Allan Schweyer, Partner, CHCI
The Senate ad hoc subcommittee on contracting is now in its second year of testimony and deliberations. Last month, committee Chairperson, Sen. Claire McCaskill (D-Mo.) told the committee that contractor spending over the past decade has grown by 44 percentversus 34 percent in spending on government employees. The committee may now be poised to recommend capping the amount the federal government reimburses individual contract employees. McCaskill referred to a September report by the nonprofit Project on Government Oversight (POGO) which found “that in some instances, contractors may be paid, on average, more than 1.83 times what federal employees are paid to perform the same work” (emphasis added).
To say that the POGO report provides less than adequate evidence upon which to draw sweeping conclusions would be a gross understatement. I’m sure it could also find some cases in which federal employees may be paid more than contractors for the same work. In either case, it isn’t about who can do the work cheaper, it’s about who can do it most effectively (where price, quality, speed, skills transfer and practicality are considered).
The questions the senate committee is considering are exactly the same as those faced by large private sector organizations. It’s a dilemma as old as business: How do you decide what work to outsource and what should be kept in-house? When considering cost, you must consider all costs. If the work is project-based, say 6 months duration, is it practical or less expensive in the long-rum to hire or reassign a civil servant? If very current skills are needed, does it make sense to train a civil servant and then reassign them? What if the need is urgent? One can quickly see how a direct cost comparison fails to paint the complete picture in many cases.
A better approach involves careful planning. Senator McCaskill referred to the Department of Homeland Security’s Balanced Workforce Strategy as “a promising approach to making contracting decisions.” insofar as DHS has a process built into its strategic workforce planning process – something referred to as “Total Workforce Planning”– it might be a model for the rest of government.
Hopefully, the DHS process won’t be biased in favor of the Obama administration’s emphasis on insourcing. Except where inherently governmental work is concerned, it and other agencies should follow a neutral, balanced approach to determining which work to outsource and what to keep in house.