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Tuesday, August 24, 2010

SBE Council Joins 36 Organizations in Letter to President Obama Urging Halt to “Insourcing”

SBE Council joined a broad-based coalition of 36 national and regional business, taxpayer and free market organizations that sent President Obama a letter urging an immediate moratorium on insourcing - the conversion of work currently performed by private sector contractor firms to performance by Federal government employees.

The coalition's action comes on the heels of comments from two key policy makers. Last week, Defense Secretary Robert Gates said, "We weren't seeing the savings we had hoped from insourcing." When asked in June about the effect insourcing had on small and minority owned business, Senator Robert Menéndez (D-NJ), Chairman of the Democratic Senatorial Campaign Committee, said insourcing was "counter-intuitive to the President's goal of creating opportunities in the federal contracting system for diversity. We already have a much more limited universe than we should, and if [insourcing] is being pursued, then it is only going to erode what exists, so it doesn't make a lot of sense."

The letter noted that insourcing is occurring without public-private comparisons or cost analysis, and that a clear and objective metric for justifying and determining cost-effectiveness of government performance of commercial activities should be developed to protect the interest of taxpayers.

The coalition suggested that the Obama Administration use the moratorium period to develop a policy, similar to that which in effect beginning in 1955, that recognized that real economic growth and job creation is in the private sector, and emphasized that government should rely on the private sector to the maximum extent possible and not compete with its citizens.

Karen Kerrigan, President & CEO

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