Contractors Cost More Money—No Surprise!

Sep 19, 2011

The federal government spends much MORE when hiring private contractors than it would if it hired workers directly and did the work in-house. Billions more.

This makes perfect sense–private companies are out to make a profit. A huge portion of the money spent on contractors goes to the folks at the top–for their big pay and bonuses, profits distributed to stockholders or owners, as well as administrative costs, costs for bidding on contracts, kickbacks to politicians, etc.–not to the workers who do the work. It’s much LESS efficient than if government workers do the job themselves.

Finally, a new study by the Project on Government Oversight (POGO) has shown that the government pays twice as much for work done outside.

The study was very limited because the POGO looked only at the one set of contracts it could get its hands on. There are very many more contracts in many more departments that the government keeps under close wraps. So the findings of the study should be multiplied many times.

The federal government pays out roughly 320 billion dollars a year to private contractors. If it’s paying those contractors twice as much as they would spend by paying workers directly, that’s 160 billion dollars a year that it’s wasting.

Not to mention–if it’s true for the federal government, it’s also true for every state, local government and school district that has outsourced so many departments to private contractors in recent years. They tell us that “private” means “cheaper.”–Not true!

THIS is a BIG part of where those government deficits are going: into the pockets of the owners of private companies, paid many times what it would cost governments to do the work themselves. It’s a huge boondoggle to corporate profit, using taxpayer money.

They want to balance their budgets? Get rid of the contractors and bring the work back in-house! Hire MORE workers directly. Don’t cut OUR jobs, or OUR wages, or OUR benefits and services!