Outsourcing of Dod Commercial Activities: Impacts on Civil Service Employees

Abstract : Responding to recommendations from the Commission on Roles and Missions of the Armed Forces, the Office of the Secretary of Defense (OSD) is investigating opportunities to increase the scope and pace of outsourcing of commercial activities. Outsourcing can reduce the cost of commercial activities directly, by taking advantage of efficiencies found in the competitive private sector, or indirectly, by inducing activities that remain in-house to operate more efficiently. Either way, civil service employees are likely to be displaced, presenting Department of Defense (DoD) managers of the civil service workforce with a range of issues. Accordingly, OSD managers of civil service employees have an interest in predicting and understanding the effects of this intensified examination of DoD outsourcing opportunities. At the request of the Deputy Assistant Secretary of Defense for Civilian Personnel Policy, RAND undertook a study to examine these effects. Findings of the study should be of interest to OSD, service, and defense agency personnel managers, especially those responsible for programs to assist displaced workers and those who have an interest in the cost and productivity of workforces. Managers of outsourcing and cost-comparison processes should also have an interest in some of the findings. This report was prepared under the sponsorship of the Office of the Assistant Secretary of Defense for Force Management Policy. It was prepared within the Forces and Resources Policy Center of RAND's.