Insourcing Implementation So Far Proves Not Smart Contracting

First, Defense Secretary Gates questioned insourcing at the Defense Department after he found that this initiative had not achieved the intended savings. Now a second administration official is questioning agency insourcing actions.

According to the Dec. 13 edition of Capital Business (the Washington Post’s business weekly), OFPP Administrator Dan Gordon indicated that agencies misunderstood OMB’s guidance and brought work in house to meet quotas, regardless of whether doing so saved money, increased efficiencies or improved internal management capabilities.

“We do not view insourcing as a goal,” Gordon said, according to the Post account of his Dec. 10 speech. “What we’re doing is rebalancing our relationship with contractors.” In this rebalancing effort, the administration wants to convert “targeted, limited numbers of positions” to public sector performance, the Post reported.

The Post quotes Gordon as saying:

“No corporation would agree to have somebody else running their entire operations…There are far too many situations where we have yielded control of our own missions…to contractors. That needs to be fixed, but it doesn’t require massive insourcing.”

Senate Insourcing Provision Could Accelerate Job Losses, Weaken State and Local Economies

At a time when our country’s unemployment rate hovers near 10 percent and Congress has to pass legislation to keep cops, firefighters and teachers employed, the Senate Appropriations Committee has penned a bill that includes language that could put thousands of people out of work and weaken local tax bases.

Section 741 of the Senate’s version of the 2011 Financial Services and General Government Appropriations Act (S. 3677) would require all government agencies to arbitrarily insource work currently being performed by contractors, even though current law and recent OMB guidance says the work is perfectly suitable for private-sector performance. In a letter to senators, PSC President and CEO Stan Soloway outlined the impact of such arbitrary insourcing actions have already had at the Defense Department:

“A number of DoD insourcing actions have already put contractor employees out of work because their jobs were physically moved to different locations, closed off by federal hiring requirements that prevent incumbent employees from continuing to perform the work, or both. It is illogical to implement this misguided policy, which only serves to set back economic recovery.”