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Government Spends Billions More Hiring Contractors Over Public Workers

09/14/2011 11:46 am 0 comments

Source: Stephanie Condon / CBS News

As Washington’s use of private contractors grows, the government is paying those contractors billions more than it would pay their government workers to do the same job, according to a new study released Tuesday..

In an attempt to verify frequently made claims that the government can save money by outsourcing its work, the nonprofit Project On Government Oversight (POGO) compared the total annual compensation for federal (and private sector) employees with federal contractor billing rates.

The group found that in 33 of the 35 occupational categories it reviewed, federal government employees were less expensive than contractors. On average, the federal government pays contractors 1.83 times more than it pays federal employees and two times more than what comparable workers in the private sector are paid.

For instance, the government on average pays contractors $299,374 for accounting services, while it pays federal employees $124,851 for accounting services. By comparison, workers in the private sector (not under contract by the government) make on average $83,132. The government on average pays contractors $198,411 for information technology management, while they pay federal workers $124,663.

That discrepancy is significant, given the federal government spends over $320 billion on service contracts each year, and about one-quarter of all discretionary spending goes to service contractors. According to POGO’s report, the contractor workforce rose from an estimated 4.4 million in 1999 to 7.6 million in 2005 — while the size of the federal employee workforce has remained relatively steady at about 2 million.

To read this article in its entirety visit CBS News.

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