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>In a similar vein, I've some friends who worked at a hush hush defense facility. The vast majority of the people at the facility are hired through a contractor. The employees are unionized, have a pension, and when a new contractor wins the bid, they have to agree to keep the staff in their current positions.

Not defense, but my government contract works the same way. I'm on company number two, but I know people who have worked for 4 different companies, all while doing the same job on evolutions of the same contract. There are people who have done full careers working onsite for my agency without ever converting to be a civil servant.