In an article in the New York Times, Government Pays More in Contracts, Study Finds, the conclusions are that:
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.
When I worked for an agency in the DoJ, as a Telecommunications Program Manager, one of the duties included radio systems for federal law enforcement. I watched DoJ and Treasury force contractors on to a big money project, a nation-wide radio system for all federal law enforcement in the 1990s-2000s.
Starting in 1993, Department and Agency radio / telecom managers (think “techs”) in DoJ and Treasury (pre DHS) got together and we started designing a nation-wide, interoperable, radio system for all federal law enforcement agencies, with sharing to State and Local agencies. This was driven by the mandate of upgrading every radio system in the Federal Government, for frequency reasons, by 2005.
As our research and design progressed, first the radio equipment manufacturers took notice, then Congress. The projected “line-item” for the Radio Project in the federal budget reached $1+ Billion in the late 1990s, for the whole system. Then, the “contractors” were in-charge of the project, “managing the design and process” for the Departments of Justice, Treasury, and Homeland Security. Some years minimal hardware was bought, contractors got the most of the budget.
Today – 2011 – the nation-wide radio system is still not installed. In 2005 (when I retired) part of it was installed in Seattle, and some along the southwest border in San Diego/Arizona (per a senator). I believe it could have been finished and working by now, using the centuries of technical experience available in the agencies of the federal employees (and with some Contractor assistance). This system was designed pre-9/11 and workable.
Tell me about how “contractors” are cheaper. Federal law enforcement still has no interoperable radio systems, as recommended by the 9/11 Commission.