IT Fleecing of the Government
It is commonly understood that the United States government pays hand over fist for even the most minute product, regardless whether tangible or otherwise. I grew up hearing stories about nuts and bolts for production aircraft purchased by the Air Force costing thousands of dollars when the company should have charged the government orders of magnitude less. Even after being bombarded with story after story, I chalked it all up to competitor jealousy.
My entire perspective was forever changed after I started working with the government as a contractor for the United States. Even though I was in the Navy for almost 9 years, and worked hand-in-hand with many contractors, I never really was privy to what you see when you work directly for a company who has a contract with the government, especially the Department of Defense.
I worked as a government contractor from the moment I separated from the Navy up through 2008. A roughly 9 year period (I know, what’s with the nines?) as a contractor really opens up your eyes, especially working in the Information Technology (IT) industry.
IT contracting is essentially a services market, where service providers bid on various technology service contracts, with the winning company providing personnel to perform required services. For example, a company may provide bodies to a Help Desk, a Field Engineering unit or any number of IT service positions.
The government forks out a boatload of cash to a “prime,” a Fortune 500 company, who then partners with a small company, to provide services required as stipulated in the contract. The fleecing is not necessarily with the contracting of IT services to private firms, but the manner in which the government ultimately awards the contract.
All things being equal, two companies bid on a contract to provide IT services. The two proposals are essentially identical but with one major difference: company B stipulates it can perform the work with the same number of people as company A but for $10m cheaper.
In almost every case, without taking in to account anything except the dollar figure, the government will award the contract to company B. All the government sees is a less expensive alternative. There is rarely ever true due diligence done on the contract proposals. If one company can provide the required services at a less expensive cost then by god they must be the right company for the job!
Surely, at this point you are asking yourself, “so what the hell is the problem? As a taxpayer I would rather award the bid to the less expensive alternative.” When was any cheap product the stronger, longer lasting, ultimately less expensive solution?
Cheap tires are cheap at the register. But when you purchase the same set of cheap $200 tires once a year, for 10 years straight you have just expended $2000 solely on tires. Had you opted to fork over $500 for the more expensive tires, which ended up lasting 5 years, you would have saved $1000 at the ten year mark.
Unfortunately, the government does not see this as a viable strategy. If the bottom line on a contract proposal is less expensive than all the competition, the government immediately jumps on it, without ever taking the future in to consideration.
This is an unfortunate and detrimental strategy for a number of reasons, and on a number of fronts. I plan on expanding on this theme in the future, to better convey why the government is wasteful and what can be done to prevent such waste.
In the meantime, is it any wonder that our deficit is so huge these days, and that stories of $1000 bolts continue to propagate throughout American culture?
I'll just say this: Thorough market research and integrity in purchasing would make a whole world of difference — taking a big dent out of government fleecing.
Part of the problem, as you well know, is that in many cases the contracting offices perpetuate the problem by award to lowest bid on paper regardless if over time other proposals will save the government money in the long run. They seemingly only look at what is written in the proposal without ever doing the math over time.
Additionally, many contracting offices are not only short-sighted but they are also forced to follow antiquated regulations which were designed well before IT requirements became so important. The Federal Acquisition Regulations are voluminous, cryptic and highly complex, and in most cases are the problem rather than the solution.
I've also found contracting offices who will call me up and say, "why don't you go with product X since it's $Y cheaper than your required product?" To which I have to explain that *I* am the IT professional and selected the product to fulfill a specific requirement. Point is, buy what I asked and stick to being a contractor while I stick to being an IT professional who knows what IT purchases are best for my organization.
Anyhow, long story short, the entire system is screwed and in dire need of a complete overhaul to properly work with IT acquisitions.
"Point is, buy what I asked and stick to being a contractor while I stick to being an IT professional who knows what IT purchases are best for my organization."
I'd lean towards commending them for even asking. Shows they at 'least' take an interest in making a good purchase. I've been through incidents where the contracting department arbitrarily changes a product because the specs are 'similar' to what was on the initial purchase request — WITHOUT asking.
Regardless, you are right, the system needs an overhaul…. badly.
"I'd lean towards commending them for even asking. Shows they at 'least' take an interest in making a good purchase. I've been through incidents where the contracting department arbitrarily changes a product because the specs are 'similar' to what was on the initial purchase request — WITHOUT asking."
We used to had that happen but had so many purchases turn out ill that contracting has come to the "understanding" that they need to contact us before arbitrarily modifying our purchase. But I know what you mean and completely sympathize. It seems all governmental contracting departments operating identically!
The really important question out of all this is what can we do to fix the system? What solutions can we provide which will still fall within the spirit of the regulations without compromising tax dollars while still allowing the IT professionals to get the job done?