Out of Control Policy Blog

Defense Department Reverses Policy on "Insourcing"

My post yesterday apparently jumped the gun a bit on the U.S. Defense Department's policy of shedding contractor jobs and replacing contractors with full-time civil servants. While this was an explicit policy and goal of the Obama Administration, Defense Secretary Robert Gates has reversed his position after analysis found few savings from this kind of "insourcing" over the last year. So, the cuts really are cuts.

According to GovernmentExecutive.com (August 10, 2010):

The Defense Department's experiment with bringing contractor functions back in-house appears to be over.

While announcing deep personnel cuts and the elimination of the Joint Forces Command, Defense Secretary Robert Gates on Monday said the Pentagon will no longer automatically replace departing contractors with full-time government personnel. Some exceptions, he said, could be made for critical areas such as the acquisition workforce.

Last year, the department announced it would reduce its number of service support contractors by about 33,000 by 2015. The Pentagon had planned to replace those contractors during the next five years with 39,000 new full-time government employees, 20,000 of whom would be acquisition professionals.


So, the 10 perent cuts in contracting reflect reduced budgetary authority, not positions.

See also the report in Federal Computer Week.

This is good news, although I don't think it will save my friends' job. The Defense department has already added 5,000 new full-time positions to replace the contractors already let go.

Samuel Staley is Research Fellow


« Market Uncertainty | Main | Further Evidence on the Stimulus… »




Out of Control Policy Archives