From OMB Watch (http://www.ombwatch.org):
Conventional wisdom in Washington dictates that the private sector can always provide services at a lower cost than the federal government. A new study (http://pogoarchives.org/m/co/igf/bad-business-report-only-2011.pdf) from the Project On Government Oversight (POGO; http://www.pogo.org/), however, turns conventional wisdom on its head, demonstrating that the government rarely reaps the purported benefits of lower costs through the outsourcing of service work. In fact, POGO found that, on average, the government pays service contractors more than 1.8 times the amount it pays federal employees with the same education, doing the same job, and performing similar tasks.
Read more at http://www.ombwatch.org/node/11865/.