COMMENTARY

How outsourcing keeps America on top

Stanton Sloane is president and CEO of SRA International, an IT services and solutions provider to the government.

On the increasingly chaotic stage of national politics, the government contractor is becoming an easy target for crowd-pleasing cost-reduction initiatives. The critical work accomplished by this segment of U.S. industry is being portrayed as unnecessary spending — or worse.

The truth is government contractors are indispensable and always have been. They are the marketplace of innovative ideas that, in partnership with government, has powered our nation ahead of all others.

Outsourcing means enlisting experts from the private sector to perform work the government can’t do fast enough, lacks the resources to do properly or simply cannot do at all.

Clearing away layers of misleading rhetoric reveals outsourcing’s prized dividend for taxpayers: lower costs and increased government productivity. That means more efficiency and a better value for all citizens concerned about the government’s bottom line. Unfortunately, those facts are being buried beneath fictions as our federal agencies attempt to comply with guidelines that are not always clear and therefore subject to misinterpretation.

Without the Massachusetts Institute of Technology scientists who worked alongside military officials, we would not have ARPAnet and its progeny, the Internet. Without innovative Lockheed Martin engineers, we would not have stealth technology. Without Ivan Getting and the Aerospace Corp., we’d be without the Global Positioning System.

Contractors are keeping unmanned aerial patrol vehicles airborne in Afghanistan and providing translation services for our troops. Contractor Jeff Hart, who had been drilling water wells for the U.S. Army in Afghanistan, was hired by the Chilean government to drill the shaft that facilitated the rescue of 33 miners who had been trapped underground for 69 days.

The federal government hasn’t seen the savings it hoped for from insourcing. For one, it often costs taxpayers more for the government to hire a permanent employee than to choose a contractor that can solve the problem in less time for a fraction of the price. A major factor in those costs is employee benefits. As USA Today reported last year, a full-time government worker receives benefits worth nearly $28,000 annually compared to a private-sector employee who receives slightly more than $16,000 a year in benefits.

Total compensation costs at all levels of government routinely outpace comparable figures in the private sector. Data from the U.S. Bureau of Economic Analysis has shown that pay rates in state and local government are increasing much faster than those in the private sector.

In 2006, for the first time in generations, the California Department of Personnel Administration conducted a government vs. private compensation analysis and found that public-sector pay rates are far higher in many areas, including for clerical, electrical, accounting and analysis work. What’s more, figures show that a government “retiree eligible for the full employer health contribution in retirement secures an additional $494,000 in compensation over 20 years,” according to the Total Compensation Survey.

The answer is neither eliminating government’s industry partners nor relying entirely on the private sector. Finding the right balance is the key.

Because job security in the private sector is more closely linked to performance, contractors are fearsomely efficient. But their contribution goes far beyond price. Contractor employees offer new perspectives on seemingly intractable problems. They have often worked in government and private industry and therefore bring a wealth of experience. Contractors can provide wise and practiced assistance from the experts who developed technology that is critical to government functions. Contractors are the key to our nation's history of successfully competing through innovation.

A blind swing at our contractors might satisfy the politics of some, but it will damage those on whom we’ve long depended for our status as the world’s pre-eminent power.

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Reader comments

Thu, Dec 15, 2011 Sacramento, CA

"Outsourcing means enlisting experts from the private sector to perform work the government can’t do fast enough, lacks the resources to do properly or simply cannot do at all." Doesn't that cover just about everything the government has ever had its hands in???

Fri, Jun 24, 2011

What a crock. Contractor workers are no better or worse than federal workers. Feds hire contractors and contractors hire ex-feds. What is happening is that the federal spending pie is shrinking and alot of work will no longer be done. Federal workers are compensated more because the lower level jobs at the agencies have been contracted out. You have to have an advanced degree and job experience to get even hired now as a fed. Ask anyone who has applied via USA jobs. Why do we constantly see comparisions between public vs private, where public includes both state and federal? There's a difference between an FBI agent investigating cyber crime and the local DMV clerk. There's a difference between a IRS lawyer prosecuting a corporation for tax evasion and a teacher. There's a difference between an Army surgeon and a restaurant health inspector. Besides, the salary and education, they must be a US citizen to be employed by the federal government. Let's start comparing apples to apples when talking about feds and fed contractors. Let's compare CEO salaries to Fed SES managers in charge of spending 100's of millions and having to deal with more red tape than any private business has ever dreamed of.

Fri, Apr 22, 2011 Olde Sarge DC

If the position is an on-going requirement or construed to be a purely governmental functiion, a contractor should not fill it. Having a contractor in such a position for more thatn 18 months is unconscienable. It costs more in total compensation (when you count the built in profits) to fill a long-term position with a contractor. Contracts should be used for acquisitons and short-term services. If it needs doing as an on-going effort, hire and train a federal employee to do the job.

Fri, Mar 4, 2011 Guest

Dr. Paul Chassy - The author did correctly quote USA Today. See article: http://www.usatoday.com/money/workplace/2009-04-09-compensation_N.htm

Fri, Feb 25, 2011 Dr. Paul Chassy Washington, D.C. (POGO)

U.S. Government figures document that IT @ $28,000, not $16,000, the the USA Today and the article's author assert. It behooves the author to confirm the accuracy of a figure he quotes before adopting it and passing it on as truth!

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