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In-sourcing in the Department of Defense
Presentation for ASMC PDI 2010
June 4, 2010
Thomas Hessel
Office of the Under Secretary of Defense for Personnel and Readiness
Requirements and Program & Budget Coordination Directorate
The In-Sourcing Challenge
Questions
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Key Themes & Messages
OUSD(P&R) is lead for In-sourcing Initiative
Teamed with OUSD(AT&L), OUSD(C), CAPE, Military Departments, and Other DoD Components
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Sequence of Events
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January 6, 2006: FY06 NDAA directed in-sourcing
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January 8, 2008: FY08 NDAA direction to DoD:
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DoD to reduce support service contractors from current 39% of workforce to 26% (pre-2001)
Rebalance the workforce, ensure appropriate mix, and rebuild organic technical capabilities
May 28, 2009: DepSecDef issued additional in-sourcing guidance incorporating lessons learned/best practices
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Only government personnel perform “inherently governmental” functions
Agencies ensure functions are performed well, and at “best value”
Reduced reliance on contractors and strengthened organic technical capabilities
April 6, 2009: Secretary Gates’ FY10 budget announcement (RMD 802)
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Give “special consideration” to using DoD civilians instead of contractors (reiterated FY06 NDAA)
P&R directed to develop/implement in-sourcing policy (DepSecDef memo 4 Apr 08)
Mandated “inventory of contracted services”/subsequent review to provide basis for well-reasoned in-sourcing (AT&L lead)
March 4, 2009: President Obama’s memo on “Government Contracting” directed:
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AT&L implemented – did not meet intent of Congress
Required “reverse” A-76, plus there were other limiting constraints
Use a “total force” approach to obtain the appropriate mix of manpower (military/DoD civilian) and contractor support
Verify mission requirements, required level of performance, and workload; Eliminate functions that are no longer required, low
priority, or of marginal value; Organize activities to promote efficient, effective, & economical operation and optimize
personnel utilization; Consider the entire workforce and how the work is performed
July 29, 2009: OMB Director memo on “Managing the Multi-Sector Workforce”
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Policies must improve to achieve the best mix of public/private labor
Currently excessive reliance on contractors – “internal capacity is lacking”
Agencies don’t understand how they use/integrate contracted services
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DoD In-sourcing Initiative: FY10-14
Total in-sourcing ~ 33,400
(FY10~13,400; FY11~6,200)
Component FYDP In-sourcing Goals
 Army: 8.8K authorizations
 Air Force: 13.8K authorizations
 DoN: 9.8K authorizations
 “4th Estate”: 0.8K authorizations
Non-acquisition
in-sourcing
23,400
Total Defense Acquisition Workforce
(DAW) Growth ~ 19,887
10,000
DAW
in-sourcing
Additional
DAW Growth
(non in-sourcing)
9,887
In-sourcing initiative focused on contracted services/functions
NOT on contractor employees or positions
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In-sourcing “Decision Tree”
From DepSecDef 28 May 09 Guidance Memo
Is the mission requirement
v alid and enduring?
Yes
Is the function
Inherently
gov ernmental?
No
Is the function
exempt from
priv ate sector
performance?
Yes
Yes
Identify contracted serv ices for possible in-sourcing
If the mission requirement is not v alid, eliminate the
contract. If the mission requirement is not
enduring, eliminate the contract upon completion of
the w ork
No
No
Can all legal, regulatory,
and procedural impediments
be addressed in the
timeframe required
and DoD civ ilians used
to perform the w ork?
Yes
No
Can a transition
plan be dev eloped
and executed to
address the
impediments?
No
In-source function
as expeditiously as practical
Does a cost analysis show
that DoD civ ilian performance
is more cost effectiv e?
Yes
No
Yes
Continue to contract
for the serv ices
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Process and Considerations
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Use a “total force” approach to obtain the appropriate mix of manpower (military/DoD civilian) and
contractor support
– In-source services entailing inherently governmental functions
– In-source services needed to support the readiness and workforce management needs, consistent with
DoD manpower mix policy (including, in some instances, functions closely associated with inherently
governmental)
– For all “other services”—conduct a cost analysis (full costs and “like comparisons”) to determine the
most cost effective source of performance
Determining/validating manpower for in-sourcing actions:
– Verify mission requirements, required level of performance, and workload
– Eliminate functions that are no longer required; tailor those of low priority or marginal value
– Organize activities to promote efficient, effective, & economical operation
– Optimize personnel utilization
– Consider the entire workforce and how the work is performed
Not all risks can be identified without a clear accounting of total force:
– Inventory of Contracts for Services required by section 807 of FY08 NDAA
– Inherently Governmental/Commercial Activities Inventory of military/civilian manpower
Consider steps/length of time it will take to complete an in-sourcing action so there is sufficient time to
transition to government performance and there are no gaps (or overlaps) in critical services
– Develop transition plans to address temporary impediments so the work can be in-sourced
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In-sourcing: A Collaborative Effort
Stakeholders within DoD Components include, but are not limited to…
IN-SOURCING
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Questions?
Thomas Hessel
[email protected]
703-697-3402
DoD In-sourcing Initiative Clearinghouse: http://prhome.defense.gov/pdusd/requirements/insource/
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