I suppose the truth of the following depends on the measure by which one gauges “control”:

“There is no plan to subcontract people out of these jobs. It hasn’t been studied. It’s just kind of like shooting from the hip to justify those cuts,” said Richard Ferruccio, president of the prison guards’ union. “It’s not about being cost effective, it’s about control. They have more control over the outside vendors than the state worker.”

If one is merely talking about the power to hire and fire, then contract workers allow more control, but it seems to me that Ferrucio’s union mentality misses the fact that there’s a freedom to being an independent contractor — and, more importantly, that freedom is in general a good thing.
In a healthy employment environment, the employer can allocate his workers to various roles as necessary and merited. He has a stronger hand in determining feasible salaries and benefits. Therefore (as one sees in plentiful evidence in the construction field), subcontracting can be an attractive option, allowing the worker to set his own wages and determine exactly what work he wishes to do. Of course, there are plenty of advantages to being a regular worker, from consistency to the capability of long-term growth.
In Rhode Island’s public sector, however, union demands (and the pliant politicians who requite them) have — as Ferruccio admits — diminished the employer’s control of regular workers to the extent that the state is being driven out of businesses, so to speak. The unions, in effect, are subcontracting companies that can’t be fired.