Outsourcing government work costs billions extra, study says
The federal government is spending billions of extra dollars outsourcing to private contractors instead of paying its own employees for the same work, according to a new study.
Employees in administrative support positions working with claims assistance and examination get $57,000 if they're working in-house for the government, compared with $76,000 on average in the private sector.
But the government would pay a contractor a whopping $277,000 a year for the same work, according to a report from the nonpartisan Project on Government Oversight, known as POGO. That's more than the average federal judge earns.
Private contractors working for the federal government are paid 1.83 times more than federal employees doing the same jobs and more than double what they would have earned on the open market, the study claims.
Hiring government workers would be less expensive than contractors in 33 of the 35 occupations the report considered, POGO said.
Though POGO said the federal government doesn't maintain accurate records of the size of its contractor workforce, the organization estimated that the group grew to nearly 8 million people in 2005, from 4.4 million in 1999. The government now spends more than $320 billion a year on service contracts, POGO said.
Meanwhile, the number of federal employees has stayed constant at around 2 million.
-- Tiffany Hsu
Photo: The Capitol dome in Washington. Credit: Jewel Samad / AFP/Getty Images