Another View: Why does Army force contractors to count heads?

Stan Soloway

Army secretary Thomas White has directed the reinstitution of the so-called Army Manpower Rule, which is designed to count the number of contractor employees performing work under Army contracts. White's policy memo says the data will help the Army manage better and that the Army must consider downsizing its contractor work force since it has already downsized its organic work force.

On both counts, the Army has it wrong. Reinstitution of the rule will provide the government with little management information'but cost taxpayers plenty.

The Army issued the first version of the manpower rule more than 18 months ago in response to a legislative mandate, but withdrew it after a firestorm of protest. Contractors objected to the vast scope of the data collection required and the Army's unique data formatting requirements. Moreover, the Army made clear it would not reimburse companies' expenses.
In reinstating the rule, White has made some appropriate changes. The Army will reimburse companies for their costs, and he has somewhat limited the scope of coverage. But the rule remains largely a waste of time and money.

The fact is that the number of contractor employees performing work under government contracts is not terribly important. What matters are the cost of a contract and the contractor's overall performance.

Moreover, White's comment relative to downsizing the contractor work force is also wrong'and telling. The Army obviously must know the size of its own work force from mission requirements and a strategic assessment of the work federal employees must perform. The precise number of contractor employees is largely irrelevant to that question.

White's comment is telling because it signals the real push behind this head-counting game: business-as-usual traditionalists, actively supported by federal-employee unions. They vehemently oppose any expansion of outsourcing primarily because they fear for their own dues-paying base.

Some of these folks have worked tirelessly to convince decision-makers there is a direct and somehow unfair correlation between the downsizing of the federal work force and increases in services contracting.

Wrong again. DOD's work force has shrunk more than 30 percent during the last 10 years, mainly from restructuring and base closures. During the same time, services contracting at DOD grew by just 14 percent, an average annual increase of less than 2 percent. So where's the correlation?

Contractors did not oppose the legislation that led to the Army rule. Many don't believe the effort is worth the cost, but they don't quibble with the government's right to conduct such analyses. Rather, industry's objections are based on the intrusive nature of the process and the burdens it creates for companies. It's a non-value-added, government-unique requirement of the very type agencies have been trying to eliminate for years.

The bottom line is simple. The Army lacks the funding to meet its facilities and infrastructure maintenance requirements. At times like this, why would the Army devote any of its precious resources to an exercise that offers so few meaningful answers in return? It's a question the Army has yet to convincingly answer.

Stan Soloway is president of the Professional Services Council and was deputy undersecretary of Defense for acquisition reform and director of the Defense Reform Initiative during the Clinton administration.

About the Author

Stan Soloway is a former deputy undersecretary of Defense and former president and chief executive officer of the Professional Services Council. He is now the CEO of Celero Strategies.

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