Who's cheaper? Feds or contractors?

GAO can't figure it out

The Government Accountability Office’s new in-depth report analyzing pay for public and private sector workers doesn’t bring any clarity to the never-ending debate  over who’s the better deal for a cash-strapped government: contractors or federal employees.

Only Congress or the White House can settle that debate, Scott Amey, general counsel for the Project on Government Oversight, wrote on the POGO Blog July 25. The debate can end with a study that compares the public sector, the private sector, and government contractors’ total compensation and all associated costs.

“A comparison of federal and private sector pay doesn’t do anything to help contribute to the government’s decisions to insource or outsource work,” he wrote.

It also doesn't do anything to help settle the argument over whether feds are overpaid compared to the private sector, which surfaces periodically when Congress considers legislation to freeze or cut federal salaries as suggested deficit-slashing measures. GAO released a 66-page report July 23 that delves deeply into General Schedule pay and its comparison to the private sector. However, any comparison of government and contractor employee costs was outside the scope of its work.

GAO analyzed six studies. One, for example, was from POGO and another was from the Heritage Foundation. But the studies all came to different conclusions about which sector had the higher pay and the size of the disparities. They each took different approaches and used different methods and different data. Thus, their interpretations were not the same.

To say the least, the title of the report says it all: “Federal Workers: Results of Studies on Federal Pay Varied Due to Differing Methodologies.”

A true evaluation needs a job-to-job, skill-to-skill perspective, Amey wrote both in the blog and in a letter in response to GAO after reviewing the draft report, which was included in GAO’s final report.

“No one will really know the truth until uniform systems are created and apples-to-apples comparisons are conducted that factor in comparable skills, work experience, education, and other non-pay factors,” he wrote in his blog post.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Wed, Sep 5, 2012

I think it's a wash. . .When you hire a federal employee, they are a lifetime responsibility from hire date to death (and potentially death of spouse) considering pensions and post-retirement health insurance. When you subcontract, that contract can end at any time, hence potentially higher salaries to cover continual at-risk employees. Also, have you read a federal contract? Tons of clauses, laws, regulations, etc. to comply with throughout the contract. . .lots of admin staff needed to support the contract and high-level project managers. That's not factored into cost of a federal employee. Federal government asks contractors to jump through flaming hoops all of the time because they hold the purse strings. . .there'a cost to that. Pros and Cons of each.

Sun, Jul 29, 2012

For limited-term projects you can tie a bow around, that have a date when you can call them complete, contractors can be cheaper. For open-ended on-going support? No Way- an honest accounting would show gov cheaper every time. Outsourcing should more properly be called subcontracting- it was a stunt so politicians could claim they reduced the size of FedGov, nothing more.

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