Neutral Squadrons are clumps of remaining Iron Hand forces, either positioned at an already controlled outpost, ready to attack a Pilot's forces, or in the middle of a chokepoint waiting for the day they will defend the area with their lives.
Some Neutral Squadrons will respawn units, or send units to attack, such as the Jackal in Sandrim. Respawning units usually use Elevators to respawn them.