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Reason Foundation

Federal Privatization Rollback Continues

Adrian Moore
April 8, 2009, 3:50pm

The Defense Department's proposed budget takes dramatic steps to roll back privatization. Some of it certainly makes sense as we draw down in Iraq.  But

The government said it would hire as many as 13,000 civil servants to replace contractors in the coming year and up to 39,000 over the next five years.

Hmm. But,

In particular, the proposed budget would sharply reduce the number of contractors who help the Pentagon oversee and manage its vast weapons-buying apparatus following a string of reports chronicling cost overruns and other problems. Of the 13,000 private contractors to be replaced in the coming year, 2,500 of them would be in the acquisition workforce. Of the 39,000 workers over five years, 20,000 would be in acquisitions. "We are right-sizing the defense acquisition workforce so we can improve our contract oversight and get a better deal for the taxpayers," said Shay Assad, the Pentagon's director of defense procurement and acquisition policy.

The goal is certainly right. By outsourcing the oversight of outsourcing, DoD has created a significant accountability problem for itself.  You can kind of understand that they focused hiring on the pointy end of combat ops rather than support functions. But an equilibrium has to be reached. DoD needs to stick with having the private sector do the commercial functions it needs. But it needs to have the staff to manage that process, to be "smart customers" who buy goods and services smart and hold service providers accountable.   DoD's aquisition problems are NOT the number of contractors it is the WAY they contract and the way they treat contract managment as a 3rd or 4th order priority.  It needs to be a regular part of business and management, making it work for DoD's outcome goals, not a side show.

The same goes for a lot of other agencies as well.


Adrian Moore is Vice President, Policy


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