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U.S. Government Outsourcing of IT Stirs Debate

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Outsourcing refers to taking some of the internal functions of a company or group and re-assigning them to an external provider who is not part of that company or group. Many U.S. companies now outsource formally internal operations such as their call centre, payroll or E-mail activities by contracting them to outside organizations that fulfil the needed services on a regular basis.


Many government organizations have adopted similar outsourcing programs and generated a significant amount of controversy by doing so. This method is particularly evident in Information Technology (IT), where present government trends are toward even greater amounts of outsourcing. (Computerworld, 2001)


The National Aeronautics & Space Administration (NASA) is an excellent case in point. As early as 2001, NASA had outsourced nearly fifty percent of its computers, encompassing approximately 44,000 PCs and Macintosh systems. In 2001, this represented one of the federal government’s biggest outsourcing programs. Today, in 2007, there are even larger examples of formally-internal functions going to outside sources. These are in IT areas of computer hardware and applications; telecom; network hardware; IT personnel and third party services. Much of the outsourcing done by the government today has been to offshore providers.


Concern has been expressed by several large associations representing American professional workers. Among these is the Institute of Electrical and Electronics Engineers, Inc., (IEEE) an organization formed in 1973 to advance the public good while also promoting the public policy and career interests of more than 225,000 electrical, electronics, computer and software engineers who are U.S. members. The IEEE is understandably concerned with projections that show as many as 3.3 million white-collar jobs and over $136 billion in salaries being outsourced to lower-cost offshore locations by 2015. Their concerns are also fueled by the fact that our economy lost more than 3 million manufacturing jobs in the past ten years and by Commerce Department reports that IT workers in all industries has dropped by 8 percent since 2000. They clearly view increased outsourcing as a threat to U.S. high-tech professionals.


As the nation’s largest professional association, IEEE’s concerns appear justified, but what government actions will actually be taken, will at least in part depend upon what happens when a new president and administration are in place. The association has expressed concerns that potentially adverse consequences of continued outsourcing may include “loss of employment opportunities and income by their members; loss of payroll taxes and income taxes by national, state and local governments; growing trade deficits in goods and services; transfer of investment capital and intellectual resources to offshore sites and increasing dependence on foreign sources for both consumer products and defence-critical weapons systems.” Ultimately, they are concerned about weakening America’s leadership in innovative technology which represents a threat to our national security and our economic competitiveness. (IEEE Position Paper March, 2004).


The IEEE’s Board of Directors has suggested that prudent steps be taken to ensure that offshore outsourcing will be implemented in a way that will benefit the U.S. and all its citizens including high-tech workers. Only time will tell how it is received.




Institute of Electrical & Electronics Engineers, Inc. (2004) Position Paper: “Offshore Outsourcing as approved by the IEEE-USA Board of Directors, March, 2004.”

Available: positions/offshoring.html  accessed 10/15/2007.


M2 PressWIRE via Thomson Dialog NewsEdge (2007) Mindbranch:” US Federal Government Information Technology Expenditures, 2006-2011” by Compass Intelligence October, 2007.

Available: printpage.aspx?PagePrint%3  accessed 10/15/07.


Thibodeau, Patrick, Computerworld (2001) “Federal government eyes more IT outsourcing April 18, 2001.”

Available at: CDW010418STO59736/pfindex/


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