This week, the Competitive Enterprise Institute (CEI), a Washington, D.C.-based organization dedicated to the principles of free enterprise and limited government, will score a vote in the U.S. House of Representatives in its consideration of the National Defense Authorization Act for Fiscal Year 2015 (H.R. 4435). The defense authorization is one of the largest bills considered each year. The vote below pertains to employment considerations for America’s labor force, both governmental and private. The score will be incorporated into CEI’s Congressional Labor and Employment Scorecard, which can be seen in full on CEI’s labor and employment policy website, WorkplaceChoice.org.
INSOURCING AND OUTSOURCING
In the course of government operations, work and employees are transferred between the federal government and private employers through “insourcing,” whereby government once performed by the private sector is brought under government control, and “outsourcing,” whereby the private sector takes over some government functions. When deciding whether to insource or outsource, policy makers should follow a basic principle: Businesses should not be subjected to unfair competition from government entities.
A good guide is the “Yellow Pages” test, which has been applied by mayors and governors around the nation, both Democrat and Republican. It operates under a simple premise: If you can find a private sector firm providing products or services that the government is also providing, then the service should be provided by the private sector. This would insert market competition into the government procurement process, break up government monopolies, and provide better value for taxpayers.
Government workers cost more per hour worked than private sector employees. As the Congressional Budget Office concluded in 2012, “On average for workers at all education levels, benefits for federal employees cost about $20 per hour worked, whereas benefits for private-sector employees cost $14, CBO estimates.”
A leaner, more efficient government is a worthy goal. The Competitive Enterprise Institute supports the following insourcing- and outsourcing-related amendments to help achieve it:
Jenkins (KS) AMDT #135 – Places a moratorium within DOD on insourcing commercial activities, and requires a “reverse A-76” to insource
- Slows the growth of the government’s size and scope by placing the burden on DOD to prove a need for shifting commercial activities from private sector firms to DOD operations.
- Requires an official cost accounting to be performed and documented in order to identify whether DOD performance is more cost effective than that of private sector contractors.
- Helps protect private sector firms from losing contracts taken away unfairly by the Federal government.