Annual Defense Bill Aims to Rein in Pentagon Outsourcing

Lawmakers are looking to reinstate a cap on the Defense Department’s service contract spending next year, amid concerns the Pentagon has unduly outsourced federal work.

The measure was attached to the annual defense authorization bill approved by the House Armed Services Committee, and would prevent Defense from spending more on service contracts than it did in fiscal 2010. Such a cap was in place from fiscal years 2012 through 2015 but lawmakers removed it the last two years.

Rep. Colleen Hanabusa, D-Hawaii, who introduced the amendment, said the measure would save the Pentagon money.

“Restoration of that cap was necessary to deter the transfer of federal work to more costly service contractors” and to "strike a fair balance," Hanabusa said. 

The amendment will prevent “unfair and inefficient” outsourcing of jobs, according to Jamie Hiranaka, president of an International Federation of Professional and Technical Engineers local that represents Navy civilians in Hawaii, which pushed for its inclusion.

“Without this provision, DoD agencies would be compelled to outsource any new work to service contractors,” Hiranaka wrote in a letter thanking Hanabusa, “as there would be no room to hire more federal workers under what amounts to an arbitrary cap on the DoD civilian workforce.”

Michael Fischetti, executive director of the National Contract Management Association, said there are already layers of statues and memoranda dictating when agencies should contract out services. Rather than a spending cap, he said, agencies should follow accepted practices of whether the work is inherently governmental and conduct cost-benefit analyses.

“Any kind of arbitrary spending caps are not really the way you should make those types of decisions,” Fischetti said. The cap, he added, would lead to “not an acquisition-related decision process. It’s more of a political process.”

J. David Cox, president of American Federation of Government Employees, disagreed with that perspective, saying the cap would supplement the processes already in place.

“This cap is one of several tools intended to help prevent the Pentagon from inappropriately contracting out government jobs with little to no regard for the impact on mission or the additional cost to taxpayers,” Cox said. He added it would provide “greater insight into DoD’s current use of contractors.”