Billions of Taxpayer Dollars Wasted on Private Contractors

A study conducted by the Project for Government Oversight (POGO) found that on average the U.S. government pays private contractors more than twice what it pays federal workers for a number of public services. The disparity amounts to billions of dollars in overpayment each year.

“Our findings were shocking,” researchers wrote. “POGO estimates the government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services.” In one instance, contractor billing rates were nearly five times the compensation paid to federal employees doing comparable work. Additionally, the government has no program for determining how much money it saves or wastes by either using its own employees or outsourcing.

The findings seem to refute an argument dear to political conservatives: that commissioning the private sector to perform essential public work saves taxpayer money.

Read the whole analysis here. —ARK

The New York Times:

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.

… The study comes after months of criticism, mostly by Republicans, about what they see as the high cost of salaries and benefits for federal workers.

… For human resources management, the federal government paid contractors an annual rate of $228,488, more than twice the $111,711 to have the same services done in-house.

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