Myth: Large cuts in the number of government contractors will save taxpayers billions of dollars.

The Facts: There is no evidence that a large reduction in the federal contractor workforce would result in any significant savings for taxpayers.

Many who make this unsupported claim assume contractor employees are performing work that could simply go undone, and that the government will not need to replace those contract employees with federal employees. The government can only save money if Congress and the Administration decide to eliminate specific programs from the government mission, which would eliminate the cost of federal employee and/or contractor salaries.

It is true that in some areas, particularly higher-end technology and management positions, contractor personnel are more highly compensated than their government counterparts; the so-called “pay gap” has been a key issue for federal employee unions for many years. When contractors compete for talent in a marketplace where such talent is in short supply, the problem is exacerbated because of the government’s failure to keep pace with the economic realities attracting and retaining highly experienced personnel.

More broadly, however, arbitrary reductions in contractors could decimate the government’s ability to meet its missions.  Indeed, because the government’s missions are increasingly complex, they require an ever growing range of technologies, skill sets and approaches to solve problems.

According to a 2007 report by the Partnership for Public Service, the government will need nearly 200,000 “mission critical” new hires over the next two years just to keep pace with expected retirements, agency needs, and national security work. In June 2008, the global human resource firm Challenger, Gray & Christmas estimated that the government will need more than 550,000 new employees over the next several years. According to their research, the government today has more than 100,000 current vacancies. As the government’s workforce demographic problems grow and its need for advanced skills and capabilities increases, the challenge of hiring and retaining employees will increase, and government contractors will continue to play a critical role in providing the skilled workforce that is so essential to the government.

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