9/15/2011 - Use of Private Contractors Doesn't Save Government Money, Study Finds

Source: NY Times
WASHINGTON — Despite a widespread belief that contracting out services to the private sector saves the federal government money, a new study suggests just the opposite — that the government actually pays more when it farms out work.


The study found that in 33 of 35 occupations, the government actually paid billions of dollars more to hire contractors than it would have cost government employees to perform comparable services. On average, the study found that contractors charged the federal government more than twice the amount it pays federal workers.


The study was conducted by the Project on Government Oversight, a nonprofit Washington group. The federal government spends about $320 billion a year on contracts for services. The POGO study looked at a subset of those contracts.


The study comes after months 
of criticism, mostly by Republicans, about what they see as the high cost of salaries and benefits for federal workers.  The House earlier this year passed a Republican budget plan that would freeze pay grade levels and eliminate raises for five years, and cut the government’s work force by 10 percent. Last year, President Obama announced a two-year salary freeze for federal workers, which Republicans said did not go far enough.

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