Contracting costs the government extra for the termination, unemployment, and retraining of displaced government workers. Contracting may have a higher initial marginal cost than would expanding government services. Quality a. Contracting may reduce quality through the pressure to cut corners economically. Contracting will decrease the professionalism of rank and file prison employees because they will be underpaid and insecure and thus not able to develop a career orientation. Contracting on a per prisoner, per diem basis gives private wardens an incentive to hold prisoners as long as possible.
Contracting creates a kind of underground government, thus adding to total government size.
Flexibility a. Contracting may limit flexibility by refusal to go beyond the terms of contract without renegotiation. Contracting may be stopped in advance, or suddenly reversed in midstream, by adverse public reaction, legal challenges, partisan politics, or organized opposition by interest groups, including public employee unions. Security a. Contracting may jeopardize public and inmate safety through inadequate staff levels or training. Contracting increases the risk of strikes, which may not be illegal for contractor personnel. Contracting may cause high employee turnover at transition.