Advocacy & Policy

Comments on In-Sourcing Provisions from FY2011 DOD Authorization Bill

ISSUE: HOUSE SECTION 325 (H.R. 5136) – PROHIBITION ON ESTABLISHING GOALS OR QUOTAS FOR CONVERSION OF FUNCTIONS TO PERFORMANCE BY DEPARTMENT OF DEFENSE CIVILIAN EMPLOYEES

DISCUSSION: Section 325 prohibits the Secretary of Defense from establishing numerical goals or quotas for the conversion of Department of Defense functions to performance by civilian employees unless such goals or quotas are “based on considered research and analysis, as required by section 235, 2330a, or 2463 of title 10, United States Code.”

This section also requires DoD to submit a report to Congress regarding decisions to insource positions in fiscal year 2010, including the rationale and basis for doing so. The Comptroller General of the United States is also directed submit an assessment of the DoD report to the congressional defense committees.

ARWG supports the prohibition on establishing arbitrary insourcing quota and the reporting requirement for DoD and GAO. However, as currently written the provision directs DoD to rely on costing methodology guidance outlined in Directive-Type Memorandum 09-007 (DTM). ARWG believes that the DTM provides inadequate guidance and does not serve as a useful tool to assist DoD decision makers with determining a true cost comparison between the public and private sectors. Hence, it is likely DoD will continue basing insourcing decisions on unreliable data. ARWG is also concerned that the DTM, which significantly affects the contractor community, was not subject to a rulemaking that allows public comment on such an important policy.

A related provision is in section 850 of the House-passed bill.

RECOMMENDATION:
ARWG supports the prohibition on establishing arbitrary insourcing quotas and the reporting requirements for DoD and GAO. However, Section 325 could be significantly approved by directing GAO to conduct a review and report on the DTM to determine whether it accurately compares public and private sector costs before Congress endorses it as a baseline. It should also direct DoD to issue the DTM as a proposed rule and not finalize it until it has received and analyzed public comments.