Senate hearing examines contractor costs

Posted at 03:45 PM ET, 03/29/2012

Senate hearing examines contractor costs

By Joe Davidson

While congressional Republicans have been targeting federal employee pay and benefits for budget cuts, there’s been little attention paid to another rising cost for the government workplace — the hiring of contractors and other non-federal employees.

These employees often work in government facilities but are employed by private companies under federal contracts.

“Government agencies are increasingly reliant on contractors to perform services,” said Sen. Clair McCaskill (D-Mo.). She thinks they need close scrutiny, as well, so she chaired a hearing Wednesday of the ad hoc subcommittee on contracting oversight to study the issue.

“Spending on service contractors has outpaced spending on federal employees,” she said in an opening statement. “The cost of service contracts has increased by 44 percent over the last 10 years, from $181 billion to $324 billion. While in the same time period, spending on federal employees has increased by 34 percent, from $170 billion to $229 billion.”

Service contractors do a wide range of government work, often in the same offices as federal staffers.

“Contractors now perform many of the duties which most Americans would assume are done by government employees, from managing and overseeing contracts and programs to developing policies and writing regulations,” McCaskill said. “Contractors sit side by side with federal employees and perform many of the same tasks.”

McCaskill cited the Department of Homeland Security’s Balanced Workforce Strategy tool as “a promising approach to making contracting decisions.”

One of the goals of that strategy is to “determine the proper balance of federal employees and contractors for program and functions,” said Debra M. Tomchek, executive director of the department’s Balanced Workforce Program Management Office.

The strategy follows a three-step process: identifying the work, analyzing the work and deciding who does the work.

When an office “determines that either federal employees or contractors would be suitable to perform a function, they must consider and compare the costs of each, which informs the final decision on the most cost-effective and efficient source of support,” Tomcheck said.

McCaskill chided colleagues for “assuming that contractors cost less and that federal employees cost more,” saying that it “doesn’t help this discussion because, frankly, we don’t have any idea whether that assumption is true or false. Assumptions are especially costly in our current budget climate and could undermine efforts to save taxpayer dollars.”

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