So, ever since the only left leaning radio station was replaced by a third sports station, I’ve been forced to listen to right wing talk shows to get my talk radio fix. So the other day, I was listening and they were talking about Bush Jr. Some guy called in and was saying how Bush had wasted so much money during his time in office by changing to hiring contractors for everything. The example he gave was that food in the military was no longer prepared by military men but by contractors. Well, the talk show host immediately told the caller they didn’t know what they were talking about. That Bush’s move was brilliant as it saved millions of dollars by not employing someone who would be getting government benefits and pensions. And that it had nothing to do at all with any connection Bush may have had with contracting companies, as the caller had mentioned that too.
Now to me, that sounds like a load of crap. I’ve seen how much those contractors get paid. I can’t imagine that it’s any cheaper than using someone internally, as in the military example. So what do you guys think? Was the talk show host right? Did Bush really save our country millions of dollars by moving over to private contractors? It just seems like such a stretch to me.
It probably doesn’t save money (see here). But it’s a really hard thing to calculate. Theoretically it could, but I think it probably doesn’t because those “temporary” contractors are not temporary, and because there is often little competition for some of these jobs. I would bet we really pay through the nose for military contractors because the government often pays to train them, then pays to rehire them at a higher cost once they finish their enlistment.
This isn’t unique to the military, or to GWB. When I started working in the late 1960s every large employer (factories, hospital, corporate headquarters, etc.) had its own employee cafeteria, sometimes complete with executive dining room. They were always staffed by corporate employees.
By the mid-80s, if the company had any kind of dining facility at all, it was outsourced to contractors like Aramark or Sodexo. Even school districts, which were notorious for overloading payroll, were beginning to outsource foodservice, janitorial and transportation.
Contractors can get fired as needed (as simple as letting the contract expire). It’s a little harder firing a civil service employee.
With contractors, the government is usually not on the hook for their medical insurance, pension/401k, educational benefits, and other things like that, so it’s cheaper in the long view. These long term financial obligations are beginning to impact a lot of cities in, and the state of, California, for example. More and more of the budget has to be set aside to meet these obligations.
I’ve been a government contractor for the last 20 years. I work side-by-side with government civil servants.
There are two major advantages for the government to hire a contractor:
As stated above, an underperforming contractor can be easily fired and replaced. By contrast, it is *extremely *difficult to fire an underperforming government worker. If they are not performing up-to-par, then either a) nothing is done, or b) they are relocated to a different group or agency.
During the BAA/RFP stage, many contractors will bid for the same contract. This creates competition, which (in theory) will provide the most “bang for the buck” to the government.
Government contractors are expert at walking the line between contract performance and negligence. It is extremely difficult to terminate a contractor who is technically performing under the terms of the contract without being sued for improper termination. Government workers are terminated all the time. Performance documentation is required, just like it is for contractor termination, but it was common in my experience and not all that difficult. That said, some people had a tendency to pass on their problems to somebody else via transfer.
Competitive bids generally means that the government (and taxpayer) is stuck with the lowest bidder, who may or may not be competent. In an overwhelming number of cases that I saw (which includes three companies I worked for), contractors would bid for a service contract without even having the people on board to execute the work, then hire people who were untrained for the work. Worse, they would submit resumes for management that included people that no longer worked for them, then hire people who were either less qualified, or not qualified at all, and pay them less than the amount quoted in the bid. This led to innumerable complaints from government agencies, which led to large turnover in personnel. It’s a continual shell game, with the taxpayer footing the bill.
Two of the jobs I was hired for required, by contract specifications, someone with an engineering degree and specialized training, of which I had neither. There was no “or equal experience” clause in the contracts. The contractor was able to finagle their way around these requirements by means I was never clear on (probably graft). The other contractor would hire people for maintenance jobs for which they were nearly completely unqualified. One of our carpenters was a metalworker. One of the “electricians” was downright dangerous and I refused to work with him. Since they were less than qualified they would accept lower pay, which meant profit for the contractor.
Contract oversight by GSA is spotty and sometimes non-existent. Contractors get away with murder by providing substandard materials and labor and billing at premium rates. Anything that is even remotely outside the terms of the contract leads to contract modifications, which are not subject to price negotiation. This is the bread and butter for government contractors: change orders and contract mods. Whenever some conscientious person (like my wife) tries to enforce contract terms, the contractor complains to the area manager, who then treats the contract administrator like she’s at fault and is a troublemaker.
Privatization was a huge blunder and it continues to cost the taxpayer billions of dollars for inferior work. I offer KBR and Halliburton as prime examples.
Another part of the theory is that you use companies that already have experiance doing whatever it is you want to do instead of trying to reinvent the wheel.
In the case of KBR/Halliburton, that company’s experiance housing and supplying large workforces in remote locations for the oil industry made them a decent off-the-shelf solution for the military. Unfortunately, their extensive oil industry experiance also meant they were accustomed to cutting corners and gouging their clients whenever possible.
That’s the other side of the coin: signing a no-bid contract and allowing the company to use their own contract language, holding them harmless for any problems that may arise, which prevents them from being sued. Contractors used to come to us and hand us their contracts to sign, which we politely refused. As the contracting entity, why would I sign your contract?
The first part is definitely true, and it’s one of the problems with contracts in general. The contracting company can’t really staff up until they get a commitment on the contract. The second part is partly true, but a bit overly cynical. When the contract is signed, the contractor has to recruit from the labor pool that is available at that time. I’m sure some take an “any warm body” approach, but the ones I’ve worked for do take some effort to recruit quality. After all, their ability to attract future contracts is going to depend in some way on how well they perform on their present ones.
In 2008 the New Zealand government signed a contract with Talent2 to replace the existing payroll system (which was principally offline) with a new one that was online. You can read more about it here.
The launch of Novopay ended up being a disaster. People have been overpaid and underpaid in some cases by tens of thousands of dollars. Teachers who hadn’t worked for years suddenly got paychecks. Income taxes and student loan money deducted from pay never actually ended up with the tax department. It was a right royal screw up. And its still not working right: and the government is strongly considering bringing back the previous company…assuming it can avoid a lawsuit.
It’s fair to say it made them the ONLY off the shelf solution for the DoD. /shrug
I mean, can you name me another company that can just create entire small cities out of thin air in a few weeks with water treatment, equipped hospitals, dining halls with functional kitchens, power generating plants, roads and completely furnished housing?
Hell the entire US army cannot pull it off as fast. Seriously.
Maybe I sound like a KBR fan, but understand, it’s not really that. I lived and worked in Iraq and Afghanistan for 5 years. I never worked for KBR or Haliburton. I lived in the FOBs, COPs and bases built by the military and built by KBR and there is just no comparison. They are amazingly efficient at doing certain things, and large scale construction and logistics in harsh environments is something they really do excel at.
As to contracting in general, it’s usually more efficient to do so, especially in technical or security cleared fields. Contractors for the DoD and in more technical roles have measurable success requirements and in right-to-work states can be fired for any reason or no reason. More to the point, if the gov’t management wants “that guy gone”, he’s gone. At a minimum off the project, and quite possibly terminated. Gov’t personnel basically do not have measurable requirements to meet, other than endless “training” on this that or the other.
Another poster argued that gov’t personnel are easy to fire, which is something that made me burst out laughing. I have personal knowledge of gov’t personnel engaging in actions which would have had me fired, stripped of my security clearance and very likely incarcerated at Leavenworth or some other federal military detention center. Not only were there no significant repercussions for this behavior, this person was promoted and transferred to a much nicer geographic area.
Finally, the contractor is in a subservient position to the gov’t supervisor. Consequently, you sometimes (not always) have to deal with the mighty ego problems of these gov’t people, who will go out of their way to remind you that you are a replaceable peon. Even if you’re more critical to the program than they are. And really, you have no way to let them know this. You just have to put up with it. Which is why they have to pay you more. /shrug
Regards,
-Bouncer-
PS: Gov’t people easy to fire… still chuckling over that one.
I’m not in the mood this Sunday to argue some obvious points, but I will point out that I never said it was easy; I said performance must be documented, which is absolutely the case. So chuckle away, then try reading for content.
[QUOTE=Chefguy]
Government workers are terminated all the time. Performance documentation is required, just like it is for contractor termination, but it was common in my experience and not all that difficult.
[/quote]
That’s your content right there, is it not?
OTOH, I’m not the only one saying that you are mistaken.
"Tom Schatz, president of the nonprofit Citizens Against Government Waste said “it’s extremely difficult to fire anyone in any agency unless you’re sitting in a hot tub with a wine glass and you’re in charge of the GSA agency out in the west.”
That, of course, was a reference to Jeff Neely, the organizer of the infamous $800,000 General Services Administration conference in Las Vegas. **And still, Neely was not technically fired – civil service regulations allowed him to retire with benefits. **"
“Very few federal employees – in the hundreds, not the thousands – are ever fired on the basis of poor performance,” said Paul Light, a professor of public service at New York University.
That’s out of a federal workforce of 1.86 million, he said.
“If you want to fire an employee, you’re taking on a task that is very intense and difficult, and biased in favor of protecting employees, and it can take a year or more to complete,” Light said."
Waitwaitwait.. need more content?
"Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.
The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance, says John Palguta, former research chief at the federal Merit Systems Protection Board, which handles federal firing disputes.
Turnover minimal at
federal agencies
Federal departments or agencies employing 1,000 or more that had the lowest rates of firing or laying off employees in the year ending Sept. 30, 2010:
Employees Laid off or fired
Federal Communications Commission 1,832 0
Federal Trade Commission 1,189 0
Nuclear Regulatory Commission 4,211 2
National Labor Relations Board 1,714 1
National Aeronautics and Space Administration 18,671 13
Environmental Protection Agency 18,742 19
U.S. Agency for International Development 3,376 4
Securities and Exchange Commission 3,917 5
Small Business Administration 4,019 6
Department of Housing and Urban Development 10,041 15
Source: Office of Personnel Management
The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn’t lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce."
So yeah, you’re apparently more likely to DIE on the job than be fired, especially for performance reasons. BTW, of the 11K firings in the gov’t, most, were probationary employees.
And yeah, I’m still chuckling that you think it’s “not that difficult” to fire a gov’t employee when it takes a year to do so. Your concept of “not that difficult” is.. unique.
The fault, of course, lies with the supervisor who is unwilling to document poor performance. The system, while unwieldy, is there to use. It’s nowhere near as easy as firing someone from a civilian job in an at-will state, but it can be done. To me, a year spent making sure someone was heading out the door was worth it. That said, most people who realized that I was on to them and was starting a process to remove them, cleaned up their acts fairly quickly. If the supervisor doesn’t give a shit, why should the employee?
Back to contracts: construction work has pretty much always been contracted. The government, outside of Seabee battalions, doesn’t have that kind of manpower, nor does it desire to have to employ those sorts of numbers. I don’t have a beef with that, other than contractors will try to get away with anything they can, even when watched.
Service and maintenance contracts are another animal altogether, and this is where the taxpayer is taking a bath. The government used to direct-hire maintenance people who, over their periods of employment, came to know every quirk of the buildings they were responsible for, could be relied upon to answer calls day or night, and could fix nearly any problem.
Enter outsourcing, with all the problems I mentioned earlier. An additional problem that crops up with these types of contracts occurs when an agency’s budget is cut. Guess what happens to those service contracts when the money dries up: they get cut back to bare minimum or in some cases are cancelled altogether. Buildings are not static entities; if they’re not cared for, the systems deteriorate. “Deferred maintenance” is put into place, which is another term for neglect, and systems eventually fail, which can mean major expenditures for repair/replacement down the road. A dollar spent today does not equal a dollar spent five or ten years from now.
At any rate, it’s pointless to argue about. Those who think it’s good or bad will stick to their points of view. I speak from over 20 years as both a contractor and a contracting officer, and from 20 years of military service seeing what goes on with both sides of the coin. As a taxpayer, I believe I’m being routinely fucked by the present system.