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67–851 2011

INSOURCING GONE AWRY: OUTSOURCING SMALL 

BUSINESS JOBS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

WORKFORCE 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

JUNE 23, 2011 

Small Business Committee Document Number 112-024 

Available via the GPO Website: www.fdsys.gov 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

Page 

OPENING STATEMENTS 

Mulvaney, Hon. Mick .............................................................................................. 1 

Chu, Hon. Judy ........................................................................................................ 3 

WITNESSES 

Ms. Dawn L. Hamilton, President and CEO, Security Assistance Corporation, 

Arlington, VA ........................................................................................................ 5 

Mr. Bryant S. Banes, Managing Shareholder, Neel, Hooper & Banes, P.C., 

Houston, TX .......................................................................................................... 9 

Ms. Bonnie C. Carroll, President, Information International Associates, Oak 

Ridge, TN .............................................................................................................. 7 

Ms. Jacque Simon, Public Policy Director, American Federation of Government Employees, Washington, DC ..................................................................... 10 

APPENDIX 

Prepared Statements: 

Ms. Dawn L. Hamilton, President and CEO, Security Assistance Corporation, Arlington, VA ........................................................................................ 30 

Mr. Bryant S. Banes, Managing Shareholder, Neel, Hooper & Banes, 

P.C., Houston, TX ......................................................................................... 36 

Ms. Bonnie C. Carroll, President, Information International Associates, 

Oak Ridge, TN ............................................................................................... 41 

Ms. Jacque Simon, Public Policy Director, American Federation of Government Employees, Washington, DC ......................................................... 47 

Additional Materials for the Record: 

Letter from Rep. Mick Mulvaney to The Hon. Daniel I. Gordon, Administrator, Office of Federal Procurement Policy .............................................. 68 

Letter from Rep. Mick Mulvaney to The Hon. Jacob Lew, Director, Office 

of Management and Budget ......................................................................... 71 

Statements for the Record: 

Clarke, Hon. Yvette .......................................................................................... 74 

Business Coalition for Fair Competition ........................................................ 75 

PAR Government Systems Corporation and Rome Research Corporation .. 87 


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(1) 

INSOURCING GONE AWRY: OUTSOURCING 

SMALL BUSINESS JOBS 

THURSDAY, JUNE 23, 2011 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, SUBCOMMITTEE ON CONTRACTING AND WORKFORCE, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in room 

2360, Rayburn House Office Building. Hon. Mick Mulvaney (chairman of the subcommittee) presiding. 

Present: Representatives Mulvaney, Landry, Chu, Schrader, and 

Critz. 

Chairman MULVANEY. Good morning to everyone. Welcome. We 

are going to go ahead and start on time. This is the new government. We are actually starting on time. We will finish on time. 

Thank you very much for coming in. 

Some explanation of how we are going to proceed today. I was 

just telling the ranking member, Ms. Chu, that ordinarily when we 

have these 10 o’clock meetings we are under the gun with votes 

that are imminent. We just learned that we will not have votes 

probably till around noon today. So I will be a little slower with 

the gavel. If you go over a few minutes on your opening testimony, 

that would be great. We will also give more latitude to the members in their five minutes of questioning. 

As I was discussing with Ms. Carroll before the hearing, five 

minutes, if you have not done this before, really is not that long 

a period of time. And this is an important topic that I think it is 

important enough for us to build a good solid record on all sides 

of this issue. So we are going to try and do this as thoroughly as 

we can today. 

The order of business is I will give a brief opening statement. 

Ms. Chu will give her opening statement as the ranking member. 

Then we will introduce each of the witnesses. We will introduce 

them together and then we will have you take your testimony and 

then we will go back and give every member of the Committee a 

chance to ask a round of questions. I will then make a closing 

statement, as will Ms. Chu, and we will wrap up. 

So again, thank you. We are going to go ahead and call the meeting to order. And I want to thank you again for participating. 

In 1987, Ronald Reagan brought attention to the need for the 

federal government to procure commercial goods and services for 

the best value whether from government employees or from the private sector. He recognized that inherently governmental work 

should be performed by government employees, but that, at the 


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same time, inherently nongovernmental functions could and should 

be performed by the private sector, including small businesses. 

Such an outsourcing of nongovernmental functions would encourage private growth, help small business, and actually save the taxpayer money. 

Toward that end, we support the continued insourcing of inherently governmental work. This hearing then is not about outsourcing military operations, for example. This hearing is about the recent push to insource inherently nongovernmental work for alleged 

cost savings. 

Over the past five years, primarily at the Department of Defense, 

there have been concerted efforts to take commercial or nongovernmental functions performed by the private sector and make them 

a permanent government function. 

In the 2006 National Defense Authorization Act, the Secretary of 

Defense was instructed to ensure that consideration is given to 

using Federal Government employees for any work done by federal 

employees since 1980, and any work that is inherently governmental was not competitively awarded or was poorly performed due 

to excessive costs or inferior quality. 

In the 19, excuse me, the 2008 National Defense Authorization 

Act, that guidance was expanded and codified to ensure that the 

Department of Defense civilian employees are used on a regular 

basis to perform activities that are currently performed by contractors but could be performed by federal employees. 

In 2009, insourcing was expanded even further to include agencies outside the DoD and agencies were directed to produce specific 

guidance on insourcing. We are still waiting on much of that 

insourcing guidance from the civilian agencies. However, this lack 

of guidance has not stopped those agencies from insourcing but has 

merely meant that the insourcing that is being done is being done 

without any transparency or without any regular process. Even at 

the Department of Defense where there is a detailed guidance on 

insourcing, the cost comparisons used to justify insourcing commercial or noninherently governmental work previously performed by 

small business has not held up to scrutiny, and yet there is no 

process for the small businesses to challenge the decisions. 

Insourcing was initially sold as a way to save the Department of 

Defense as much as 40 percent. President Obama claimed that it 

would save as much as $40 billion a year. However, after years of 

implementing this policy, the Department of Defense has admitted 

that they have not achieved significant cost savings. In fact, in February, the Army froze all insourcing efforts without direct approval 

of the secretary due to cost increases. 

Our national debt stands at $14.3 trillion. Our federal deficit is 

higher now than at any point since World War II. The federal 

budget comes in a $3.7 trillion—a quarter of our entire GDP. And 

the federal workforce has expanded to over 2.1 million employees. 

We need to find ways to both reduce spending and to keep it low. 

Continuing the policy of insourcing commercial functions without 

demonstrable cost savings increases the size and the cost of the 

federal government and moves us in exactly the wrong direction. 

When the government chooses to consider insourcing, the burden 

should fall on the government agencies to prove that the full, longVerDate Mar 15 2010 04:04 Aug 30, 2011 Jkt 067851 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HR\OC\B851.XXX B851

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term cost (including pay, benefits, and support) of hiring and training new federal employees is, in fact, less than a temporary government contract. Recent reports indicate that it is not. 

I want to thank the small businesses that have come here today 

to testify about the lack of transparency in the insourcing process 

and the need to reform the process to ensure that taxpayer dollars 

are being used to maximize productivity and not to maximize government employment or union membership. I would also like to 

thank the work of outside groups, including the Business Coalition 

for Fair Competition for documenting the many instances in which 

the government has sought to compete directly with small business 

to provide commercial items to the federal government. 

I look forward to hearing from the small businesses that will testify today about how insourcing has affected them individually, 

and, again, I want to thank everyone for their participation. 

I will yield now to Ms. Chu, the ranking member, for her opening 

statement. 

Ms. CHU. Thank you, Mr. Chair. 

The federal government buys a wide range of goods and services 

annually running the gamut from office supplies and janitorial 

services to aircraft and engineering services. In the last decade, 

such procurement spending has doubled to more than $500 million 

as policy changes encouraged more and more services to be contracted out to the private sector. With this rapid growth in mind, 

it is appropriate that we consider the impact of these policies not 

only on the private sector but also on the government itself. 

Over the years, and as administrations have changed, the government’s reliance on the private sector has ebbed and flowed. 

These changes have had a direct affect on the private sector and 

small businesses in particular with regard to their ability to secure 

federal contracts. Conversely, it has also affected agencies which 

now rely on private sector corporations to carry out many functions. 

Determining the proper balance of these public-private arrangements is critical to increasing efficiency and reducing costs. Across 

agencies this balance varies and often there can be disagreements 

over what is inherently governmental. It is not uncommon for the 

purchasing needs, management responsibilities, and overall spending related to certain similar tasks to differ across the executive 

branch. 

As a result, many agencies have taken steps to better achieve 

their core missions. Such rebalancing efforts have been used to ensure that inherently governmental functions be performed by federal employees. 

In other cases, the process has been used so that agencies can 

build their capacity and capabilities in certain critical areas. In 

doing so, agencies have implemented new processes to review their 

responsibilities and determine which functions should be retained 

in-house and which should be conducted by vendor. 

In many cases, the process has been complicated. In instances 

where cost is the primary justification for rebalancing, there has 

been some disagreement as to the method used to determine which 

functions are selected. There is a tension here and we must recognize agencies’ desire to retain inherently governmental functions, 


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but also fairly treat small businesses that are currently or may 

want to in the future perform these tasks. 

To make certain that small businesses are respected in these 

processes, transparency is a key. It is important that small firms 

that are provided with full and complete information regarding 

why these efforts are being undertaken but also made a means for 

them to contest any inequitable treatment that they may be subjected to. Doing so can ensure that agencies can proceed with such 

efforts but in a manner in which small firms are respected. 

The effect of these transformational practices on small businesses 

has been recognized by administration officials. Agencies have been 

advised to place a lower priority on reviewing work performed by 

small firms in certain instances. While this is an important first 

step in ensuring fair participation by small businesses and federal 

contracting, additional examination is needed. While we may not 

be able to always outsource contracts to small businesses, we must 

do what we can to diminish the impact on them. 

Today, this hearing will focus on the process of how functions are 

selected for federal performance, examine the effects that it has on 

small firms, and identify steps to improve the process so that we 

can determine the appropriate balance between functions that 

should be performed by federal agencies and the private sector. We 

will hear from a number of witnesses who will provide different 

perspectives on these practices and look at the challenges they 

have presented. 

I want to thank all the witnesses who have traveled here today 

for both their participation and their insights. And I look forward 

to hearing their information about this important topic. 

Thank you, and I yield back. 

STATEMENTS OF DAWN L. HAMILTON, PRESIDENT AND CEO, 

SECURITY ASSISTANCE CORPORATION; BONNIE C. CARROLL, PRESIDENT, INFORMATION INTERNATIONAL ASSOCIATES; BRYANT S. BANES, MANAGING SHAREHOLDER, NEEL, 

HOOPER & BANES, P.C.; JACQUE SIMON, PUBLIC POLICY DIRECTOR, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES 

Chairman MULVANEY. Thank you, Ms. Chu. 

It is a great panel. I am looking forward to it. First, we have 

Dawn Hamilton. Ms. Hamilton is the president and CEO of Security Assistance Corporation, a Virginia-based, small, disadvantaged, woman-owned A business, which she formed in 2003. And 

Ms. Hamilton will be telling us about her personal experiences 

with insourcing, specifically, I believe at the Coast Guard. 

Next, we have Bonnie Carroll, the president of Information International Associates, a woman-owned, small business headquartered 

in Oakridge, Tennessee. They provide information management 

systems and technology services to the government, academic, the 

private sector, and international entities. Ms. Carroll will be testifying regarding her personal experience with having three contracts insourced. 

Finally, we have Bryant S. Banes, the managing shareholder at 

Neel, Hooper, and Banes. Mr. Banes formerly practiced government 

contract law on behalf of the Department of Justice, and for eight 


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years active duty as a judge advocate general. Thank you for your 

service, Mr. Banes. 

Mr. Banes has taught government contracting at George Mason 

and the U.S. Army’s Judge Advocate General’s School. He will be 

talking today about issues of standing and insourcing cases, something that only lawyers could really appreciate, Mr. Banes. So 

thank you for doing that. As well as the recent Court of Federal 

Claims, excuse me, Court of Federal Claims Case, Hallmark Phoenix 3 v. The United States. 

And I will yield now briefly to the ranking member for the introduction of the fourth witness. 

Ms. CHU. Yes. I would like to introduce Jacque Simon, director 

of Public Policy of the American Federation of Government Employees. Thank you for being here. 

Chairman MULVANEY. Very well. Ms. Hamilton, if you will begin. 

You have roughly five minutes but again, we are going to be a little 

slow with the gavel today. So do not feel the need to rush. 

STATEMENT OF DAWN L. HAMILTON 

Ms. HAMILTON. Chairman Mulvaney, Ranking Member Chu, and 

distinguished members on the Subcommittee on Contracting Workforce, thank you for inviting me today to discuss my experiences 

with respect to the implementation of the current administration’s 

insourcing policies. I am Dawn Hamilton, president and CEO of Security Assistance Corporation. 

SAC was founded in 2002 and is a small disadvantaged, minority 

woman-owned SBA certified 8(a) security services provider. 

In September 2008, the Coast Guard awarded SAC a small business set-aside contract to process merchant mariner applications at 

the National Maritime Center (NMC) in Martinsburg, West Virginia. This work is comprised of three task orders. 

Shortly after receiving the contract, SAC instituted various process improvements at the NMC to alleviate a significant backlog in 

merchant mariner applications. As a result of SAC’s process improvements, the credentialing process is significantly improved 

today. For this work, the Coast Guard has recognized SAC for its 

outstanding performance and contribution to the Coast Guard’s receiving the Alexander Hamilton award. 

Notwithstanding SAC’s exceptional performance, and without 

any warning, on December 23, 2010, I received a call from Coast 

Guard Headquarters stating that they would be insourcing two of 

the task orders. By the end of the business day, the Coast Guard 

posted the relevant position on the USA jobs website. 

Soon after being informed of this insourcing action, SAC requested the cost analysis and documents that allegedly justified the 

insourcing action which revealed that the positions at issue were 

not inherently governmental. The Coast Guard’s insourcing process 

failed to provide SAC with an opportunity to provide actual cost 

data or respond to this action. 

The cost analysis was incomplete and inaccurate. It underestimated significant costs, including indirect costs, the cost of additional positions, salary, transition, short-term and training costs. 

The cost analysis justification and conclusions were also unsupported. The analysis stated without authority that the cost of a 


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contractor is automatically higher than a government employee 

and that the insourcing would have no adverse impacts to other organizations. This obviously is incorrect since this insourcing action 

has the potential of putting SAC out of business. 

SAC repeatedly attempted to meet with the Coast Guard to 

present its findings. When the Coast Guard finally met with SAC, 

we apprised the Coast Guard of the faulty process and offered to 

provide actual cost information. In response, the Coast Guard stated they had performed a robust cost analysis, had spent significant 

time and resources on their analysis and had no interest in reviewing SAC’s actual cost data. 

SAC then met with the Small Business Administration officials, 

for which the first time have effectively intervene in an insourcing 

action. Specifically, the SBA procurement center representative has 

requested the Coast Guard halt the insourcing action until it is 

able to conduct a true cost and impact analysis and discuss the results with the SBA. 

Regardless, the Coast Guard is moving forward with the action 

and has already extended offers to over 55 of SAC’s employees. In 

fact, the number of SAC’s employees insourced represents approximately 23 percent of all the Coast Guard insourcing for the last 

two years. 

There is no question that the insourcing of these task orders 

have profoundly affected the future viability of SAC. This action 

has directly resulted in the loss of 75 percent of SAC’s jobs and revenue. 

SAC respectfully submits the following recommendations. (1) 

That a moratorium be placed on all cost-based insourcing actions 

until further government-wide procedures are in place. (2) That the 

Federal government adopt government-wide procedures through a 

public rulemaking process. 

At a minimum, such procedures should include: (a) Requirements 

that affected companies and organizations be provided with all government cost data and analyses used in making an adverse 

insourcing action; (b) an impact analysis for insourcing actions that 

affect small businesses; and (c) an appeal process for affected companies and organizations. 

And finally, (3) that the SBA be given a defined role in the review of agency insourcing actions. 

In summary, the positions at issue in the insourcing action taken 

against SAC are not inherently governmental functions. Rather, 

the Coast Guard claims it was done to save money. The cost analysis provided by the Coast Guard is riddled with problems and is 

ultimately inconclusive of whether the Federal government will realize any cost savings. What is certain is that the Coast Guard’s 

actions have inflicted real and actual harm to my small business— 

cutting jobs and revenue (during this economic downturn) by up to 

75 percent. 

Going forward, it is imperative that the impact on small businesses, the driver of our economy, must be a required consideration 

in any future, excuse me, insourcing action. 

I appreciate your time and attention today and look forward to 

answering any questions that you may have. Thank you. 

[The statement of Ms. Hamilton follows on page 30.] 


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Chairman MULVANEY. Thank you, Ms. Hamilton. And by the 

way—thank you, Ms. Hamilton. By the way, just an explanation of 

the lights in front of you. Again, we are going to be a little looser 

with the time but I do not know if you actually see the amount of 

time or if you just see red, yellow, and green. Green, obviously, 

means that there is more than a minute left; yellow means there 

is a minute; red means that we have ended the five minutes. If we 

go much over five you will hear a light tapping. A light tapping 

sound just to bring to your attention the fact it is time to wrap up. 

But, again, we will be fairly loose with the time. 

So thank you, Ms. Hamilton. Ms. Carroll, would you please begin 

with your testimony? 

STATEMENT OF BONNIE C. CARROLL 

Ms. CARROLL. Chairman Mulvaney, Ranking Member Chu, and 

members of the Subcommittee, I appreciate the invitation and opportunity to provide testimony on this very important issue. In addition to being president of Information International Associates, I 

am also a member of the Professional Services Council and serve 

on their board. So I am pleased to testify on behalf of many other 

small businesses at PSC. 

The insourcing actions that we have had that were the most significant impact on us has been for the Department of Defense, and 

particularly the Air Force. So I will focus a little bit on our experiences from the Air Force today. But similar activities are taking 

place across the government. 

We are proud of the quality and level of service we provide the 

nation’s military men and women. We have done work on over 15 

Air Force bases. Our contract performance has been outstanding. 

Our contract prices have saved as much as 33 percent over previous government in-house costs. Our work has never been identified as inherently governmental. In fact, we continue to do that 

work, as do other contractors across the whole Air Force. 

Yet, despite these performances metrics, we have lost 16 percent 

of our employees to insourcing by the Air Force over the last eight 

months and we hear rumblings about the potential for another 15 

percent. Amen when I say we do agree with the strategic need of 

the Federal government to strengthen performance of inherently 

governmental functions, particularly the Federal acquisition workforce and also in areas where the government must have internal 

expertise to manage agency mission. Coming from Oakridge, I hope 

the government has internal nuclear expertise. 

Where insourcing fulfills a validated strategic need, we support 

its proper use. As a taxpayer, of course I wholeheartedly support 

saving the taxpayers money. However, the tactical methods of implementing the insourcing requirement and the impacts on the Air 

Force mission raise grave concerns for us. What we have observed 

is that decisions to insource are driven more by arbitrary budget 

and manpower boogies than by the objectives of enhancing the government’s workforce capabilities or by true cost savings. 

Furthermore, the reprehensible tactics of directly recruiting our 

staff before official notice is given about the government’s even decision to insource is highly inappropriate. 


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Finally, where insourcing decisions were based on cost savings, 

the cost analysis of how the deliberations were made have not been 

transparent and there really is no effective mechanism for a contractor to gain enough information in appropriate time. 

In addition to the faults and the decision and transition process, 

once the insourcing occurs we do not believe that there is any 

meaningful internal or external oversight to ensure that the 

claimed savings and desired programs’ objectives have been 

achieved. In fact, quite the contrary. What we see is evidence that 

insourced positions have not been fulfilled and services to our war 

fighters have, in fact, been diminished. 

In my written testimony, I have provided three case studies 

where outsourcing has occurred to the detriment of my company. 

Rather than going into the details here, I would like to address 

some recommendations that can be done to perhaps fix some of the 

problems created by inappropriate insourcing. 

First, in the issue of transparency, and I think we are saying 

many of the same things, Congress should insist on more transparency for any contract which is considered for insourcing. From 

the moment the consideration begins, some kind of an ombudsman 

or ombuds process should be appointed to work with industry to assure an appropriate and fair process is followed. Another recommendation in transparency as part of that process, actions taken 

to fulfill the requirements should be documented and made available to the contractor before contracts are terminated. Going 

through the FOIA route is not giving people information when they 

need it to have any kind of reasonable ability to take action. 

Next in the issue of competition, when the government is pricing 

contracted function, a contractor also should be allowed to put in 

a price to ensure that the taxpayer is, indeed, getting the best 

price. Five years after a contract begins, the contractor might, in 

fact, have lower prices to offer. Unless there is significant and special justification in insourcing, small businesses should be allowed 

to complete the contract with all of the options exercised and not 

stopped in the middle. Special justification should be required. 

Transition planning and consequences. And I emphasize the 

word ‘‘consequences.’’ The government should demonstrate that it 

can transition the contract just as a contractor would be required 

to meet a transition plan. There should be consequences to the government’s failure, just like there are to a contractor when commitments are not met. 

Ongoing reviews of process during performance should be required. This is like the letter of obligation that is applicable under 

A–76 and some form of it should be used and enforced. 

And finally, and probably most problematic, is inappropriate recruitment. Poaching, and I hope you have heard that word before, 

and other questionable recruitment practices aimed at contractor 

employees on contracts targeted for conversion should be dealt 

with. It is against regulations and it has a significant financial impact on the contractor. We recommend where the workforce is converted from private to public sector positions, the government 

should actually compensate contractors for the cost of hiring and 

training those personnel. If the government did not take them over, 


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they would have to incur these costs. At a minimum, these costs 

should be considered in the cost analysis. 

So we are proud to do the work we do and are proud to support 

the important missions of our government. What we ask for is fair 

opportunity to compete and a government that makes the right decisions for the right reasons. 

Thank you for the opportunity to testify. And I am pleased to answer questions. 

[The statement of Ms. Carroll follows on page 41.] 

Chairman MULVANEY. Thank you, Ms. Carroll. We will hold off 

the questions until the very end. 

So, Mr. Banes. 

STATEMENT OF BRYANT S. BANES 

Mr. BANES. Mr. Chairman, Ranking Member Chu, distinguished 

members of this Subcommittee, it is an honor and a privilege to 

talk to you today about the legal developments on insourcing, their 

adverse impacts on small business, and job creation and the lack 

of transparency in the process. More specifically, I have been asked 

to talk to you today about the recent decision by the U.S. Court of 

Federal Claims and Hallmark-Phoenix 3, LLC v. United States. In 

this case, I want everybody to understand that the Court of Federal 

Claims—one judge on the Court of Federal Claims issued a decision ruling that the Court lacks jurisdiction to review insourcing 

decisions by the Federal government because private contractors 

are not within the zone of interest of the applicable statutes. This 

was a Defense Department insourcing action by the Air Force, specifically the United States Air Force Space Command. And it concerned a contract that was far from inherently governmental or 

anything close to that. 

I would like to talk to you about this today because it is a very, 

very bad thing once we understand that we can no longer question 

our government and we do not have the right to go into court and 

say stop, take a look at this, and is it the right thing to do. 

In this case, that is exactly what the Court said. It looked at the 

statutes at issue, namely 10 U.S.C. §§ 129a and 2463, the Defense 

Department’s insourcing statutes, and decided that private contractors have no right to question the government’s insourcing in court, 

saying that that is for the halls of Congress. 

Well, we are here today, and I would echo the concerns of my distinguished colleagues and the private contractor community. I see 

the same things where I am for several contractors. I represent 

several that have been subject to insourcing and it is interesting 

to see, to talk about Hallmark today because that is an excellent 

example of insourcing gone awry. The Hallmark contract is a transportation contract and vehicle maintenance contract. It does not 

concern weapons. It does not concern policymaking. It was competitively awarded. The contractor has no adverse performance history. 

In fact, did a very good job. And from what we can tell, they were 

doing the work in a very, very cost-effective manner. 

The statutes at issue that we are talking about require the least 

cost form of manpower, either military, civilian, or private contractor when you are looking at whether or not to do insourcing. 

The Court, when it was looking at it, said that, well, no, you cannot 


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look at, you cannot question the analysis that they did because you 

are not within the zone of issue and legal parlance. In other words, 

this statute was not passed for your benefit. But when you look at 

10 U.S.C. § 129a, it does say and it mandates from Congress that 

the least costly form of manpower be used. And it specifically 

states military, federal, civilian, or private contractor. 

Now, if a private contractor is the least costly form of manpower, 

which in the Hallmark case we believe it was, then that would 

make a private contractor the beneficiary of that statute and one 

that should get the contract and it should stay outsourced. But for 

some, for a host of legal reasons that we do not have enough time 

to go into here, the Court decided that private contractors had no 

legitimate right to question that action. 

There was a CRS (Congressional Research Service) Report issued 

earlier this year titled Functions Performed by Federal Contractors: An Overview of the Legal Issues. This is an excellent report 

and it talked about an analysis that the current administration 

was doing. And this is in line with some of the recommendations 

we are going to make today. 

When we are looking at how we fix the problem of whether we 

can question insourcing in court, we have to do three things, I 

think, to make sure that no court in the future denies that opportunity. First of all, we need to amend the Competition in Contracting Act to define protest to include conversion of a function 

that is being performed by private contractors to federal, civilian, 

or military employee performance. Second, we need to amend the 

Competition Contracting Act to provide the prudential standing 

and a protest action is coextensive with interested party status. 

And three, I think it is appropriate to impose a legislative moratorium on insourcing, the one that was named in the CRS report, 

until the administration completes an evaluation of the impact of 

insourcing on small business and the general overall cost savings. 

This is key because when you look at this, in the Hallmark case 

when we talked to the people at Air Force Base Command, we 

learned that they had not asked any of these questions. They specifically told us that we have not considered the impact on small 

business, we have not considered the impact on the union 

workforces that will lose their jobs, and there is no direct higher 

authority. So in that context, that was another reason that we had 

to question the insourcing in court. 

Because the administration has not considered these things and 

has had no emphasis placed on considering these things, that is 

why we recommend putting the brakes on this today. 

[The statement of Mr. Banes follows on page 36.] 

Chairman MULVANEY. Thank you, Mr. Banes. 

Ms. Simon. 

STATEMENT OF JACQUE SIMON 

Ms. SIMON. Mr. Chairman, Ranking Member Chu, and members 

of the Committee, thank you for the opportunity to discuss the importance of insourcing and reducing the Federal government’s expensive and risky overreliance on service contractors. 

For the uninitiated, there is no better reminder of how 

insourcing can be used to save money and improve services than 


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the retirement and annuity work at the Defense Finance and Accounting Service (DFAS). In 2001, the work was privatized. In 

2003, the DoD inspector general determined that the decision to 

contract out had been wrong and reported that a systematic flaw 

by a CA–76 process against the in-house workforce and raised serious questions about the integrity of all A–76 cost comparisons. 

Despite growing concerns over the contractors. poor performance, 

including reports that thousands of military retirees with disabilities died before they received their benefits, DFAS did not actually 

decide to insource the work until 2010. DFAS’s decision to insource 

600 jobs saved money and improved services because according to 

the agency, federal employees were more flexible, were better able 

to change the way they worked, and to accommodate increases in 

demand. 

In 2011, DFAS told the House Defense Appropriations 

Subcommittee this insourcing would save $5 to $10 million this year and $19 million in the next fiscal year. As DoD reported in 

December 2010 regarding its overall insourcing, and I quote, ‘‘Execution to date has been highly successful. More than half of current 

insourcing actions are because the contracted work was determined 

to be inherently governmental, closely associated with inherently 

governmental, or otherwise exempt from private sector performance to mitigate risk, ensure continuity of operations, build internal capacity, meet readiness needs, et cetera.’’ Moreover, on a case 

by case basis at the organizational level, DoD components are finding that they can generate savings or efficiencies through 

insourcing certain types of services or functions. 

Regardless of what is said today, this hearing has provided a 

very valuable service because we now know that of the almost 

17,000 in-house positions created in DoD through insourcing in 

2010, just six percent were established where the prime contract 

holder was a small business. Although not the final word, DoD’s six 

percent report is the first set of undisputed facts to be introduced 

in a debate rife with disinformation and misinformation. 

Here is a bit of historical context. During 2010, when DoD actually insourced, it has been a record $248 billion on service contracts, a huge increase from the $104 billion spent in 2001. Civilian 

personnel costs during that same period increased from $41 to $69 

billion. 

And a little bit about proportions. I think defense service contractors would have a very difficult time convincing taxpayers they 

have been victimized by insourcing when there has been such a 

large net increase in service contracting—a $5 billion net increase 

in 2010 despite insourcing. Insourcing affected less than one percent of contracted outwork at DoD in 2010. 

As we have seen, insourcing can be used to improve service, save 

money, and reassert public control over public functions. Federal 

employees are often far more flexible than contractors because they 

do not insist on lengthy negotiations and costly surcharges every 

time something unanticipated occurs. Yet, despite significant savings from reducing overreliance on contractors, DoD insourcing has 

all but stopped. 

DoD is no longer managing its workforce based on the usual criteria of cost, policy, risk, and the law. Instead, it is not assigning 


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work to federal employees; indeed, it is taking away work from federal employees merely because they are federal employees, which 

inevitably undermines the interests of taxpayers and war fighters. 

It is also important to understand that the insourcing laws do 

not cover conversions to performance by military or reserve personnel. This has not stopped lawmakers from offering draconian 

amendments to stop insourcing even when the so-called horror stories that inspired them actually involve insourcing to military or 

reserve personnel, not to federal employees. The insourcing laws 

also have nothing to do with contracts that are terminated simply 

because the agency no longer needs the work to be performed. 

I realize that both of those points are obvious, but the vast majority of alleged horror stories we have been presented with are actually contracts that are not continued or have been converted to 

performance by military and reserve personnel. At a time of large 

budget deficits, it is important that contractors, both big and small, 

be required to make the same sacrifices that rank and fire federal 

employees are already making. 

Proposals to prevent managers from using federal employees instead of contractors even when money would be saved for taxpayers 

are indefensible. Contractors consume enormous amounts of discretionary spending. No effort to reduce the burden of contractors on 

the taxpayer can be taken seriously if it does not allow managers 

to substitute federal employees for contractors when savings are 

possible. 

This concludes my statement. I would be happy to answer any 

questions members of the Committee may have. 

[The statement of Ms. Simon follows on page 47.] 

Chairman MULVANEY. Thank you, Ms. Simon. And thank you to 

everybody. 

As is my practice, I will defer first to Ms. Chu and then allow 

the members who are participating to ask their questions and I 

will hold my questions till the end. So Ms. Chu, you have as much 

time as you need. 

Ms. CHU. Thank you, Mr. Chair. 

Ms. Simon, last year the Department of Defense instituted the 

efficiency initiative to reduce taxpayer costs by increasing efficiencies and eliminating redundant functions. And you have talked 

in detail about that. What was the impact on insourcing and why 

is it important that agencies comply with the laws that require 

them to inventory their service contracts? 

Ms. SIMON. I will answer the second part of your question first 

if that is okay. One of the reasons bipartisan majorities of the Congress have endorsed a moratorium on outsourcing is because the 

outsourcing policy based on A–76 competitions was conducted in a 

way that was not consistent with the public interest. There has 

never been systems in place that have allowed agencies to actually 

track the costs and savings, if any, of A–76. The A–76 process itself 

has been found by independent third parties, such as the DoD, IG, 

and the Government Accountability Office, to be systematically biased against in-house performance because of the vast overstatement of overhead costs that are put onto the in-house cost estimate. And I can talk about that further. 


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And then there is the fact, and it is very interesting to hear my 

fellow panelists talk about the importance of transparency. You 

know, one of the reasons that federal employees have been the exclusive targets of the efficiency initiative is because we are so 

transparent in the budget process. Anybody looking at an agency’s 

budget, DoD or any other agency, can see exactly how may federal 

employees there are, what they do, and how much they cost. But 

the same has never been true for the contractor workforce that is 

in many cases many, many times larger than the federal workforce, 

you know, the civilian in-house workforce and any given agency. 

Consequently, the moratorium on A–76 was imposed to exist unless and until agencies could compile inventories of their service 

contracts, that it would allow them to bear the same kind of scrutiny that the federal employee workforce bears on a continual 

basis. We want to know, and the public deserves to know given the 

hundreds of billions of dollars spent on service contracts, exactly 

how many there are, what they do, and how much they cost. 

And in that context, because, and you can see in my written 

statement there is an exchange between Senate Armed Services 

Chairman Levin with the person from DoD in charge of the efficiency initiative where he admits that in the efficiency initiative 

contractors have been spared any kind of scrutiny or any kind of 

proportional request for sacrifice because they are invisible in the 

budget. Nobody can tell exactly how much they cost, what they are 

doing, and how many of them there are. 

And so because of the fact that we are easy targets because we 

are visible because of the transparency, and I am not complaining 

about the transparency about federal employees, it is as it ought 

to be, there just ought to be equivalent and comparable transparency to the even larger service contract workforce. 

Ms. CHU. Now, it seems to me that there are certain inherently 

governmental functions. For instance, oversight on spending. What 

type of positions do you think should be performed by federal employees? 

Ms. SIMON. Well, our position is that obviously inherently governmental functions should be performed by federal employees. I 

mean, that is not just our position as, you know, I think there does 

not even seem to be any disagreement about that. There is always 

going to be disagreement about the definition of what is inherently 

governmental. It is a controversial concept but we do have one both 

in statute and regulation that if we only enforced that we would 

be in a much better place than we are today according—the Army, 

the Department of the Army is the one agency in the government 

that has actually done a good job in creating a contractor inventory 

and its initial findings are that there are about 45,000 inherently 

governmental jobs being performed by contractors right now. 

But there is also the concept of work that is closely associated 

with inherently governmental work and critical functions. In fact, 

the OMB’s Office of Federal Procurement Policy is in the process 

right now of putting together a new definition of inherently governmental that will include the concept of critical function. And the 

FAR includes a long list of examples of work that—specific examples of work that fall into the category of closely associated with 

inherently governmental. And it involves things like preparing 


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budgets, writing regulations, evaluating contract bids. I mean, a lot 

of work that is currently performed by contractors that even on the 

face of it raises people’s eyebrows because it is work that is so 

closely identified with the public interest and work where there is 

almost inevitably a conflict of interest when it is performed by a 

private business that we would want it performed by employees of 

a federal agency. 

Then there is also work that has been contracted out without any 

competition. The vast majority of federal employees who lose their 

jobs to outsourcing do so when there is what is called a direct conversion. There is no cost comparison, there is no competition, there 

is often no private-private competition. Just the work is handed 

over to one particular contractor. And we have suspicions. Since everyone in this room is a great believer in the benefits of competition, that competition lowers prices. And when work is handed over 

without benefit of any kind of competition—public-private or private-private—I think that there is certainly a good public policy argument to be made that at a minimum it should be subjected to 

some form of competition. 

And then, of course, there is the category of work that is poorly 

performed by contractors, either far more expensively than originally promised or quality problems. And God knows we have a 

long, long list of headlines in the newspaper of contracts that are, 

you know, poorly performed for one reason or another or very, very, 

very expensive, more expensive than they ought to be. 

Ms. CHU. Let me ask a question about the controversies with regard to the costing methodology for analyzing whether a particular 

function should have been in-house or outsourced. Has the costing 

methodology for DoD where there was predominantly more reviews 

than efficiency been reviewed by other congressional committees? 

Ms. SIMON. Oh, yes, they have. I have a few different things I 

would like to say, if I may, about the DoD’s costing methodology 

and the insourcing context. But in answer to your question, the 

Armed Services Committees, which are the committees that probably have spent the most amount of time actually studying and 

analyzing questions of cost comparison methodology have codified 

now twice. And the National Defense Authorization Act for fiscal 

year 2011 and then again when the Democrats were in charge and 

now again when the Republicans have been in charge, in the fiscal 

year 2012 National Defense Authorization Act, two times that 

Committee had codified and endorsed the DoD costing method that 

has been used in the context of insourcing. 

We are aware, of course, of the critique that has been put forward by CSIS of the costing methodology and we have actually 

asked the Department of Defense to respond to that critique. It is 

interesting to us, however, you know, our critique of A–76 costing 

methodology has been validated by independent third parties, Government Accountability Office, and the Department of Defense Inspector General. So far at least the contractors have only been able 

to find one of their own to criticize DoD’s costing methodology. 

I think the fact that, you know, two separate House Armed Services Committees have endorsed this costing methodology and that 

to date we have no independent third party that has validated in 

any way the CSIS arguments gives us reason to at least have some 


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faith in it but we are absolutely—if there are flaws in that methodology, we would want them to be corrected. 

Ms. CHU. And, in fact, the non-DoD agencies do not have a public 

costing methodology. And, of course, you have mentioned that the 

Professional Services Council has recommended OMB circular A– 

76. Would that alleviate the costing methodology concerns raised 

by contractors? 

Ms. SIMON. I doubt it. I think that, you know, they are looking 

for some kind of issue to hang their objections to, and costing methodology is sort of the argument of the day. A–76 is systematically 

biased and we know that. Bipartisan majorities in both houses of 

Congress have also recognized that. The GAO has recognized it. 

The DoD IG has recognized it. I mean, during the heyday of A–76 

outsourcing during the Bush administration, it is true that inhouse bids won most of the time in spite of this rather enormous 

bias against in-house performance. I mean, the overhead costs, it 

is not just double counting. You know, overhead costs should only 

be charged to the in-house bid when it is a cost that would only— 

that would go away when the work is outsourced. And, of course, 

what the DoD IG found was these costs continued even after outsourcing. So they were inappropriately charged to every in-house 

bid. 

And so A–76 is just—it is a deeply flawed costing methodology. 

It is possible that the OFPP will issue a new and improved A–76 

and we expect any time that OFPP will issue a costing methodology for non-DoD agencies to use in the insourcing context because 

I think there is obviously, in DoD, if half of the work that is considered for insourcing is because it is inappropriate for outsourcing 

and half is due to cost reasons, well, then there is a lot of money 

to be saved once these non-DoD agencies have an opportunity to 

perform these kinds of rational cost-based comparisons. 

Ms. CHU. Okay. Thank you. I yield back. 

Chairman MULVANEY. Thank you. I am going to recognize now 

the gentleman from Louisiana, Mr. Landry, for five minutes. 

Mr. LANDRY. Thank you, Mr. Chairman. 

Ms. Simon, when you say that contracts that have been 

insourced to private contractors are performed poorly, are they 

poorly performed because they may be poorly managed? I mean, is 

it possible that the management of the Federal government in 

some of those contracts may not be adequately supervised and 

managed improperly? Is that possible? 

Ms. SIMON. Well, I would not say that it is a logical impossibility 

but it seems really doubly unfair to federal employees to blame 

them when they are performing the government work if it does not 

go well and also blame them when it has been contracted out and 

it does not go well. I mean, federal—— 

Mr. LANDRY. Would you say there is a bias when you manage 

those kind of projects? 

Ms. SIMON. No. I think that, unfortunately, there were in the 

course of hollowing out agencies that occurred in the great 

downsizing of the ‘90s, we did find ourselves with so much work 

contracted out that contract management itself was contracted out. 

And agencies lacked adequate in-house personnel to effectively 

oversee their contractor workforce. When the contractor workforce 


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was five, six, seven times bigger than the in-house workforce, 

things were completely out of control. And that is exactly what 

gave rise to the idea of insourcing work that is inherently governmental. 

Mr. LANDRY. But the private industry has a record of being able 

to manage, you know, they have management teams that easily 

manage seven, eight, nine times their size and perform well in the 

private sector. And when they perform well, of course, you can see 

that they perform well because their profits go up. And so I just 

wonder, you know, the problem I have is that, you know, it is easier, and especially in times when this country is broke and American families are having to tighten their belt and cut certain 

things, you know, whether it be going to the movies or not taking 

that summer trip to Disneyland and just going to the park instead, 

it is—it becomes, I guess, easier for us to be able to look into, especially when we are insourcing, to be able to eliminate programs 

that are not useful. But when you load them up with federal employees, they seem to become difficult and become this animal that 

you are not able to properly cut when you should be cutting. 

And so those are my two concerns, is that one, are we properly 

managing our private contractors? I have yet to be able to, even before I came to Congress, find a government agency that really is 

as proficient as the private sector. Now, I will admit my bias. I 

come from the private sector so I just mention that. I did want to 

just ask Ms. Hamilton a question before I run out of time. Why do 

you think your contract was canceled? 

Ms. HAMILTON. Excuse me. Well, I only have what was given to 

me by the Coast Guard and the FOIA request which is it is based 

on cost. And that is all I can really say. 

Mr. LANDRY. And what is your feeling on it though? 

Ms. HAMILTON. Well, the numbers. There are a lot of people on 

the contract. It did make up over 23 percent of all the contracts 

that they have insourced over the last couple of years. So I guess 

it is numbers. They are under pressure to cut contractor positions 

by the agency that oversees them. 

Mr. LANDRY. But you believe that you are creating a cost savings 

to the Coast Guard? 

Ms. HAMILTON. Oh, there is no—I am creating a cost savings, 

yes. 

Mr. LANDRY. Right. 

Ms. HAMILTON. But insourcing—I do not believe. 

Mr. LANDRY. So why would there be pressure for them—there 

should be pressure for them to save in the budget rather than to 

spend more money. So what is the pressure? 

Ms. HAMILTON. I think it is just the appearance of numbers 

being cut. They are being asked to cut by these jobs and save this 

money and then they are producing a document that is saying it 

is saving $5 million and it is coming out of their pocket. And then 

I guess it goes over to the Federal government’s pocket instead of 

the Coast Guard’s pocket. So it creates that appearance or illusion 

of saving some money from that agency when, in fact, it is not; it 

is just coming from a different purse. 

Mr. LANDRY. I see. Mr. Chairman, I yield. 

Chairman MULVANEY. Thank you, Mr. Landry. 


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We are going to recognize now Mr. Critz from Pennsylvania for 

five minutes. Mr. Critz. 

Mr. CRITZ. Thank you, Mr. Chairman. 

I was actually going to ask a couple of questions other than to 

Ms. Simon, too, to give other people a chance to talk and give you 

a chance to rest a little bit. Now I am going to—let me get my papers in front of me. 

Ms. Hamilton, you had mentioned that—well, in your testimony 

you had 75 percent of your workforce you lost with a Coast Guard 

contract. Is that correct? 

Ms. HAMILTON. That is correct. 

Mr. CRITZ. How much notice did you get that this contract was 

going to be eliminated or you were not going to get a follow on or 

anything? 

Ms. HAMILTON. Well, they called me on Christmas Eve, as I stated, and said—then jobs were posted that evening. Through the 

FOIA request we did see that they had sent out a notice. However, 

it was sent to the wrong address. So if it was sent to the right address that would have been maybe six months. But that did not 

happen. 

Mr. CRITZ. Oh, so they sent a notice out but because it went to 

the wrong address you did not get that six months notice. Is that 

what you—— 

Ms. HAMILTON. That is correct. And we brought that to their attention when we met with them. 

Mr. CRITZ. Okay. All right. The contract you had with the Coast 

Guard, what was our margin, would you say on it? 

Ms. HAMILTON. You mean our profit? 

Mr. CRITZ. Yes. 

Ms. HAMILTON. Probably around six percent. 

Mr. CRITZ. Six percent. But you were still saving the Coast 

Guard money and making six percent? 

Ms. HAMILTON. Yes. 

Mr. CRITZ. Okay. All right. 

Ms. Carroll, you lost work and it looked like from your testimony 

about 25 percent of your workforce? 

Ms. CARROLL. It was 16 percent in the last 18 months with another 15 potential. 

Mr. CRITZ. Okay. How much notice did you get that this contract 

was going to be eliminated? 

Ms. CARROLL. Well, you know, notice is a funny thing because we 

get lots of rumblings. Okay? We get, oh, this is going to be 

insourced. We hear from our people this is going to be insourced 

and things like that. So we did get some notice, maybe four to six 

months notice on some of these contracts. 

Mr. CRITZ. Okay. 

Ms. CARROLL. One of which was canceled before the last option 

year. 

Mr. CRITZ. Yeah. 

Ms. CARROLL. And so, you know, the official notice versus the 

rumblings that go on and when people are approached and told to 

apply for jobs when we have not even been told that an official decision is made is a real problem. 


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Mr. CRITZ. Okay. Thank you. Mr. Banes, you cited a CRS report 

and I missed what report—what the title of the report was. 

Mr. BANES. Yes, sir. It was Functions Performed by Federal Contractors: An Overview of the Legal Issues. Excuse me. It was Functions Performed by Federal Contractors: An Overview of the Legal 

Issues. The cite to it is in my testimony. 

Mr. CRITZ. Is it? Okay. I went through rather quickly and I did 

not see it. Thank you very much. 

Now, for the three of you, I have some data here in front of me 

and I was curious if you were aware of it. There is a report by the 

Office of the Director of National Intelligence in ‘08 that concluded 

that in the intelligence community, contractors make up around 29 

percent of the workforce yet they account for nearly half of the personnel budgets. So obviously there is an issue. And I think what 

you see from the Federal government is that we have a way of 

making a one-size-fits-all solution and I think you can cite personally that one-size-fits-all did not fit you because you were doing 

good work. But when the Federal government moves, it is a huge 

mass of people that move and trying to save money. 

And I am on the Armed Services Committee. I used to work for 

a member that was Defense Appropriations. And what I can tell 

you is when you go into country in Iraq or you go into country in 

Afghanistan, there are way more contractors than there are military personnel and it is a huge problem because the management, 

as Mr. Landry cited, is tough because there are so many moving 

parts. And I think things like this, what I just cited with intelligence, is that it is not working as it was set to be. But it works 

in some instances. You can cite that. But it does not work in all 

instances because there are some functions that are inherently governmental. There are some functions that are better done within 

the government. And it is not a perfect system. And I think it is 

great that we all can sit down here and talk about this. 

The one thing that Ms. Simon brought up that I think is very 

interesting is that of all the insourcing, 17,000 in-house positions 

created in DoD, six percent of them were displaced small businesses. So it is not perfect but it is close. 

Go ahead. 

Ms. CARROLL. That number is a very interesting number but, you 

know, numbers can be used to tell many stories. The reality is 

maybe there is a big company that has 800 positions. Okay, so are 

we talking percentages by contract? You have to look at how many 

small business contracts there are and what percentage of small 

businesses being insourced versus large contractors and what percentage. That six percent does not really mean very much to me. 

Mr. CRITZ. Well, it says where the prime contract holder was a 

small business, six percent. 

Ms. CARROLL. Of the money? Of what? I do not really understand 

that money. 

Mr. CRITZ. Ms. Simon, can you address that? 

Ms. SIMON. I would have to get back to you with the details but 

I believe it is of contracts. 

Mr. CRITZ. Of contracts. Okay. My time has expired. Thank you, 

Mr. Chairman. 


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Chairman MULVANEY. Thank you, Mr. Critz. I am now going to 

yield five minutes to Mr. Schrader from Oregon for his questions. 

Mr. SCHRADER. Thank you, Mr. Chairman. I am just trying to get 

a handle on the fairness of the contracting issue area and reference 

is made to—each agency I guess gets to pick how it wants to define 

what cost should be allocated to a contract. I guess I ask Ms. 

Simon and Mr. Banes that question. 

Ms. SIMON. I am sorry. I am not sure I understand the question. 

Mr. SCHRADER. In other words, there does not appear to be a 

standard methodology for the Federal government to include, you 

know, a set number of costs, whether it is in your variable costs, 

you know, direct costs, overhead. I mean, all these—— 

Ms. SIMON. As we—— 

Mr. SCHRADER. It is up to each agency. Is that correct? 

Ms. SIMON. Well, no. Not exactly. 

Mr. SCHRADER. Okay. 

Ms. SIMON. As we speak, only the Department of Defense has 

issued and had codified into law a costing methodology for use 

when making insourcing decisions that are not based on—that are 

based on cost as opposed to based on whether the work is inherently governmental, closely associated to inherently governmental 

poorly performed—— 

Mr. SCHRADER. It seems like cost, providing it is not national security interests it would be. 

Ms. SIMON [continuing]. Competition. Non-DoD agencies right 

now are not insourcing for cost as far as we know because they are 

waiting for OMB to issue a costing methodology that they can use 

when their insourcing decisions are going to be based on which is 

the lowest cost. 

Mr. SCHRADER. When is that due? Or do we know? 

Ms. SIMON. I have no idea. They are on their own schedule. 

Mr. SCHRADER. You indicated at one point, well, sorry, Mr. 

Banes, a comment on that also? 

Mr. BANES. Yes, sir. When you are looking at what the costing 

methodology is for the Department of Defense, I mean, Ms. Simon 

is right in her exposition of what the field of play is. But the directive-type memorandum 09–007 is the Department of Defense costing methodology. That one was talked about in the Ike Skelton Act 

and it basically was reviewed at that point. The interesting thing 

about it, and from a fairness perspective, is that there were two 

sets of numbers that are made in this directive-type memorandum 

or that are used. 

One is the set of numbers that is used to justify insourcing and 

then the other set of numbers is used to report to Congress how 

much money you need or how much money the agency needs. The 

number that the agency needs in reports to Congress is up here. 

The number that is used to justify insourcing is down here. It is 

less. So, you know, I did not, you know, I did not think the government was supposed to make a profit in its appropriations but that 

is one way. 

Mr. SCHRADER. So there is a mix and match? In other words, a 

report of two different numbers using different variables? 

Mr. BANES. Yes, Your Honor. Or yes, sir. I am thinking I am in 

court. 


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Mr. SCHRADER. That is okay. 

Mr. BANES. Sorry. But, you know, it is an interesting memorandum. When you look at it there are just two sets of numbers 

in there. There is one in the front that talks about reports to Congress. 

Mr. SCHRADER. I see. So the reporting is different than the costing actually to some degree. 

Mr. BANES. Yes, sir. And that is the, you know, that is our concern, is the full costing methodology. I would echo the chairman’s 

concerns that, you know, I do not think the DTM actually has a 

full costing in it on the insourcing side. I think it does on the report 

to Congress side. But we do not, you know, no one ever sees the 

insourcing side. That is secret. You know, I cannot—it is under a 

protective order. I cannot tell you what it was for the Hallmark 

contract here today. 

Mr. SCHRADER. Okay. 

Mr. BANES. But I can—but Ms. Simon is right. You can go to 

Congress and you can see what the agency asked for. But you cannot see what the justification was. 

Ms. SIMON. Well, and I would also like to add, of course, what 

Mr. Banes says may be true but it is also true that the true costs 

of service contracts are truly invisible in the budget process. And 

the cost of hiring federal employees and the full lifetime costs of 

hiring federal employees are extremely transparent and known to 

all of us in great detail. 

Mr. SCHRADER. I appreciate that. You mentioned the CSIS critique and stuff. Could you elaborate a little bit on that? 

Ms. SIMON. Well, I only raised it because it is certainly—the contractor lobbying organizations and pressure groups have tried to 

make great fanfare out of this report that we are not sure if they 

commission it or not. We do not really know, you know, what 

moved CSIS to suddenly jump into this arena. But they produced 

a report. And like I said earlier, we have formally requested that 

the Department of Defense respond to the criticisms that CSIS has 

made. From our own cursory review we did not find them persuasive. And what we find least persuasive is the recommendation in 

the report that the government revert to A–76 as a costing methodology because we know that that is a fatally flawed methodology. 

Mr. SCHRADER. Thank you very much. I yield back. 

Chairman MULVANEY. Thank you very much. And again, thanks 

to all the panelists for coming in today and thank you for the questions. 

I will take a few minutes now and go down with each of the witnesses and ask a couple of questions. 

Ms. Hamilton, tell me a little bit more about your contract. 

What—you spoke briefly about the services that you were providing. Could you go down that list again of what you were actually 

doing under your contract? 

Ms. HAMILTON. Sure. Absolutely. What we do is we perform professional qualification evaluation of merchant mariner credential 

applications and safety and suitability screening of these applications as well. So basically the criteria is established by the Coast 

Guard and we simply administer its routine and administrative 


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function in nature. SAC does not—it is not involved in any exercise 

of government discretion. So it is just administrative. 

Chairman MULVANEY. So it was personnel-based? 

Ms. HAMILTON. It is personnel services. Yes. 

Chairman MULVANEY. And I guess my question to Ms. Simon, 

Ms. Simon, you talked about the horror stories. The horror stories 

of either contracts that had been canceled or contracts that were 

non—that were performing inherently or near inherently governmental functions. I guess my question to you is what she just described, does that raise your eyebrows as to whether or not it is inherently governmental? 

Ms. SIMON. If Ms. Hamilton says that she learned from the agency that the work had never been categorized under a Fair Act inventory or otherwise as inherently governmental, I have no reason 

to doubt the truthfulness of her statement. Whether or not it is 

closely associated with inherently governmental work is really a 

judgment that is inherently governmental. I think that is for the 

agency to decide. You know, it is not really—I am absolutely a 

layperson when it comes to these kinds of distinctions but there are 

people in the agencies who are much more knowledgeable about 

the integration of the work of the agency and are in a much better 

position to judge when work is a critical function for an agency or 

whether it is closely associated with inherently governmental. 

Chairman MULVANEY. Ms. Simon, give me a few examples of 

what would not raise your eyebrows, of something that to you is 

absolutely noninherently governmental? 

Ms. SIMON. Well, I would be happy to answer that question but 

I just want to put my answer in a little bit of context. I am sorry 

that Mr. Landry left because one of the arguments that contractors—the most compelling arguments that contractors have, I believe, made in their own favor is that they are essentially disposable. You can hire contractors for temporary needs, for surge situations, but not necessarily for ongoing functions that are core to the 

mission of an agency. And I think this concept that once a contract 

is let to a contractor, the contractor has some kind of a fundamental right to a continuation of that work and perpetuity. It just 

seems to be certainly counter to everything I know about the free 

enterprise system and what people can expect from their government. 

There are jobs that are, you know, commercial in nature and 

that, you know—— 

Chairman MULVANEY. What would some of those be in your 

mind? 

Ms. SIMON. I think that, you know, I guess the rule that I personally use when I analyze this kind of issue, I look at a business 

and if a business has 100 percent of its work is government work, 

that makes me think that business might be inherently governmental. If it has—— 

Chairman MULVANEY. If I was the food service—— 

Ms. SIMON [continuing]. Absolutely no customers outside of the 

government and there is not that good or service is never exchanged solely in the private sector—— 

Chairman MULVANEY. If I was the food service provider in this 

building and that was 100 percent of my business or 100 percent 


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of my business was providing services to the government, would 

you consider that to be inherently governmental or commercial? 

Ms. SIMON. I will tell you a food service function that I do think 

is inherently governmental, and that is the food service in a VA 

hospital. And that has been inappropriately contracted out in far 

too many cases. 

Chairman MULVANEY. Why is the food service in a VA hospital 

inherently governmental? 

Ms. SIMON. The veterans—an overwhelming majority of the employees of the VA who do provide food service are veterans themselves and providing, you know, veterans who are in a VA hospital 

are acutely ill, of course, and they often have very special dietary 

needs. And the integration of—food service is actually very highly 

integrated with patient care in a VA hospital and it is part of the 

internal functioning of the holistic care of a veteran who is in the 

hospital. And often what has happened when food service has been 

contracted out solely for cost reasons is people get inappropriate 

meals that might have food or additives in their meals that are actually—counteract the effectiveness of the drug regime they might 

be on or that they are only available certain hours and so people 

are forced to have frozen meals that are, you know, that also vary 

from either their taste or the regime that they have been placed 

on by their health care provider. 

Chairman MULVANEY. Is not food service provided commercially? 

Ms. SIMON. I think food service is a great example. 

Is food service provided commercially at every hospital? 

Chairman MULVANEY. At every hospital other than VA hospitals 

in this country? 

Ms. SIMON. At every hospital. Of course it is. But I think that 

other hospitals, private hospitals, do not outsource their food service. 

Chairman MULVANEY. I am sorry. What? 

Ms. SIMON. Private hospitals do not outsource their food service 

to patients. Selling a hamburger to visitors, sure, that is commercial. 

Chairman MULVANEY. Okay. All right. You mentioned before, 

Ms. Simon, that to your knowledge it was only the DoD that was 

doing this on a cost basis. I think you said they were the only ones 

that had come up with the actual rules and to our knowledge there 

were other—— 

Ms. SIMON. To my knowledge, yes. 

Chairman MULVANEY. Who as your contract with, Ms. Hamilton? 

Ms. HAMILTON. The Coast Guard. 

Chairman MULVANEY. And the Coast Guard falls under what 

agency? 

Ms. HAMILTON. Department of Homeland Security. 

Chairman MULVANEY. Ms. Carroll, your contract was with 

whom? 

Ms. CARROLL. Air Force One with the Department of Labor. 

Chairman MULVANEY. Department of Labor. Is that under the 

Department of Defense? 

Ms. CARROLL. No. 

Chairman MULVANEY. Is it fair to say then that in the real world 

what is actually happening is there are other agencies other than 


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the Department of Defense that are doing this supposedly based on 

cost? 

Ms. Carroll, tell me a little bit more about the Department of 

Labor contract that you had. You did not get a chance to talk about 

the specific examples. And I do think the specific examples are 

real. In fact, the reason we are having this hearing is because I 

was approached by somebody who went through something that 

was very similar to what you folks have gone through. He was a 

mapmaker, a cartographer who showed up at work one day to find 

out that he had been insourced and that all of his employees had 

been hired by the Federal government. And when he inquired as 

to whether or not the employees were willing to do that he was informed that they were actually getting paid 20 percent premium to 

go to work for the government over what he was paying for them. 

And it was in large part that experience that drove this hearing 

today. So I think the individual experiences are real. And Ms. Carroll, I will be curious to know yours. 

Ms. CARROLL. In the Department of Labor, as I said in my testimony, we were not the prime. We were a sub. We were working 

with a minority business. We had been in that library a number 

of years before so we knew the library. And they just said—a lot 

of the things we are hearing today come down to the way contracts 

are managed. I totally agree. That is what someone said. The problem is that the government has to step up and manage these contracts right. When you say in the food service that, you know, the 

right thing is not served, if there are standards of performance and 

they are well written, then the right things will, in fact, be done. 

And I know many contractors will do the right things even though 

it is not written in there. 

So in the case of the Department of Labor, they—eight weeks before the end of the contract we were notified that the contract 

would not be renewed nor recompeted. We had no indication why 

that would happen except we knew that the Cos, the management 

of that contract, the COTR changed all the time. So they really did 

not understand what was going on at all. And they somehow had 

the idea to pull that work in. 

We had two librarians that worked there and two of the people 

were insourced. The rest were just laid off. They gave us no time 

to really prepare for that kind of an action. And since we were not 

the prime, we could not motivate the prime to go ahead and do 

FOIAs and do various things. They just said you know what? At 

some point it is worth just going on. And they did. 

Chairman MULVANEY. Ms. Carroll, you also mentioned something that I am not familiar with which is poaching. To me that 

is shooting an animal that does not belong to you. What does it 

mean in your world? 

Ms. CARROLL. Not necessarily shooting but taking an animal that 

does not belong to you. How about that? 

Chairman MULVANEY. Is that the term for hiring away the employees and so forth? 

Ms. CARROLL. Right. Yeah. You do a very extensive recruitment 

process. You hire people. You train them. They work. And the government comes in and suggests that this person apply for a government job. 


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Now, there are two kinds of poaching. Okay? There are some contracts we have we know this is going to occur. We know we are 

going to hire people and eventually they are going to become government. And yeah, they post the jobs but everybody knows that 

that person is wired for that kind of a job. That is kind of voluntary. The individual has the right to choose to apply for a government job that is posted. Okay? But it is the involuntary poaching that really is very distressing. 

Our project manager at an Air Force base in California was told 

before we were told that the contract was officially going to be 

outsourced—of course there were rumblings—she was told your job 

is being posted. Go and apply for it. 

Chairman MULVANEY. Do you have any idea what it paid in that 

particular circumstance? 

Ms. CARROLL. No, I do not know that. 

Chairman MULVANEY. Whether it was more or less? 

Ms. CARROLL. I could get you data on that. I do not know what 

GS level it was. I never did that cost comparison but I could get 

it if you would like it. 

Chairman MULVANEY. We talk about cost comparisons and I am 

going to ask Ms. Simon a question in a few minutes about some 

of this supposed systematic bias in the A–76 process I think you 

mentioned specifically about overhead. Are you convinced, Ms. Carroll, that when you do or when the departments do the cost comparisons that they are taking into consideration all of the costs that 

they should when they cost the government side of things? When 

they cost the government option? 

Ms. CARROLL. No, I am not convinced that they do cover it. The 

problem is that government lifecycle costs for employees for benefits are in many different pots, sometimes not even in the same organizational pot. And so I do not think it is that transparent a 

process. I think you would have to go through all kinds of roots in 

order to really know what the full lifecycle cost to these people are. 

On the other hand, with a contractor it is very clear exactly what 

the costs are. 

Chairman MULVANEY. You and I were talking before the hearing 

about a circumstance with a posting overseas. Do you want to 

share that with the panel? 

Ms. CARROLL. Yeah. We had a contract, U.S. Air Force Europe 

(USAFE). And we were doing, you know, we were performing very 

well. Before the end of the contract they decided they would not exercise the last option year. And they said they were insourcing. Unfortunately, the German labor laws and the U.S. agreement requires those people to come back to the United States so they could 

not be directly insourced. So some of the people just were out of 

jobs. 

But what happened was very interesting. The government never 

filled some of—still has not—months later still has not filled those 

positions. We are hearing through our previous project manager 

who still is in Europe that the positions are not filled. And what 

they are doing now is they are paying people to go on duty to Germany. Now, was this figured in the cost? I mean, what is the accountability and what is the metrics and the measurements after 

the fact on whether this really works? 


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We know a couple of the positions are still vacant, which means 

there is not good data for promotions, for career paths, and other 

things. So the servicemen and women are suffering. 

Chairman MULVANEY. You raise a good question, something I 

heard from all three of the panelists. Regarding finding out about 

the process, Mr. Banes, given the decision in the Hallmark case, 

what methods, what avenues are available to Ms. Carroll if she 

wants to find out how the government costed that project? 

Mr. BANES. Mr. Chairman, I do not think there are any avenues 

at that point because if you cannot file—if you cannot file in the 

Court of Federal Claims, if there is no jurisdiction there, then you 

cannot get a protective order to look at this data. So, because, and 

the government takes the position when you ask for it under the 

Freedom of Information Act that it is source election information. 

And that is secret. So I cannot tell you what the numbers were in 

the Hallmark case sitting here today because they are still under 

a protective order. 

But I can tell you that when you scrutinize them there are two 

aspects that are totally out of whack. One is how many people it 

would take to do the job internally in the government; and then 

two, how much—what are the full costs of performance of those individuals? And when you look at them and scrutinize exactly what 

is going on and exactly what the Air Force is going to do in the 

future, it does not make any sense at all. And now under this decision there may not be an opportunity to even find out ever. 

Chairman MULVANEY. Ms. Simon, I will ask you. What is wrong 

with making the process public? What is wrong with sharing the 

information with the contractors with the public? What is wrong 

with granting standing to the businesses that have had their contracts terminated? 

Ms. SIMON. Well, I am listening to the three panelists. All I could 

think of is welcome to our world. This is the exact same situation 

that federal employees, only I would say we are in an even weaker 

position. This is the same kind of situation that federal employees 

face in the outsourcing context. We do not have—we still do not 

have standing ever to go to the Court of Federal Claims. We are 

allowed to be an interested party and intervene but we can only 

do so when we get the information on the in-house bid, the bid that 

was made on our behalf, and the contractor bid after it is too late 

to file a protest. We are in a complete veil of ignorance. 

Chairman MULVANEY. Well, certainly somebody in the government has that information. Right? 

Ms. SIMON. But not us. 

Chairman MULVANEY. Who are you in that circumstance? 

Ms. SIMON. The employees that are losing their jobs. The employees that have—— 

Chairman MULVANEY. But you are a counterpart to what Ms. 

Carroll and Ms. Hamilton do. I mean, the bosses, I guess, have access to the information. Do they not? 

Ms. SIMON. There are designated individuals within the agency 

that have that information but certainly not the people who are affected by the decision to outsource the government work. 

And there is effectively no appeal right because by the time we 

get the information, again, through FOIA requests or the intervenVerDate Mar 15 2010 04:04 Aug 30, 2011 Jkt 067851 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 E:\HR\OC\B851.XXX B851

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tion of members of Congress, it is too late for us to file any kind 

of protest or do anything about it. 

We are for transparency. On the other hand, I think that be careful what you wish for. If contractors are granted the right to engage in endless litigation whenever there is any possibility of having their contract terminated, I think agencies will certainly think 

twice before they sign these contracts because it certainly raises 

the stakes and raises the long-term costs of engaging in a contract 

with a private company because you do not have the flexibility that 

contractors, you know, use as their best argument for themselves. 

If you can never terminate a contract because you no longer want 

to perform that function or you would like to compete it in another 

way or bring it back in-house and the prospect is endless litigation, 

why would you ever want to subject yourself to that? 

Chairman MULVANEY. I think there is a distinction. We might be 

using legal terms here that mean different things to different people. To me the termination of a contract is one thing. The expiration of a contract is another. The expiration of a contract would be 

the ending of a contract by its own terms and it is completely contemplated in the document itself. The termination of a contract is 

the breaking of a contract. 

Ms. SIMON. Yeah. I think that what Ms. Hamilton referenced 

was that the government did not exercise all of its options. Is that 

correct? 

Ms. HAMILTON. No, that is not correct. I am sorry. 

Ms. SIMON. Ended prematurely? I am sorry. 

Chairman MULVANEY. I think there has been testimony that 

some of the contracts discussed today were that but other ones 

were actual terminations. So I guess my question to you is to get— 

to try and focus here, it is fairly simple which is what is wrong 

with giving the managers of private businesses the same information that the managers of the government projects have? 

Ms. SIMON. I think that we have no problem with the concept of 

notice. Notice is one thing. And the provision of all the internal 

costing information prior to the decision is another. And we have 

some misgivings about that. Notice, no problem at all. 

Chairman MULVANEY. All right. Then lastly, I do want to touch 

on this issue of overhead because in my world, Ms. Simon, by the 

way, you are the first person I have heard in Washington and I 

mean this slightly tongue in cheek, that has said that this place 

is inherently transparent and everybody understands what is going 

on. You may be the only person in town who believes that. 

Ms. SIMON. No, I said that with respect to federal employees, not 

the government as a whole. 

Chairman MULVANEY. That is right. 

Ms. SIMON. Certainly, there is a contractor workforce—— 

Chairman MULVANEY. But regardless of transparency, as a lawmaker, as someone who is ultimately called upon to sot of choose 

between these two things, obviously we set policy and it gets implemented at a different level, if you present me with a private contract for Ms. Hamilton to provide the services to the United States 

Coast Guard that she described, I know exactly what that is going 

to cost. I know how long it is going to cost and what it is going 

to cost on a year-to-year basis. I have what in the legal world we 


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call a liquidated sum. I know it is going to be $100,000, whatever 

the number is. If you come in and tell me, well, I also want to hire 

the same number of government employees to do that exact 

amount of work, I would suggest to you I have no idea how much 

that is going to cost because what I am doing now is I have got 

permanent workers. I am not—I do not have a short-term contract. 

I have not hired contract workers to do this work. I am actually 

taking federal workers and putting them to work on this particular 

job. You mentioned that overhead should not be counted. It strikes 

me that that is bizarre. No one in the private sector would ever say 

those words, that you cannot cost overhead into what you are 

doing. And it just strikes me as odd that you have taken the position today that you actually know what the government is paying 

for these services because I think the exact opposite tends to be the 

case. 

I am going to yield back to Ms. Chu. And I will give you a chance 

to propose—— 

Ms. SIMON. May I respond? 

Chairman MULVANEY. Very briefly. Let me get Ms. Chu and she 

may give you the opportunity to do that. I have spoken for way too 

long and I apologize for doing that. So Ms. Chu, if you have any 

follow-up questions I will yield to you as much time as you need. 

Ms. CHU. Well, I will just thank all the witnesses for coming and 

give you a chance to respond to that question. 

Ms. SIMON. Okay. I would not agree that when you sign a contract that specifies a certain amount of work to be done for a certain price that that is the end of it. One of the problems with service contracting is that that is often not the end of it. When new requirements arise, unanticipated events occur, it requires renegotiation, new task orders. You know, there is often—contracts often 

grow far beyond their initial terms and costs. In contrast, when you 

hire a federal employee, you agree to pay a certain salary or an 

hourly rate for when they are working. But each time you give the 

federal employee a new assignment or a new task, you do not suddenly raise their pay. You do not have to engage in a whole new 

negotiation over the terms of employment. There is a very useful 

term in every federal employee’s job description—other duties as 

assigned. 

You can move federal employees around, you can tell them to do 

whatever you want them to do and they have to do it. And there 

is no increase in cost. 

And I would also object to the assumption that once a federal 

employee is hired they are forever. The efficiency initiative in the 

Department of Defense, for example, the 600 employees that I 

talked about that DFAS hired when it insourced that work, because of the sort of zero—it is not a zero sum. Because of the fact 

that the efficiency initiative has a cap on federal FTE, any new employees hired have to be offset with positions eliminated. So many 

federal employees are going to lose their jobs and many federal positions are going to be eliminated in the context of the efficiency 

initiative. 

Ms. CHU. Thank you. I yield back. 

Chairman MULVANEY. Ms. Chu, I am finished. Would you like to 

give your closing statement? 


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Ms. CHU. I would just like to thank all the witnesses for coming. 

It was a very informative hearing today. 

Chairman MULVANEY. Thanks very much. I will close with this. 

I do appreciate everyone’s participation. I think it has been a 

healthy debate and it has been helpful to me to help frame the 

issues. 

Ms. SIMON, I especially appreciate your testimony. 

Ms. SIMON. Thank you. 

Chairman MULVANEY. It is obvious counter to what positions I 

would take. And I would, before we close, point out that actually 

it was Robert Gates who said that in his opinion this system within 

the DoD, the insourcing system, has completely failed to meet its 

goal to save costs. As is so often the case, one part of the government is saying one thing and one is saying the other. In fact, I see 

some heads nodding negatively in the body so I will read the quote. 

‘‘We were not seeing the savings we had hoped for from insourcing 

as the Defense Department brought work from the private sector 

in-house,’’ Secretary Gates said on August 9th of last year. And 

thank you to everybody. 

Having the stories, not only from the private sector but on behalf 

of the federal employees is extraordinarily helpful to us. And as 

this Subcommittee continues to focus on creating opportunities for 

small businesses to compete for federal contracts, we will continue 

to investigate instances where agency actions harmed small business and cost the taxpayer more money. 

Ms. Simon mentioned earlier today that most of the horror stories were probably contracts that were expired over their own 

terms or that were inherently governmental. I would suggest to everyone here in the room that that is not the purpose of this hearing. The purpose of this hearing and the purpose of the additional 

hearings that we will do will be to focus on the exceptions to those 

two things. I cannot sit here and defend somebody who is upset because their contract that was a three-year contract with the government expired and they have not decided not to hire them again. 

That is the government’s right and it is the contract terms that set 

forth that. Similarly speaking, if you were doing something like 

trying to shoot people, I would think that that would be one of 

those inherently government functions that should be insourced. 

I want to focus, however, as we go forward on the other things, 

the other exceptions to those two rules where the government actually reaches out and takes things from the private sector that are 

not inherently governmental functions and that do not save costs. 

We are here on the Small Business Committee and both party 

members I know agree with this, to protect the interest of small 

business. And to the extent that the Federal government is trampling on the opportunities that are afforded to our small businesses, I know that both parties where will do everything we can 

to prevent that from happening. 

After today’s hearing we are going to take four actions. I am 

going to ask the full Committee to follow up with the agencies mentioned by Ms. Hamilton and Ms. Carroll. Secondly, I am going to 

send a copy of the transcript to the Office of Federal Procurement 

Policy so they can suggest, excuse me, they can look at the suggestions offered by our witnesses as they finalize their policy guidance. 


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Third, I will send a letter to OMB requesting that each agency publish their insourcing guidance pursuant to notice and comment 

rulemaking and that OMB and each agency ask them to impose a 

moratorium on cost based insourcing until those rules are, in fact, 

published. Fourth, as we consider contracting legislation, excuse 

me, contracting legislation for this Congress, we will look at ways 

we can address standing for small businesses, facing insourcing difficulties, and ways that we can strength the SBA’s roles in this 

process. 

At this time I would also ask unanimous consent that members 

have five legislative days to submit statements and supporting materials for the record. Hearing you objection, it is so ordered. 

Thank you all again. Thank you for participating. This meeting 

is adjourned. 

[Whereupon, at 11:28 a.m., the Subcommittee was adjourned.] 


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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 125 here 67851A.047
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 126 here 67851A.048
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 127 here 67851A.049
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 128 here 67851A.050
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 129 here 67851A.051
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 130 here 67851A.052
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 131 here 67851A.053
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 132 here 67851A.054
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 133 here 67851A.055
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 134 here 67851A.056
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 135 here 67851A.057
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 136 here 67851A.058
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 137 here 67851A.059
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 138 here 67851A.060
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jbell on DSKDVH8Z91PROD with HEARINGInsert graphic folio 139 here 67851A.061