OUTSOURCING 

Contracting for services is an increasingly crucial part of the government marketplace. One ramification of increased service contracting is greater attention on outsourcing which has become a lightning rod issue in the House and Senate. 

The Federal government needs the ability to fully utilize competitive sourcing, outsourcing, and privatization options to achieve the necessary performance of commercial activities more efficiently, at “best value” and at lower total operating cost.  Unfortunately, current statutes and Federal implementation policies unduly restrict the Government’s actions related to competitive sourcing of commercial activities.

Outsourcing has significant benefits for the U.S. taxpayer.  As former President Ronald Reagan said about privatization in 1986: “the Federal government has increasingly sought to provide services that can be more efficiently provided by the private sector.  To address this problem, I have established a working group to investigate which Government functions could be effectively returned to the private sector.  I have also included several initiatives in this area in the recently-released budget.  This strategy does not necessarily require eliminating services now provided by the Government.  Rather, it would make private alternatives available.  Such a strategy ensures production of services that are demanded by consumers, not those chosen by Government bureaucrats.  It also leads to more efficient and lower cost production of those services, and often removes Government-imposed restraints on competition.” 

Indeed, a recent report from the General Accounting Office states that when competition for government contracts takes place, taxpayers receive an over 30% savings regardless of whether the government employees or the private sector win a public-private cost comparison.   

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