Business Leaders Throw Contractors an Unexpected Curveball

Categories: DoD, Outsourcing

The Defense Business Board (DBB), which provides Pentagon officials with private sector perspectives, consists of business leaders and consultants, some of whom have been contractors to the Department of Defense.  So it comes as a surprise that the board is changing its long-time position and proposed steep cuts to the service contract workforce. The board this week issued a report entitled Transforming DoD’s Core Business Processes for Revolutionary Change, which called for reductions in the size of the civilian and contractor workforces who perform these six functions: human resources management, health care management, financial flow management, supply chain and logistics, acquisition and procurement, and real property management.  

While DBB wants to shrink the civilian workforce in these areas from 231,000 to 207,000 through early retirement and attrition, it seeks to make steeper cuts to the service contract workforce—the most aggressive plan calls for $89 billion in cuts to service contracts over five years and reductions in civilian spending over that same period of $29 billion in early retirement and another $23 billion in attrition. Some departing civilian employees would likely be replaced by lower-graded replacements. The report includes information on civilian employees who are now or will soon be eligible to retire in the relevant functions.  

It’s extraordinary that DBB would change its long-time position of recommending significant arbitrary reductions in the civilian workforce and wholesale privatization, although the report’s recommendations also raise significant concerns for AFGE. What is the basis for the assumption that the civilian workforce needs to be cut—is it based on actual requirements?  Would the early retirement and attrition cuts simply be another ruinous cap on the size of the civilian workforce for the performance of those six functions?  Has the Department ever shown an ability to enforce cuts in service contract spending, particularly in the absence of an inventory of service contracts?  In other words, is the proposal to reduce the civilian workforce the usual unappetizing leftovers served on a different plate?  Is the proposal to significantly reduce service contract spending even remotely realistic?  DBB members have reached out personally to AFGE National President Cox and have said that they want to have follow up discussions with our union.

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