I forget the "price point" or whatever it is called where employing a contractor is cheaper than hiring a Fed.
It's not what y'all think.
Past about year 3 or so, that CTR will cost us more than one of those dirty, lazy Feds. I contracted for almost 17 years, the game isn't new to me. I hope some of you are doing the math...
As a private sector contractor myself who also has a brother that is a government contractor, I want to say up front that I don't think contractors are a good replacement for employees especially in very large bureaucratic organizations. It causes a loss of tribal knowledge as they move in and out of positions. There's a case for contractors as point solutions or short term staff augmentation but they should be applied and then move on to the next one. Career contractors, the ones that get in a position and build a nest should be cut mercilessly. Hire them, get them to do the job they were hired for and then let them move on. If a project becomes a never ending program, replace the contractor with an employee (or offer employment to the contractor).
That said, there are distinct financial benefits to using contractors over employees at ANY income level. Yes, there's a point where the annual cost based solely on salary and benefits gets higher for a contractor than an employee. BUT, when you factor in retirement in an enterprise, whether public or private, that has a pension plan based on the traditional 20-year to 30-year timespan the lifetime cost of an employee far exceeds the lifetime cost of a contractor. As lives have gotten longer, the tail costs on retirement plans has tipped massively. Work for 20 years and collect retirement and medical benefits for the next 40. It only works without COLA and good investments by the pension plan. We've all seen how good the government has been at investing... Just ask those of us that are facing retirement without social security after paying into it our whole lives.
For government, there's another benefit to contractors as well. We all know that it requires a literal act of Congress to remove an employee. Employees of the US government can quickly get to a point where they are virtually impossible to fire directly. That's the reason DOGE started with probationary employees. They are the only ones that can be immediately released without cause. That's also why they have the resignation program. It doesn't take changes to the law to let people quit... Contractors on the other hand can be let go without warning, with no severance, for any reason at all with no notice. They aren't being fired, the contract is simply ending due to shifting needs. There's no law or union protecting them with the exception of true discrimination and even that is hard for the contractor to prove.
There is a place for both types of worker. Ongoing long term position with shifting requirements, employee. Short term need, contractor. The biggest issue is that the roles are not interchangeable, but they are treated that way in both the private and public sectors.
ETA: if there ever was a place where it makes sense for a contractor in government, it's the elected official. Work for 4 years and collect lifetime income and medical? Bah! Make them contractors, pay them well for the time they are in office, but don't amass huge expenses covering them for the rest of their lives.