In this case, yes the OPs argument is "small" gvt is less efficient. Except what the OP considers small government isn't actually small government. As far as efficiency goes. It depends. If you are a business you can do something in house or outsource it. Which is more efficient? If what needs to be done is a one of thing and neither party has the expertise then out sourcing is less efficient. As the amount of work that needs to be done is the same plus there is the additional overhead of the contract. The thing is, there was other variables that come into play, so it is difficult to say which way is better.

But small vs big government isn't really about the number of employees but rather what the government does.

The way I'm reading it, no, that's not what they're saying. Govt doing the same things but having them done by contractors does not make it "smaller".

right, this is what I meant. Running a covid tracing app requires a certain number of people. Splitting those people into "govt employees" and "contractors" doesn't reduce the number of people involved, it just adds an arbitrary boundary between them, which hinders their efficiency.

> Splitting those people into "govt employees" and "contractors" doesn't reduce the number of people involved.

It increases it, because (even optimally) you need the same number of people doing the main work, and as supervisors, HR support, etc., for the main workers, plus you have additional contracting and contract management overhead on both sides.

Small government has always been about business being able to make money doing outsourced big gov tasks. Look at who seeded that debate, it's big capital funded thinktanks.