MARCH 29, 2012


John LaBombard: 202-228-6502, 202-384-4132 (c)

Anamarie Rebori: 202-228-6253, 202-631-3310 (c)

– U.S. Senator Claire McCaskill chaired a Senate hearing today aimed at exploring a seemingly simple question—is it cheaper for American taxpayers when the federal government contracts with private companies, or uses federal employees?—and highlighted the fact that the answers are not as clear as previously thought.

Continuing her five-year fight for stronger accountability over the way taxpayer dollars are spent through contracting, McCaskill said that the federal government’s spending on contractors has far outpaced dollars spent on federal employees despite little evidence that using contractors instead of federal employees saves taxpayers money. McCaskill also pointed to the fact that contractors now perform many of the duties which most Americans would assume are done by government employees, from managing and overseeing contracts and programs to developing policies and writing regulations.

“As with any expense of taxpayer dollars, we have to ask whether the government is getting the most effective use out of those dollars,” said McCaskill, Chairman of the Senate Subcommittee on Contracting Oversight. “It would seem intuitive then that when deciding whether to contract out a function, the government would figure out how much it will cost, and whether it might be cheaper for federal employees to do it instead.”

Citing efforts to freeze and cut the pay of federal employees without addressing pay awarded to contractors, McCaskill added that “it’s like shutting one eye and only looking at part of the problem. We’ve got to take a hard look at whether taxpayers are really getting the best bang for their buck” through contractors.

McCaskill heard testimony from representatives from the U.S. Army, the Department of Homeland Security, and the Office of Personnel Management. Army and Homeland Security officials described steps being taken to better track the amount of money spent on federal contracting through those departments. Specifically, witnesses answered questions on federal legislation to cap the amount of taxpayer money the federal government can pay contractors—a move McCaskill supports.

“My colleagues Senators Boxer and Grassley have proposed changing this cap to $400,000 for all contractor and subcontractor employees—that’s how much the President currently gets paid,” McCaskill said. “It’s important to understand that this isn’t about how much private companies should pay their own employees—it’s about how much we’re willing to pay for contractors.”

Video of McCaskill’s hearing is available HERE.