Independent Study Shows Reckless Privatization of Federal Jobs is a Raw Deal for Taxpayers


A comprehensive study released this week confirmed what many federal workers throughout government have known for a long time: Federal employees are most often a better value to taxpayers than private firms. The report was published by the Project on Government Oversight (POGO), an independent, non-partisan think tank that conducts research on government waste, fraud and abuse.

The years of painstaking research that went in this report unveiled some remarkable statistics:

POGO discovered that the government pays contract billing rates that are 1.83 times more expensive than the rate they pay federal workers; of the 35 occupational classifications the researchers reviewed, federal government employees were less expensive than contractors more than 94% of the time; and of the 1,375 A-76 privatization competitions held between fiscal years 2003 and 2007, 83 percent were won by federal employees.

The costs of this reckless outsourcing have been staggering. The federal government now employs an estimated 7.6 million contract employees at an annual cost of $320 billion to the American taxpayer. This growth, according to the study, appears to be based far more on political favoritism than sound fiscal policy.

“For decades there have been increasing political pressures to reduce the size of the federal government. In response the government has awarded service contracts, resulting in an expanding ‘shadow government’ that costs hundreds of billions of dollars annually.”

This study comes as anti-government rhetoric has reached a fever pitch on Capitol Hill, with conservative members of Congress calling for massive workforce cuts and benefit reductions. These assertions are based on the assumption that federal employees always cost more than their private sector counterparts. With that reasoning now thoroughly debunked, the time has come for our elected officials to give federal workers the resources they need, and the respect they have earned.

“Based on POGO’s findings, we believe awarding government service contracts is nearly always more expensive than having such work performed by federal employees, even after accounting for the total cost to the government of federal employee fringe benefits and associated overhead costs.”

Click Here to View the Project on Government Oversight Report