A defense contractor (or security contractor) is a business organization or individual that provides products or services to a military or intelligence department of a government. Products typically include military or civilian aircraft, ships, vehicles, weaponry, and electronic systems. Services can include logistics, technical support and training, communications support, and engineering support in cooperation with the government.
Security contractors do not generally provide direct support of military operations. Under the 1949 Geneva Conventions, military contractors engaged in direct support of military operations may be legitimate targets of military attacks.
Defense contracting has expanded dramatically over the last decade, particularly in the United States, where in the last fiscal year the Department of Defense spent nearly $316 billion on contracts. Contractors have also assumed a much larger on-the-ground presence during recent American conflicts: during the 1991 Gulf War the ratio of uniformed military to contractors was about 50 to 1, while during the first four years of the Iraq War the U.S. hired over 190,000 contractors, surpassing the total American military presence even during the 2007 Iraq surge and 23 times greater than other allied military personnel numbers. In Afghanistan, the presence of almost 100,000 contractors has resulted in a near 1 to 1 ratio with military personnel.
The surge in spending on defense services contractors that began in 2001 came to a halt in 2009 with a new eye on the bottom line, leading to the Better Buying Power initiative of 2010.
Source: http://www.sipri.org/research/armaments/production/Top100 "Arms sales are defined by SIPRI as sales of military goods and services to military customers, including both domestic and export sales. Military goods and services are those [...]designed specifically for military purposes."