They do everything you can think of: data processing and analysis, programming, designing equipment, manufacturing equipment, training others, doing administrative jobs, delivering things, armed security gigs, etc.
The difference is, a government agency gave a contract to a private business to do the job rather than hiring a full time government employee to do it. This means the contractor won’t get all the same benefits/perks as a federal employee, and job security can be a little lower depending on the nature of the contract, but there can be some tradeoffs (for instance, they might make more money).
A really dumb example is that often an agency will give the “59 minute rule” to employees ahead of big holidays – they can work 7 hours and 1 minute and still get paid for a full 8 hours of work. Contractors aren’t guaranteed to get that benefit, just depends on what their contract says.
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