Kirsten Gillibrand United States Senator for New York

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Senators Gillibrand, Brown to DOD: Maintain Civilian Workforce Before Awarding More Costly Private Contracts

Gillibrand, Brown Lead 26 Senators on Letter to Defense Secretary Panetta – Senators Concerned That Civilian Workforce Has Been Cut to FY2010 Levels, but No Comparable Constraints Were Imposed on Contract Personnel

April 25, 2012

Washington, D.C. – U.S. Senators Kirsten Gillibrand, a member of the Senate Armed Services Committee, and Sherrod Brown today led 26 senators on a letter to Defense Secretary Leon Panetta urging the U.S. Department of Defense (DOD) to implement sourcing and workforce management laws, and to use civilian personnel where possible as opposed to awarding more costly private contracts. The senators are urging the Department to make sourcing decisions based on merit, and urge against using contract personnel simply because fewer civilian employee slots are available. 

“We are proud of all of our men and women serving the U.S. military,” Senator Gillibrand said. “In New York, civilian employees of the Defense Department have proudly served our installations from West Point to Fort Drum. Even as we seek to find more efficiencies, we must continue to honor their service.” 

“As the Defense Department seeks to reduce costs, it must recognize that the use of private contractors can be more expensive than using direct employees,” Senator Brown said. “The Defense Department must make its sourcing decisions on what is best for our nation and our military, even if that means lifting the arbitrary cap on civilian employee numbers.” 

In their letter, the Senator wrote, “We understand that the defense budget must be adjusted to take into account new national security risks and budgetary realities.  However, we are concerned that while the size of the civilian workforce is proposed to be cut back to FY 2010 levels, no comparable constraints were imposed on workforce hired through contractors. We are concerned that this would incentivize managers to use contracting firms rather than civilian employees even when the latter costs less.  We also believe that there are a number of sensitive roles that should be performed by direct employees. When determining whether services should be performed by employees or contractors, DoD’s sourcing decisions should be made on the basis of the law, cost, policy, and risk, and not because DoD managers simply have fewer civilian employee slots.” 

In addition to Senators Gillibrand and Brown, the letter was signed by Senators Mikulski, Leahy, Murray, Harkin, Tester, Durbin, McCaskill, Blumenthal, Menendez, Conrad, Shaheen, Merkley, Franken, Klobuchar, Schumer, Stabenow, Sanders, Akaka, Begich, Coons, Casey, Boxer, Wyden, and Lautenberg.

Dear Secretary Panetta:

 

Thank you for your leadership of the Department of Defense (DoD) during these challenging times.  We are proud to support DoD installations that employ military, civilian, and contractor personnel who make invaluable contributions towards ensuring our national security.

 

We understand that the defense budget must be adjusted to take into account new national security risks and budgetary realities.  However, we are concerned that while the size of the civilian workforce is proposed to be cut back to FY 2010 levels, no comparable constraints were imposed on workforce hired through contractors.

 

We are concerned that this would incentivize managers to use contracting firms rather than civilian employees even when the latter costs less.  We also believe that there are a number of sensitive roles that should be performed by direct employees. When determining whether services should be performed by employees or contractors, DoD’s sourcing decisions should be made on the basis of the law, cost, policy, and risk, and not because DoD managers simply have fewer civilian employee slots.

 

That is why, as the federal government’s largest employer, the DoD must comply with sourcing and workforce management laws, both those that are longstanding as well as those that were included in the FY 2012 National Defense Authorization Act (NDAA). Specifically, we expect DoD to:

 

  1. 1.      Eliminate the arbitrary cap on the civilian workforce or provide a waiver. If there is work to be done and the funding to pay for that work, managers should not be arbitrarily prevented from using civilian employees (10 USC 129). Commercial functions should be shifted on the basis of costs (10 USC 129a). The FY2010 cap on the civilian workforce should be lifted or a waiver be provided so that sourcing decisions can be based on merit, rather than arbitrary constraints.
  1. Embrace the Total Force Management approach. Instead of managing civilian personnel by arbitrary constraints, we expect the Department to embrace the Total Force Management approach necessary to ensure that the Department looks at its military, civilian, and contractor workforces holistically.
  2. Cap spending on service contracts. Until the cap on the civilian workforce is lifted, we expect the Department, particularly the Comptroller’s office, to comply with the FY 2012 NDAA that caps spending on service contracts at FY 2010 levels. If the Department insists on capping the civilian workforce at FY 2010 levels, a similar cap must be applied to the service contractor workforce levels.
  3. Conduct cost comparisons when making outsourcing decisions. DoD cannot convert a function last performed by civilian employees to contractors without conducting a formal cost comparison (10 USC 2461). We are pleased that the Department issued guidance in December in order to enhance compliance with this prohibition. We expect you to place the highest priority on implementing these reforms.
  4. Implement an inventory of contract services. We appreciate that DoD has come to an agreement on implementing an inventory of contract services. We expect the Department to be aggressive in overcoming any procedural concerns related to the Paperwork Reduction Act so that the inventory can be implemented in such a way that it allows for the identification and control of costs, including identifying and preventing over-execution of spending, as well as distinguishing base spending from Overseas Contingency Operations spending. Finally, we expect the Department to respect the decision reached by conferees to the FY 2012 NDAA that “the appropriate use of public-private competition is predicated on a sound planning process and the availability of accurate information, including the information that would be supplied by a compliant inventory.”
  5. Prohibit outsourcing of inherently governmental work. We expect the Department to comply with the FY 2012 NDAA requirement that no inherently governmental work be privatized and that reliance on contractors for the performance of work closely associated with inherently governmental functions should be incrementally reduced.  Finally, we expect the Department to adhere to the insourcing laws that were reaffirmed in the FY 2012 NDAA and make insourcing decisions on the basis of the historically based criteria of the law, cost, policy, and risk, instead of arbitrary targets or constraints.

As you lead the Department in adjusting to budgetary realities, it is imperative that the Department and the Services build upon and fully integrate the remarkable work done by our civilian personnel. The best way for the Department to accomplish this is by ensuring that it is fully compliant with all relevant sourcing and workforce management laws. 

Thank you for your consideration.