Research for Contracts

Outsourcing is one way, although not the only way, to increase efficiency. Outsourcing, or more generally, competition (whether public or private) provides cost visibility - customers begin to see what they pay for goods and services. It also can provide alternative sources, enhance flexibility, introduce better business practices, and take advantage of emerging technologies and innovations. Outsourcing and competition are sometimes considered something new and untested, as experiments. In fact, they are not. The public sector has relied on the private sector for years. Although it is hard to write contacts for something as risky as developing and manufacturing a major weapon system, the Department of Defense (DOD) has done it repeatedly. DOD has outsourced successfully functions as complex as acquisition, and as straightforward as laundry services. This is not uncharted territory. The purpose of this paper is to take a first look at what outsourcing opportunities exist and what types of cost savings are possible. To glean some insights into implementation, we look at how one naval technical center has outsourced various functions. We consulted several databases to quantify good candidates.

Outsourcing is one way, although not the only way, to increase efficiency. Outsourcing, or more generally, competition (whether public or private) provides cost visibility - customers begin to see what they pay for goods and services. It also can provide alternative sources, enhance flexibility, introduce better business practices, and take advantage of emerging technologies and innovations. Outsourcing and competition are sometimes considered something new and untested, as experiments. In fact, they are not. The public sector has relied on the private sector for years. Although it is hard to write contacts for something as risky as developing and manufacturing a major weapon system, the Department of Defense (DOD) has done it repeatedly. DOD has outsourced successfully functions as complex as acquisition, and as straightforward as laundry services. This is not uncharted territory. The purpose of this paper is to take a first look at what outsourcing opportunities exist and what types of cost savings are possible. To glean some insights into implementation, we look at how one naval technical center has outsourced various functions. We consulted several databases to quantify good candidates.

Some activities performed by government employees are similar to those performed in the private sector. Government policy -- outlined in Office of Management Budget circular A-76 -- is to allow private sector companies to compete with government organizations for this work. The goal is to use competition to encourage efficiency -- whether the function is contracted out or not. The Navy's Commercial Activities (CA) program is responsible for implementing this competition program within the Navy. Over the last decade, the Navy has studied about 1,000 activities -- covering about 29,000 billets (both civilian and military). Due to changes in legislation, the Navy is not doing any CA studies at this time. In this research memorandum, we examine: (a) the savings achieved as a result of CA studies; (b) whether the initial savings diminished over time; and (c) the prospect for future studies. Full documentation of this work appears in CRM 92-226.10, 'Analysis of the Navy's Commercial Activities Program.'

The end of the cold War and the breakup of the Soviet Union have many global implications, the most interesting of which is the potential for lasting peace. Lasting peace can allow the United States to change politically, militarily, and economically. One obvious concern is that this transition be as efficient as possible. Resources that are being freed up from defense-related endeavors can be shifted to alternative uses. How can we, as a society, ensure that the transition is smooth and efficient? If there is a 'dividend' of peace, are there government policies that will use the dividend most effectively? This paper addresses the economic implications of peace for the United States.