The use of private contractors is not just for the Pentagon or the State Department. It is also for that frequently crashing collection of agencies euphemistically known as the intelligence community (IC).
I have written previously on this but let's consider some of the costs of using contractors in the IC. The following is taken from a paper, “‘We Can't Spy … If We Can't Buy!': The Privatization of Intelligence and the Limits of Outsourcing ‘Inherently Governmental Functions” by Simon Chesterman of the National University of Singapore Faculty of Law, presented at a meeting of the International Studies Association in San Diego back in April. Chesterman is author of the book One Nation Under Surveillance: A New Social Contract to Defend Freedom Without Sacrificing Liberty, published last year.
Just like old Pentagon contractors, IC contractors can go way over budget. One example was the “National Security Agency's contract with Science Applications International Corporation (SAIC) to modernize its ability to sift vast amounts of electronic information with a proposed system known as ‘Trailblazer,'” according to Chesterman's work.
“Between 2002 and 2005, the project's $280 million budget ballooned to over $1 billion and was later described as a ‘complete and abject failure'. Perhaps the most spectacular such failure was Boeing's Future Imagery Architecture, a 1999 contract with the National Reconnaissance Office (NRO) to design a new generation of spy satellites. It was finally cancelled in 2005 after approximately ten billion dollars had been spent. Nevertheless the pool of potential contractors — in particular given the requirement for security clearances — remains small. Thus when the NSA sought a replacement to the failed Trailblazer, the contractor it retained to develop the new programme ExecuteLocus was SAIC.”
, updated 10/13/2012 
