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.”

Insourcing Not Smart Contracting, Gates Acknowledges

Defense Sec. Robert Gates’ Aug. 9 admission that “we weren’t seeing the savings we had hoped from insourcing” should come as no surprise to those who follow PSC’s advocacy on this issue.

For more than a year, we’ve warned that the Gates’ plan to insource critical management functions was devolving into a quota-driven, arbitrary budget exercise that would cost the government more than it would save. In letter after letter, we asked the department to show how it would achieve the 40 percent savings it claimed insourcing would bring, but PSC never received a response.

Now we know why. As we suspected, the “savings” were illusory. A budgetary sleight of hand.

More “Top Secret America” Myths Debunked: Contractor Costs Edition

In the July 20 installment of “Top Secret America,” The Washington Post unabashedly states:

"Through the federal budget process, the George W. Bush administration and Congress made it much easier for the CIA and other agencies involved in counterterrorism to hire more contractors than civil servants. They did this to limit the size of the permanent workforce, to hire employees more quickly than the sluggish federal process allows and because they thought - wrongly, it turned out -that contractors would be less expensive."

The Office of the Director of National Intelligence (ODNI) largely debunked this myth in its July 19 briefing paper, which states:

"It is true that core contract personnel are, on average, more expensive than their government counterparts. However, in some cases, contractor personnel are less costly, especially if the work is short-term in nature, easily available commercially, or requires unique expertise for immediate needs."

Fair enough. But even ODNI’s statement ignores the fact that no apples-to-apples comparison of contractor and federal employee costs has been conducted. Not for intelligence work. And not for other government work.

Post’s “Top Secret America” Miscasts Contractors as Profiteers

The July 20 Washington Post article questioning the intelligence community for tapping the vast array of private-sector talent to meet immediate intelligence needs after 9/11 glosses over the government’s most basic need: to respond with agility to changing threat environments.

But it does not gloss over less factual points. Namely, the second installment leads with the idea that government contractors, and the employees who work for them, are money grubbing profiteers only interested in serving their shareholders and with no interest in doing the public good.

Development contractors face danger in war too

On July 4 the Washington Post Magazine published “This is War,” a sobering profile of U.S. Agency for International Development professionals working to improve conditions in Afghanistan and Iraq under exceedingly treacherous circumstances.

As the piece highlights, the work these dedicated civilians perform is as critical to establishing security and stability in both nations as the higher profile military activities we usually read about. However, the piece failed to mention that those government employees work alongside thousands of equally dedicated private-sector implementing partners supporting the agency’s missions.

Contractors Help CDC Prevent Flu Contraction

Pres. Obama receives his H1N1 flu shot
during the height of the crisis.

The public spotlight on H1N1 may have faded, but the matter is still a spotlight issue for the Centers for Disease Control and Prevention (CDC).

The CDC hired PSC member Abt Associates last year to help the agency study the effectiveness of the H1N1 flu vaccine. Since December, Abt experts have worked closely with CDC officials to develop research protocols and operations procedures for these studies, which will track the effectiveness of this upcoming flu season’s combination H1N1 and seasonal flu vaccine in preventing flu in pregnant women, children, and health care providers.

The Irony of Freezing Financial Systems Modernization

There is no doubt the federal government’s budgetary climate is chilly. The national debt is growing at a rapid pace largely because of mandatory spending on Social Security, Medicaid and Medicare, the latter two programs suffering from high levels of improper payments.

The government’s need for sound financial systems to accurately account for every penny spent is crystal clear. However, in the name of sound financial management, the Office of Management and Budget has frozen approximately 30 financial system modernization projects worth $20 billion, regardless of the success of the projects to date, until it can review each and every one of them.

Call us crazy, but shouldn’t OMB have completed the reviews before those proverbial horses left the budgetary barn? And why halt the programs now, in medias res, just as the government is in dire need of modern financial systems? Isn’t that…ironic?