The way the Defense Department estimates the cost of insourcing contractor positions to government employees has come under new criticism from the Government Accountability Office.
Whether government employees or private contractors ultimately cost the government less has long been a subject of debate, and past attempts to settle the matter have faced scrutiny for flaws in their methods and assumptions.
According to a GAO report dated Sept. 25, the department’s instructions say to estimate the cost of overhead for insourced employees by using a standard rate of 12 percent of labor costs. But the GAO and the department’s office of inspector general have both said that rate has no sound basis.
Until officials can determine a more meaningful rate to estimate overhead costs, “savings expected from public-private competitions will be imprecise and competition decisions could continue to be controversial,” the report says.
Keep reading this article at: http://www.fiercegovernment.com/story/gao-critical-how-dod-estimates-insourcing-cost/2013-10-08
