Government Contractors May Be Costing the Government More Money

The POGO analysis found that private contractors working with the government make, on average, twice as much as a comparable private-sector worker. In any case, this is just one study, and POGO does include caveats about the difficulties of collecting good salary data. But maybe the most stunning revelation in the report is that the federal government doesn’t have a solid system for determining how much money it saves or wastes by outsourcing various functions to private firms.

And this seems like something we’d like to know: Since 1999, the number of federal workers employed by the government has stayed roughly constant at about 2 million. But the number of private contractors has ballooned, from 4.4 million to 7.6 million in 2005 (these numbers turn out to be surprisingly difficult to pin down, since records on contractors are fairly unreliable). Last year, the government spent some $320 billion on service contracts. And yet there’s no ready way to tell whether this outsourcing boom is actually saving taxpayers money. Wonkbook

The Project on Government Oversight found that contractors cost more in 33/35 jobs. When contracting was embraced during the Clinton Administration, why wasn’t there an evaluation of the process?

Private contractors necessarily add an extra layer of work: coordinating between two separate entities, so it’s possible they do indeed cost more money. Most companies aren’t stalwart entrepreneurs burning the midnight oil with a trusted sole employee, they’re private bureaucracies and operate under a system of stringent rules (rightly so) to do business with the USG. What’s scary is no one knows, and the cost of outsourcing was most likely left unstudied on purpose.

How else to reward the Best and Brightest for doing their brilliant and irreplaceable stint in government… (read: making their contacts in government to exploit in the private sector)? Rinse and repeat.

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One Response to Government Contractors May Be Costing the Government More Money

  1. Schmidty says:

    Woohoo!

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