Small Business Fights Insourcing—and Wins A small firm has fended off the Air Force’s attempt to insource its contract. According to a report from the Venable law firm, the Air Force decided to insource multimedia and audiovisual services at Edwards Air Force Base, CA. Rohmann Services Inc. of San Antonio had been performing the work since 1997. Rohmann filed suit in a Texas federal court, alleging that the Air Force had not done a proper cost analysis, as required by Defense Department rules, to determine whether insourcing would save money. After the suit was filed, the Air Force withdrew its insourcing decision and extended Rohmann’s contract. Venable commented, “This case demonstrates that although the Obama administration may be seeking to insource much of the services the Federal government currently fulfills through private contractors, it will not be allowed to do so in a carte blanche manner.” The case “signifies the real threat of in-sourcing to government contractors, as well as the tools and defenses available to them in defending their contracts,” the law firm added. “As a result, government contractors should be mindful of the government in-sourcing efforts and take steps to protect their contracts and document their true cost.” The Obama administration has made insourcing one of the cornerstones of its procurement reform agenda. The president’s proposed 2011 budget calls for hiring 20,000 new DOD personnel and 10,000 people in civilian agencies to replace contractors. However, industry officials have complained that agencies are arbitrarily assuming big savings when they bring work in-house. In January the Defense Department issued a new directive including 15 pages of “business rules” that DOD agencies must follow in comparing costs of contracting versus insourcing.