Outsourcing of DoD Commercial Activities

Outsourcing of commercial activities in the Department of Defense (DoD) occurs within a well-defined legal and policy framework. This framework creates a predisposition toward outsourcing but also imposes an evolving set of exclusions and restrictions. Within this framework, DoD outsourcing has occurred on a relatively modest scale. However, DoD has recently given outsourcing renewed attention, and momentum is building for a potentially significant expansion of outsourcing. If that expansion occurs, DoD civilian personnel managers will benefit from having a greater understanding of how the process affects civil service employees. In this report, the authors review executive and legislative policy related to DoD outsourcing; present results from site visits to Army and Air Force installations where activities have been outsourced recently; and develop models useful for predicting the number of employee displacements likely to result from outsourcing studies. The authors develop recommendations for improving the productivity of the civil service workforce (making it more competitive in outsourcing cost-comparison studies) and making the cost-comparison process fairer to government employees.