Richard W. Stevenson discusses privatization of government jobs,

a trend that has been taking place in government at all levels for the last two decades. State and local governments as well as Washington have been hiring private companies to pick up trash, run prisons, collect traffic tickets and do much of the other mundane business of government. In many if not most cases, the changes have gone smoothly, and have been seen as living up to their goals of saving money and improving services, although there have been problems as well.

But then he concludes by citing Paul C. Light, "an expert on the federal bureaucracy at New York University and the Brookings Institution, the liberal-leaning research group (my italics), to the effect that:

firm evidence of savings in the long run was sketchy, in part because private contractors sometimes won the business with low bids and then pushed their prices up after the government work force has been disbanded. Union officials also cited what they called horror stories of contractors who performed poorly or got into legal or financial trouble after taking over government jobs. Last spring, for example, the Education Department's inspector general concluded that a contractor had improperly kept for itself $6.6 million in student loan interest payments it had collected.

Well, he did make an effort to be balanced.

Update

NPR just interviewed a skeptical Paul Light on privatization. And here he is again, this time as "an expert in the molten turf wars of bureaucracy", although I've got to agree that the Department of Homeland Security, which will necessitate merging almost two dozen slow-moving and highly independent agencies, "will probably become the most complicated government reorganization in American history."