Occupational Education #3: The Cost of Contractor Budget Analysis Services

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June 20, 2012

Looking for billions of dollars' worth of savings for taxpayers? Look no further than government service contracting. Last September, POGO released a report that found service contractors cost taxpayers nearly twice as much as federal employees who do the same work. With the final discussion of the mammoth defense budget bill looming in Congress and with the nation’s deficit crisis largely unresolved, we figured there’s no better time to take another look at data from the report.

Our report examined 35 different occupations. Over the next few days, we’ll offer a fresh look at ten of those occupations. Today’s occupation is budget analysis. Let's check out the numbers!

Our report found that the annual contractor billing rate for budget analysis is a whopping $302,661—nearly three times the $110,229 in full annual compensation (salary AND benefits) that it costs for a federal employee to do the same work. To put it another way, federal employees perform budget analysis at roughly a 64 percent discount for taxpayers. This sort of service was among the most expensive examined in our report.

Budget analysis represents just a small portion of the, er, budget for service contracting. In fiscal year 2011, the federal government spent $325.3 billion on all kinds of service contracts, according to USAspending.gov. The Pentagon alone spent $198.6 billion on these services.

We’ve said it before, and we’ll say it again: It's time for the government start conducting meaningful comparisons of the costs of performing work in-house and contracting out to the private sector. It doesn’t take a budgetary genius to see that service contracting represents a massive opportunity for savings.

Check out our Bad Business report for more details on this issue and recommendations for how we can begin to address it.

Topics: Contract Oversight

Related Content: Occupational Education

Authors: Bryan Rahija

Project On Government Oversight (POGO)

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