Security "contractors" are not the same as real contractors. They are themselves employees of a different 3rd party company that "hires" them to the paying cust

Security "contractors" are not the same as real contractors. They are themselves employees of a different 3rd party company that "hires" them to the paying customer for a (usually much) bigger bill than the contractor's wage. The flexibility from the point of view of the customer is that they can let go such "contractor" on a wimp and expect to have a replacement lined up in a short time if needed. The 3rd party company probably manages this by swapping its employees from one customer to another, at least in the short term. Strategically speaking, the reasons for resorting to this type of arrangement range from the legitimate (you really don't care about developing the core competencies required by the position in-house) to the borderline fraudulent (you want to hide a big fixed cost in your accounting books and make it pass as a variable cost, so your company's finances look healthier than they really are).