Components must prioritize leveraging in-house expertise and existing DoD capabilities before pursuing external consulting, advisory, or assistance contract. Image: Jeremy Christensen/Shutterstock.com
Defense Secretary Pete Hegseth has told DoD components to look first to in-house capabilities before entering into consulting or management services contracts, saying that “we must in-source more expertise and harness the unparalleled talent of our existing experts to drive financial efficiency and operational strength.”
A memo says no new IT consulting and management services contracts should be granted unless components certify that “no element of the contracted effort” can be “accomplished by existing DoD agencies or personnel” or acquired directly from the provider. High-level officials will review contracts and monitor them for compliance with those requirements, it says.
Similarly, “Components may not execute new contracts or task orders for consulting, advising, assisting, or any professional services performing similar functions without prior review and approval,” it says. “Components must prioritize leveraging in-house expertise and existing DoD capabilities before pursuing external consulting, advisory, or assistance contract.”
There are exceptions in the former case for contracts below $10 million directly related to weapons systems and in the latter for contracts below $1 million for engineering and technical assistance in support of weapons systems—but in both cases “Merely reclassifying contracts to avoid the requirement is prohibited.”
The memo also creates a presumption for using in-house employees over contractors for functions such as analytical research, administrative support, HR, IT, training and education, compliance, and reporting. Contractors are to be used for them only if the role is not inherently governmental; no existing employees have the skills to fulfill the requirement; the organization cannot address the need through hiring or other steps; and no better rates are available through a consolidated GSA contracting mechanism.
The memo follows one on reducing the department’s spending on contracts in which Hegseth stressed using the department’s own employees instead and ordering a review of how the department can “in-source IT consulting and management services to our civilian workforce.”
However, in another he ordered a review of the DoD structure with an eye on consolidating, outsourcing or eliminating functions that do not meet certain standards, and the department separately said it expects to cut its civilian employment by between 5 and 8 percent, which would translate into about 38,000-62,000 jobs.
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