A Methodology for Implementing the Department of Defense¹s Current In-Sourcing Policy

Abstract : Identifying the appropriate balance between contractor and government staff is not a new challenge for the government. However, recent direction from Department of Defense (DoD) leadership has led to increased awareness of the importance of finding this balance. In his fiscal year (FY) 2010 budget message, Secretary of Defense Robert M. Gates called for growing the civilian workforce by replacing contractors with DoD civilian personnel. In the 2010 Quadrennial Defense Review, DoD's ongoing in-sourcing efforts were described as a means of establishing a balanced total workforce . . . that more appropriately aligns public and private sector functions. In August 2010, Secretary Gates called for a halt to the creation of Office of the Secretary of Defense (OSD) positions to replace contractor staff after FY 2010. Although some may have believed that in-sourcing efforts were to be ceased, additional guidance clarified that in-sourcing efforts would continue. A three-year hiring freeze was implemented at OSD, the combatant commands, and the defense agencies, but in-sourcing was allowed to continue in the military departments. The research conducted by the RAND Corporation reviewed the recent history of outsourcing and in-sourcing and assessed the current laws and policies pertaining to in-sourcing to develop a framework and methodology for applying the current laws and policies to arrive at a decision about in-sourcing. This research was initially undertaken as part of an insourcing assessment for a U.S. Navy organization. However, during research, we discovered a gap in the current in-sourcing guidance, and individuals tasked with in-sourcing still appeared to be struggling to interpret and implement this guidance. This report interprets commonly used terms, such as inherently governmental, and describes an approach to implementing current in-sourcing guidance.