DHS Launches Contract Review; DoD Issues Guidance on Insourcing

More Insourcing Initiatives, Legislation Introduced

In response to Secretary Napolitano’s efficiency reviews, the Department of Homeland Security (DHS) has also undertaken an assessment of whether its workforce is adequately structured to meets its missions. DHS Undersecretary for Management Elaine Duke, in a June 8 presentation to an industry group, offered insight to DHS’s strategy for conducting the assessment. She said all DHS professional services contracts exceeding one million dollars will undergo a mandatory review before a new contract is awarded or an existing contract is renewed to ensure that proposed contract awards do not include inherently governmental functions or impact core functions that must be performed by federal employees.

In addition, on May 28, Deputy Secretary of Defense William Lynn issued a memorandum announcing the department’s implementing guidance for insourcing contracted services. The DoD memo is one of many developments that would limit the federal government’s ability to contract with the private sector.

The DoD memorandum is intended to offer guidance to DoD components to help them meet a DoD resource management decision stemming from the DoD budget request that includes a decrease in funding for contract support and an increase in funding for approximately 33,400 new DoD civilian employees. However, it also reflects DoD’s efforts to comply with statutory requirements regarding insourcing that were contained in the FY2008 National Defense Authorization Act.

On June 9, PSC President & CEO Stan Soloway sent a letter to Deputy Secretary Lynn reiterating support for the department’s overall strategic direction to rebalance its workforce to ensure it has the critical skills needed to execute its missions. However, he also outlined concerns that the guidance does not adequately clarify, discuss or identify a range of critical decision elements and options that should guide the insourcing initiative.

Lastly, on June 4, legislation (H.R. 2736) was introduced in the House by Rep. John Sarbanes (D-MD), a companion to the bill (S. 924) introduced in May by Senator Barbara Mikulski (D-MD), that would restrict competition for commercial functions performed in the government and potentially require the insourcing of currently contracted work without regard to total cost and performance evaluations.