Occupational Education #4: The Cost of Contractor Claims Assistance and Examining Services

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June 21, 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 claims assistance and examining. Let's check out the numbers!

Lawmakers or executive branch budgeteers looking to find savings in service contracting might want to start by looking at this profession. Of all the occupations we analyzed in our report, claims assistance and examining—which involves examining workers' comp claims and other legal / entitlement claims—had the highest ratio of contractor billing rate to full federal employee compensation. The annual contractor billing rate for this service comes in at $276,598—nearly five times the full compensation of a federal employee performing the same work ($57,292 including benefits).

Again, this is only one piece of the massive service contracting puzzle. In fiscal year 2011, the federal government doled out $325.3 billion on service contracting. With so much spending on service contracts, the government needs to ensure that it balances its workforce with the interests of the taxpayer in mind. Up to this point, it has largely operated under the assumption that outsourcing is cheaper. It’s time for it to conduct meaningful comparisons of the relative costs of service contractors and federal employees.

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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