Insourcing raises new ethics questions

DOD warns about ex-contractors managing former colleagues

Defense Department ethics officers are warning officials about conflicts of interest that could soon follow when the officials hire contractors as employees through insourcing.

“The problem is they are often being hired to perform duties related to their former contract employers,” the officers wrote June 7 in a newsletter updated regularly by DOD’s Standards of Conduct Office.

The new DOD employees likely will oversee support contractor employees, evaluate contract’s performance, or issue task orders on their former employer’s contract, the ethics officials wrote.

“This raises conflict-of-interest concerns,” they wrote.

Related stories: 

Does insourcing lead to 'theft' of contractor employees?

Ethics rule could slow DOD's revolving door 

Washington Technology June 2010 issue 

The Code of Federal Regulations bars federal employees from getting deeply involved in situations where they could influence a decision in favor of someone they worked for during the past year. The employees may have to recuse themselves if they have knowledge of the relevant facts that could call into question their impartiality in a situation, the officers wrote.

DOD and civilian agencies are planning to build up their in-house skills in numerous areas, including their acquisition expertise, through insourcing. Deputy Secretary of Defense William Lynn said June 4 that DOD will save money by adding more people to its payroll. He also said he expects DOD to become a better buyer as a result of insourcing more acquisition expertise into its workforce.

“So I think that those people are going to be an investment. And we’ll get a many-fold return on their expertise,” he said.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Tue, Jul 13, 2010

Its amazing that over the past 20-30 years the Gov has outsourced to save money and now insources to save money. It is not just Acq positions, DOD is insourcing in all positions to "save money". Its not doing any economic justification as was required by A76 to outsource. It makes no sense!

Thu, Jun 10, 2010 Max No. Virginia

Will the insourcing of acqusition support services cut into the sweet, extremely highpriced market for "Acquisition Solutions" and like government contractors? any one know? Of course, all of their people come from the government.

Thu, Jun 10, 2010

Oh yes, there is a revolving door of employees/contractors that goes both ways, but this is not a valid argument against insourcing. Do the federal polices for ethics or procurement force a "cooling off" period between these employees jumping back and forth (6 to 12 months)? Is the cooling off period enforced? Enforcement is critical to the reduction of conflicts of interest.

Thu, Jun 10, 2010

I am watching insourcing further degrade the delivery of services to the public. We are taking contractor employees, who can be fired and removed for cause, and converting them into government employees who are really impossible to dismiss for substandard performance. The lack of accountability for government employees is appalling and a true waste of our tax dollars. I will support insourcing once the government again assumes the responsibility to fire employees who do not produce.

Thu, Jun 10, 2010 Mouse

It has become common practice in agencies within the Government to hire directly from industry and for people leaving to move directly to industry, back and forth as a "revolving door". The level at which these actions occur are at the SES and program direction level, with great influence on regulations and policy. Several agencies, such as USDA and FDA come to mind, though DOD is not immune. I find it hypocritical for agencies to focus ethical concerns on lower level employees when at the higher levels this type of hiring/appointment appears to be condoned with abandon.

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