Even rank-and-file employees benefit. In a recent survey by the jobs Web site ClearanceJobs.com, contractors with security clearances earned an average salary of $98,221, or 18 percent more than those doing similar jobs in the governmentTo expand this point, federal employees don't feel overpaid because they can see contractors and vendors earning better money. And they can see people retiring, particularly from the military and DOD, and going into private enterprise making use of the knowledge and contacts they gained while in the government.
Now to some extent it's apples and oranges: postal workers and mid-level bureaucrats are unlikely to move to private enterprise. And the bureaucrat who resents the hell out of a contractor/consultant who comes in as a savior, but with no knowledge of the agency's business, is unlikely to remember the contractor is taking on a lot of risk: today's contract feast is tomorrow's no-work famine. But we're talking psychology here, we're talking people, not an accountant's audit.
[Updated: with this--"And in case you're keeping score at home, "Great" Falls was at the top of the list of "top-earning towns," which, you know, shocker, especially when you consider it's essentially a magnet for government welfare recipients, also known as "contractors," the end."