Civilian Agencies Late On Insourcing DeadlineCivilian Agencies Late On Insourcing Deadline

Nine federal agencies that account for a large share of government spending on outsourced services failed to meet a deadline to create new guidelines for stepping back from the practice, according to a Government Accountability Office letter to Congress.

President Obama penned a memo in March expressing concern about the U.S. government's overreliance on outside contractors and directing the Office of Management and Budget to clarify its outsourcing policy. Subsequently, Congress passed legislation that required federal agencies to create insourcing guidelines by mid-July.

A report released this week by analyst firm INPUT found that the top 20 contract vehicles in the federal government could amount to $180 billion in outsourced business and that agencies including NASA and the Transportation Security Agency continue to outsource new work.

The new requirement, found in an omnibus spending bill, requires non-military agencies to periodically reassess outsourced work to see if it could be brought back under the umbrella of government employees, giving special consideration to work that has been recently performed by federal employees, is closely associated with the performance of "an inherently governmental function," is being done under a non-competitive contract, has performed poorly under contractors, or is a new requirement. The outsourcing in question include, but is not limited to, IT services.

Despite specific OMB guidance on criteria for insourcing, none of the nine federal agencies that collectively account for 80% of civilian agencies' outsourcing met the July deadline, and only one had issued even preliminary guidelines by that date. The nine agencies are the Departments of Energy, Health and Human Services, Homeland Security, Justice, State, Transportation, and Veteran Affairs, and the General Services Administration and NASA.

In fact, most of the agencies are still in early stages of developing those guidelines, the GAO found. The Department of Transportation gave the OMB no timeline for when it would draft the guidelines, while the VA won't have an initial draft until early next year.

In some cases, agency officials told the GAO that they were awaiting additional guidance from OMB, especially in terms of what kinds of government functions are considered "inherently governmental." In correspondence with GAO, agencies mentioned other challenges to decreasing their reliance on outsourcing, singling out workforce and resource shortages, as well as difficulty in analyzing contract data to make sound decisions.

information Analytics has published a guide to the Open Government Directive and what it means for federal CIOs. Download the report here (registration required).