“Despite the evident problems identified, it is clear we are safer. Through the private sector the government has been able to access talents and capabilities that would otherwise be inaccessible, since they are in great demand and short supply across the economy.”This, I can tell you, is pretty much total nonsense.
For one thing, this amounts to argument by assertion. "It is clear we are safer." Really? Is it? Then it should be easy to demonstrate.
Which talents and capabilities are we talking about? It's not like we're curing cancer here. I know some people have technical gigs, but mostly you're looking at project management and basic white-collar professional skills. Those are in great demand and short supply?
The problem is the government's hiring system. There's a reason that 90% of the smart people under 40 that I know in government are contractors: because the government makes it impossible for you to come aboard as a civil servant, even in transition from a contractor position performing the exact same duties.
Now there are presumably reasons for this relating to the extensive benefits/sustainment trail for a government employee (which obviously need not be invested in a contractor), personnel flexibility (read: ease of firing), and the opportunity to contract outside for a specialized skill when the need calls for it. But it also means that you have an old, comfortable government workforce (in many places made up primarily of retired O-5s and O-6s with no specific preparation to perform their function) supplemented by young, purpose-trained contractors (often with recent graduate degrees in their field of work). A RAND study from 2001 (pdf) found that about 75% of the defense civilian workforce was over 40, and around a third were over 50. I'm not gonna spend half the morning looking for recent data, but let's just say the trend is not improving. (I'm almost certain I saw some figures recently saying that around two-thirds were over 50.)
I'm getting a bit off track here, but this is a subject I get really exercised about. It's a complex issue, figuring out the costs and benefits of insourcing versus contracting, defining what exactly constitutes an "inherently governmental function" (which cannot be performed by contractors, and which I can tell you for damned sure is a much larger bin than the way we currently define it), how we best husband taxpayer dollars while ensuring the future health and effectiveness of the workforce by balancing civil service hires with contractor support, etc... but I fear for the composition of the Defense Department in 2030.
UPDATE: Jason Sigger has a bit more on this at Armchair Generalist.