One thing to be cognizant of. (Isn’t that a pretty erudite word for a guy educated in small town Western Maryland?)
Congress has repeatedly and successfully tried to limit or reduce the number of federal government employees under the banner of smaller government. But they missed something. (If I were a cynic, maybe they didn’t miss something.)
Here’s the deal. (My data and facts are several years old. I’d bet big time that my analysis and conclusion is still the valid.)
A federal government employee on average used to cost us taxpayers on average about $150K per year (salary, benefits, pension, everything).
A contractor (with the same skills, doing the same work) costs about us taxpayers on average about $250K.
That’s $100K per year difference. (Note that the contractor human doesn’t get that $100K diff. They do get some of it. But a lot goes to corporate profits for the contractor company and to cover all the overhead in the contractor company.)
From Google: “According to data from Federal News Network, there are approximately 3.7 million federal government contractors in the United States, significantly supplementing the 2 million federal civilian employees.”
Take 1M contractors, wave your magic wand, and convert them to federal civilian employees. Same person doing same work. You save us taxpayers 1M people x $100K diff = $100B. Yes, $100B. Annually, every year, forever. Why in the world wouldn’t a sane person do that? And do it yesterday? (I keep putting this out there and wonder why no uptake. Is there a flaw in my analysis?)
OK, it gores the ox of the profits of the big contractor providers (e.g., Lockheed Martin, Northrop Grumman, Boeing, etc.). OK, it gores the ox of the big contractor companies contributing to lobbyists and PACs. Too bad for them but, as a taxpayer, I care not. If I were a politician in a district with a lot of govies and contractors, would I care? Contractors vote but so do govies; one vote each.
OK, it means a larger federal workforce. As a taxpayer, I care not; I want the same output from my federal government with the same quality … but at a lower cost. You can have your cake and eat it too.
I really, really hope DOGE tumbles to this.
PS. Frankly, the current use of contractors instead of govies is awfully close to waste, fraud, and abuse. What have the IGs done about it?
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Reed, this comment comes from a position of very minimal understanding of your topic.
Are contractor expenses always repeated annually?
Since it appears to me that Govies are pretty permanent, wouldn’t the total expenditures for employees ultimately exceed those of contractors?
I’m sure there are exceptions, and maybe a lot of them. But not most of them. My mental model of the norm is that a contractor position is long lived. Anyway, it’s a very good, insightful question. So, I took a peek, albeit cursory. Google says: “The number of federal contractors has increased over time, while the number of federal employees has remained relatively constant.”
Interesting. I wonder what role has Congress played in this?
I think that Congress sets govie headcount. In their passion for “small government”, they limit or reduce headcount of govies.