Part 1 described one of the memoranda issued by the Obama administration to end the abusive privatization that existed under the Bush kleptocracy. Part 2 examined a second memo also issued July 29, by OMB Director Peter R. Orszag.
This memorandum, also issued July 29 by Peter Orszag, discusses hidden costs to government and governance of libertine privatization. Privatization of that sort eats away at government agencies and eventually makes it impossible for agencies to perform their missions.
Orszag gets a lot right, but he also needs to take a page from Ford’s new playbook.
Orszag’s memorandum is not an anti-privatization screed. He begins by acknowledging that there is a role for using contractors.
Contractors provide vital expertise to the government and agencies must continue to strengthen their acquisition practices so they can take efficient and effective advantage of the marketplace to meet taxpayer needs.
However,
agencies must be alert to situations in which excessive reliance on contractors undermines the ability of the federal government to accomplish its missions.
In particular, overreliance on contractors can lead to the erosion of the in-house capacity that is essential to effective government performance. Such overreliance has been encouraged by one-sided management priorities that have publicly rewarded agencies for becoming experts in identifying functions to outsource and have ignored the costs stemming from loss of institutional knowledge and capability and from inadequate management of contracted activities. Too often agencies neglect the investments in human capital planning, recruitment, hiring, and training that are necessary for building strong internal capacity – and then are forced to rely excessively on contractors because internal capacity is lacking. In many cases, agencies lack the information that would allow managers to understand how contractor employees are deployed throughout their organization and integrated with federal employees. The full potential of our total workforce -- both contracted and federal -- often goes unrealized due to insufficient or ineffective management attention. These management shortcomings work against effective government performance and must be corrected.
The memorandum identifies three near term goals that are discussed in more detail in attachments to the memorandum. All seem to be good broad stroke initiatives.
1. Adopt a framework for planning and managing the multi-sector workforce that is built on strong strategic human capital planning. The framework emphasizes collaboration among program, human capital, acquisition, and budget and finance offices to achieve a high performing workforce made up of a strong internal core of federal employees supported by the expertise of contractors.
2.Conduct a pilot human capital analysis of at least one program, project, or activity, where the agency has concerns about the extent of reliance on contractors. The pilot will provide agencies with an opportunity to develop processes and practices that support the broader vision of multi-sector workforce management. Agencies should complete the pilot analysis by April 30, 2010.
3. When considering in-sourcing, use guidelines that facilitate consistent and sound application of statutory requirements.
One issue that they really need to reconsider is this observation from one of the attachments that discusses whether work should be done by government employees or contractors. For the first two, which deal with work that is inherently governmental or not inherently governmental but critical, the conclusion that the work either stays in-house or is likely to stay in house. The third is for “Essential, but not inherently governmental” and it may be performed by either federal employees or private sector contractors.
Here is the problem. There is an inherent assumption that only work that is highly skilled and specialized do work that is really necessary to government. That view ignores reality as anyone who has worked for an organization - and who pays attention - knows. Everyone matters. Every job matters. They all contribute to the functioning of an organization. Replace the janitors with other janitors, and the place goes to hell. The new ones don’t know people’s quirks and wishes. It takes time to learn them.
The thinking that sees noninherently governmental jobs as expendable miss the point: If those jobs didn’t matter then those jobs would not exist.
Take a look at the one US car company that seems likely to make it through this bad economy intact, and you will see a company that gets that everyone matters.
One Ford
Ford’s new CEO put in place a new attitude there - and one that Peter Orszag needs to emulate. One Ford’s motto is: One Team, One Plan, One Goal.
You can’t get that commitment if you don’t have commitment to all the parts of an organization.
Now it may be that OMB under Orszag will get it. I noticed that the memorandum says:
OMB is reviewing the definition of inherently governmental function and the manner in which agencies identify critical functions to be performed by federal employees.
Maybe that review will open their eyes to what makes an organization really function.
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