Genghis,
G.E is the only company that enforces a 12 month rule for contractors; literally unheard of in the rest of the industry.
If you know guys at BAe then you will certainly know of long term permy-tractors that have contracted at one site for five years plus; I admit this is not something people can get away with now with the IR35 regulations; but it was certainly very common a few years back.
Lozzin; IR35 regs only allow you to claim tax benefits as a contractor at one site for up to two years; hence this is why contractors will now leave after two years at one site. Nothing to do with company rulings.
Most companies are now only offering money purchase pensions schemes, not any near as beneficial as the old final salary schemes of yester-year. My technical specialistion probably biases me to the contract sector, but even though contracting is not as lucrative as it once was; a vast majority of us still find the extra pay still out-weights the benefit of pension, sick pay and job security.
It is an individual choice which you prefer, contract or permy; also it is something that could be discussed as much as the mod vs integrated is discussed in the pilot sections of this forum. However Lozzin I do suggest you wait another five years and then give me your opinion.
Dodo, accepted some contractors do at some point go permanent, however I have still met a reasonable number that have spent a life time as contractors.