Monday, December 28, 2009


Just a few years ago, the Government was outsourcing (contracting) as many jobs as it could. If a job was not for an inherently governmental function, it was targeted for outsourcing. Now the pendulum has swung and the trend this year is "in-sourcing"; replacing contractors with federal employees.

Last year, Congress determined that contract employees were costing the Government an average of $250 thousand per year, an amount far in excess of what it cost for a federal employee. The Department of Defense estimated that it could save an average of $44 thousand per year per job for every contractor position it replaced with a federal position. For fiscal year 2010 defense appropriation bill, each Defense Department agency has been given in-sourcing targets.

Not everyone agrees that in-sourcing is a good thing however. Stan Soloway, the President and CEO of the Professional Services Coucil wrote that the Government's math is fuzzy and savings will be largely illusory. He also stated that he is seeing more arbitrary in-sourcing of purely commercial activities, rather than a focus on the critical skills the Government most needs.

The Huntsville Times reported that Government in-sourcing activities are of great concern to area companies, particularly smaller companies who are spending money to hire and train and develop a work force, only to lose it to their customer. The Times reported that many of these smaller companies are totally dependent on Government work and some will probably go out of business.

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