When Privitization INCREASES Expenses!

Good Magazine highlights a new POGO study which finds that government outsourcing often increases costs rather than decreasing them. 

A new study by the Project On Government Oversight revealed that contractors earn 1.83 times more than public employees, and more than twice the compensation paid in the private sector for comparable services.
While the federal workforce has remained steady at about 2 million people since 1999, the contractor workforce increased from 4.4 million to 7.6 million in 2005, costing approximately $320 billion a year. In 33 of 35 occupational classifications, paying government employees would be cheaper than hiring a contractor.
POGO points to two main reasons for the huge waste. One is the steady drumbeat of small- and anti-government rhetoric from the right, which has resulted in the creation of a “shadow government” in which contractors perform services once handled by public employees at far greater cost—which, ironically enough, increases the size of the federal budget.
The second reason is that the government is ill-prepared to negotiate market-rate fees because it does not manage data about payments and processing or maintain clear standards about occupational specialties and justifying outsourcing. There’s also the issue of no-bid contracts and other shady paths for companies to find lucrative arrangements working for the government.