Armed Services Panel Says No to Insourcing Quota The House Armed Services Committee has voted to prohibit the use of “numerical goals or quotas” in the Defense Department’s insourcing initiative. The provision, Section 325 of the 2011 Defense Authorization bill, was approved May 19. The bill, H.R. 5136, is awaiting action by the full House. Industry groups have complained that DOD is setting quotas and is insourcing work without proper cost analysis. Defense is taking the lead in bringing work in-house. Defense Secretary Robert Gates has emphasized the need to have government employees perform inherently governmental and mission-critical jobs, but the Professional Services Council, a contractor organization, says the department is also insourcing commercial activities such as food service and base operating support. “Regrettably, based on extensive examples we’ve collected, non-strategic insourcing is occurring regularly, from Maine to Ohio to California to Hawaii,” PSC executive vice president Alan Chvotkin said in Senate testimony. Chvotkin said internal DOD documents show that the military services and other defense components “were given specific quotas to meet.” He said jobs are being insourced without full cost analysis, while the department assumes savings of 40% for each job that is insourced. “To date, we have not seen a single case of insourcing where the government has even attempted to truly capture the total cost implications of its decisions,” he said in testimony May 20 before a subcommittee of the Senate Homeland Security and Governmental Affairs Committee.” At the hearing, the administrator of the Office of Federal Procurement Policy, Dan Gordon, repeated that the Obama administration’s goal is to balance the mix of contractors and federal employees, while assuring that contractors are not performing inherently governmental jobs. “We’re asking agencies to take a hard and honest look to see where they are overly reliant on contractors,” he testified. The administration has proposed new policies concerning inherently governmental functions, functions that are close to inherently governmental, and jobs that are mission-critical. Comments on the draft policy are due by June 1. (SAA, 4/2) The Professional Services Council said the proposed policy is balanced, but agencies’ field offices are interpreting it as an insourcing mandate.