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Insourcing’s Dubious Journey: Where We Stand Now

Robert Gates, DoD
Robert Gates, DoD

There were two main pillars laying the foundation for insourcing – canceling government-contractor positions in favor of an increased federal workforce.

One was that it would help reduce ballooning costs at the Pentagon. The other was that it would repurpose jobs that should belong in the federal sector, the so-called “inherently governmental” positions.

But insourcing now appears to stand on shaky ground with the cost-saving pillar slowly crumbling and the other wavering in the wind of vague definitions.

The insourcing initiative began last year with a plan to replace 33,000 contractors working within DoD with federal workers.

Insourcing again reached a fever pitch as Defense Secretary Robert M. Gates announced his plan of overall budget cuts at DoD.

But the insourcing plan fizzled out, as the hoped-for savings never materialized, and DoD went on a hiring spree for those new-found federal positions.

“We weren’t seeing the savings we had hoped from insourcing,” Gates said Aug. 9.

Last month, Federal Computer Weekly declared the death of insourcing as we know it, and detailed a list of new fixes from Gates, including cuts to the DoD budget and personnel. But just a few weeks ago, FCW reported on a “change of heart” at the Pentagon and announced that insourcing was “still a go” – at least among contractors in the military services.

Since insourcing’s on-again-off-again policy was implemented, more than 16,500 civilian jobs have been created, and 12,000 are expected in 2011, according to a senior Pentagon analyst quoted in FCW.

But though insourcing is still pushing forward, there remains “widespread confusion” about the policy itself, according to an article in National Defense Magazine last week.

Reporting on a meeting between a Pentagon official and contracting-industry insiders, the article mentioned that some insourced workers, who are not properly trained, are already outsourcing themselves as they leave for work in the private sector. The article concludes the “unintended consequences of in-sourcing already are manifesting themselves.”

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