Stalinism Comes To DoD Contracting

Russian President Dmitry Medvedev came to Silicon Valley in an effort to bring the world of modern technology and economics to his country. If he wanted to take a trip back in time and see what it might have been like in his country under Stalin he could have visited the Department of Defense (DoD). Under Stalin, the Soviet Union collectivized its agriculture, seized control over Russia’s economy and created a massive state bureaucracy and planning sector.

Much the same is going on today in DoD. What was originally a good idea, to make sure that only public employees performed jobs that are “inherently governmental” in nature, has been transformed into an excuse to undermine the private sector. Encouraged by public sector unions and their Congressional allies, the department is engaged in dismantling the private sector economy that supported this nation and its warriors for decades and replace it with a government-managed and staffed bureaucracy. Under a series of overzealous directives from the White House and senior defense leaders, the department is directed to consider as candidates for insourcing — that is replacing private sector workers with government employees — any contract in which the work is closely associated with inherently governmental functions, awarded legally but without competition, experiencing administrative difficulties, performed by government employees within the last ten years or where cost analysis determines that insourcing would be cheaper. This is an open invitation for abuse.

One of the most perverse characteristics of the effort to bring socialism to DoD is the replacing of economic analysis with government dictates. This is what the Soviet State Planning Commission used to do. In this case, DoD memoranda declared that using government workers in place of the private sector saves 40% per person. To date, there has been no economic analysis published to justify this statement. According to the Bureau of Labor Statistics, the average federal government worker earns on average ten percent more than their private sector counterparts. These salary figures do not include the value of health, pension and other benefits, which average $40,785 per federal employee per year. The notion that government employees can work cheaper than the private sector is ludicrous.

In reality, what DoD did to arrive at the 40 percent savings was simply to allocate 40 percent fewer dollars to the task. The government simply reprograms funds previously planned for contractors, transferring 60 percent for insourcing of the same functions and retaining 40 percent of the funds for other uses. So government workers are expected to perform the same work to the same standards as before with 40 percent fewer dollars. Those required to implement the DoD plan know that it is sheer fantasy. In its memorandum outlining how it will implement this directive from on high, the Air Force Materiel Command made the following statement, “This assumes a 40 percent savings for every contract-to-civilian conversion; AFMC’s historic savings in past cycles was only ~20 percent.”

This is a living embodiment of the Stalinist approach to economics. Back in the USSR when workers failed to fulfill the insane targets imposed on them by their government they were accused of sabotage and sent to Siberia. What excuse will DoD and the administration use?