Libertarians love government contracting. The less the government does themselves, and contract out to corporations instead, the happier libertarians are. Many libertarians even want to abolish the US Postal System so that even that work can be contracted out to corporations.
These kind of libertarians are all about "economic liberty", e.g. unfettering and deregulating corporations. They care little for individual liberties; a surveillance police state administered by corporations is right up their alley. In their view, the problem with the Stasi is the Stasi wasn't a for-profit corporation, and was consequently inefficient at what they did.