More than two dozen Democratic senators protested the Defense Department’s plan to shrink its civilian workforce without limiting the number of contract workers.

In a letter to Secretary Leon Panetta, the senators wrote, “[W]e are concerned that while the size of the civilian workforce is proposed to be cut back to FY 2010 levels, no comparable constraints were imposed on workforce hired through contractors, We are concerned that this would incentivize managers to use contracting firms rather than civilian employees even when the latter costs less.”

Contractor groups said the senators are misinformed. The Professional Services Council said spending on service contracts fell in both 2010 and 2011, leading to the loss of tens of thousands of jobs.

The senators acknowledged that Congress has already capped spending on service contracts at 2010 levels. They said that cap should be enforced and called on Panetta to ensure that DOD managers don’t hire more contractors to make up for the loss of employee slots.

Stan Soloway, president of the Professional Services Council, wrote to the senators, “Contractors and their employees have not been, and are not now, immune from the budget pressures. To be clear, we do not support arbitrary caps on or reductions to the federal workforce any more than we support them for contractors.”

The senators urged the department to adopt a Total Force Management approach to look at the whole universe of military, civilian and contractor employees. They also also asked Panetta to complete an inventory of DOD’s service contracts.

In a similar letter to Panetta in March, 130 House members called the employee cap a gimmick and complained, “This shift away from a civilian workforce isn’t just inefficient—it’s also a violation of long-standing workforce management rules.”

In 2009 then-Defense Secretary Robert Gates announced an aggressive insourcing initiative, but abandoned it the following year when the anticipated savings did not materialize.

Since then, budgetary pressures have forced the department to seek additional savings. DOD has already outlined plans to deal with $500 million in budget cuts over the next decade. Unless Congress acts, an additional $500 million cut would be required beginning next year, under provisions of the 2011 deal that raised the federal debt ceiling.