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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]1 contractor I know at State was laid off a month or two ago.

Yes, typically direct hire employees are cheaper in total cost than contractors, but they are getting rid of those too. [/quote]

How is that possible with benefits, retirement, etc.?[/quote]

Typical body shop contractor markup is maybe 80-100%. This means if contractor's direct employee has $x in pre-tax salary then government is charged (1.8 * x) to (2 * x) dollars.

The pass-thru markup typically is 8% to 10%. So for subcontractors who are 1099s (on the same contract) who get paid $x, the government gets charged (1.08 * x) to (1.1 * x) dollars.

Federal employees usually cost less than a direct employee of the contractor. For subcontractors who are 1099s, the subcontractors often are cheaper than civil service, but not always.

My part of the government is not in the budget. We are pure fee for service, so I have visibility into the fully burdened costs of a civil service employee. [/quote]

Imagine if the federal government had the same system of appending a percentage of the total salaries and benefits of support staff and management to each FTE's hourly rate to get the true cost of a federal employee.[/quote]

Uhh, that's exactly what we. At least at my agency. That's how our budget works. I pay a "tax" to the agency that covers institutional support.[/quote]

Yeah our Department takes like 10% off the top before the sub components get it. They basically tax us to fund the central department (where most of the waste is IMO). [/quote]

There's some skimmed off the top for the overall budget, but we're taxed on what we spend. There are different overhead rates that for staff, contracts, equipment/service purchases, and grants. That's how most of the centralized management and support functions get their money.[/quote]

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