Didn't see any IT debate this week.. I'll roll one

Upon what factors do Australian businesses decide whether to tender the IT project to independent contractors Vs companies. Apprently, contractors rates are less than half of companies rates. Are there specific trends, that certain types of businesses prefer contractors, etc

Vendor's capacity to be sued if things go wrong?
Vendor's reputation? i.e. Nobody every got fired for using <insert name of blue chip vendor here>.

So, you think paying more than twice of daily rates is justified, just to get that assurance.

Just wondering, what is the risk to go with independent contractors or a contract agency.. Penalty clause can be applied to them as well.

I haven't even considered pricing the risks I mentioned but those are ones that come to mind. Isn't risk mitigation the number one reason for outsourcing?

The 2:1 ratio sounds similar to the UK when I worked there. The extra covers a lot of admin and other crappy functions a company would have to do if they employed contractors direct. In Aus I guess it also gets rid of the super requirement.