Outside of potholes and crack filling, where do you see the government doing street overlayments, etc without using a private contractor?
Your thesis has been debunked so many times that it is ridiculous that I'd even have to point it out to you. So here's a little story for ya. A number of years ago, an irrigation district in the home area of Dick Cheney pulled some strings to remove the federal government from doing the maintenance and operation of the irrigation district. Yep, the farmers thought for sure they were being billed way too much for the project and they were determined to save a bunch of money by removing the inefficient/lazy/excessive labor force known as the federal employees.
It wasn't even 3 years after the feds relinquished control over the operation and maintenance that the farmers came crawling back asking for the feds to once again take over the water district. Of course, by then those fed employees had transferred, retired, or laid off the vast majority of the employees. One thing that people seem to always forget is that the government does stuff without a need for a profit. Private industry, while being more fleet afoot, is absolutely burdened by the need to generate a profit for its owner(s). Given similar inputs (costs associated with owning the equipment and labor), government often does stuff for a lot less cost than a private company because of the lack of profit. But because of Republican led efforts to put money into the pockets of private business, most major things are now contracted out. There just aren't many government employed heavy equipment operators working on a major project. Instead, you have government employed engineers/scientists/project managers that oversee contracts with private businesses.
This country hasn't actually had much in the way of government run large projects since the Manhattan Project and dam building days of the 30s-60s, instead it contracts everything out to private companies. Think of the space shuttle, yep...it was a private company (Morton-Thiokol) that effed up the booster rockets and cost the country a shuttle full of astronauts.