Over the last several weeks, I have added information on the DD-21 class of ships with its contracted-out logistics function; the Navy/Marine intranet with its contracted information system; etc. In listening to the outgoing acquisition reformers at the Defense Department, part of their legacy will be that federal employees manage the process with federal contractors doing the actual work.

What will be the end result and is there any precedent for this direction?

By Fred Weatherill on Friday, October 13, 2000 - 11:59 am:

Bob,

The end result has already happened. It is called the USS Cole. My heart goes out to all of the sailors and their families

By Vern Edwards on Saturday, October 14, 2000 - 01:42 pm:

Bob:

The end result will be a continuing trend toward contracting out. There is plenty of precedent; contracting out has been government policy for many years. See The True Size of Government, by Paul C Light (Washington, DC: The Brookings Institution Press, 1999). Light says that in 1996 there were about 1.9 million federal civil servants, compared to 5.6 million contractor employees and another 2.4 million working under Federal grants. There are fewer civil servants today, about 1.7 million, and more contractor employees.

The trend toward contracted-out government dates back at least as far as the Carter administration. According to Light the trend is irreversible, at least in the near term. This is in part due to the fact that in the current labor market young people are not attracted to Government employment. In his second book of last year, The New Public Service (Washington, DC: The Brookings Institution Press, 1999), he writes:

"In the midst of a growing labor shortage, government is becoming an employer of last resort, one that caters more to the security-craver than the risk-taker... Battered by down-sizing, political scandal, and a never-ending war on waste, the federal government has yet to articulate a clear vision of how to compete against the private sector for talent. Agencies are struggling just to hold the talent they already have... ."

If these things are true, then there is no choice but to continue contracting-out, and to do so at a faster pace.

By bob antonio on Saturday, October 14, 2000 - 04:40 pm:

Vern:

My organization has no trouble hiring individuals that have excellent grades and graduate degrees. The difficulty is keeping those employees. That is where the federal government falters with personnel policies that lack thought.

In corporations, the corporation and the employee are both rewarded with simple incentives such as stock options. The corporation reduces its tax libility and the employee can accumulate wealth.

The federal government has no shortage of financial instruments that it can offer its employees as incentives. However, it chooses to entice them with nickels and dimes as incentives.

If one listens to the acquisition reform hierarchy at DoD, one hears that people work for the government because they are patriotic or something like that. They explain that money is not an issue. I wonder where they made their money.

By Vern Edwards on Saturday, October 14, 2000 - 07:41 pm:

Bob:

Paul Light says money is not the issue, it's the work. He says:

"Contrary to conventional wisdom, there is little evidence that government can win the recruiting battle with higher pay. Pay is no doubt important as students consider first jobs, but it is far less important than the nature of the job itself. Young Americans are not saying, 'Show me the money' so much as 'Show me the work.' And it is on that count that government is losing ground."

It's a very complicated problem, Bob, and a very serious one.

By bob antonio on Sunday, October 15, 2000 - 07:09 am:

Vern:

I think many government and industry jobs have remained the same. However, in this information age there are many exciting opportunities in the non-government area. (I don't consider failing dot.coms that never earn a profit as part of an industry.)

I believe government work is either more exciting or as exciting as private industry with the exception of entrepreneurship. If I have spelled that correctly, nothing compares to it.

Currently organizations are faced with a problem of retiring corporate knowledge. My organization has received legislation to rid itself of "surplus" individuals. If you look at DoD's 2005 acquisition staff document published last week, you will see that it concentrates on new hires (rehired annuitants also). Perhaps they consider their current staff as "surplus." In fact, DoD also believes that the best way to cure their potential mass retirements over the next few years is to get rid of them quicker.

I have not decided what I will do when I leave federal service in the near future. However if I go the entrepreneurship route, I will turn to the "surplus" from the federal service to obtain talent.

By Stan Livingstone on Monday, October 16, 2000 - 08:49 am:

This is getting a little bit off the subject of the thread, but I've read some interesting articles lately on this subject. Many of the senior executives in government claim they are here because of the challenges they face. They love the complexity of the programs, the magnitude of resources they control (poeple and money), visibility, and freedom. At the lower end, articles claim the government also does a fairly good job recruiting some of the best (as measured by high gpa). The problem seems to be in retaining people once they gain some experience. They seem to leave in mass after only three years. Reasons cited are money, bored with entry level responsibility, dislike of detailed rules and procedures, and mobility blocked by people with no degrees and content to just sit it out.

By bob antonio on Monday, October 16, 2000 - 09:20 am:

Stan:

I think your note is within the general framework of this thread. Besides, this is general discussion anyway.

I agree with you. Higher level positions are interesting and shield the holders of these positions, to some extent, from the daily work that must be completed. What these positions need to do is pay more attention to their staff and find ways to keep the daily work interesting.

After a few years at an organization, reality and understanding set in. If the organization bores the staff at this point, they lose them.

Additionally, innovative pay enhancements are needed. It takes little thought to recognize that the federal government can provide "debt options" on federal debt securities that trade in the marketplace. Unfortunately, there is no thought on this subject.

By Kennedy How on Monday, October 16, 2000 - 12:34 pm:

The interesting thing here (which has been raised in other areas outside of this forum), is that of this group of Contractor Employees, how much are they making, and what is their impact on the budget? Certainly, a contractor employee isn't making the same kind of money we Civil Servants are. On the flip side, they are doing jobs that we currently are doing, but under the personnel cuts, we've decided to contract them out, because even though we have X percent less people, those jobs still need to be done. And they're being done be contractor employees who are being paid some salary similar to mine, or maybe even higher than mine, plus overheads.

This is that "hidden" cost that some people have pointed out; that the savings towards privatization aren't as large as one might think.

It's funny that somebody mentioned those college graduates. Instead of coming to work for the Government, they may well work for a "Contracted out" contractor, with all the benefits that entails.

Kennedy