The insourcing debate seems to have heated up this month, as competing forces
are all at play and all are trying to be satisfied. The Office of Management and Budget (OMB) continues to provide guidance on inherently governmental functions, public comments continue on the proposed rules, and groups to help small business seem to forming in an effort to organize resistance to “non-strategic” insourcing that will disproportionally affect their business and possibly their survival.
Along those lines, recent testimony talked to the difficulties and challenges that result with
strategically insourcing:
Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia. “In other words, rebalancing does not require an agency to insource … provided the agency can hire, retrain or reassign sufficient federal employees with the requisite skills in managing contractors to maintain control of their activities.”
Accordingly, Administration officials and Congress appear to understand that the effort to “rebalance” the workforce must be done deliberately.
…”We must ensure that the goals we are asking agencies to achieve with respect to insourcing can be achieved using current hiring tools,” said Sen. George Voinovich, R-Ohio. “If not, the administration or Congress must supply agencies with sufficient flexibilities to get the job done.”…
Although the debate has many aspects and stakeholders across the Government, it is the small businesses and firms affected that seem to be lost in this debate about insourcing the right way. Where is the strategic nature of these actions?
Although a provision in the fiscal
2011 Defense authorization bill, approved by the House Armed Services Committee, would prevent the Pentagon from establishing “any arbitrary goals or targets to implement DoD’s insourcing initiative,” it does not seem that DoD is taking this measure seriously.
Earlier this month, Professional Services Council President Stan Soloway,
sent a letter to Defense Secretary Robert Gates to raise concerns that the Pentagon’s plan to bring thousands of contracted positions back to the Pentagon has gone off track. I am not sure if there has been a response yet by the Secretary or DoD, but there seems to be lack of any concerted effort to show demonstrated savings or any cost analysis that warrant the actions or create the best deal for the taxpayer.
Rebuffing these claims of improper costs analysis has been Christine Fox, director of Defense’s cost assessment and program evaluation. Ms. Fox issued guidance earlier this year for comparing the labor costs of civilian and contract support. Falling short of the guidance, however, are a number of costs that should be attributed to the government, which include training and development according to Mr. Soloway. The guidance also cites the expenses incurred by DoD for contract administration and oversight, but does not include similar information when the work is performed by federal employees. Why the disconnect? An oversight or trying to fit a position into an argument?
The insourcing pressure at DoD is intense, as Secretary Gates has called for
DOD to reduce the number of support service contractors from its current level of 39 percent of the workforce to its pre-2001 level of 26 percent, with acquisition positions being the largest increase.
There are many competing forces at stake, but It is unfortunate that strategic analysis seems to have gone by they wayside to fulfill policy that benefits narrow interests and seems to be opposed to what is in the best interest of the taxpayer and the mission.
Interesting. We’ve seen a similar story unfolding within Australia on the back of the Gershon Review, which has had some substantial industry impacts and creative departmental approaches to continuing to source, often the same talent/skillsets, through Panel Providers instead. This has simply inflated cost burdening in some cases. There’s some related research just been released which has parallels, touchpoints with your article, available at http://itcra.com.au/news-events/news-articles
Thanks Brian. I think it can only be helpful to find ways other governments are tackling these issues. Especially Australia, one of the leaders in Gov 2.0.