of mineral rich but cash poor African nations, seeking to install native 'leaders' with pre-signed mineral contracts in their hands. Those mercenaries would, as a general rule, be stripped of their citizenship in their native land for engaging in that activity.
One other form of mercenary: the French Foreign Legion, comprised entirely of foreign nationalities with French officers. The FFL would take just about anyone who demonstrates an ability to be a soldier and can pass the very rigorous training period, without looking too closely at their background.
French citizenship may be applied for after three years' service. Additionally, any soldier who becomes injured during a battle for France immediately becomes a French citizen under a provision known as "Français par le sang versé" ("French by spilled blood").
During the US Revolutionary War, the British, hard pressed by engagements elsewhere, hired Hessian mercenary units to take on some of the battles in the colonies. These were hired as entire units and not individuals, definitely a 'rent an army'.
