TheHonorable Mark Warner
U.S.Senator
Washington,DC 20510
DearSenator Warner:
Theundersigned Virginia organizations request your sponsorship of an amendment tothe Defense Authorization instituting a moratorium on insourcing – the conversionof work currently performed by private sector contractor firms to performanceby Federal government employees.
InAugust, Defense Secretary Robert Gates said, “We weren’t seeing the savings wehad hoped from insourcing.” (“Insourcing failed, DOD's Gates says. Nowwhat?” Federal Computer Week, August10, 2010.)
InJune, Senator Robert Menéndez (D-NJ) was asked about the effect insourcing hadon small and minority owned business. The Chairman of the Democratic SenatorialCampaign Committee said insourcing was “counter-intuitive to the President’sgoal of creating opportunities in the federal contracting system fordiversity.” Sen. Menendez concluded, “We already have a much more limited universethan we should, and if [insourcing] is being pursued, then it is only going toerode what exists, so it doesn’t make a lot of sense.” (“Procurement pinata out of hispanic reach” Hispanic Link News Service, June 21,2010.)
EveryCongressionally-chartered White House Conference on Small Business (1980, 1986,and 1995) has made unfair government competition with small business a topissue. The issue of government competing with the private sector has been aserious concern for small business for decades. According to inventoriescompiled under the Federal Activities Inventory Reform (FAIR) Act, beginningunder the Clinton Administration in 1999, there are still more than 850,000Federal employees engaged in activities which are commercial in nature. Subjecting these positions to establishedpublic-private comparisons can save more than $27 billion annually over thenext 5 years. We are concerned that in-sourcing is occurring without suchpublic-private comparisons or cost analysis. In fact, a recent Air Force insourcingeffort was reversed when a court challenge was filed noting that no standardsfor cost analysis were utilized.
Thisshift to government performance of commercial activities not only hinders theprivate sector, including small and minority owned business, but placesadditional costs on taxpayers during a lengthened period of a steep decline inthe nation's economy, a staggering national debt, and a high national rate ofunemployment. The government intrusion and competition in the private market thatinsourcing brings is having a detrimental effect on capital investment and jobcreation. The insourcing agenda is particularly impacting Virginia. Manyprivate firms, including small and minority owned firms, have lost jobs or havejobs threatened, by insourcing of Federal contracts. This increases privatesector unemployment and shrinks state and local tax revenues.
GivenSecretary Gates’ recent acknowledgement that insourcing does not savemoney, Senator Menendez’s concerns that insourcing is ‘counter-intuitive’ tothe Obama Administration’s goal of creating Federal contracting opportunities,particularly for small and minority owned businesses, and the current state ofthe nation’s economy, we respectfullyurge you to offer an amendment to the Defense Authorization that would place amoratorium on insourcing within the Department of Defense.
Wesuggest that the Obama Administration use the moratorium period to develop apolicy, similar to that which was Federal policy, beginning in 1955, thatrecognizes that real economic growth and job creation is in the private sector,and emphasizes that government should not compete with its citizens, but shouldrely on the private sector to the maximum extent possible. Finally, a clear andobjective metric for justifying and determining cost-effectiveness of governmentperformance of commercial activities should be developed to protect theinterest of taxpayers.
Sincerely,
Jordan Forbes
Federal Government Affairs Manager
National Taxpayers Union