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The 10th thing you need to know after you are in your new job.
Introduction to Outsourcing
Dear Fernando, Outsourcing government jobs is an emotional issue that both republicans and industry officials worship, and government employees, unions, and some democrats generally detest. As the manager of perhaps the biggest technology program in the government, outsourcing will dominate your life in government.
There has been an outsourcing boom in the federal government since Ronald Reagan took aim at what he felt was a bloated federal workforce and launched a drive to contract out government jobs. In 1998, Congress codified the boom into law, through the Federal Activities Inventory Reform Act, requiring government agencies and departments to publish annually those tasks, not “inherently governmental,” tasks that contractors could probably handle.
The Office of Management and Budget has a set of rules, called Circular A-76, to open government jobs to private-sector competition, but the transfer depends in large part on how committed the president is to move more jobs to the private sector.
Every subsequent administration has embraced some form of Reagan’s war on government. Clinton and Gore under their “Reinventing Government” program continued Reagan’s work when they ordered that outsourcing procedures be streamlined, and then they slashed the federal work force to the lowest level since 1960, forcing agencies to shift more jobs to contractors whether it was advantageous or not.
Today, contractors build ships, planes, and helicopters, collect income taxes, issue social service checks to the public, provide weather data to the media and the public, manage disasters, provide health care and education to veterans, research diseases, and protect the meat and food supplies. The list is much longer.
Contractors are an important part of the government team, but no one really knows how many there are. Paul Light, professor of public service at New York University, tackles this issue from time to time and estimates that there are about eight million contractors, outnumbering government employees by a factor of four, possibly five, to one.
The companies themselves, their lobbyists, and supporters in Congress advocate even greater use of contractors. Additionally, many government managers prefer to use contractors to avoid the frustrating federal personnel system.[i]
On May 20, 2010, the nation’s top procurement official, Daniel Gordon, testified to Congress that in his six months on the job, he heard numerous times that the number of contractors is out of control.[ii]
Perhaps the first program to outsource all of a state government’s desktop computers, mainframes, and telecommunication occurred in the State of Connecticut. In late 1998 the State’s CIO, Rock Regan, was ordered by the governor to privatize the state’s IT infrastructure. This was a bomb shell in the community, and it resulting in a $1.35 billion seven-year contract to EDS. Regan was a rock star for a couple of years because everyone in management positions in many governments wanted to learn what he did in Connecticut, and how.
However, the government cancelled the contract in less than a year due to lobbying from unions, state legislators, the state controller, and resistance from several state government agencies.
Today such programs in state governments are routine because of the ubiquitous deficits in the 2010-2012 period.
Outsourcing by the federal government is not new; there is a long history of major programs being outsourced to mega-integrators. For example, the Department of Defense has employed contractors since the American Revolution, when there was one contractor for every six soldiers. In recent years however, without a military draft, the ratio of contractors in Iraq to uniformed soldiers was 1 to 1. In Afghanistan, the ratio became two contractors for each uniformed soldier. In Afghanistan and Iraq, domestic contractors hired many low cost foreign subcontractors not subject to American laws.[iii]
[i] Paul Light, A Government Ill-Executed, Harvard University Press, 2009.
[ii] “Statement of the Honorable Daniel I. Gordon, Administrator for Federal Procurement Policy, Office of Management and Budget” before the Subcommittee on Oversight of Government Management, United States Senate, May 20, 2010.
[iii] Dana Hedgepeth, “Boeing loses Bid,” The Washington Post, March 1, 2008.
Manage your way to success in your government assignments