DHS draws flak for review of services contracts

Some suspect ulterior motives

The Homeland Security Department’s new mandatory reviews of all professional services contracts worth more than $1 million are an attempt to address a longstanding, thorny issue, but some experts think there might be an underlying motive: aid the Obama administration's push to return many outsourced jobs to the government.

John Chierichella, a government contracts attorney at Sheppard Mullin Richter and Hampton law firm, said the department's effort strikes him as an attempt to create negative reports on contractors. During the past few years, the government pushed to reduce the federal workforce, a process accelerated by the George W. Bush administration. The government’s severe cuts on its own acquisition staff created the need Obama sees to bring those jobs back in-house, Chierichella said.

DHS Secretary Janet Napolitano announced the reviews May 28 to identify inappropriate contracts for inherently governmental work. Historically, this has been an area ripe for reforms, according to experts in federal contracting.

“I think it is a wonderful idea,” said Scott Amey, general counsel for the Project on Government Oversight watchdog group. “But it will be very difficult.”

Identifying inherently governmental work requires a detailed look at the tasks that employees are performing, he said. “It is a fine line,” Amey said. “I think crossing the line happens more than we would expect.”

“The devil is in the definitions,” Chierichella said.

Napolitano said DHS will begin immediately conducting mandatory reviews of all new professional services contracts worth more than $1 million, including renewals of existing contracts. The aim is to ensure that contracts are not being awarded for inherently governmental functions, the jobs that only federal employees should perform.

The additional review "adds a new level of rigor to the DHS contracting process,” she said in a news release.

The new procedure is part of a workforce assessment to improve management, which is among several efficiency initiatives that began in March in the department.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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Reader comments

Tue, Jun 16, 2009

oracle2world___At least 3 falacies 1)Private industries cannot just kick out an employee at 50. There are age discrimination laws and lawsuits occur. JC Penny Company lost a class action suit not too many years ago. 2) A government will not necessarily save by calling some workers "independent contractors" because the contract worker who works alongside a government worker for years and then is denied equal retirement benefits can quite possible sue and win under theory of tortious interference. 3) Contractors are very often not replaced and get contract renewals for 20-30 years without being forced to re-bid...They are made essentially sole source. Is it the procurement officer's laziness or is someone getting paid off? It could be either or both.

Tue, Jun 16, 2009

Way back in our distant past, conversion of government jobs to civil Service jobs was intended to make it harder for politicians to use appointments as rewards for their family, friends, and financial supporters. Of course, contracting and outsourcing arrangments to replace civil service workers totally circumvent the civil service requirements and the intent behind the laws that created them.

Wed, Jun 10, 2009 ritpg

If we keep in mind the two major thrusts of the current administration (aka regime) - big government and transfer of wealth - this will all make sense. Working for a large defense contractor (we were a small business until we were acquired), I quickly recognized what form "fundamental change" as it applies to "acquisition reform" was going to take. First, one of my small contracts with the Coast Guard was suddenly canceled in mid-POP. The explanation was that they were ordered to reclassify the work to be performed by an 8A company who proceeded to hire my employees. Then one of my Navy customers hired two of the people I had placed at the customer's site under a CPFF contract. That customer then told me confidentially that, against his wishes, he was under orders to hire all of my employees. Consider the effect. I not only lose valued employees, I also lose the revenue because I am not allowed to replaced them. Talking to other managers, I have confirmed that this is going on all over the country. I laughed to myself when management, during a recent strategy meeting, decided that the best tack would be to focus on non-DoD opportunities such as DHS because I knew the policy change would affect all government agencies. Sure enough within a week I found an article on line discussing the order to review all DHS contracts which I forwarded to fellow management with appropriate observations. There is no doubt in my mind that large businesses currently providing engineering and other services to any agency of the government are at risk. And short of (God forbid) a major catastrophe irrefutably attributed to the current administrations acquisition policy shift, I don't see this changing any time soon, at least not before companies and projects have been damaged. What voter is going to sympathize with moving business away from the big, bad tier one companies to the poor, small, minority-owned, disadvantaged companies and a government which has promised to give them everything they need? My own job and career interests aside, I can't help but wonder what is going to happen to the infamous military industrial complex which, warts and all, is still the best in the world. And to think that a combination of the federal government and small business will proceed without a significant reduction in productivity is a pipe dream. Neither possesses the organization, management experience or critical mass to take on important projects in the pipeline or on the drawing board. How long will it take for our enemies to recognize the emasculation of the defense industry and devise strategies to exploit it? You can be sure they are already licking their chops

Tue, Jun 9, 2009 Bureaucrates

Bravo! So much of this contracting has merely been payoffs to contributors to the political process (ahem). The government, carefully guided by our "well intended" (well remunerated?) pols, has created an underclass of workers with substandard benefits and pay, with absolutely no job security while enriching the big corporate contributors. Finding every sort of charitable guise to obfuscate the real intent of contracting out, the nation has been poorly served.

Tue, Jun 9, 2009 oracle2world

The problem with federal employees is that you can't kick them out at age 50, like private industry does. Contractors, on the other hand, can be replaced at the end of the usual five year contracting cycle ... sort of like changing the motor oil. At some point a contractor gets a little too old and expensive for the next contract, and out they go. Easy, clean, no recourse. "Inherently governmental" has nothing to do with this scheme. All you say is that contractors make "recommendations" not decisions, and have some overall government official to sign-off.

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