ANOTHER VIEW: Col. John C. Deal, Lt. Col. Drew Hamilton and James H. Ward

With outsourcing, DOD fights a losing battle

Col. Deal

Nowhere does the battle over outsourcing rage more fiercely than in the halls of the Pentagon.
The Defense Department finds itself in the throes of a debate that might, over time, make it yield its control to commercial forces and lose forever the tools it will need to fight on distant battlefields.

Since the mid-1960s, DOD has engaged in a robust contracting-out program. According to a Business Executives for National Security special report, nearly every support function in Defense has been outsourced to some degree, including 47 percent of data processing.

There are exceptions. Outsourcing at the Army's White Sands Missile Range is a case in point. According to former commander Brig. Gen. Harry D. Gatanas, the range, set in a remote part of the New Mexico desert, survived 22 studies conducted under Office of Management and Budget Circular A-76. Arbitrators concluded that a streamlined, adequately equipped government work force could perform the White Sands duties more effectively than contractors.

In fact, the A-76 study might have done the range work force a favor by forcing the organization to modernize its operation.

John Thorpe, deputy chief of information management for the Army-Pacific, pointed out that in Hawaii, the Army outsourced its end-to-end telephone services several years ago. Yet, Thorpe said, the cost of this system continually rises by as much as 30 percent a year.

Zeroing in on the 516th Signal Brigade, across-the-board outsourcing was supposed to cut costs, improve service and help organizations adopt new technology quickly. But those benefits haven't materialized. Problems with security clearances and high employee turnover have plagued government management. Still, you could postulate that on the U.S. mainland, with so many vendors available, the military could outsource a lot more than it currently does. But, under provisions of the Federal Activities Reform Act of 1998, for a federal function to be outsourced, it must be nongovernmental. Shouldn't this proviso exempt DOD?

A Defense agency's systems communications may not be inherently governmental, but using these tools to conduct command and control activities in combat certainly is. An information-based Army must retain the core competencies necessary to operate and maintain its information technology.
As a recent General Services Administration white paper stated, 'In general, inherently governmental functions are those tasks that are so intimately related to public interest that they need to be performed by government employees.'

In Huntsville, Ala., the Army's Directorate of Information Management is working to reverse an outsourcing process established several years ago. Why? Officials there cite rising costs and loss of control. Information management is a core military function'now more than ever.

Reversibility is another concern. GSA said, 'Once IT functions have been turned over to a contractor, it will be too costly to reverse the situation'' The advent of hostilities is no time to attempt to revert to in-house management of C2 systems.

Unfortunately, these purely strategic and tactical concerns have not slowed the pace of A-76 studies. The Pentagon brass feel the pressure of their ambitious, short-term cost-cutting promises. These amount to some $11 billion by 2005, according to published reports, and could affect 229,000 positions.

IT is supposed to provide the strategic and tactical backbone of the Army in the years to come. Technology cannot be separated out because of a shortsighted need to show cost savings.

Fool's gold

The Outsourcing Institute, referenced in the same GSA report, offers this observation: 'Overemphasis on short-term benefits is a clear sign of an outsourcing project that will prove unsuccessful.' Only an in-house Army work force can define the evolving information infrastructure the service will need to support the promise of Joint Vision 2020 and DOD's knowledge-centric Global Information Grid.

The Army must not base its modernization decisions solely on savings, because to do so could undermine its ability to provide end-to-end command and control connectivity.

Army Col. John C. Deal is commander of the Information Systems Engineering Command. Army Lt. Col. John A. 'Drew' Hamilton Jr. is director of the Joint Forces Program Office at the Navy Space and Naval Warfare Systems Command. James H. Ward is a research analyst for the Information Systems Engineering Command at Fort Huachuca, Ariz.

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