Seven Years Later: The Jury Is Still Out on Outsourcing

POGO has written previously about the ongoing debate over the federal government's growing reliance on the private sector to perform public functions (see, for example, here and here). A recent article in the Washington Post about the current state of President Bush's competitive sourcing initiative will surely add more fuel to the debate.

In his 2001 President's Management Agenda, Bush made competitive sourcing--i.e., making commercial activities performed by the government subject to competition with the private sector--one of his key strategies for improving the federal government. Bush's original goal was for agencies to eventually put up for public-private competition no less than 10 percent of their full-time positions, but agencies have fallen far short of that goal. Private contractors are increasingly wary of participating in the competitions, which federal employees have won 83 percent of the time since 2003. But victories often come at a steep cost: To prove it can do the job better and more cheaply than a private contractor, the agency must often cut its staff to the bone, which depletes the federal workforce (ironically increasing the need for contractors) and takes a heavy toll on the morale of all government workers. The Bush administration has also been accused of overstating the cost savings of competitions.

Proponents of competitive sourcing believe that putting federal jobs up for competition with private firms saves money and improves performance. Opponents dispute the fiscal savings and worry about outsourcing a growing number of inherently governmental functions. POGO, which is in the process of investigating the outsourcing issue, tries to fairly present both sides of the debate, but accounts like the Post article only heighten our concerns.