How Government is Burning Through Your Money

Of all the three workforces that do work for the federal government – federal civilian employees, military personnel, and contractors – federal civilian employees are the cheapest, often by two to three times. But because of politics, agencies are forced to cut down on the use of civilian employees and give the work to contractors.   

Chart: Increase in Spending on Service Contracts Outpaces Investment in Civil Servants from 2000 - 2012; Percent Change over that period: Federal Workforce: Federal Civilian Workforce - 26%; DoD Civilian - 28%. Service Contracts: Non-DoD - 62%; DoD - 116%This trend is dangerous, not only because of the huge amount of money wasted but also because handing over control of public functions to for-profit private businesses could affect the nation’s security and readiness. Considering the fact that the Defense Department is the biggest outsourcer, the threat is bigger than you think. The department is also increasingly using military personnel in place of civilian personnel for non-military functions, even though military personnel cost more than civilian personnel and sometimes even more than service contractors.   

These numbers from 2000 and 2012 show the extent to which federal agencies were wasting money on expensive contractors when they could have hired civilians to do the work.

  1. Federal spending on service contract in 2000: $136.5 billion
  2. Federal spending on service contract in 2012: $259 billion
  3. Percentage change: 90%
  4. Investment in civil servants in 2000: $229 billion
  5. Investment in civil servants in 2012: $293.6 billion
  6. Percentage change: 28%

The Defense Department was leading the pack. DoD’s spending on service contracts went up 116% between 2000 and 2012 while investments in civilian employees increased a mere 26%.   

As the House Armed Services Committee noted last year: “The committee is concerned that not all contracted services are being subjected to spending limitations. The department does not deliberately plan for most contracted services. At the same time, the department exceeded its spending limitations on contracted services, the department furloughed a majority of its civilian workforce and, in the case of many DoD components, under-executed civilian spending.”  

The small increase in the civilian workforce during that period of time was for good reason. According to the DoD Comptroller, 50,000 positions were added to replace more expensive military personnel. Similarly, 30,000 were added to replace more expensive contractor personnel. Civilian positions were also added for acquisition, health care, and cybersecurity.  

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