Laissez-Faire back at ya – contractors shouldn’t control the government

Outsourcing, competitive sourcing, or A-76 … call it by any name, but the federal government continues to allow contractors to play a major role in how the government serves the public. Yesterday’s hearing by the Senate Homeland Security and Governmental Affairs Committee entitled “Is DHS Too Dependent on Contractors to Do the Government’s Work?,” tackled the very important issue of whether the government has lost control of itself.

The fear is that contractors are performing inherently governmental functions that must be performed by government employees. Federal regulations list some government activities that must be performed by civil servants and other activities that can be performed by contractor employees. A problem arises when contractor employees cross the faint line between those activities.

The Government Accountability Office report (pdf) that was the subject of yesterday’s hearing found that in fiscal year 2005, the DHS spent $1.2 billion contracting for professional and management support services that closely support the performance of inherently governmental functions. The report listed the following activities as “high risk” of approaching the line of work that must be performed by government employees:

• Acquisition support             
• Budget preparation
• Developing or interpreting regulations
• Engineering and technical services
• Intelligence services
• Policy development
• Reorganization and planning

How many people know that contractor employees are writing agency budgets and creating policy?

While contracting for such services has helped a brand-new agency like the DHS fulfill its needs for staff and expertise, the GAO found the DHS comes up short in making sure that vital agency decisions are not being influenced by contractor judgments and that contractors are performing as required. The report highlighted the disturbing example of the Coast Guard hiring a contractor to help determine whether DHS jobs should be contracted out. A conflict of interest? We think so!

By relying too heavily on contractors, agencies like the DHS run the risk of eroding institutional knowledge. The government also risks paying too much for services or not receiving the best possible services for the money. More importantly, the government loses control over its own decision making. Service to the public and not to private interests should always be the goal. We are unsure that companies like Enron, Worldcom, and many large federal contractors think the same way.

-- Neil Gordon and Scott Amey

Comments

[J Johnson]

Good article, but as a retired federal government employee, I have to say you are waaaaaaay off base on your basic premise. Just a couple of examplets. You write:
"By relying too heavily on contractors, agencies like the DHS run the risk of eroding institutional knowledge. The government also risks paying too much for services or not receiving the best possible services for the money. More importantly, the government loses control over its own decision making. Service to the public and not to private interests should always be the goal."
Government employees cost the taxpayer far more than the equivalent contractor. Proof? The U of Maryland (Competitive Sourcing: What Happens to Federal Employees?), is the most comprehensive report ever done on the A-76 process. It concludes that the govt saves 40% of its operating budget by conducting a study (these savings result because the govt is, on average, overstaffed by 40%. Even the govt orgs, when they win (which is in nearly 90% of the competitions), do so by cutting 40% of their staff) and the report states that the quality of service either remains the same or actually goes up after a competition. I can vouch for the poor quality of service in many govt orgs prior to a competition. It isn't that govt people are unable to deliver top-flight srevice, it is simply that nothing happens to them if they deliver poor quality...and it is easier to deliver poor quality than good quality.
You feel that govt loses control over its own decision making if a contractor does work for them. How on earth would that happen? Every contract I ever managed (I retired from the USAF Space Shuttle program) we hired contractors to simply develop information, to help us make a decision. If I didn't want a contractor to give a recommendation, I just said so and they remained silent, allowing me to come to my own "government" decision.
Competitive Sourcing is the only way to get government under control. We tried many times to "streamline" government orgs I was in. Nothing ever worked, for the simple reason that no government employee benefited from cutting 1) the size of their organization, or 2) their budget. We just ignored requests to streamline (or made up something that seemed to indicate we did streamline.) With A-76, the penalty for not truly streamlining is that all of the govt positions "go away."