Public or private: the outsourcing dilemma within the Department of Defense

Abstract

This thesis investigates the outsourcing experience of Commander, U.S. Naval Air Force, Pacific Fleet's experience in implementing an outsourcing initiative as directed by the Chief of Naval Operations. Concerns regarding outsourcing identified are cost growth and administrative. Cost growth concerns include statutory wage rate increases for contractors; changes in contract requirements; deficiencies in written statement of contract requirements; poor contract administration and surveillance; and lack of competition for contracts among contractors. Administrative concerns include lack of contracting authority at the fleet level and loss of control of resources; reduced flexibility; profit motives of contractors; and potential of contractor corruption. Recommendations include determining exact requirements and stating them unambiguously in the contract; intensifying training for contractor administrators; factoring in the costs of oversight; ensuring that a competitive environment exists among contractors prior to outsourcing; and taking stringent precautions against contractor corruption.