The biggest issue, though, is the "government service as a great big welfare program" mentality that pervades full time gov't employees.

The Contractors, you can fire. Unfortunately the great majority of gov't employees are there because you are overpaid, underworked and cannot be fired for incompetence.

The real problem isn't contractors or contract companies, it is that the supervision of contracts is accomplished by the same lazy, incompetent gov't full-time employees you are trying to avoid in the first place.

Until gov't service becomes "at will" and performance based, you will see more of the same. Except you can fire a contractor.