DoD may put more jobs up for outsourcing

The Defense Department may add more civilian jobs to the list of 230,000 positions that have already been targeted for contracting out studies, according to the Pentagon official in charge of outsourcing.

Under the Defense Reform Initiative, launched in November 1997, DoD has planned formal studies-where government workers restructure their operations and compete with contractors for specific workloads-for about 230,000 civilian jobs through 2005. But on Dec. 30, the Pentagon released a list of 308,000 jobs that are potential candidates for outsourcing and a total of 504,000 that could be performed in the private sector. The list of jobs that could be outsourced was required under the 1998 Federal Activities Inventory Reform (FAIR) Act.

"The department is aggressively pursuing competitive sourcing and the FAIR Act inventory is one of the key management tools in this process," said Randall Yim, deputy under secretary of Defense for installations. Yim's office oversees DoD's privatization efforts. "While the inventory provides us with a pool of potential candidates, our plan is to evaluate the positions to ensure competitive sourcing makes good business sense. As the positions are evaluated, we anticipate some will be identified as not being viable candidates for outsourcing while others will be confirmed for cost-comparison studies."

Positions that are identified as outsourcing candidates undergo a public-private competition described in Office of Management and Budget Circular A-76. In that process, federal workers attempt to show that they can perform work more efficiently and less expensively than private contractors.

The Defense Department refers to the A-76 process as "competitive sourcing," part of a larger cost-saving initiative known as "strategic sourcing."

Strategic sourcing "involves a function-wide assessment of whether processes can be eliminated, improved or streamlined," Yim said. "Following such an evaluation, those activities identified as commercial in nature can become competitive sourcing candidates. Strategic sourcing is an umbrella term that includes competitive sourcing, as well as reengineering of activities not eligible for competitive sourcing." DoD leaders hope to save billions of dollars over the next five years through strategic sourcing.

Competitive sourcing is the primary method being used in the strategic sourcing effort, though the Navy has chosen other methods of reducing costs, such as reengineering and streamlining. The military services and other DoD components are evaluating their programs to determine if they can take advantage of additional strategic sourcing options to save money, Yim said.