By SCOTT AMEY
Congress attempted to negotiate at least $1.2 trillion in deficit reduction measures, but failed. Congress continues to promote controversial cuts to the federal workforce as well as measures to reduce their pay and benefits. But today's hearing by the Senate Subcommittee on Contracting Oversight might have the most realistic plan for realizing savings, and it is asking the right question: how much are contractors costing the federal government?
POGO will not be testifying, but we were invited to submit written testimony for the record. Our testimony highlighted our findings and recommendations in our Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors report released on September 13, 2011.
Questions about service contracting costs are vital to government operations and spending issues, but they have taken a backseat to comparisons of public and private sector pay (there was even a hearing on that topic last year). But even that question has resulted in conflicting data (see the engineering example on the bottom of the page). If the government is serious about saving money, it should not be worried about what a private sector accountant in Florida makes in salary and benefits as compared to a federal employee. Instead, it should be worrying about what a contractor accountant is making and take into consideration all of the life-cycle costs for the federal and contractor employee. Unfortunately, those comparisons are not being done, and the government has been making hiring decisions based on theories of “big government” rather than costs.
POGO doesn’t have all of the answers, and we have been promoting the idea of an independent government study to determine if the government is truly getting the most bang for the buck with all of the insourcing and outsourcing that has taken place. A reminder—the government is spending over $320 billion on services each year, so big money is involved.
There are two recommendations in particular which deserve heightened attention by this Subcommittee and Congress—using comparative cost modeling and improving service contract inventories. Without improved data about the actual number of contractors, labor hours, costs, as well as information about types of services/occupations, overhead costs, and other intangibles, the government will be without the information needed to make good insourcing or outsourcing decisions.
POGO will be working with Senators Clair McCaskill (D-MO) and Rob Portman (R-OH) and others to improve the current system and save taxpayers as much money as possible.
Scott Amey is POGO’s general counsel.