Monsters in the Closet? The Impact of Collective Bargaining Agreements in A-76 Sourcing Decisions
Abstract
The following article is taken as an excerpt from the proceedings of the annual Acquisition Research Program. This annual event showcases the research projects funded through the Acquisition Research Program at the Graduate School of Business and Public Policy at the Naval Postgraduate School. 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.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 30, 2007
- Accession Number
- ADA493250
Entities
People
- Jenine Cowdrey
- Timothy S. Reed
- William Pike