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THE IC OUTSOURCING CONUNDRUM

Tuesday, May 27, 2008
AFCEA Intelligence

Despite the collected wisdom of those who know about this stuff (i.e. congressional staffers) that it is unlikely there will be an intelligence authorization bill for the third year in row, I was interested in the language of the authorization bills recently reported out by both the House Permanent Select Committee for Intelligence (HPSCI) and the Senate Select Committee for Intelligence (SSCI). The reason there won't be an FY 2009 Intelligence Authorization Bill is because the executive branch through the IC finds both versions fatally flawed on interrogation techniques the CIA should be allowed to employ.

So if there is not going to be an intelligence authorization bill (again!), why care? The obvious reason is because these bills tell us what is foremost in the minds of the Congressional oversight committees and what their staffers will be grilling the IC leadership about up until the new Congress convenes in January. No one needs to read either of these bills to know that the Congress is now mightily concerned about the balance between security and civil liberties in the practice of intelligence as manifested in the debates over updating the Foreign Intelligence Surveillance Act (FISA) and appropriate interrogation techniques for foreign nationals. I am not sure I have anything to add to on either of these topics except my opinions, so I will spare you that.

Almost equally as charged in these authorization bills is the Congress' increasing concern about the outsourcing of intelligence. It seems the oversight committees have issues about the cost of using contractors ($250,000 on average for an IC contractor verses $126,000 for a government equivalent) and that contractors are performing "inherently government functions" (one of which is interrogating foreign nationals). The following particulars are from the SSCI authorization bill (S2996):

section 103: Allows for the potential of IC civilian employment growth of "not to exceed 5%." Counting IC personnel is inconsistent, and does not count certain personnel against IC personnel ceilings. Allows for IC civilian personnel growth as long contractor counts decline

section 104: Defines Intel Community Management Account (ICMA), which I believe is the ODNI staff at 944

section 305: Directs IC agency heads to provide DNI with personnel level assessments; sees need for IC personnel level assessment tool. Reduce contractors; average IC civilian employee costs $126,500 fully loaded compared to average contractor at $250,000.

section 315: Discusses prohibiting contractors from performing "inherently government functions" and is concerned about conflicts of interest where a contractor is providing both product and consulting services on its use.

I suspect this Congressional interest in IC contracting is related to recent press reporting associated with the Caryle's Group's purchase of Booz Allen Hamliton's (BAH) government business for $2.5 billion as a recent DIA presentation indicated 70% of the IC budget is outsourced. It also fits with the current political angst aimed at earmarks and lobbyists.

Since the IC does not build its own collection platforms or information systems 70 percent of the IC budget being outsourced to industry does not strike me as figure that puts our republic in peril. The more germane policy questions are: what constitutes an inherently government function not appropriate for the private sector to perform and what percentage of the IC budget ought to be outsourced? Both of these questions deal with people under contract to the IC vice the procurement of satellites or computers. Presumably the IC is working on answers to both how many people it should have under contract and what they should be allowed to do as it seems the Congress is or is going to be asking.

Assuming that 70% of the IC's budget ($60 billion if you agree with R.J Hillhouse’s analysis; see http://www.upi.com/Security_Terrorism/Briefing/2007/06/06/intel_budget_m...) is executed in the private sector this is a compelling argument not only for why the DNI needs a principal deputy for Acquisition, but why this function also needs to be staffed with experienced acquisition professionals (know anybody who has gotten to the top of the IC in that career field?) and both the substance as well as the process of acquisition need continuous DNI attention. With a significant majority of the IC's budget being spent in the private sector, it also reasonable to ask why the emphasis on streamlining the granting and managing of security clearances is focused on government employees? Seems like there is more return on investment faster getting the private sector clearance debacle fixed. Finally, I hope the next time a senior IC official talks about the IC partnership with the private sector that he or she thinks about where 70% of the IC budget is spent. Far too many in the IC treat the private sector they are depending on as contractors, suppliers, or vendors…not as partners.

That's what I think; what do think?

Comments

Ah, how the pendulum swings! A few years ago, the pressure was the other way to contract out. People jumped on the notion in droves! As I recall, someone even came up with the figures that demonstrate "for all time" that contracting out is cheaper than hiring more government employees. The use of "cowboy" contractors in our wars has certainly influenced this debate, as have concerns over privacy,but what I fear is a mindless overreaction that salami slices the solution. The key is deciding what are "inherently governmental" functions and then applying the definition and overseeing the implementation. The US government has ALWAYS used contractors ... and gone to war with them. If we are not careful and react rather than think, it will have the effect of hurting the national security in ways that would be very unfortunate.

By John Casciano

I think the facts are clear that the Unites States is weaker because of defense spending and waste in the past decade, but those of you in the industry will never see it that way! You will not be happy unless every american penny is spent on defense. We don't school, we don't parks and roads... We only need defense, we know how successful defense programs have been the past years, just no one wants to say it....

By Anonymous