Offshoring is what happens when jobs are moved outside of our country to less expensive sites overseas. Are substantial federal government services being performed outside of the U.S.?

There has been considerable rhetoric over the past several months during the Presidential debates and in the press about U.S. jobs being lost to overseas companies. It is clear that companies are acquiring significant labor from foreign countries because it is far less expensive than U.S. labor. But how much government work is being taken offshore either directly or through the proxy of its contractors? A recent study by the Government Accountability Office indicates that there is not sufficient data to draw specific conclusions about the amount of government offshoring of services.

Should agencies take a more proactive approach to requiring prime contractors to report on the amount o services being offshored? It is probably wise to start thinking about the possibility that regulations for offshoring may appear, but it is unlikely that anything will happen in the near term as the corporate tax bill, recently sent to President Bush for signature, allows federal agencies to continue awarding contracts to companies supporting the work from offshore.

A preliminary Senate version of the legislation contained a measure that would have barred most agencies from outsourcing jobs to companies planning to move the work outside the United States. The language also would have prohibited agencies from buying goods or services produced offshore, with a few exceptions. Congressional negotiators, led by Rep. William Thomas (R-CA) removed the provision from the compromise version of the tax bill (H.R. 4520). That version, passed by both the House and the Senate, awaits the president's signature.

The full GAO report can be found at
http://www.gao.gov/cgi-bin/getrpt?GAO-04-932