I have to be careful with what I say.

What I'm saying is that, at least in the "defense industry", government is cheaper (from what I can see) than contractors because, in THAT industry, defense contractors have more bloat, more levels of middle management and demand for higher profit margins than 'organic' government jobs.

Mind you, this was different in the Department of Transportation when I worked there for a few months many years ago. It was just one layer - the contract house - of overhead that the government was paying for. In that case, the comparison between gov't benefits and contractor overhead was quite fair.

I've had friends who own contracting and temp firms. I know the kinds of margins that these companies work with. The margins in THIS industry are way out of whack with that.

In software, a contractor can expect (depending on the length of the contract) to get anywhere from 50-70% of the 'contract rate' in their salary (meaning the remaining 30-50% is what the agency keeps). The contractor I work for has a far higher margin than that, even when I factor in the cost of the most expensive benefits (retirement contributions & health insurance).