Congress is asking the Defense Department to justify its plans to outsource up to 220,000 jobs over the next five years.
In the conference report accompanying the 1999 Defense appropriations bill, Congress instructs DoD to prepare a report demonstrating how the military is benefiting from the Pentagon's privatization strategy. Under the Defense Reform Initiative announced last fall, the Pentagon identified 150,000 jobs that would be subject to public-private competitions. That number was expanded to 220,000 this summer.
During the competitions, federal employees try to show they can do their work more efficiently than private companies. Historically, the private sector wins competitions 50 percent of the time. Cost savings generated by the competitions average 40 percent when contractors win and 20 percent when federal employees win. The Pentagon estimates it will save $6 billion over the next five years through competitions, and has included those savings in DoD budget requests.
But Congress needs some convincing.
"The conferees harbor significant concerns about DoD's privatization strategy, primarily due to the risk of building unrealistic savings estimates into the budget request," Senate and House negotiators wrote in the appropriations bill report.
Congress instructed Defense Secretary William Cohen to submit a report by March 31, 1999, assessing the results of the department's competition initiative. The report must include a list of jobs selected for outsourcing, the criteria used to select the jobs, an estimate of savings gained from outsourcing from 1996 to 1998 and a comparison of the number of contractors and the number of federal workers needed to perform privatized jobs.
The Federal Managers Association, which has questioned DoD's privatization push, praised Rep. Joe Skeen, R-N.M., for adding the report request into the bill. FMA said the report would shine a light "on DoD's burgeoning shadow workforce of contractors."
The Defense appropriations bill, H.R. 4103, was sent to President Clinton for his signature last week.
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