Federal agencies spent some $333 billion on service type contracts in fiscal 2018, GAO has said, a figure well above the cost of pay and benefits for federal employees outside the self-funding Postal Service.
Federal employee organizations commonly argue that in many if not most cases, federal employees could be performing the same work that agencies receive through service contracts, and that those contracts are used to hold down in-house employment counts, which are always a point of public attention. Various studies by outside observers have yielded a wide range of estimates of how many private sector employees work under those contracts.
According to the fiscal 2020 budget proposal from the White House, the non-postal federal payroll in fiscal 2018 was $195.4 billion, with benefits valued at $87.1 billion. In contrast, GAO said that DoD spent $175 billion on service contracts and all other agencies combined spent $157.7 billion.
On the DoD side, the top categories for those services were professional engineering/technical, general health care, general professional, logistics support, and maintenance, repair and rebuilding. On the non-DoD side, they were operation of R&D facilities, general professional, IT and telecomm, building operation, and professional engineering/technical.
In addition, DoD spent $183.3 billion and non-defense agencies $38.1 billion on goods, GAO said. After DoD in total spending came Energy, VA, HHS and DHS.
Of all contracts, it added, 81 percent at non-defense agencies and 53.8 percent at DoD were non-competitive, for a government-wide average of 63.4 percent. “Non-competitive contracts are risky because there is no direct market comparison to help set the price,” it said.
Of all contracts, it added, 81 percent at non-defense agencies and 53.8 percent at DoD were non-competitive, for a government-wide average of 63.4 percent.