A senior military officer says the Army and its contractor Capita have "made some bad mistakes and some errors" in recruiting new soldiers.
The 10-year £1.3 billion recruiting partnership project between the MOD and Capita was signed in 2012.
Since then, the number of soldiers being recruited has not hit its target in any year.
In a Public Accounts Committee meeting, Lieutenant General Tyrone Urch was asked whether he considered the contract with Capita "a success" or "a failure" from an army perspective.
Lieutenant General Urch, Commander of Army Home Command Group, disagreed that the contract was a failure but said: "Between March 2012-2015, something like that, this contract does not look pretty and I think that we would all agree that we have made some bad mistakes and some errors.
"The Army must shoulder it's fair proportion of those mistakes and Capita would as well, I know.
"In hindsight, I would say we did a bunch of things not too cleverly."
Video: Lieutenant General Urch outlines the 'top three or four' mistakes.
Lieutenant General Urch went on to highlight some of the Army's biggest downfalls including their "naive approach" in thinking they could "subcontract out the idea of an army recruitment sergeant" to a non-military organisation, which he described as a "failing".
He added that the Army's insistence of Capita using an antiquated recruitment system, known as DII, was also a "bad mistake".
The Army's "hugely complicated career structure" was also criticised by Lieutenant General Urch.
However, he said that by the end of the contract with Capita, the Army "will be recruiting everybody that we need" and that the current size of the force is capable of protecting the country and working on operations.
Jonathan Lewis, Chief Executive of Capita, told the committee that he "completely concurs" with Lieutenant General Urch on the "challenges of the contract early on" and that Capita is not proud of recruitment numbers.
Nevertheless, he said there are clear improvements: "I'd like to think that what has been done over the last year has addressed many of those issues.
"The stats that have been published as of this year are clearly demonstrating an improvement, in the number of people making applications and the number of people who are recruited into the British Army."
He argued that Capita has proved good value for money, claiming that the company saved the Army a "material cost-saving of over £200 million".
Meanwhile, in the House of Commons, ministers have been told to end the outsourcing of large defence contracts to the private sector after a string of "unacceptable" failures.
Shadow defence secretary Nia Griffith highlighted a contract with one firm that led to fire doors and fire escapes not being maintained.
A leaked report by the Defence Safety Authority earlier this month concluded that cash cuts had led to an 'unacceptable degradation' of MOD accommodation.
Ms Griffith, speaking at defence questions, also called for a £500m contract awarded to Capita to run UK military fire and rescue services to be "halted".
"The defence fire safety regulators' leaked report highlighted a catalogue of failures to manage fire safety in single living accommodation," she said.
"It appears that the estates contract that was outsourced to CarillionAmey does not include the inspection and maintenance of fire doors and fire escapes, a shocking omission that put servicemen and women in an unacceptable situation.
"Will the minister agree to carry out an immediate review of fire safety across all Ministry of Defence sites and to implement the report's recommendations in full and will he agree to halt the outsourcing of the defence fire and rescue service to Capita, which seems grossly irresponsible in the circumstances?"
Defence Minister Stuart Andrew responded: "Of course the Ministry of Defence takes the safety of its people and the findings of this report extremely seriously.
"We are committed to addressing the short falls identified in that report, we've already taken actions against some of the recommendations and we'll continue to make sure that we implement the recommendations that were in that report."