That outsourcing government work to private contractors will get the work done more cheaply and efficiently is an article of faith in some circles. It’s not always (or perhaps even usually) true. Ron Nixon, writing for the New York Times, reports on a study showing that government pays a lot more for private contracts than it does for having comparable work done in-house.
Despite a widespread belief that contracting out services to the private sector saves the federal government money, a new study suggests just the opposite — that the government actually pays more when it farms out work.
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.
In the past, I’ve shared my own experience with bringing printing of bills for the General Assembly in-house — it resulted in some fairly substantial savings over the amount they were paying to contract out the printing.