Hoover: Insourcing, contractor image concerns not new

Thursday - 8/5/2010, 6:56pm EDT

Bill Hoover

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Military downsizing, contracting, and "inherently governmental" debates sometime happen in a vacuum. We discuss these issues as though they are brand-new and have never been dealt with before. My conversation today with Bill Hoover, President and CEO of American Systems, reminded me that these are all issues we've been dealing with for years.

"When the force was downsized in the 1993/1994 time frame, as part of the reinvention of government, what happened was the uniformed personnel went closer to the point of the spear, but the requirements in the background in the acquisition side or the logistics side didn't go away," he told me. "Somebody had to do them. Since there was a cap on the civil servants, they brought in contractors. That's where I think [contractors] really got into a lot of activities or a lot of services being performed that perhaps should have been performed by the government."

The reputation of contractors has suffered in the last few years, but Bill says that negative perception is also not new. "When i first joined the industry in 1980, the term of art for contractors was beltway bandit. I hated that term," Bill said. "I was talking to a friend of mine [at the time] who happened to be still in the service, and I asked him why they used that term. And his comment back to me was, the reality of it is, we know when the going gets tough, you'll get going, meaning contractors are going to evacuate."

The turning point, Bill said, was the first Gulf War. "I remember when Saddam Hussein came into Kuwait, there was a broad scale order issued by the State Department to evacuate all US personnel. [Contractor] BDM had two major contracts in Saudi Arabia, and they had a couple hundred people that supported those two contracts. And the two program managers got together and said, 'our job is here. We're not leaving just because there's a problem.' They evacuated all their dependents, but the BDM employees stayed. I was at a company called PRC at the time, and I had 50 or 100 people in theater. What you saw after that, was that contractors did not leave. They stayed and they continued their mission, and I think you saw a change in attitude as a result of that."

I talked to Bill for the full first hour today. You can hear him talk about these issues, and how his company has fared under the Pentagon's insourcing initiatives, by clicking on the audio link.