In FY 2010 (Oct 1, 2009 through Sep 30, 2010), the Federal Government spent more than $44 billion on management support services. In laymens terms, these are contract employees, sitting next to and indistinguishable from government employees. Guestimating about $100k average per contract employee (probably a low estimate), this would mean that contract employees add another 440,000 (upper estimate) on top of the official government worker numbers (federal = 4,443,000).

$100k would not be the average salary that these employees receive, but the amount paid to the managing company who in turn pays their employees (possibly with a $50-60k salary). Tangentially, these numbers show what hidden costs are associated with government jobs (to the extent that organizations are willing to pay $40k extra not to employ these workers through government channels).

More directly, these numbers show that official government payroll numbers are fraudulent. This is not even counting contractors paid to perform on government contracts (such as construction workers building a federal building). The federal workforce is substantially larger than the official numbers.

This contracting process benefits organizations on multiple levels. On the market side, these employees can be fired at whim, yearly (the contract can be chosen not to be renewed). This is, as opposed to government workers, who can literally sleep on the job and not get fired. Also, the worker does not incur government pensions (although are still subject to the Service Contract Act), and the worker possibly can be paid less than an equivalent government worker (including benefits). An additional benefit is that asinine government hiring procedures can be bypassed.

Contrawise, the worker can be paid more than an equivalent government worker (as is more often the case). The position is not subject to competition (agencies literally tell the parent company who to hire), and in turn, nepotism/favoritism is rampant (friends and ex-government workers being directly hired). Also, the positions do not count to any agency total and bypass agency limits (so the workforce can be expanded indefinitely).

When those in the news talk about the government workforce, it is important to remember that there is a concurrent workforce behind the scenes. A shadow government.