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Insourcing Debate Is About Strategy, Not Numbers

From The Acquisition Corner

As the federal government continues to find ways to move contracted work back in-house, it must overcome some major obstacles. One area that has been significantly neglected is 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. This issue became acute with the federal acquisition workforce, but only recently garnered substantial attention. Although human capital plans are being implemented as part of the Office of Management and Budget’s (OMB) guidance on contract savings initiatives, the real challenge remains understanding the roles and responsibilities of current contract activities and how a blended workforce will be managed in order to continue performing the acquisition mission.

Strategic human capital plans can only be effective and executed properly by identifying an organization’s skills and capabilities, and recognizing how that current skill set performs the mission. Contractor 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 alleviating these continuing problems. In short, the government must have a better grasp of who the agency contractors are and what activities they are performing.

On the other side, industry must also engage by providing information crucial to human capital planning so they too can be more effective. Contractors have more accurate and current data on their workers because of their necessity to maximize profitability and utilization. Obtaining this data from industry will help the government make informed decisions and strike a much needed balance. Only through this partnership and trust can workforce plans be created that are of any value.

Furthermore, vast information to help make these decisions already exists, but because of the lack of contract oversight and administration, in addition to poor overall program management skills by government, this data is either incorrect or incomplete. This creates a vicious cycle because inadequate staffing contributes to contract management issues, which in turn fuels reliance on contractors. Additionally, lack of staffing and bad practices have led to poor quality assurance principles, making it difficult to determine whether contractors are meeting their contract requirements. The end result is that skills, capabilities, and outcomes are obfuscated because of shortcomings in following guidelines for contract execution.

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

A comprehensive review must also be conducted of current contracted services, what services and skills are being purchased, the size and complexity of the contracts, and the efficiency and costs associated with these contracts. This will be an exercise in information management, and the power of collaboration tools, or Gov 2.0, can undoubtedly play an important and essential role.
Solving these problems requires strong leadership, and a demand for accountability and transparency, from both the government and the private sector. Only by working together can both succeed, and provide the tools necessary to create the foundation for effective government management.

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I’ve noticed at the state level the reliance on contractors at our agency seems to be huge for a few departments within my agency. I believe you said it perfectly when you mentioned “reliance on contractors to help it perform vital functions” – this seems to ring true for us. I believe the rationale for bringing on contracted workers is because salaries for state employees are considerably lower than private sector, as well as federal, county, and city governments. Hiring contractors is a way to get the work done that no one whom is qualified will do for the salary that the state pays.

Joe Flood

I think the core problem is that gov HR rules are written for the 1950s. This includes job titles and descriptions. Govt is supposed to do more on the web but there are not many web jobs on USAJOBS. Outside of govt, these jobs have titles like web producer, web editor and so on. Do these jobs even exist in govt? When web duties are part of a job, they seem like just one duty of many and show up in generic job titles like IT Specialist and Writer/Editor. I’d suggest getting job descriptions and titles that match the work required and use the terms that the rest of the world uses.

I’m a contractor in web development who would love to be a fed but I don’t see many fed jobs in my field – just lots of contractor opportunities.

Jaime Gracia


I hear this complaint frequently, as job descriptions and titles are often confusing and do not match the requirements. Government hiring needs to adapt many commercial practices, and not just shortening the time it takes to hire; direct-hiring authority aside. Federal hiring practices need an overhaul.

Jaime Gracia

Tricia – Thanks for the input. Always good to hear the perspective from state and local governments, as their issues with personnel, and procurement, seem to be left off the table. The issues are really not that different, but the state and local governments have more flexibility and are able to execute much faster than the federal government. Further, state and local governments can better leverage commercial best practices, innovation, and risk-taking. Nonetheless, the capability and skills gaps can also be more acute as you mention, which can tend to favor the use of contracted services or cuts in services due to revenue shortfalls.