By BRYAN RAHIJA
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 cemetery administration services. Let's check out the numbers!
Our report puts cemetery administration services near the top of the list of most expensive services to contract out to the private sector. We found that the annual contractor billing rate for cemetery administration services is $299,832—about triple the amount of the annual compensation (including benefits!) of a federal employee performing these services.
If you asked me to rattle off a few services performed by the federal government, cemetery administration probably wouldn’t be one of the first things I’d name. But it’s one of the many, many services that we now outsource to the private sector, largely under the assumption that contracting out is more efficient than having the government perform the work itself (see here for a recent example of a cemetery-related contracting controversy). The scale of this outsourcing is enormous: in fiscal year 2011, the federal government spent $325.3 billion on all kinds of service contracts, according to USAspending.gov. As we note in our report, the federal contractor workforce dwarfs the federal employee workforce nearly four-fold.
Unfortunately, the spigot of spending on service contracting has opened without much analysis of the relative costs of federal employees and service contractors. As we argue in our report, the bottom line is that the government needs to start conducting more of these cost comparisons before we dig our budgets an early grave.
Check out our Bad Business report for more details on this issue and recommendations for how we can begin to address it.
Bryan Rahija is a contributor to POGO's blog.