Insourcing still a go for the military

Government officials confirm services exempt from Secretary Gates' billet freeze

The military services and some nonmilitary Defense Department organizations will continue with plans to bring thousands of private-sector jobs in-house despite an Aug. 9 statement by Defense Secretary Robert Gates that the Pentagon isn’t “seeing the savings we had hoped from insourcing."

Last month Gates reversed course from plans he had last year to eliminate as many as 33,000 service contractors during the next five years, in keeping with a directive from President Barack Obama to insource jobs deemed to be inherently governmental or close to inherently governmental.

Gates announced new plans for efficiency that outlined a number of cuts to the DOD budget and personnel, including a 10 percent reduction in funding yearly for contractor support during the next three years.

Related stories:

Gates details plans to slash DOD budget

Insourcing failed, DOD's Gates says. Now what?

Unions fire back at Gates for insourcing about-face

“The problem with contractors is — and what we’ve learned over the past year — is you really don’t get at contractors by cutting people,” Gates said at the time. “So the only way, we’ve decided, that you get at the contractor base is to cut the dollars.”

However, Gates’ change of heart on insourcing doesn’t mean the deal is off the table.

“No insourcing programs were cancelled. Insourcing is a statutorily required workforce-shaping tool/process to appropriately align work between private and public sectors,” Thomas Hessel, a senior analyst in the Office of the Undersecretary of Defense for Personnel and Readiness, said in a recent report.

According to that report, the Army, Air Force, Navy and Marine Corps are exempt from a fiscal 2011 billet freeze that would halt insourcing plans. Insourcing measures already being implemented at other DOD organizations for fiscal 2010 are allowed to continue, as are conversions of acquisition support jobs.

“Insourcing is well under way,” said Warren Suss of federal IT consulting firm Suss Consulting. “DOD is making contractors an offer they can’t refuse: Join government or get fired.”

Hessel said that as of June 30, more than 16,500 civilian jobs have been established across DOD as a result of insourced contracted services, with another 12,000 expected in fiscal 2011.

“On a case-by-case basis at the organizational level, DOD components are finding that they can generate savings or efficiencies through insourcing certain types of services or functions,” he said.

The moves to insource, and the confusion surrounding the plans’ implementation, are stirring up debate within the contracting and government workforce communities.

On Aug. 19, a coalition of 36 business organizations supporting the private sector, including the Business Coalition for Fair Competition, demanded Obama place a moratorium on his insourcing initiative.

“This shift to government performance of commercial activities not only hinders the private sector, including small and minority-owned business, but places additional costs on taxpayers,” the letter said. “The government intrusion and competition in the private market that insourcing brings is having a detrimental effect on capital investment and job creation.”

Stan Soloway, chief executive officer of the Professional Services Council, agreed. “The department needs to look across all of its activities, regardless of who is performing them, and determine what activities are no longer needed and what activities can be done more efficiently,” Soloway said last month. “As we learned from the department’s failed actions regarding insourcing, effectively addressing the department's mission and budgetary challenges must be a holistic and strategic exercise.”

However, union leaders and members say that insourcing could still be a good thing, and that it’s still too early to determine the effectiveness of the measures.

“The department’s budget is in critical condition because of decades of excessive privatization,” said John Gage, president of the American Federation of Government Employees. “Surely, we should not give up on the promising but short-lived insourcing effort after just one year.”


About the Author

Amber Corrin is a former staff writer for FCW and Defense Systems.

The Fed 100

Save the date for 28th annual Federal 100 Awards Gala.


  • computer network

    How Einstein changes the way government does business

    The Department of Commerce is revising its confidentiality agreement for statistical data survey respondents to reflect the fact that the Department of Homeland Security could see some of that data if it is captured by the Einstein system.

  • Defense Secretary Jim Mattis. Army photo by Monica King. Jan. 26, 2017.

    Mattis mulls consolidation in IT, cyber

    In a Feb. 17 memo, Defense Secretary Jim Mattis told senior leadership to establish teams to look for duplication across the armed services in business operations, including in IT and cybersecurity.

  • Image from

    DHS vague on rules for election aid, say states

    State election officials had more questions than answers after a Department of Homeland Security presentation on the designation of election systems as critical U.S. infrastructure.

  • Org Chart Stock Art - Shutterstock

    How the hiring freeze targets millennials

    The government desperately needs younger talent to replace an aging workforce, and experts say that a freeze on hiring doesn't help.

  • Shutterstock image: healthcare digital interface.

    VA moves ahead with homegrown scheduling IT

    The Department of Veterans Affairs will test an internally developed scheduling module at primary care sites nationwide to see if it's ready to service the entire agency.

  • Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit.

    MGT Act poised for a comeback

    After missing in the last Congress, drafters of a bill to encourage cloud adoption are looking for a new plan.

Reader comments

Wed, Oct 6, 2010 DFAC Soup Line

“Let’s look at Insourcing on a small scale. We are Government Catering/Food Service Contractors . We are a Woman owned local Small Business and focus on Military Contracts for Reserve/NG Units.
Most are small Contracts to feed between 20 to 500 Soldiers per Meal …some Contracts are 1 day, some 2 day ..others might last 1 or 2 weeks.
Our normal rate for a full Breakfast (Eggs/Bacon/Hash Browns/Pancakes/Toast/Pastries/ OJ/Coffee/Milk/Cereal /Fruit) runs from $4.00 to $4.50 PER SOLDIER
Have you priced an Egg McMuffin lately ?
The Salvation Army’s calculated cost is $11.25 per Senior Meal
Back in 2006 , The Navy tried stopping Civilians from eating in the Gov subsidized Galley (Mess Hall) because of a 2005 Audit that proved the real cost of a ration (defined as a day’s meals – breakfast, lunch, and dinner) the Gov pays is $22.40, while the price charged to Civilian cash customers is only $9.05.
…Since that Study was done 5 years ago , I’m sure the actual costs are much higher today.
We normally bid $20 per Soldier (per Day) for 3 FULL Meals --Given the layers of Bureaucracy involved (Admin costs) benefits/salaries/Food costs/Cleaning Supplies and Paper Goods , there is no way the Federal Gov can compete with our prices…OR the Quality/Value we provide our Soldiers.
We use to Bid on 1 to 3 Contracts a Month ….Now that this “Insourcing” deal has taken our work away , we have only been asked to Bid on 3 Contracts over the last year.
You can’t convince me that Food Services should be classified as “Inherently Governmental” ….and yet, no one can explain why the DoD has decided to spend more Money by doing it “in house”.
The Federal funds use to go to local Contractors who also hired and bought supplies locally …that Money helped our Economy.
It’s gone now….

I'm sure the National Guard Cooks and Union Employees can do a better job than us , and for less...right ?

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group