Depot managers protest outsourcing

Managers at 21 Defense Department depots around the country are protesting an outsourcing initiative aimed at putting 220,000 civilian jobs up for competition with private firms.

In a letter to Defense Secretary William Cohen last week, the Federal Managers Association charged that DoD is putting too much confidence in the belief that outsourcing saves money.

"DoD managers believe that contractors low-ball their bids in order to get the work and then increase their prices once the government competition is eliminated," FMA President Michael Styles wrote to Cohen.

Each year, depot managers conduct commercial activities inventories, in which all jobs at a depot are divided into three categories: mandated by law, inherently governmental, or subject to review for outsourcing. This year, depot managers told FMA, the military services' headquarters offices sent inventories back to the depots, asking managers to expand the number of jobs that should be subject to review for outsourcing.

"The manner in which the commercial activity inventories are being conducted does not instill great confidence in us that efficiency is the paramount goal of this effort," Styles wrote.

Public-private competitions are a primary strategy of the Pentagon's Defense Reform Initiative to reduce defense infrastructure costs. Last fall, DoD and the services identified 150,000 positions to put up for competition under Office of Management and Budget Circular A-76. This year, DoD pushed the number up to 220,000 positions. DoD operations targeted for competition must prove they can perform their duties at a higher quality and lower cost than a private company could.

Patricia Armstrong, a management analyst at the Naval Aviation Depot in Cherry Point, N.C., said Navy depots cannot be cut any more. The number of depots was cut from six to three during the last base closure round.

"There's definitely a misperception that privatization and outsourcing are going to arbitrarily save you a large amount of money," Armstrong said. "If the government loses a competition and the jobs go to private industry, then you haven't really saved that much money down the road. Private industry is in business to make a profit. Outsourcing is not always the best deal."

In the FMA letter, Styles recommended that DoD not seek further cuts at depots. Cuts should be targeted at layers between field activities and headquarters, Styles said.

In a July 21 interview with the American Forces Press Service, Deputy Defense Secretary John Hamre said resistance to public-private competitions stems from workers' fear for their jobs.

"They are linking A-76 competitions with base closures, which is quite unfair," Hamre said. "We have had very senior members of the administration team being called up [by Congress] to explain why we're competing five jobs. It's really crazy. The best thing they can do to save their base is to become more efficient through the A-76 process. They should view this as an opportunity. But there definitely is resistance."

Styles countered that managers are resisting competitions because they are concerned DoD is jeopardizing its ability to meet its national security mission.