Incompetent female in squad (5)
I believe the answer is:
unfit
'incompetent' is the definition.
(I've seen this before)
'female in squad' is the wordplay.
'female' becomes 'f' (abbreviation).
'in' means one lot of letters goes inside another.
'squad' becomes 'unit' (both can mean a group of soldiers).
'f' put inside 'unit' is 'UNFIT'.
(Other definitions for unfit that I've seen before include "Ill-equipped" , "Incapable" , "Not prepared" , "Ill-suited" , "Not in good physical shape (5)" .)