Converting contract IT workers to employees saved $27M, official says

Customs and Border Protection's enterprise IT division federalized 200 jobs in fiscal 2010

The U.S. Customs and Border Protection's Office of Information and Technology unit saved $27 million in fiscal 2010 by converting about 200 contract employees to federal employees, a senior official said today.

“We are giving a major push to federalization,” Bob Neubert, executive director of the technology office’s Enterprise Networks and Technology Support Division, said at the office’s Industry Day today. The vendor event was held in conjunction with AFCEA's Homeland Security conference. CBP is part of the Homeland Security Department.

The savings were achieved by hiring the contract workers at salaried rates that were lower than the contracted rates, he said. The goal was to strike the appropriate balance between contract work and oversight, and previously the balance favored contractors rather than oversight, Neubert said.

Related story:

CBP to hire 1,000 IT workers during fiscal 2011

The converted jobs included field support, program management, network support and training staff, CBP officials said. The new federal jobs ranged from General Service Levels 5 through 11; none were senior executive service jobs.

Neubert’s division of 2,100 workers and a $400 million budget represents about half the labor force of the technology office. The savings from federalization were used to offset budget cuts there, he added.

Insourcing has been affecting other areas of CBP as well and is likely to continue this year. Ken Ritchhart, deputy assistant commissioner of the technology office, said recently that the office intends to convert 1,000 jobs this year. The enterprise networks division anticipates federalizing possibly another 100 positions in fiscal 2011, officials said.

In a related area, CBP officials including Charles Armstrong, assistant commissioner for the technology office, described acquisition goals and trends at the agency, including increased collaboration between the acquisitions office and the technology office, regular use of requests for information to solicit advance information from vendors, and agile and incremental development of IT projects.

Holding the CBP’s industry outreach event in conjunction with the AFCEA event was a sign of increased collaboration, Armstrong said.

“This is a learning process for us," Armstrong said. "We are really trying to improve our communications, so please be patient with us. Tell us what we don’t know.”

He also urged vendors not to overlook the CBP even though it is a relatively small agency.

“We are in the middle of budget cuts, but we do spend about $1 billion" a year, Armstrong said.

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

Thu, Feb 24, 2011 John Oakes Virginia Beach, VA

Mr. Neubert's claim that CBP saved $27M by in-sourcing 200 IT positions is hard to believe. That works out to a savings of $135,000 per position. Such a claims should be publicly challenged. Mr. Neubert should be required to provide hard statistics justifying this claim. I can easily believe that the civil salaries paid to the in-sourced employees are lower than the costs of contract employees, but I also know that salary is only one component of the total cost of employing a civil servant. Mr. Neubert should be required to compare the costs of contractor employees with the the total costs "federalized" employees ... costs that include generous vacation and sick pay, government contributions to employee health care and retirement programs and the government's loss of the tax revenue that industry pays back to the government on any profits realized from government contracts.

Wed, Feb 23, 2011

Most of the $27M difference was the overhead/G&A/etc. incurred by the contractors for employee benefits, operating expenses, and administrative costs. Those costs will now have to be absorbed by the Government. This article seems to indicate that the Government came up with savings by taking the difference of the contractor rates and the federal employee salaries. Guess what, now taxpayers have to fund 200 more federal pension plans and probably pay for building renovations or a new facility for these additional employees. However, calculating those costs in would give us the shocking headline would it?

Wed, Feb 23, 2011

All I can say is, from my perspective, the frenzy of privitization over the past 15 years or so was a colossal failure, both, in terms of efficiencies and cost benefit. If only the citizens of this country knew how much more a financial burden privitization was and continues to be, they'd be up in arms. As for those jobs that were privitized, guess what, the federal employees who were doing the work before privitization just put on a different hat and went to work for the contractors, many times, for less money and less benefits. But the tazpayers of this country really took it on the chin, when you consider the contractors employing these workers were charging the government, or taxpayers of this country, roughly twice the amount the same workers were making as federal employees.

Tue, Feb 22, 2011 $$$

Sounds like CBP figured out that it just costs more money to have a politically connected contracting company between the employer and the actual worker. I wouldn't be surprised to find out that not only are the converted workers costing the government less, but the workers themselves are probably taking home more.

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