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April 13, 2010
12:03 PM


Kirsten Stade (202) 265-7337

Pentagon In-Sourcing Plan to Reverse Bush Contracting Gains

Conversion of Over 33,000 Jobs Would Return to Military Contract Levels of 2000

WASHINGTON - April 13 - Over the next four years, the Defense Department will convert approximately half of its contracted functions back into civil service positions, according to official guidance released today by Public Employees for Environmental Responsibility (PEER).  This "In-Sourcing Initiative" would cut military contracting back to 2000 levels, before the outsourcing explosion during the Bush years.

In a May 28, 2009 service-wide memorandum, Deputy Defense Secretary William Lynn laid out a plan for "realigning resources for FY 2010-2014 to decrease funding for contract support and increase funding for approximately 33.4K new civilian manpower authorizations, 10,000 of which are for the Defense acquisition workforce."  He concluded, "In-sourcing is a high priority of the Secretary of Defense."

During the Bush administration, spending on military contracting nearly doubled to nearly $400 billion, consuming approximately 39 cents of every defense dollar.  This in-sourcing plan would reduce contract spending back to the levels of 2000, or approximately 26 cents of each Pentagon dollar.  In a tacit admission that military outsourcing had gone too far, the plan prioritizes the conversion of contracts for "inherently governmental" functions which should never have been contracted out for private performance in the first place.  It advises commands to "in-source as expeditiously as possible" existing contracts that -

  • Perform an "enduring mission requirement," a function which is needed beyond the contract term;
  • Had experienced "problems with contract administration"; or
  • Civilians could do more cost-effectively than contractors.

Each service has begun implementation of in-sourcing.  One such plan, from the Air Force Materiel Command dated January 2010, contains draft contract conversion orders and communication talking points for affected "audiences (stakeholders)."  The Pentagon projects a "40% savings for every contract-to-civilian conversion" a savings that the Air Force Materiel Command discounts by half based on its "historic savings in past cycles."

"The Pentagon is conceding that the recent boom of military outsourcing proved to be a bust," stated Jeff Ruch, Executive Director of PEER which successfully sued to block total outsourcing of environmental work on domestic bases.  "Most importantly, it is now officially recognized that excessive outsourcing compromises both accountability and performance."

While the thousands of new civil service openings will be filled through open merit system competition, as a practical matter the current contractor employees performing the soon-to-be in-sourced functions will have advantages in applying and competing for these openings.

"Under Bush, military commands were graded on how much they could outsource and now the services are being evaluated on the speed with which they in-source," Ruch added.


Public Employees for Environmental Responsibility (PEER) is a national alliance of local state and federal resource professionals. PEER's environmental work is solely directed by the needs of its members. As a consequence, we have the distinct honor of serving resource professionals who daily cast profiles in courage in cubicles across the country.

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