Well, well, well. Turns out that while the salaries of private contractors do tend to be lower than those of federal employees, the total cost of the contract ends up being higher.
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.
Where's the extra money go? Well, if I were to hazard an educated guess, it goes to the corporate bureaucracy of those who won the contract as well as the built in corporate profit margins. The same issue exists with private insurance companies and healthcare. All of the money going into the insurance company does not get paid out in medical expenses--there's a cut for the company. There's profit in denying care and there's profit in simply being the corporate middleman.
We should not privatize or contract out government services when it ends up costing us more than simply hiring federal employees.
“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.”