In my experience (permanent employee now but 12+ years as a contractor), the contractors normally do the work the permanent employees want to avoid, which is often times the dirty work critical to keeping things working (as opposed to the high-profile, career-building new initiatives and projects).
Chase off all the contractors, and 6 months later at most companies you'll be begging them to return back to fix everything - even at double the rate.
Excaberating this is the tendency of contractor to be less than enthusiastic regarding documentation (why document when it just makes you easier to be replaced/not be renewed?) and the low prioritization of documentation in daily operations which makes swapping out highly technical human resources a significant challenge.
Antagonize your contractors at your own risk! Of course the gov't has no clue about such effects - perhaps they'll notice when their own IT breaks......
Biting the hand that feeds IT
