The Insourcer's Apprentice

Jeff Liebman is the Obama Administration’s point person for its efforts to cut service contract spending by 7 percent – about $40 billion a year – in part by insourcing work that has been outsourced to conractors, according to Federal Times’ Elise Castelli. Liebman is an executive associate director at the Office of Management and Budget.

In her story, “New Guidance Expected on Insourcing,” Castelli quotes Liebman: “There is no requirement to insource. . . There is a requirement to do proper human capital planning and analysis to make sure the government isn’t losing control of its mission because of an overreliance on contractors.”

She notes, “OMB will issue new guidance in the coming weeks to clarify the definition of what is an ‘inherently governmental function,’ which will help agencies determine which work should be outsourced or insourced.” Last year, Congress required agencies to begin insourcing work when contractors failed to perform, when work was improperly outsourced, or when the work was outsourced without competition. This underlies part of why OMB launched a major assessment of all existing contracts.

The Defense Department, which has led the government over the past decade in outsourcing services to the private sector, is now the leader in insourcing work, notes Castelli.

Castelli also reports that the Professional Services Council, an industry group, surveyed its 350 members and “60 percent reported some kind of reduction in their contracts as agencies turned contractor-filled positions into federal positions.”

New guidance to be released shortly by OMB will address three things:

• How agencies can reduce their use of cost-reimbursement contracts
• How agencies can increase competition in contracting and limit the use of sole-source contracts, and
• How agencies can increase the capacity of their procurement staffs to effectively manage contracts.