Sen. Rob Portman, R-Ohio

Sen. Rob Portman, R-Ohio Alex Brandon/AP

Contractors remain a focal point in cost-cutting efforts

Senators and agency officials highlight financial benefits of insourcing and proper auditing.

As the government continues to search high and low for cost-cutting initiatives, Congress has turned its eye on federal contractors.

At a hearing Thursday before the Senate Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Contracting Oversight, representatives from the Army, Office of Personnel Management and Homeland Security Department discussed how reducing their dependence on contractors and getting a better handle on expenses can lead to savings.

“The government simply doesn’t have the information it needs to make smart choices,” subcommittee chairwoman Sen. Claire McCaskill, D-Mo., said in her opening remarks, explaining agencies have for years been operating under the assumption that contractors inherently are less expensive than federal workers.

Subcommittee ranking member Sen. Rob Portman, R-Ohio, said the federal government spends $320 billion annually on service contracts and fails to take competition into account when making purchasing decisions. The Office of Management and Budget declined to send a representative to the hearing.

Senators were particularly critical of defense procurement, which makes up 70 percent of all government contracting, according to the Center for American Progress. In 2009, the Defense Department began a voluntary insourcing initiative.

“Anybody who believes we cannot find savings in the Department of Defense contracting does not know the issue,” McCaskill said.

McCaskill praised Jay Aranowitz, the Army’s deputy assistant secretary for force management, manpower and resources, saying the service’s work on contractor inventory “is setting a standard” for the rest of Defense. The Army reduced its contract services obligations from $51 billion in fiscal 2008 to $36 billion in fiscal 2010, according to Aranowitz’s testimony. Aranowitz told the subcommittee, however, that contracts are not integrated into the Army’s overall budget, though the service is working to change that.

Debra Tomchek, executive director of the Homeland Security Department’s Balanced Workforce Program Management Office, touted a strategy formed in mid-2010 to ensure DHS was establishing a proper balance of contractor and inherently governmental work. Under the Balanced Workforce Program, the department identified $2.3 million in savings as of January 2012, Tomchek said in written testimony.

Yet there’s still a way to go. Separately, Pratap Chatterjee, Center for American Progress visiting fellow on government procurement, authored three studies on contracting published Wednesday. He said the disorganized, unchecked nature of contractor auditing leads to a propagation of wasted government resources.

“There’s some fraud and there’s a lot of waste and there’s a lot of abuse,” Chatterjee told Government Executive. “One part of the government has no idea what the other part of the government is doing.”

The problem, he said, stems from multiple uncoordinated contractor accountability databases within government, from the Excluded Parties List System to the Past Performance Information Retrieval System to the Federal Awarding Performance Integrity Information System.

Additionally, Chatterjee said, because most contracts come from Defense, the Defense Contract Audit Agency handles the lion’s share of all federal contracting audits. Since DCAA is nestled within the Pentagon, it is unable to maintain proper independence when making decisions about the fiscal responsibility of military contractors, he said.

Chatterjee would instead like to see a new Federal Contract Audit Agency, which would reside outside the Pentagon, allowing it to maintain independence when attempting to recover taxpayer dollars contractors spent improperly. However, he did not formally recommend such an agency in his report.

In written testimony submitted to the Senate subcommittee, American Federation of Government Employees President John Gage recommended stronger enforcement over excessive contractor compensation and proper federal insourcing.

“This administration, like its predecessors, is unwilling to enforce the relevant sourcing and workforce management laws,” Gage said in his testimony.

According to McCaskill, the current cap on the amount the government will reimburse a contractor for top executives’ salaries is set at $693,000 per year, though legislation is circulating to reduce the limit to $400,000 annually. National Treasury Employees Union President Colleen Kelley warned against such “exorbitant” salaries in her written testimony to the subcommittee.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.