Federal agencies, quite rightly, are determining where they may have gone overboard with outsourcing by contracting out work that should have been kept in-house to maintain government control over its mission. Where agencies find they’ve improperly outsourced jobs, they’re supposed to insource only the positions that will put the government back in the driver’s seat of mission control.
But so far, the government’s execution of insourcing has been a non-strategic, quota-driven exercise, which actually threatens the government’s ability to carry out its mission in an efficient and cost-effective manner, PSC Executive Vice President and Counsel Alan Chvotkin warned the Senate Homeland Security and Governmental Affairs Committee.
“Insourcing for the sake of insourcing is no more intelligent, no more effective, and no more defensible than outsourcing for the sake of outsourcing. Nor should government accept repeating the mistakes of past outsourcing efforts when implementing insourcing efforts,” Chvotkin said at a May 20 hearing of the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia.
Indeed, even the administration’s procurement policy chief, Daniel Gordon, offered a similar sentiment about insourcing during the hearing entitled “Balancing Act: Efforts to Right-Size the Federal Employee-to-Contractor Mix.”
"In many cases, overreliance on contractors may be corrected by allocating additional resources to contract management," said Gordon, administrator of the Office of Management and Budget's Office of Federal Procurement Policy. "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."
Subcommittee Chairman Sen. Daniel Akaka, D-Hawaii, asked Chvotkin to identify best practices to avoid the mistakes that plagued the Bush administration’s outsourcing agenda. Before insourcing work that does not involve inherently governmental functions or residual core skills, Chvotkin recommended agencies:
- Conduct in-depth cost analyses that assess all identifiable costs associated with the work and positions involved for both contractors and federal government employees.
- Use competitive procedures to ensure that, before making a precipitous decision, they have full knowledge of what would be possible to achieve under contract.
- Be transparent throughout the process to prove rigorous analysis was conducted.
- Prohibit arbitrary budgetary quotas.
On May 19, the House Armed Services Committee approved an amendment to bar DoD from establishing arbitrary insourcing quotas. DoD’s insourcing quotas are a significant concern as PSC members have seen thousands of contractor positions insourced, resulting in the potential loss of thousands of contractor jobs and threatening the survival of some small businesses. In addition, and perhaps worst of all, these non-strategic insourcing activities all but certainly will increase DoD costs to taxpayers.
“We are pleased that the House Armed Services Committee has taken another important step to prevent DoD from setting insourcing quotas and provide greater transparency into its current insourcing activities,” Chvotkin told the Senate panel. “This prohibition should be made government-wide.”
