Typically, to be in any sort of management position you have to be a civil servant. To be a PI or run your own research program you have to be a civil servant. Contractors are great, but there are a number of things vital to government agencies that they cannot legally do.

Which means that your managers are still getting paid civil servant wages, no matter how well paid the contractors working under them are. Consider how well run a tech firm would be if it paid less and less competitive salaries the higher up in management you go.