Project of Government Oversight give us the facts and the public/media/political response is minimal.
Simple question: at what point will a totally privatised world cause concern for society (hint: now)?
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.
In 33 of the 35 job classifications POGO looked at, the average contractor billing rate was significantly steeper than the average compensation for federal employees. The two jobs where it was more cost-effective to hire contractors were groundskeeper and medical records technician. So when the White House needs its lawn mowed, it shouldn’t hire in-house. Still, in every other case, it was cheaper for the government do the job itself.
In some occupations, the difference in price was so dramatic, any coupon-clipping soccer mom could easily have seen the government was getting ripped off. When the government hired a claims examiner for example, it paid the contractor nearly five times more than if it had gone with a federal employee.
“This is absolutely something taxpayers should be worried about. The government needs to be very careful about outsourcing work, especially work that is inherently governmental. It also costs so much more to privately contract,” says Janine Wedel, a professor at George Mason University who specializes in the privatization of public policy and corruption.