Government is paying service contractors nearly twice as much as it would cost a federal employee to do the same work
POGO Study: Contractors Costing Government Twice as Much as In-House Workforce
By DANA LIEBELSON
The U.S. government’s increasing reliance on contractors to do work traditionally done by federal employees is fueled by the belief that private industry can deliver services at a lower cost than in-house staff.
But a first-of-its-kind study released today by the Project On Government Oversight (POGO) busts that myth by showing that using contractors to perform services actually increases costs to taxpayers.
POGO’s new report is the first to compare the rate that contractors bill the federal government to the salaries and benefits of comparable federal employees. The study found that while federal government salaries are higher than private sector salaries, contractor billing rates average 83 percent more than what it would cost to do the work in-house.
The study comes at a crucial time, considering that Congress’ special “Super Committee” is looking for ways to cut $1.5 trillion from the federal deficit.
“We’re wasting tens of billions of dollars on a belief that it’s cheaper to have contractors doing the work, without any hard evidence. The government should operate on evidence, not belief” said Paul Chassy, a POGO Investigator.
POGO’s study compared 35 federal job classifications, covering more than 550 service activities. The occupations included everything from auditing and law enforcement to food inspection. The results surprised even POGO investigators, who for years had tracked a dramatic increase in the amount the government spends on contracts—from $200 billion in 2000 to well over $500 billion in 2011.