For the sake of debate, lets assume an equal level of incompetence between contractor run projects and government run projects.
In that case at least
a) There's no need to pay extra for the profit margins of the contractor companies (and the inevitable sub-contractors they use)
and
b) The incentives of the people doing the work are likely to be closer to the original project, in that the people doing the work are in the same organization as the project.
For me, outsourcing makes sense if the organization doesn't have enough of the specific type of work to have a fully staffed internal team, so specialist services, or if they are obliged to get an external opinion (e.g. auditing/pen testing). Otherwise you're just adding more layers of profit seeking middle-people...
"Overhead" is a large part of costs, and profit is often contractually limited in government contracts. But much of the profit is hidden in the markup, which can sometimes be 50%, meaning you pay $1.50 for $1.00 of supplies, labor, etc.
To add to this, the gov requires that all the markup is broken out, so it can be audited. I think usually contractors are allowed things like R&D budgets, salary (maybe not bonuses?) etc. I'd love someone more knowledgeable than I am to chime in.
The Apollo program was run by NASA, who had lots of government employees, but at the same time all the hardware and much of the software was built by contractors. The Apollo program was behind schedule and over budget for most of the project period.
NASA originally estimated the cost to somewhere between 7 and 12 billion USD; NASA Administrator increased this to 20 billion USD in 1961, but it ended up costing more than 25 billion USD in 1973 dollars.
When allowed to do the job well, yes. The UK’s Government Digital Service led the way in this, and have massively improved the online experience of everything from finding information about the current Parliament to booking vaccinations. Their entire approach is focused on “what does the user need” as opposed to “what does the thousand page spec doc say”. The USDS was founded on the same basis and from what I’ve heard are similarly impressive.
That's heart-warming to hear, but alas cherry-picking examples won't sway anyone much?
Have a look at eg the outsourced Danish firefighters. Seems to work just fine, but would be unthinkable in most countries, including the US. (Btw, Americans have more firefighters per capita than about anywhere else.)
In that case at least
a) There's no need to pay extra for the profit margins of the contractor companies (and the inevitable sub-contractors they use)
and
b) The incentives of the people doing the work are likely to be closer to the original project, in that the people doing the work are in the same organization as the project.
For me, outsourcing makes sense if the organization doesn't have enough of the specific type of work to have a fully staffed internal team, so specialist services, or if they are obliged to get an external opinion (e.g. auditing/pen testing). Otherwise you're just adding more layers of profit seeking middle-people...