According to a story in the Edmonton Journal, our provincial Government has decided to clean up and standardize their computer desktop systems at a cost of $70 million dollars, over a period of 7 years. Simple math tells you that is $10 million dollars a year.
Rather than hiring more IT staff to deal with this, they have decided to reduce the size of the IT department, touting "oh look we are cutting back" and then turn around and (most likely) pay a lot more than they would have saved, by farming out the work.
There is a time and place for consultants and contractors, of that there is no question. I would suggest to you, that this is not one of them. The "odds" of the cost of this contract going UP in price is huge. The classic example would be the Federal Gun Registry program, that went from some "millions" of dollars originally (which was beyond absurd to start with) to over a billion dollars.
As the old story goes, you can pay me now... or you can pay me later. Paying me now, means having employees who work for a resonable wage, and will deliver performance. Paying me later means letting someone else do the same work, and guess what... paying a lot more in the end to get the job done.
I for one, am getting pretty tired of the lip service.