Outsourcing in the U.S. Military

Examples, Problems

And Prospects

A-76 Memorandum

• Dates back to 1955

• Preference for private companies

• Relative to government’s commercial activities

• Prohibits “inherently governmental work”

1990’s Policies Favors Outsourcing

• Al Gore’s Reinventing Government

• Slogans of “Better, Faster, Cheaper”

• Federal Agencies Inventory Reform Act

• (FAIR ACT) under Pres. Clinton

• Targets for outsourcing set

Acquisition Streamling Rules – 1990’s under Pres. Clinton

• Federal Acquisition Streamlining Act

• (FASA)

• Federal Acquisition Reform Act

• (FARA)

• Information Technology Management Reform Act

• (ITMRA) aka Clinger Cohen Act

Military Case Studies

• Guam Navy Base Facilities Management

• Pensacola Navy Base Facilities Management

• Military Base Housing- Hawaii

Guam Navy Base Facilities Management

Contract Award Saved Govt $250M

Started as Public Works Center

Funded by Working Capital Fund

Expanded to Include all base activities

Fixed Price Contract type

Government proposal Most Effective Org. was cost-plus (pay as you go)

Implications for Military Personnel

• Former base jobs converted to “trigger-pulling jobs”

• Anxiety

• Transfers to front-lines

Military Base Housing Outsourcing

• Base Housing no longer provided free of charge

• Does contractor have to comply with Davis-Bacon Act?

• Relocation of military personnel to “front-lines”

President’s Management Agenda(PMA)

• President Bush’s Administration• Renamed outsourcing to “competitive

sourcing”• Eliminated many “inherently governmental

provisions”• Follows on to further the FAIR act• Supports commercial enterprise to provide

government services

Examples

• Federal Acquisition Institute

• Guards in National Parks Privatized

• Governmental activities in targeted areas

• Spans Many Agencies