One way that the US Department of Defense (DoD) is attempting to reduce the costs of overhead and support activities is by bringing into the government work done by private contractors.
Over the past two years, the military services have repeatedly cancelled well-performing contracts with private companies and turned all or much of the work over to the public defence industrial base – largely government-owned and operated depots and logistics centres.
Often the claim is made that the public sector can do the work more cheaply than the private sector.
Such claims go against several decades of history and established DoD policy which had been to emphasise performance-based logistics over the traditional fee-for-service approach.
How credible is the claim that the public sector is more efficient that the private sector?
Unfortunately, the services have not made public the analyses they say demonstrate the advantage of public sector work over that done by the private sector.
More recently, USA Today reported that the number of federal workers earning top wages has skyrocketed over the past decade.
“The number of federal workers earning US$150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office.”