Over the years there has been a lot of discussions, white papers…etc on why the USPS should be privatized. However, the people pushing for privatization of USPS  has failed to mention the high cost to taxpayers. As Senator Claire McCaskill (D-MO) aptly put it:  “We have spent a lot of time in Congress talking about freezing the number of federal employees and freezing the pay of federal employees. There has not been enough talk about freezing the size of the contracting force and freezing the pay of contractors. And frankly, if people understand that we’re spending more money on service-related contractors in many agencies than we’re spending on federal employees.”

The following are excerpts from two editorials that point out: “The inability of the private to compete with the public seems to matter little to politicians of both parties who’ve drunk the private-sector-is-always-better Kool-Aid.”It’s been a bad month for the private sector

The private sector has had a very bad month.   Its most widely publicized failure occurred when UPS and FedEx fumbled their Christmas deliveries while the U.S. Postal Service scored a touchdown.

“An unlikely Star of the Holiday Shipping Season:  The U.S. Postal Service” is how Business Week described the clear victory of the public over the private. “The government-run competitor was swamped with parcels just like UPS and FedEx were, with holiday package volume 19 percent higher than the same period late year. But there were no widespread complaints about tardy deliveries by USPS. The postal service attributes its success to meticulous planning.”

Less publicized but even more damning has been the spate of articles regarding the epidemic of snafus and high costs of private contractors . A recent Op Ed in the New York Times by David A. Super, Professor of Law at Georgetown University offered a litany of private contractor failings, including a flawed Colorado Benefits Management System that took four years to fix.

Washington now spends about $500 billion on private contractors, more than double what it spent in 2000 even though the evidence is overwhelming that hiring contractors is more costly and less accountable than keeping the work in-house.

A thorough investigation by the Project on Government Oversight (POGO) found that Washington pays private contractors almost twice as much as federal employees. In 33 of 35 occupational classifications, federal employees were less expensive.

via Its Been a Very Bad Month For the Private Sector

Obamacare website woes: another sign of out-of-control private contractors

Whatever the ultimate benefits of Obamacare, it’s clear that the rollout of its $400m registration system and website has been a disaster. Healthcare.gov was unusable for millions who visited the site on launch day earlier this month, and the glitches reportedly continue. What went wrong?

Of course, the Obama administration is to blame for the botched rollout, but there are other culprits getting less attention – namely, global tech conglomerate CGI, which was responsible for the bulk of the execution, and in general the ability of big corporations to get massive taxpayer-funded contracts without enough accountability.

Government outsourcing to private contractors has exploded in the past few decades. Taxpayers funnel hundreds of billions of dollars a year into the chosen companies’ pockets, about $80bn of which goes to tech companies. We’ve reached a stage of knee-jerk outsourcing of everything from intelligence and military work to burger flipping in federal building cafeterias, and it’s damaging in multiple levels.

For one thing, farming work out often rips off taxpayers. While the stereotype is that government workers are incompetent, time-wasters drooling over their Texas Instruments keyboards as they amass outsized pensions, studies show that keeping government services in house saves money. In fact, contractor billing rates average an astonishing 83% more than what it would cost to do the work in-house. Hiring workers directly also keeps jobs here in the US, while contractors, especially in the IT space, can ship taxpayer-funded work overseas.

[PR note: According to the news media CGI’s current contract will not be renewed after February]

via Obamacare website woes: another sign of out-of-control private contractors