Posts Tagged ‘Government Contractors’

U.S. contract workers cost 3X civil servants

December 18, 2013


When Eastman Kodak Co. was downsizing in the 1980s, it sometimes happened that a laid-off worker went back to work at Kodak as an employee of a temporary help agency.  There were cases where they were hired to do the same jobs that they had done before—except at lower pay and with little or no benefits.

Investigative reporter David Cay Johnson wrote that it doesn’t work that way with the federal government’s contract workers.

The budget deal just worked out between the White House and Capitol Hill … does nothing to curtail wasteful spending on companies that are among the nation’s richest and most powerful – from Booz Allen Hamilton, the $6 billion-a-year management-consulting firm, to Boeing, the defense contractor boasting $82 billion in worldwide sales.

In theory, these contractors are supposed to save taxpayer money, as efficient, bottom-line-oriented corporate behemoths.  In reality, they end up costing twice as much as civil servants … . Defense contractors like Boeing and Northrop Grumman cost almost three times as much.

via Newsweek.

The federal government does not count the number of its contract employees.  Prof. Paul C. Light of New York University is widely quoted as saying that, based on government procurement data, the number of employees working on government contracts exceeds the combined total of federal civil servants, postal workers and members of the armed forces, and employment of contract workers is increasing faster.


Affluence on the Potomac

May 31, 2012

The Washington, D.C., area has overtaken Silicon Valley as the nation’s most affluent metropolitan area.

Andrew Ferguson of Time magazine explained why.

Double click to enlarge

The size of the nonmilitary, nonpostal federal workforce has stayed relatively stable since the 1960s. What has changed is not the government payroll but the number of government contractors.  It’s estimated that, thanks to massive outsourcing over the past 20 years by the Clinton and Bush administrations, there are two government contractors for every worker directly employed by the government.  Federal contracting is the region’s great growth industry.  A government contractor can even hire contractors for help in getting more government contracts.  You could call those guys ­government-contract contractors.

Which means government hasn’t shrunk; it’s just changed clothes (and pretty nice clothes they are). The contractors are famous for secrecy; many have job titles that are designed to bewilder.  What is it, after all, that an analyst, a facilitator, a consultant, an adviser, a strategist actually does to earn his or her paycheck?  Champions of the capital’s Shangri-la economy like to brag of ­Washington’s knowledge workers.

Peter Corbett isn’t so sure about the wisdom of D.C.’s version of the knowledge economy.  Corbett heads a social-media marketing company, with corporate clients that have famous names.  Most of his work involves nonprofit foundations that have flocked to Washington to be close to the fount of grants and tax breaks.  He did a single project for the federal government and then swore it off for good.  He describes his first meeting at the Pentagon.  “There are 12 people sitting around the table,” he says. “I didn’t know eight of them. I said, ‘Who are you?’ They say, ‘I’m with Booz Allen.’ ‘I’m with Lockheed.’ ‘I’m with CACI.’ ‘ But why are you here?’ ‘ We’re consultants on your project.’  I said, ‘You are?’  They were charging the government $300 an hour, and I had no idea what they were doing, and neither did they.  They were just there.  So I just ignored them and did my project with my own people.”

Aside from its wealth, the single defining feature of über-Washington is its youth.  Most of the people who have moved to Washington since 2006 have been under 35; the region has the highest ­percentage of 25-to-34-year-olds in the U.S.  “We’re a mecca for young people,” [economist Stephen] Fuller [of George Mason University] says.   One recent arrival says word has gotten out to new graduates that Washington is where the work is.  “It’s a place where a ­liberal-arts major can still get a job,” she says, “because you don’t need a particular skill.”

Click on Bubble on the Potomac for the full article.  Hat tip for the link to Marginal Revolution, which I list in my Best Blogs menu.

[Later]  I am not anti-government, as anybody who reads this web log will know.  We need letter carriers, school teachers, firefighters, public health nurses and a whole range of other public servants who do actual work.   Most of them are less well compensated, by a long shot, than the people Ferguson described in his article.