Government’s other IT workforce

Contractors provide skills and workers agencies don’t have, but what are the risks?

The federal government doesn’t know how many contract IT workers it employs. Nor does it care, as long as the work gets done.

But with $67 billion in IT funds sloshing around in the federal budget, ignoring the bulk of the workforce iceberg also ignores regulatory, policy and demographic issues that matter a great deal.

Existing federal regulations governing employee business conduct don’t apply to contractors, for instance.

Neither do policies on conflict of interest or some mandatory computer security measures such as encryption.

These and other gaps in the federal employment environment create headaches at best, and significant risks at worst, by ignoring the structure and function of the contractor workforce in the government’s midst.

“Through the budget process, the appropriations process, the Federal Activities Inventory Reform Act, and the Government Performance and Results Act, we have detailed knowledge about how many federal employees there are, where they work, what they do and how well they perform,” said John Threlkeld, a legislative representative and lobbyist with the American Federation of Government Employees. “In order to better manage the immense ... private-sector workforce, we need a comparable contractor inventory, particularly for information technology employees.”

And the chances of new headaches and risks are growing each year, as more and more agencies look to the private sector for IT help. For instance, agencies are spending more on services than on products—about 60 percent of the $380 billion federal procurement budget in fiscal 2006. In IT, services usually mean agencies are hiring companies to provide people to perform work.

The Federal CIO Council estimates that the government has approximately 79,500 civil-service IT workers on the payroll.

That figure includes all the civil servants whose job categories are considered primarily IT in nature—68,100 people in the 22xx job classification. It also attempts to include the “shadow” IT workforce—11,400 people who do IT work, but whose positions fall in functional series such as law enforcement, said Dagne Fulcher.

She is on detail to the Office of Personnel Management from the Patent and Trademark Office to run the IT Workforce Assessment project for the council.

Even though the core federal IT workforce of 68,000 has grown about 4.8 percent from 2004 to 2006, the IT budget has increased 8.4 percent during that same period—from $58.6 billion to $63.5 billion.

But that pool of IT workers represents only 3.6 percent of the federal workforce, which in June was north of 1.86 million employees. That would seem to imply the government has a pretty efficient IT organization.

But a GCN survey sent to 52 of the top 100 federal systems integrators, drawn from the annual list prepared by Washington Technology magazine, illustrated the virtual army of contract workers connected to federal projects, many of them working in agencies’ facilities. The 10 companies that responded fully to the survey—evenly split between the top and bottom halves of the list—reported 38,700 employees.

And like agencies, the majority of companies do not know how many private-sector employees are working on government IT contracts. The government doesn’t keep count, nor do the companies themselves. And any estimate drawn from the list of top integrators doesn’t take into account employees working for subcontractors on government IT projects.

When asked, many on both sides of the customer-vendor relationship say it doesn’t matter. As long as the work gets done, and contractors don’t encroach on the privileges and responsibilities of government—i.e., making policy and spending decisions—it isn’t important that civil servants and contractors work side by side, frequently doing the same work.

Still, the question of whether the government isn’t effectively transferring jobs to the private sector remains as hard to ignore as it is to answer.

Government Computer News sent questionnaires to more than 20 of the largest
departments and independent agencies, asking the number of civil servants classified as IT workers and the number of contractors working on IT at their facilities. Most organizations provided a variety of inconsistent responses. Two agencies, for instance, required GCN to submit a Freedom of Information Act request. Some just provided their total number of employees, some the total number of employees with IT system access and a couple provided highly detailed information.

Only a few provided any estimated contractor data, and most noted exceptions that kept the data from being inclusive.


Only the Labor Department provided a civil servant/contractor breakdown that covered the entire agency.

Labor reported that out of its approximately 15,100 employees, it has 675 IT workers in the 22xx job classification and 1,570 IT contractors—or almost 2.5 contractors for every government employee.

The Energy Department has almost 13,300 federal employees and more than 100,000 contractors—most of them working at the department’s research laboratories, and many of them with IT responsibilities—or 7.5 contractors for every civil servant. But in its headquarters, DOE has 623 employees classified as IT workers and 600 contractors, or almost a one-to-one ratio.

The size of an agency’s contractor workforce relative to its pool of government employees, however, is irrelevant, Fulcher said.

“An agency contracts with a company to provide expertise—services and products. There is a contractual relationship if the company does not provide those services,” Fulcher said. “It is not incumbent upon the agency to assess the individuals performing under the contract; those individuals work for the company, not the agency. It doesn’t matter how many people the company employs to get the job done: The services and products just have to be provided under the contract.”

But AFGE’s Threlkeld disagreed.

“Shrouding the contractor information technology workforce in secrecy shields
a major part of every agency’s budget from scrutiny and accountability,” he said. “Indeed, upon closer analysis, it may well be that much of the information technology work currently outsourced would be performed more efficiently in-house.”

That’s partly suggested by the results of GCN’s survey of Washington Technology’s Top 100 list.

Payton Smith, an analyst with Booz Allen Hamilton Inc. of McLean, Va., said the sample is too small to be statistically valid, “but it could be considered representative” of the Top 100. In that case, it is easy to conclude that the number of contract workers vastly outnumbers the civil-service IT workforce.

Stan Soloway, head of the Professional Services Council, a trade association representing many of the companies that provide these contract workers, has his own reasons for considering the number of contract IT workers inside the government unimportant.

“I’ve never been enamored of the headcounting of contractors,” Soloway said. “It’s sometimes not done with a view to rational assessment but to making a political point.”

There are downsides, however, to ignoring the size of the contractor workforce: Projects can invisibly mushroom out of control, conflicts of interest can be missed and the possibility of contract abuse increases.

Federal regulations address ethics requirements and acquisition rules governing government employees, but those regulations, for the most part, don’t apply to private-sector employees working inside the government.

While no one disputes that the hidden contractor workforce is growing, some wonder whether agencies aren’t also taking on greater risks with this blended approach.

For instance, if contract workers have the opportunity—in some cases the responsibility—to make technical recommendations on products and services, that creates the potential for conflict of interest.

Congress, too, is concerned about the potential conflicts arising from managing a workforce made of both federal and contract employees.

The Senate Armed Services Committee has requested that the Government Accountability Office examine the adequacy of existing safeguards for preventing ethics violations or individual conflicts of interest among contract employees at the Defense Department. The request asked GAO to identify, among other things, conduct that is prohibited to federal employees but not contractors; mechanisms DOD has in place to identify contractor employee misconduct; and how corporations are addressing ethics and standards-of-conduct issues.

In May, Steve Epstein, of DOD’s Standards of Conduct Office [, QuickFind 720] expressed concern in a presentation that regulations in place to guard the integrity of governmental decision-making apply only to government workers, not to contractors.

While Epstein offered a disclaimer that he was not speaking on behalf of DOD, he suggested that federal statutes governing such issues as conflict of interest, political contributions and protection of government-privileged information need to be revised to cover contractors’ actions.

Comptroller general David Walker also included the workforce issue in his Nov. 17 letter to the congressional leadership identifying areas for oversight in the 110th Congress.

“The Congress should continue to monitor agencies’ efforts to address existing [acquisition and contracting] problems, while facilitating a re-examination of the rules and regulations that govern the government-contractor relationship in an increasingly blended workforce,” he wrote.

Meanwhile, federal IT workers have to learn new skills having less to do with writing software code or installing networks and more to do with managing the mix of public- and private-sector assets.

“Our fundamental [human resource] systems didn’t quite anticipate project management work,” where a worker could be assigned to a specific project for three to five years, then move to another assignment, said Doris Hausser, senior policy adviser at OPM. “Our systems are still predicated on the idea that you’ve got a career path.”

Tools needed

As federal agencies turn more and more of their IT tasks over to contractors, government employees are more frequently serving as managers.

Their need to direct large, complex IT projects with many milestones and fluctuating budgets, and to manage the contractual obligations to which vendors agree, increases each year. For this to work, program and project managers need better training and tools to supervise both governmental and private-sector employees, and to understand the differences between the two workforces.

Agencies’ lack of experienced project managers has been an albatross for many years. In fact, in the fiscal 2007 budget request, the Office of Management and Budget listed skilled IT project managers as one of four areas in which agencies should focus their recruiting efforts.

OMB found that agencies needed to hire almost 600 project managers in 2006. Other areas the agencies needed to focus on included 488 IT security professionals, 180 enterprise architects and 148 solution architects.

But filling those open positions is a challenge, in light of the demographic pressures on both public- and private-sector elements of the IT workforce.

There have been numerous reports over the past several years, from agencies such as GAO and OPM, that the federal workforce is aging. In November, the National Governors Association noted that nearly 50 percent of the federal workforce could begin retiring in 2008. The loss of all that experience is worrisome to federal human capital professionals.

And those same retirement pressures are coming to bear on the private-sector companies the government is looking to draw upon to make up the shortfall.

Many contracts, particularly for large, expensive programs, require integrators to commit staff with specific expertise and experience; substituting two less-experienced workers for one highly experienced person is not workable.

“Everybody talks about the [aging] government workforce, but in my opinion, large companies like Lockheed Martin and Northrop Grumman—name a big company—in a few years they’re going to be faced with a similar impact,” said Paul Leslie, president and CEO of Apogen Technologies of McLean, Va. “We try to recruit [out of college], but it’s obviously a little difficult because our customers want the experience.”
Then there’s the problem of security clearances. The backlog of clearances waiting to be processed has been widely publicized, as has the recruiting of federal employees to go to the private sector because they already have their clearances.

But this problem increases costs in two ways.

First, getting a security clearance is an expensive and time-consuming process—and those costs are passed on to the government. Second, workers with clearances can charge a premium in the marketplace—the government has been offering hiring and retention bonuses and special wage rates for particularly valuable skills, so companies have to up the ante to recruit them away.

Then the government pays more on its contracts to access those skills. Either way, the government is footing the bill.


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