Include contractors in federal workforce debates, lawmakers urged

A House hearing held May 26 to examine the size of the federal workforce resulted in no clear conclusion about whether the number of federal employees should be reduced. However, what did become more apparent is that discussions about the size of the workforce might need to include contractors.

The House Oversight and Government Reform Committee's Federal Workforce Subcommittee held the hearing, titled “Rightsizing the Federal Workforce.” Subcommittee Chairman Rep. Dennis Ross (R-Fla.) called the current federal workforce “bloated” and “fiscally unsustainable.”

But Democrats on the panel argued that any debate over the size of the federal workforce must include contractors.

“It’s obscene that we’re focusing today on the 2.5 million employees of the federal government, while completely ignoring the 10.5 million contractors … that work for this government,” said Rep. Stephen Lynch (D-Mass.), the subcommittee’s ranking member. “If we’re serious about reducing costs, we need to look at the contractor community.”

Rep. Cynthia Lummis (R-Wyo.) and Rep. Thomas Marino (R-Pa.) testified about recent bills they have introduced that would shrink the size of the federal workforce through attrition.

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Lummis’ bill, the Federal Workforce Reduction Act of 2011, would put a hiring freeze on all federal agencies except the Defense, Homeland Security and Veterans Affairs departments. The legislation would take effect in fiscal 2012 and would require the government to hire only one replacement for every two federal employees who retire or leave the government.

Marino’s bill, the Federal Hiring Freeze Act of 2011, would freeze most federal hiring until the director of the Office of Management and Budget “determines that a federal budget deficit no longer exists.” The bill would allow for “common-sense exceptions,” Marino said, during times of war and for national security concerns.

Lummis and Marino said their bills are not intended to be an attack on federal employees. And Marino explained that these legislative proposals are just one step in the process of getting the nation’s fiscal house in order.

“A hiring freeze is not the silver bullet that will unilaterally lead us out of this crisis,” Marino said. “It is a start.”

But other witnesses, echoing Lynch, said that contractors -- who are paid from taxpayer funds as are agency employees -- might need to be included in any measures that affect the workforce. At the least, the witnesses said, the question should be part of the discussion.

Andrew Biggs, a resident scholar at the American Enterprise Institute for Policy Research, agreed that there is not enough known about how the contractor workforce functions. He added that although he is confident that the government could function with a smaller workforce, looking at only one group of employees to bring down costs is "sort of kidding ourselves."

William Dougan, national president of the National Federation of Federal Employees and chairman of the Federal Workers Alliance, also said contractors need to be included in the workforce size debate.

But Dougan explained that what concerns him most is that lawmakers have only been talking about saving money without accounting for the work that will not be completed if the workforce is cut. “There is no accountability for what is the impact [on] services,” Dougan told lawmakers. “What are we not going to do and what are we going to do less of.”

Although Dougan expressed opposition to what he described as the “arbitrary staffing limitations” that would be imposed by Lummis’ and Marino’s bills, he said he is not entirely against downsizing. However, he said that the first piece of business in the size debate should be determining what government services will no longer provide if the workforce does get smaller.

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Alyah Khan is a staff writer covering IT policy.

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Reader comments

Tue, Jun 7, 2011

Everybody is missing the point. The contractor firms give contributions to the Republican representatives. The Republican representatives then pass bills to cut federal jobs. When the federal jobs are cut then the work still has to be done and it is contracted out to the firms. Then when the Republican representatives run for re-election the firms pay back the favor by donating more to the campaigns. The firms get big profits and the Republican representatives get to stay in power and benefit from the relationship once they leave power as well as a consultant, etc. Nobody in this current scenario really cares about the deficit or the taxpayer it is all a PR ruse.

Fri, May 27, 2011 bobfrom accounting san diego

@ the person saying contractors cost 2x a gov't employee. Compare position equivalent rates. As one of the Sr. Financial Analyst that performs Total Ownership Cost Studies for a living for the DOD (20+ years), I can address the issue easily. The gov't published fully burdened standard rates for FY12 for an SSC PAC employee are $128 per hour or $266,240 per year (2080 work hours). Fully burdened represents: base salary/vacation/pension/healthcare/etc... That is for a mid-level Engineer or program manager. An equivalent contractor position, Sr Associate level, at a fully burdened rate is approx $108/hour or $203,040 (1880 work hours) Before someone gets their panties in a twist, the difference in hours is because the contractor doesn't charge for the employees vacation time or time spent in annual training. The gov't agencies have mostly these level/type of positions as all the lower level and administrative positions have been contracted out. Approx. 2 years ago the Secretary Gates and the gov't started toward in-sourcing positions. It didn't last long and that approach has ceased and a hiring freeze is in place. The wind shifted back to utilizing contractors. $1 Million buys 4 gov't employees or 5 Contractors. As a tax payer, which would you choose???

Fri, May 27, 2011

You are right, contract employees do not get benifits, health care,leave, 401K, or retirement. But that is not a tax saving for the people of this country, because the Companies that manages these contractors gets the equivilent of these benefits in profits and overhead charges. Example: "....Lockheed Martin (LMT), which makes weapons including F-16 fighter jets and Trident missiles, posted higher fourth-quarter earnings of $827 million, or $2.17 per share, topping Wall Street's expectations...." Daily Finance, by Melley Alazraki Jan 10. 10.2M contractors vs 2.5 Federal Workers.... PLEASE....If you cut each workforce by 10% you would cut 250,000 federal workers compared to 9.1M contractors. You do the math.

Fri, May 27, 2011

I am a Federal employee I don't know where you are working but I can assure you that isn't happening here where I work. I work about 9.5 hours a day and still have a hard time keeping up with my work load and no matter what I will contenue too perform my job no matter how long it take me in a day to complete my duties. I can assure you that the people I work with don't sleep or have time to surf the internet be cause we value our jobs and the quailty of our work and most of all the service members we are supporting. I beleave if that is happening where you work and you haven't reported it then you are just as guilty as they are. Stand up and report it as fraud.

Fri, May 27, 2011

@Taxpayer, you need some more schooling. Contractors do have pension and benefit liabilities that are paid for by the Government as a pass through. Where do you think that money is coming from.? The Government is the contractor's customer. As to contractors being temporary workers, that is another fallacy. If there are no Feds to do it, the contractor has to do it at a mark up. Most times the contractor management may change, but the contract employees stay the same, unless the employees choose to change their contract employer. As for Lummis and Marino, their campaign coffers need to be look at to determine what Government contractors are bankrolling them. The work will still need to be done and they are looking to slide those contractors the cash. It is crazy to think that they could want a hiring freeze on just Feds for as long as a deficit exists and to think that the result is going to be lower costs. They are incompetent and tools of their handlers. Oh, just wait until 2012, the voters will take them off of our dime too.

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