skiddish german shepard

Question
I am a k-9 officer i just recieved an 18 month german shepard who is fully trained to track and bite. he is also a drug dog.When myself and another officer went to look at him we were impressed with him.he was not shy even though we were strangers to him. about a month later i went to pick him up.when i got him home he was fine around me,but when anyone else came around he would try to hide and would back away.I have had him for two weeks now and he has not changed. What can i do to solve this problem? If he dont start doing better soon i will have to swap him for another dog.but i would really like to make this one work.

Answer
I'm not a protection expert.  However, it appears to me that this dog has not been socialized to normal (home) situations.  He is clearly demonstrating a fear response.  It is also possible that he is experiencing cognitive dissonance: meaning, without a cue (command or situation he has been trained to recognize) he does not know how to respond.  The three responses any domestic dog can offer to a threatening situation are fight, flight and freeze.  He is offering the flight response.  I do not consider 18 months of age a reliable threshold for the work your dog is expected to perform; temperament has yet to fully develop in a dog that young.  Furthermore, I have no idea what sort of temperament testing was done before this dog was admitted to your K9 unit.  No intention to in any way disparage your unit, but it appears that this dog was not adequately evaluated before being admitted to training (a possible huge error since teaching any dog to use bite response should only be done with dogs whose temperaments are rock solid, meaning they are highly social and confident without being dominant.)  Before passing judgment on this situation, I would need you to answer these questions:
1.  Under what situation did the dog first demonstrate this behavior (who was present, what time of day, what were you doing at the time)
2.  What DID YOU DO when he first offered this response?
3.  How have you tried to manage this behavior (include everything you have tried, no matter how seemingly insignificant to you.)
4.  How are your family members responding to the dog's apparent fear?  What do they do around him?
5.  Where does he sleep
6.  Who has attempted to interact with him in your household since the initial response and how have you behaved during this interaction?

All these are pertinent questions.  If the dog works well, does what he is trained to do consistently and WITH NO HESITANCY, then he is a competent partner.  However, he is very young (immature) and this behavior is a concern to me, as he will be your lifelong partner in a job that endangers your life every single day.  Let's try to work this out together.  Give me every clue you can offer, including whatever you know about his past history.