Has the government been "snowden" by claims that private contractors are cheaper?

Inasmuch as I work for a company that does business with the Federal government, I'm going to decline to venture a personal opinion on the matter. But one byproduct of the Edward Snowden brouhaha is that the use of private contractors, such as Snowden, to work for the Federal government is being re-examined. USA Today:

"I don't see this as a major breach where the company was hacked, or a hard drive, or a server walked out of their facility or thousands or millions of records on individuals have been leaked," says Scott Amey, general counsel at the Project on Government Oversight, a government watchdog group. "This leak has been fairly small."

In addition, it's not as if contractors are uniquely prone to leaks. The government is just as capable of unwanted releases of sensitive information; one needs to look no further than Bradley Manning for proof of that.

Still, Amey says he believes the case may cause the government to rethink its reliance on contractors....

The government has three key reasons why it chooses contractors, says Amey: cheaper employees (due to not having to pay for benefits like pensions), a perception that the private sector is better at innovating than the government and greater flexibility, in the sense that it's harder to fire government employees than private-sector workers.

However, Amey considers those "myths." In one 2011 report, for example, Amey and a colleague at the Project on Government Oversight found that federal employees were less costly than contractors in 33 of 35 occupations.

More here.