Insourcing is about strategy, not numbers

Contractors help the government fill a critical gap, which must be the central focus of any debate on managing a blended workforce

As the federal government continues to look for ways to move contracted work back into agencies, it must overcome some major obstacles. Here's one: It has significantly neglected the need for effective human capital planning.

As a result, the government's lack of in-house resources has increased its reliance on contractors to help it perform vital functions.

That issue has been acute with the federal acquisition workforce for some years now, though it has only recently gotten substantial attention. The Office of Management and Budget is incorporating human capital planning into its guidance for contract savings initiatives -- a good first step. However, the real challenge remains understanding the roles and responsibilities of contract activities and knowing how to manage a blended workforce so these combined forces can continue performing the acquisition mission.

Strategic human capital plans can only be effective and executed properly when leaders identify an organization’s skills and capabilities and recognize how that skill set helps the organization achieve its mission. Contractors' visibility and transparency remain areas of concern for the government because of poor information management, lack of oversight and accountability, and, most importantly, poor leadership. A renewed focus by the government on contract management is critical to fixing those problems.

In short, the government must have a better grasp of who the contractors are and what activities they are performing.

The lack of contract oversight and administration means the government has incorrect or incomplete data. That creates a vicious cycle because inadequate staffing contributes to contract management problems, which in turn fuel reliance on contractors. The lack of staffing and bad practices have also led to poor quality assurance, making it difficult for the government to determine whether contractors are meeting their contract requirements.

Companies must provide agencies with information crucial to human capital planning so they, too, can be more effective. Contractors have more accurate data on their workers, if only because they need to maximize profitability. Obtaining such data from industry will help the government make better-informed decisions. Only through that partnership and trust can workforce plans be created that are of any value.

The government does not have the manpower to perform all necessary tasks, and contractors help fill a critical gap. However, this gap must be the central focus of any debate on insourcing and managing a blended workforce. The human capital quandaries must be solved to help shape the balanced workforce as contractors continue to perform such vital functions as the acquisition mission.

Solving those problems requires strong leadership and a commitment to accountability and transparency from both the government and the private sector. Only by working together can both sectors succeed and contribute the tools necessary for effective government management.

About the Author

Jaime Gracia has 20 years of experience in the federal government sector, most recently as president of Seville Government Consulting, a professional services consultancy.

Reader Comments

Thu, Feb 4, 2010 Dave

The biggest problem with insourcing is also it's greatest promise: contractors, who typically advance in their own companies by bringing in new business, are not in a position to say, "No." Having been active duty and now as a contractor, I've seen lots of money spent on projects that never should have been... when and insourcing determination is made, it gives the government another chance to determine if the function needs to be performed at all. As Peter Drucker said, "There is nothing so useless as doing efficiently that which should not be done at all."

Mon, Jan 25, 2010 George Rhodes NCR Fort Belvoir

Clearly established policies of "inherently governmental functions", independently defined, implemented, and enforced internally and individually by Federal Departments or Agencies (in the spirit of the FAR/DFARS) is perhaps what is required. It is doubtful that Congressional action to clearly define the policy "across the board" will succeed. One size will not fit all.

Mon, Jan 25, 2010 George Rhodes NCR

Providing professional services as contractors embedded on-site with DOD or other Government activities poses some unique relationship considerations.
Contractors, whether on or off-site, need to be aware of the Federal Acquisition Regulations (FAR Subpart 7.5 - Inherently Governmental Functions) and DOD Supplement to the FAR (DFARS Subpart 207.5 - Inherently Governmental Functions). Although subject to interpretation by the Contracting Officer, these regulations, along with other related DOD and Government policy pronouncements are the foundations for determining contractor/Government responsibilities and provide operational guidelines for consideration.
Contractors embedded on-site with DOD or other Government activities over extended periods of time hopefully develop close and effective working relationships with customers, military or civilian. Over time, however, the appropriate delineation of responsibilities between contractor/Government personnel can become muted and possibly overlooked altogether. Furthermore, if the delineations of contractor/Government responsibilities are not clearly defined and understood by both parties, misunderstandings can backfire that may have a perceived negative impact on contractor performance. This may more likely occur in support situations involving active duty military who are “rotating through” and may be less versed in contract structure and the FAR/DFARS than their civilian counterparts. Often their expectations can be outside the responsibility limitations placed on the contractor by contract, yet the contractor may be compromised in his willingness to “satisfy the customer”. Nevertheless, failure to clearly delineate contractor/Government responsibilities, make them known and understood, and comply with the FAR/DFARS, can put contract employees in jeopardy of their positions and Government employers at odds with Federal laws.
Whether email signature blocks, voice mail announcements, or actively answering the telephone, on-site Government contractors should identify themselves in all forms of business communications as contractors. Further, email addresses that include references to military Rank/Rate for retired/inactive/reserve personnel should remove such references. This is to avoid potential confusion/misrepresentation of contractor personnel as active duty Government representatives.
Suggest that Government COs make every effort to ensure contractors be made aware of the FAR 7.5, and DFARS 207.5 subparts as well as related DOD and Government policies that address “Inherently Government Responsibilities”. Contractors should further adopt a policy of understanding the delineation of contractor/Government responsibilities as may be addressed in their governing contract as well as defined by the CO of the activity they support. When in doubt, ask the Contracting Officer.

Mon, Jan 25, 2010

What the author fails to state is first agencies need a "settled" definition of what are inherently governmental functions--only then can agencies proceed to consider and implement the excellent suggestions made by the author.

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