Have the Feds Over-Outsourced Work Contracts?

Outsourcing is Driving Contracts
Outsourcing is Driving Contracts – Too Much?

Has the Pentagon been outsourcing federal work too frequently? Some lawmakers believe so, and they’re attempting to resolve the problem by instituting a cap on service contract spending by the Defense Department.

Restoring Balance to Defense Department Outsourcing

A cap that limited service contract spending to fiscal 2011 totals was instituted in fiscal year 2012. The measure remained in effect until fiscal year 2015, but it has been removed for the past two years.

Rep. Colleen Hanabusa, D-Hawaii, introduced the amendment including the cap, which was part of the annual defense authorization bill approved by the House Armed Services Committee. According to Rep. Hanabusa, the cap was necessary to “strike a fair balance” between federal workers and service contractors.

Has Outsourcing Become “Unfair and Inefficient?”

The International Federation of Professional and Technical Engineers local in Hawaii represents a number of Navy civilians. Led by its president, Jamie Hiranaka, the union supported the amendment’s inclusion.

Hiranaka stated that without the cap, “unfair and inefficient” outsourcing of jobs is likely to continue. With no room to hire federal workers, DoD agencies would be forced to outsource new work.

Michael Fischetti, executive director of the National Contract Management Association, disputes the need for a cap. In his view, such caps make spending decisions political rather than acquisition-based.

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Congress Tackles DoD Acquisition Overhaul

Putting the Pieces Together for Effective Acquisition
Putting the Pieces Together for Effective DoD Acquisition

Once again, the House Armed Forces Committee is tackling the hot-button issue of DoD acquisition reform. The current Defense authorization bill under consideration includes a blockbuster provision that would signal the biggest change in decades.

DoD Joins the E-Commerce Revolution?

The provision in question requires DoD to purchase commercial off-the-shelf products from at least two private sector online platforms such as Amazon and Staples. Committee chairman Mac Thornberry’s original proposal has been revised to include all federal government spending.

While proponents of the measure believe the government would benefit from the already competitive nature of online buying, opponents question the possibility of conflicts of interest by forcing commercial firms to sell through a portal operated by a competitor. There’s also the question of compliance with the Buy American Act and other legal requirements.

Controlling Service Contract Spending

Other provisions address service contracts, which comprise more than half of the DoD’s contracted spending. DoD budgets would be required to include detailed spending plans for both service contracts and weapons systems, and so-called “bridge contracts” to cover the period between an expiring contract and a new one, which would need approval from officials at increasingly higher levels of command.

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Reforms Coming to DoD Acquisition Including Online Marketplace

Reforms Are Coming to DoD Acquisitions
Reforms Are Coming to Online DoD Acquisitions

E-commerce has changed the way Americans shop, and that could soon include the Department of Defense. The National Defense Authorization Act (NDAA) for fiscal 2018 would allow DoD to purchase through the same online marketplaces used by civilians and commercial buyers.

Is E-Commerce a Solution for DoD Spending?

Defense Department purchasing has traditionally been done through DoD contracting or the General Services Administration (GSA) calendar, which includes set pricing. Rep. Mac Thornberry of Texas, chairman of the House Armed Services Committee, proposed that DoD be given the ability to purchase online from retailers such as Amazon and Staples.

According to Thornberry and other proponents, the reform would allow DoD to enjoy significant savings on off-the-shelf goods such as bottled water and treadmills. A recent GSA Inspector General report found that GSA prices run 13 percent higher than the open market.

DoD would also benefit from access to data allowing improved tracking and analysis of purchases. As Thornberry explained, such a level of transparency and accountability would be “revolutionary” for these processes.

The bill passed out of committee into the House, where it was approved on July 14 by an overwhelming vote of 344-81. It now awaits the Senate’s passage of its own version of the bill so the two can be reconciled.

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