Agencies turn to contractors to acquire new buildings

Staffing shortages are driving some agencies to use the private sector to oversee the acquisition of new federal buildings, according to a recent report from the National Research Council. While Uncle Sam routinely contracts out the design and construction of government facilities, only a handful of agencies have tapped private firms to manage the purchase of federal buildings. But as agencies focus on their core missions and the number of federal architects and engineers declines, many agencies are outsourcing the management of building acquisition projects. In a December 2000 report, "Outsourcing Management Functions for the Acquisition of Federal Facilities," the National Research Council concluded that agencies can outsource such managerial functions, but must retain enough in-house expertise to oversee their contractors. The National Research Council is the research arm of the National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine. The key to outsourcing management tasks is determining whether the task to be outsourced must be carried out by the building's owner, according to the report. Agencies, as the owners of the new buildings, must make final decisions involving the use of federal funds or the choice of a prime contractor. But implementation of such decisions is a managerial task that can be performed by contractors, the report found. Still, contractors should not perform activities that allow them to influence an agency's ownership decisions, the report added. "If … a function might unduly compromise one or more of the agency's ownership functions … then the function should be considered a "quasi"-inherently governmental function and should not be outsourced," said the report. If agencies decide to outsource managerial duties, they must retain in-house workers with "core competencies," which include the ability to assess design and project alternatives and monitor the progress of a building project, the report said.

Agencies should improve the training of project managers and contract specialists so they have such oversight skills, the report said, lauding a General Services Administration mentoring program that pairs veteran program managers with less experienced colleagues. Improved in-house training is particularly important in light of a factor driving the outsourcing of management functions across agencies: the lack of in-house expertise. In a survey of seven agencies that have tapped the private sector to manage the acquisition of facilities, the report found agencies often lacked the ability to manage such projects themselves. "The most frequently cited reasons for outsourcing management functions were staff shortages and the lack of in-house expertise," the report concluded.