Monsters in the Closet:' The Unanticipated and Uncontrollable Impact of Collective Bargaining Agreements in A-76 Sourcing Decisions
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Authors
Reed, Timothy S.
Cowdrey, Jenine
Pike, William
Subjects
Outsourcing
A-76 Process, Labor Cost Growth, Collective Bargaining Agreement (CBA), Wages
A-76 Process, Labor Cost Growth, Collective Bargaining Agreement (CBA), Wages
Advisors
Date of Issue
2007-04-01
Date
01-Apr-07
Publisher
Language
Abstract
Federal Government agencies convert in-house positions to contractor positions via the A-76 process in order to save money. During an A-76 conversion, stable future labor cost growth is assumed. This assumption is faulty in cases wherein the contractor workforce subsequently unionizes. Unionization may lead to unanticipated increases in cost, threatening the savings projected during the A-76 process. This study seeks to: 1) compare the rate of labor-cost growth for military, civilian, and contract employees and 2) compare current labor costs for a sample outsourced activity (fuels) to labor costs for the military requirement based on manpower standards. The study finds that overall, annual collective bargaining agreement (CBA) wages increases were typically 1-2% higher than Service Contract Act (SCA) wages increases. However, we found no evidence that contractors performed functions in our sample functional area at a higher cost than in-house. The actual cost of contractors averaged ~40% less than the cost derived from the military manpower standard. The actual in-house cost averaged over 20% higher than the cost derived from the manpower standard. Our results indicate that for the fuels functional area, A-76 actions remain economically advantageous to the government, despite increases in contract labor cost.
Type
Report
Description
Proceedings Paper (for Acquisition Research Program)
Series/Report No
Department
Acquisition Management
Other Research Faculty
Identifiers
NPS Report Number
NPS-AM-07-019
Sponsors
Naval Postgraduate School Acquisition Research Program
Funding
Format
Citation
Distribution Statement
Approved for public release; distribution is unlimited.