While Republicans this year are claiming President Obama wants to balloon the size of government, reality tells a different story: not only has public sector employment fallen under the current administration, but Obama has succeeded in making significant cuts to wasteful contractor spending. Expenditures on independent contractors in the first half of 2012 dropped by 28 percent relative to the same period in 2010, the $13.1 billion dollars spent this year coming in well ahead of the Obama Administration’s target for cuts to contractor spending.
Contractors from large firms are often employed in place of standard federal employees, a process which costs the government a several billion dollar per year premium:
Federal contracts in 12 targeted consulting areas totaled $43 billion in fiscal 2010, with companies such as Lockheed Martin, Deloitte and Booz Allen Hamilton Holding among the biggest recipients of awards.
“Sometimes agencies are spending money on consultants to write reports that really don’t go anywhere — they sit on the shelf,” Jeff Zients, then-deputy director of the Office of Management and Budget, said when he announced the goal. “Some of these contracts are unnecessary and can be reduced.”
Independent evidence backs up Deputy Director Zients’ assessment. A report by the watchdog group Project on Government Oversight (POGO) found that the government “pay[s] contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services.” POGO researchers concluded that “the federal government is not doing a good job of obtaining genuine market prices, and therefore the savings often promised in connection with outsourcing services are not being realized.”
One federal contractor, Larry Allen of Allen Federal Business Partners, told Bloomberg Government that contracting profits would likely go up again in a Romney Administration, saying “You would have much more of a predisposition for outsourcing, and that could lead to an increase in service contracting.”