Your statement is incorrect, there are literally millions of defense contracting companies. There are market forces involved as well (the U.S. is not the sole employer of defense contractors), plus most large contractors also have plenty of nongovernmental commercial ventures as well.
As to the status of a defense contractor as a quasi-government employee, that is patently false. Other than working at a government facility, a contractor has no ability to influence the government agency he works for substantively. Contractors do not have the sames rights as a government employee nor do they share the same protections. Defense Contractors are elements of the free market as much as accountants at Microsoft or IBM.
Cheers,
CSG
if I work as an engineer for a defense contractor, and the government cancels the contract, and I lose my job as a result - it must mean that I in-effect worked for the government. The government contract paid my salary, in its absence I am unemployed, so they must have effectively been my employer. Forget the semantics of it.
Millions? I seriously doubt that.