More “Top Secret America” Myths Debunked: Contractor Costs Edition

In the July 20 installment of “Top Secret America,” The Washington Post unabashedly states:

"Through the federal budget process, the George W. Bush administration and Congress made it much easier for the CIA and other agencies involved in counterterrorism to hire more contractors than civil servants. They did this to limit the size of the permanent workforce, to hire employees more quickly than the sluggish federal process allows and because they thought - wrongly, it turned out -that contractors would be less expensive."

The Office of the Director of National Intelligence (ODNI) largely debunked this myth in its July 19 briefing paper, which states:

"It is true that core contract personnel are, on average, more expensive than their government counterparts. However, in some cases, contractor personnel are less costly, especially if the work is short-term in nature, easily available commercially, or requires unique expertise for immediate needs."

Fair enough. But even ODNI’s statement ignores the fact that no apples-to-apples comparison of contractor and federal employee costs has been conducted. Not for intelligence work. And not for other government work.

The former Chief Human Capital Officer for the ODNI has acknowledged that the statement claiming contractors are 40 percent more expensive actually comes from doing only a compensation survey, not a total cost comparison. Moreover, he also points out that because such a large segment of the contractor workforce brings specialized skills that are in short supply and great demand across the economy (and thus far more expensive than what the government can afford), the 40 percent figure is quite misleading. These are skills the government cannot compete for and might well not otherwise be able to access unless contractors are hired.

Outside the intelligence realm, the story is no better. An Air Force Materiel Command document proves that the government isn’t including all of its overhead, benefit and other associated costs in the comparisons between a federal worker and a contract employee. It states:

"Q: Was there a non-pay tail added in for each new civilian authorization to account for supply training and other costs? A: No…The intent of the conversion was only to remove the contract labor costs.”

Such smoke and mirror tactics only serve to hurt the mission by spurring ill-informed decision making and unsupported media statements that could weaken government readiness and unnecessarily increase taxpayer costs.

Further, given the obvious internal government management challenges highlighted in the Post piece it’s also a stretch to say that this would be any better if all the work were performed by federal employees. In fact, more than two-thirds of the work is performed by federal employees, and yet incidents like the attempted Christmas Day bombing show the intelligence community was still not coordinating or collaborating adequately. This is not a use of contractors problem. This is a government management and organizational problem.

Watch PSC Executive Vice President and Counsel explain more about the role of contractors during his July 19 appearance on CNBC's "Street Signs with Erin Burnett."