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White House push to reduce contractors is at odds with expanding role of agencies

By Robert Brodsky rbrodsky@govexec.com November 11, 2009

Within his first few months in office, President Obama signed the largest economic recovery package in a generation, significantly boosted government assistance to banks and auto manufacturers, and augmented the role of U.S. troops in Afghanistan. No matter your political affiliation, it is undeniable that these policies have expanded the missions of federal agencies, and by proxy, those of government contractors. History has shown that when the responsibilities of the federal government intensify -- from the growth of Medicare to the creation of the Homeland Security Department -- agencies must turn to the private sector for assistance. The result has been a steady uptick in procurement spending.

But the administration is vowing to buck that trend. In July, the Office of Management and Budget unveiled a bold vision for reshaping, and ultimately reducing, government's dependence on contractors. The guidance, authored by OMB Director Peter R. Orszag, calls for agencies to save 7 percent from their baseline contract spending -- 3.5 percent in fiscal 2010 and another 3.5 percent the year after.

Agencies also must reduce by 10 percent their use of high-risk procurements, including sole-source, cost-reimbursement and time-and- materials contracts. OMB expects these reforms to save $40 billion annually.

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While Orszag offered ideas for maximizing savings -- consolidated purchasing, better market analysis and enhanced upfront planning -- agencies are left to determine the best approach. "We are telling them that it's the time to be innovative and to take some smart risks with trying to do things a bit differently to get better performance," says Jeff Liebman, executive associate director at OMB.

Skeptics see the administration's metrics as unequivocally arbitrary and its goals as unrealistic. "When you say you are going to cut contractors it means one of two things: you are either increasing the size of the government in terms of personnel, or you are going to provide less services," says Steven L. Schooner, associate professor of law and co-director of the government procurement law program at The George Washington University Law School. "And, neither one is an option right now."

In the November issue of Government Executive, Robert Brodsky explores the administration's moves toward contracting cuts. Click here to read the full story.

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COMMENTS

  • At last! The idea of the government actually saving money by hiring contractors was such a flawed methodology. I am so glad someone finally saw the light. For years I have worked side by side contractors whose "company" (and many times they were a "company" of one because they were retired military officers who incorporated)received $500K a year or more for one person. Oh don't forget, they were also hired for 10 or more years as their contracts were reviewed over and over again. Tell me how that saved money!!! Kathy Posted November 19, 2009 11:03 AM
  • I luv being a gov employee. No accounting for time or worrying every week if the gov funding will stop. No worries I have no work to do but no worry about losing my job. TY Obama I luv this. alex badme Posted November 12, 2009 7:04 PM
  • Deja Vu or Deja Boo or Deja Maja Haja? 1. Bush II touted shifting federal gov work from civil service to contractors as: economically efficient and easier to manage expand, shift, renew or cancel. Ideologically, Bush II favored contractors to minimize or reverse a dangerous creep of fed government into the private sector, considered the prime source of economic and political strength. Dems, liberals and progressives attacked and largely stymied the Bush II strategy, regarding the Bush II approach as a cynical pork shift of federal work to the private sector cronies; e.g. Haliberton; further a cynical trick to starve the federal sector of operating funds, create incidents of fed incompetent service, thereby raise tout the private sector as a competent and disinterested provider. 2. Clinton -- touted the end of Big Government, claimed a reduction in the fed employment numbers; dubious or contentious statistics maybe; but, a masterful political tactic – more bang for the federal buck, same services at cheaper cost. Cool. 3. Now comes President Obama - massive federal spending to help economy, to help suffering citizens - but how to help without increasing federal payroll, contractor payroll -- oh my -- a managerial impossibility -- so what's the news -- GovExOnline and wise bloggesters? -- I say the only news herein is the justification for more people -- feds, contractors, and volunteers -- who will be needed to build the pyramid, what’s the total number, I say again, what’s the total number and the delta from the bad Bush II daze. 4. A final issue – what say the citizens, what say the tax payers, do they really want less, fewer, services? Of course, all citizens want MORE services delivered efficiently, graft free, non-porkified, not limiting their personal independence, states rights, religious or non-religious beliefs, blah, blah, blah. So, the typical tale: Citizen A is shocked at the pork feast by Citizen B in a neighboring Congressional district. However, regarding the pork…er…wise fed dollars served up to Citizen A inside his local district, these dollars are a diet of sweet justice. Hypocrisy? Alas, no, it’s just the crux of all politics, and the cheap fuel for lazy journalism and blogger outrage. Show me the delta, show me reduction, show me a miracle. 5. And so it goes: Just makin bacon in ole DC. Plus ca change. Concerned Retiree Posted November 12, 2009 3:25 PM
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