Department of Defense: Contract Labor Sourcing (A)

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Case

Reference no. UVA-OM-1183

Subject category: Production and Operations Management

Authors: Timothy M Laseter (Darden School of Business, University of Virginia); Tom Cross (Darden School of Business, University of Virginia); Heather Burns (Darden School of Business, University of Virginia)

Published by: Darden Business Publishing

Originally published in: 2004

Version: 1 March 2013

Revision date: 25-Mar-2013

Length: 11 pages

Data source: Published sources

Topics: Strategic sourcing; Contract labor services; Government procurement; Accounting and control: Cost allocation; Diversity management and leveraging difference; Entrepreneurship and innovation: Managing growth; Finance: Financial derivatives; Financial strategy; Portfolio management; Leadership and organizational behavior: Self-management; Management communications: Corporate advocacy; Management communications: Corporate communication; Publicity; Marketing: Pricing; Operations management: Operations analysis; Purchasing; Pedagogy and higher administration: Teaching techniques; Strategy: Five forces; Technology and innovation management: e-commerce; Accounting and control; Entrepreneurship and innovation; Finance; Global economies and markets; Global economies and markets: Emerging markets; Macroeconomics; Leadership and organizational behavior; Management communications; Marketing; Operations management; Pedagogy and higher administration; Strategy; Technology and innovation management

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Abstract

Contract labor services were typically sourced through small businesses, with large, nationally (and globally) recognized firms making up a small portion of total spend; however, large businesses could potentially provide DoD contract labor services at lower cost. By continuing to purchase contract labor from small businesses, DoD would be spending more money than necessary - in effect, taking money away from the overall budget that could be spent supporting the troops. Alternatively, a switch to cost-advantaged large businesses would negatively impact the socioeconomic goals expected in a government-procurement environment.

Industry:

Government, Nonprofit