Monday, March 16, 2015

How Many Contractor Employees Working Under Government Contracts? No Clue

Last week, the Congressional Budget Office (CBO), in response to a request from Congressman Van Hollen to provide him an analysis of the size and cost of the federal Government's contracted workforce, wrote that "regrettably" there is no comprehensive information about the size of the contracted workforce and further stated that it was unable to come up with a realistic estimate given the sparsity of available data.

This admission is hardly surprising. Folks have been trying for years to figure out the numbers of contractor personnel under Government contracts - not only the numbers of employees but also the salaries earned by those employees. There is long-held suspicion that contractor employees make a whole lot more than there Government employee counterparts.

The CBO reported that federal agencies spent over $500 billion for contracted products and services in 2012, an amount that grew faster than inflation since 2000 and grew as a percentage of federal spending from 11 percent to 15 percent. But that includes everything from a gardener to an aircraft carrier. Of that $500 billion, $260 billion represents purchase of services for professional, administrative, management, facilities, construction, information communications and equipment related services. But this data still does not give FTE (full-time equivalent) headcount.

Recently, DoD began collecting and reporting the number of FTE positions funded by some of its service contracts. However, the CBO found that it excluded service contracts related to facilities, some data is reported by contractors, and some data is estimated by DoD officials. The CBO could not rely on its accuracy or completeness. In fact, the database would probably lead to erroneous conclusions. For example, it reported that $129 billion was spent on service contracts for 670,000 FTEs. That would average to about $193 thousand per contractor employee. However, that average does not account for other costs included in the $129 billion including materials needed to do the work, capital equipment, structures, training, etc.

The full CBO letter can be obtained here.

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