Who's Controlling Our Vital Information Systems?

HangingChad writes "Gary Lyndaker talks about Janine Wedel's Shadow Elite; about how our information infrastructure is increasingly being sold off to the low bidder. Contracting in state and federal government is rampant, leaving more and more of our nation's vital information in the hands of contractors, many of whom have their own agenda and set of rules. From the article: 'Over 25 years, as an information systems developer, manager, and administrator in both state and private organizations, I have increasingly come to the conclusion that we are putting our state's operations at risk and compromising the trust of the people of our state by outsourcing core government functions.' I've seen the same thing in my years in government IT, ironically much of it as a contractor. My opinion is this is a dangerous trend that needs to be reversed. We're being fleeced while being put at risk."

Comments

re Who?

[jelizondo]

Who's on first!

Trend will continue...

[adosch]

Unfortunately this is the way our American gov't operates: Bottom-line management style approach to everything with only the lowest budget in mind. It's really no different than people in society who try to live and act like rockstar's on a McDonald's budget. FTFA, IT, in particular, is in shambles because the mass employee attrition related to budget woes. So maybe you get the "diamond-in-the-rough" person who picked up the in's and out's of the infrastructure and singlely-handed administers the whole network themselves, you'd be ignorant to think he's going to stick any long when anything remotely better in the private sector surfaces again. Just like any place, Gov't IT creates their own single point of failure because they 1) Won't purchase what you need to succeed because they are under the esteemed impression that they pay you to come up with enterprise solutions out of thin-air, and 2) charge the gov't 1.5x the salary than they are paying the contractors to do it. You don't build tenure and stability that way, folks.

Re:Trend will continue...

[thetoadwarrior]

The government has always gone for the lowest bidder and then people say their stuff is shit. But if they started paying more then they'd be accused of wasting tax payer money.

Sure there is still government waste but until people realise that the government should spend a premium for some stuff while people vote out those who just waste money.

Re:Trend will continue...

[some-old-geek]

The Milwaukee Journal-Sentinel has done any number of stories over the past couple of years that indicate IT contractors are significantly more expensive than Wisconsin state employees. The problem (in WI) is that you can find money to hire contract staff build your application; you can't get additional positions to build it. Getting additional positions is almost impossible.

So you pony up money, hire contract staff, and build the application for some factor N greater cost, but you do get your application. Project is completed, contractors go off to their next project in another organization. Then there's no one to maintain the thing. Also remember it was built by people who knew they wouldn't have to maintain it, so it might be crap. It might also be wonderful because taking pride in your work isn't a trait that's confined to permanent staff. I've seen both, but more often the former.

Having state staff build the system means they know they have to maintain it. Usually that results in better quality, but not always. Again, I've seen both, more often than not the staff create something maintainable (if not elegant) because they have to live with the consequences.

[Cue a whole bunch of twits with variations on "but that doesn't make sense" because they think bureaucracies are supposed to make sense.]

Round and round the Mulberry bush

[wheelema]

Budget strapped State/County/Municipal I.T. organizations do not employ the best and brightest and their budgeting process is simplified by off loading functionality at a constant fixed cost. It is with this in mind that outsourcing firms market services to them. Once that contract is signed... usually with language that gives the contractor significant leeway and discretion to torque their service model so as to maximize profitability... the problem is off of everyone's mind. I.T. management is free to focus elsewhere, the contractor is free to find new worlds to conquer, and no one gives a damn if the process delivers what was promised until it's too late.

Then it's off to Court you go where only the public loses. :(

Hard vs. Easy

[hey!]

Hard: building a top notch IT organization.

Easy: paying somebody to hide the problems, firing them when the problems can't be ignored, then hiring another contractor who does exactly the same thing.

Re:Hard vs. Easy

[TheRaven64]

I'm not sure how it works in the USA, but there's a bit of a catch-22 in procurement for IT systems in the UK. One of the factors that is considered important in evaluating bids is that they have a proven track record. This means that they've been awarded government contracts before, but doesn't mean that they have delivered on time, on budget, or at all. Companies like EDS, who have consistently failed, are given priority over other companies that have never been allowed to try. There are countless examples where a small business could have delivered a working system for around £1m, but EDS has been awarded £20m and still failed to actually produce anything that works.

Public regulation, private provision?

[giladpn]

There is an interesting debate going on world wide about how best to manage privatization.

Many successful examples follow the example of government regulating the private sector, but the actual provision of the services being private.

Just as an example, it seems education in Scandinavian countries is provided like that.

So why is that bad for IT? It could be a good thing.

Contracting is a way around public employee unions

[Anonymous Coward]

And good riddance.

The contractors do a great job, pay well and don't leave the taxpayers on the hook for an underfunded pension plan.

And no amount of union screaming will stop it. At the federal, state and local levels, government is INSOLVENT.

So I expect to see more of this. And I for one welcome it.

That's Life

[amcdiarmid]

The Government does not pay all that well (and previously less well). You are talking about large networks, that are very complicated. As a result, you do not have a whole lot of government staff with experience to run a network that is that complicated.

I work in a very small (5K users) government (federal) office. I have to deal with 12 windows domains, 11 Political groups, and offer support to all Regional Admins, and departmental admins - as well as dealing with a help desk which has been told "we don't investigate error logs."

Unfortunately, some of the government staff can't find their ***es with both hands. This is because 12 years ago, the government paid much less than the contractors. Good technical people could earn twice a much contracting a working for the government. Those people are still contracting (mostly), and are the ones that you would want in the government running the show. The people who have "more senior" positions in gvt now? They are largely the ones who couldn't get the better paid contracting jobs, and state: Helpdesk personnel should not be investigating application event logs.

Furthermore, this is also the case for many large businesses: They outsourced the tech support years ago (cheaper); most users get someone in india to change passwords, while sr. staff get concierge service. Those large businesses have similar issues as well: but they have an explicit 2-tier service system.

It's been going on for years, but I don't see any way to rectify it: especially as the job listings still seem to be opaque, and difficult to decode.

Would the state do better?

[haus]

I have spent over a dozen years working on various federal government systems. I have seen things that would make your head spin.

But I see no evidence that if contractors were phased of of the Missouri IT systems that things would necessarily get better. Sure the author mentions the grade of 'A' from Governing Magazine, but this is not a heavy hitting name in the IT world, I would not be surprised if a good part of this 'A' grade is because the state has been aggressive with outsourcing of IT.

Outsourcing it s not an excuse for management to not be involved in these process. It does not matter if work is being done by employees or contractors, it must be managed, a failure to do so will lead to bad situations. What we have here appears to be an inability to manage, changing the color of the badges for those doing the work is not likely to resolve this.

Re:And this is news... how?

[tthomas48]

Not to answer the broader question, but your question specifically. The difference is that the federal government is (at least somewhat) accountable to the people and has tools like the courts and freedom of information acts to get information out.

Private corporations not so much.

The Jobs

[florescent_beige]

I could be totally wrong and often am, but the voices in my head say the /. spin on this speaks to working conditions more then management philosophy.

Many of us have done early-career stints in larger organizations where we learned to our horror that technical experts are viewed as evil twits, not assets. That's why so many of us nerds of a certain age walk around with pinched pained expressions. Caused by thoughts like, why doesn't anything make any SENSE? You would think, working in technology and all, being a wizard would bring with it a certain amount of status and security. It just doesn't seem to be the case.

It's not so much the sub vs in-house question as the management vs expert question that always seems to get answered in a predictably bad way. What's even worse, former geeks who grow up and get into decision-making positions are often i.m.experience the worst offenders, becoming the most vicious defenders of the bottom-line view of things, lording it over the rest of us who see our jobs as being to tease Mother Nature into behaving long enough to do something useful. And she's a fickle old witch.

The big organizations who do seem to do some technology ok, the GEs, the HPs, the IBMs, well as far as I can tell they accomplish it by being practically Darwinian. They have their research chairs sure, but they succeed in business by absolutely grinding middle management into powder so that the survivors are just about sociopaths.

I don't know, I guess in this phase of human development if a person wants to do something with love and passion it has to be a hobby. A few lucky ones might get paid for it. Everybody else chases bucks.

Zero Incentive for Success Equals Certain Failure

[silverspringer]

The bottom line is that the operation of a country's IT infrastructure is a thankless job. There is (literally) no financial incentive to do a good job. There is almost no incentive whatsoever to do a good job; some might argue that reputation and respect are valid incentives but there's not much of that in the government IT world. Build a system where success isn't recognized and you're sure to have failure overall. Why would anyone work for no (significant) money, no respect, no long term benefits, no challenge even (it's not like government systems are cutting edge)?

Pointing the fingers at contractors is simply extraneous information. Good teams do good work no matter who they work for.

Fixing the problems is a non-trivial task. Hell, identifying all the problems is a non-trivial task. The only trivial task is the too common announcement of "oh my god, the world is falling, our country won't survive this apocalyptic disaster that's brewing in our infrastructure".

The reason this crazy system works at all is that it's a distributed system. Failure in one section doesn't lead to failure in other sections. Just like most natural systems (think of the way a river flows, often in separate channels) our infrastructure adapts to problems as needed.

It's interesting that people predict massive problems despite there never being any massive problems. For example, name a single infrastructure event that impacted the daily lives of every American. Katrina, which wiped out a big section of the country for several weeks didn't impact the Northeast, Northwest, etc. in the least (aside from non-stop news coverage). FAA flight control screw ups are probably the most significant failures and note that it's a centralized system.

Government systems need to be operated as distributed systems, managed by many different people, because that is the primary security control protecting us from catastrophic failure. Government or contractor management has nothing to do with this, both options can do well, both can do poorly.

Radical idea?

[Anonymous Coward]

Here is a radical idea that meshes with the US Constitution: maybe the government should NOT be in all this business in the first place? Then it wouldn't be an issue.

Re:Radical idea?

[causality]

Here is a radical idea that meshes with the US Constitution

That seems to be the definition of "radical" these days. I guess that also makes you a right-wing extremist or an anarcho-libertarian. Isn't that what they call anyone who wants a minimal federal government that derives all of its authority and purpose from a literal, strict reading of the Constitution?

Re:Radical idea?

[causality]

I guess that also makes you a right-wing extremist or an anarcho-libertarian. Isn't that what they call anyone who wants a minimal federal government that derives all of its authority and purpose from a literal, strict reading of the Constitution?

The Libertarians would also sell off our roads to the Chinese despite the Constitution calling for federal regulation of them, so you'll need to find some other name for people wanting a literal reading of the Constitution (like "strict constructionist")

My whole point was that the labels were not being used correctly. You are merely reiterating my point. It sometimes surprises me that people can feel such a need to do this that the redundancy of it does not deter them.

Having said that, it's my personal belief that the truest Libertarians were the Founding Fathers. Today's Libertarian Party as a political organization can either follow in those footsteps or it can fail to do so, but that does not concern me as an individual. Although, I personally do not know of anyone identifying themselves as Libertarian who advocates having the government take actions that are blatantly illegal under the Constitution. That would be like people who refer to themselves as (i.e.) Christian and then do things that clearly contradict the tenets of Christianity. They can say whatever they want, but they are still engaging in hypocrisy.

If there are self-described "Libertarians" who want to sell public roads to China, they certainly do not represent all Libertarians. Most Libertarian thinkers I have ever heard from are quite the opposite; they believe many of today's problems are caused by the government exceeding its authority and engaging in behaviors that are either unconstitutional or questionably constitutional.

Like any other philosophy that would radically and favorably alter the status quo if correctly understood and implemented, Libertarianism should be easy to understand but the waters have been muddied on purpose. There is no such confusion of terms with the statists who want an even more dictatorial government that is even more involved in the daily lives of its citizens. Libertarianism is a very simple idea: your right to swing your fist ends at the tip of my nose. Until and unless you strike my nose, where and how you swing your fist is none of the government's concern, not even if they think they know what's best for you.

This is not a rejection of all law enforcement or all regulation. It's a clarification of the purpose thereof. The confusion comes from the assumption that everyone who has any degree of Libertarian thought is a radical, extremist Libertarian who desires an anarco-capitalist society. The purpose of that is to cause people to dismiss the philosophy as absurd without actually examining it. Unfortunately average people won't put apparent absurdity to the test and find out if it is actual absurdity before choosing to dismiss new ideas. If you practice looking deeply into things, you will find that influential people and monied interests are keenly aware of this fact. One mechanism they use to protect their status quo is the gross misrepresentation of any ideas that would change it if implemented.

Re:Radical idea?

[raddan]

Like any good programmer, I myself have Libertarian learnings. I mean-- who doesn't like the idea that a simple and elegant system of governance will produce the best outcome? It's a principle that has served me well in my years of building reliable software.

But there are a couple blind spots in the Libertarian philosophy. One is that, even in cases where government intervention is undesirable, merely having their presence ads a great deal of stability. E.g., fundamental science research would be largely stagnant without organizations such as the NSF, NIH, NIST, and NASA (among many others). Becoming an expert (i.e., PhD) in something like physics or computer science takes a great deal of time and personal sacrifice. Making it risky as well would largely kill those fields; and having experts of that kind are a matter of national importance. These organizations keep the flow of money steady so that, for the most part, when you get your degree, you can find employment. Likewise, we really want a stable, enduring organization to ensure that we have roads, bridges, railways, etc. The presence and overall reliability of these things means that commerce can move ahead unimpeded. The cost of maintaining, e.g., the route from California's orchards to Massachusetts' supermarkets is largely externalized from the cost of growing and selling produce.

And that brings me to the other blind spot: global competition. Sadly, we cannot be a nation unto itself anymore. We are a player in a global marketplace-- there's no going back. When you have to compete against nations like China, which artificially manipulates its currency value to stay competitive, which engages in human rights abuses to keep labor costs low, which ignores costly pollution controls (at the expense of the rest of the world) to keep their products cheap-- you cannot compete unless you have a big player that can even the odds a little. Modern statehood is a very complicated thing, and I think that most Libertarians really are living in the past to some degree, evidenced largely by their frequent calls to "Constitutionality". Hey, the world's changed in the last 230 years! It's a good document, but it was also expected to be a living document.

As you suggest, we should indeed clarify the purpose of regulation. E.g., as we've now discovered, the Glass-Steagall act was an essential bit of market regulation-- it kept the markets from being so volatile that people lost their trust in the system. If putting your money into a bank is the same thing as putting your money on a gambling table, well, you're going to put your money under your mattress instead. Given that a safe lending system is a major source of entrepreneurship and upward mobility, having lending dry up is a major problem for an economy that wants to keep growing. We just need to make sure that "re-examining" our legislation is not the same thing as throwing it all out. I'd gladly switch to a simple flat tax if there was some assurance that wealthy people and corporations actually paid up. As it is, those people and their companies use the national infrastructure that is paid for with the hard work of the rest of us.

Re:Radical idea?

[causality]

My own beliefs are also strongly influenced by Libertarian philosophy, though I am not inclined to derive any aspect of my identity from simplistic labels. Thus, I don't call myself a Libertarian because I reserve the right to differ from their stated positions.

I recognize three roles that are legitimate purposes of government. Any legitimate authority government has derives from its service of these three things: defense, law enforcement, and public works. Anything else is an overextension and is likely to be blatant tyranny.

Defense consists of the just use of the military to offer armed resistance to national enemies. I strongly agree with Thomas Paine who said "not all the treasures of the world, so far as I believe, could have induced me to support an offensive war, for I think it murder". An example of the legitimate use of defense would be a foreign army aggressively invading Ameican soil. I don't personally recognize as valid the use of flimsy excuses to justify the use of force to interfere with other sovereign nations.

The correct purpose of law enforcement is to prevent one citizen from using force or fraud to deprive any other citizens of their life, their freedom, or their property. It is not valid to use this power to micromanage the lives of people based on some idea of what's good for them. That includes the carrot-and-stick methods of income taxation. I believe that consenting adults should be allowed to do whatever they want, so long as their actions do not impact unwilling participants. So if someone wants to sit at home and smoke crack all day, that is unfortunate and I hope they obtain a higher concept of themselves, but it is not my job to tell them how they should live. However, if they rob other people to pay for their crack habit the government has an obligation to lock them up because they are using force to deprive another person of property. The reason why they did so is immaterial.

Public works usually includes things like roads and bridges. I have no problem with this also including the funding of scientific research, because everyone benefits from those advances just like everyone benefits from well-maintained roads. Additionally, much "pure research" is not expected to generate a profit in the foreseeable future so by its very nature it would not do well in the marketplace.

Wealthy people and corporations do not pay up much under the current "progressive" income tax system. The real private wealth in this country is largely held by old-money families. It is inherited and it is invested and otherwise it is unearned income. There are many methods of avoiding even the capital gains tax. The only reason to have an income tax is because it lets you use carrot-and-stick methods to financially reward and punish certain behaviors in order to manipulate people. Otherwise, an income tax is the least efficient and most easily cheated form of taxation in existence.

Corporations do not really pay taxes. Yes, they have a tax rate and yes they send a check to the government to pay that tax. But they rightly consider taxes as a cost of doing business, and as such, it is one factor determining how much they charge for goods and services. If you raise the corporate income tax, the corporation will charge more to its customers to compensate. Its competitors will have to absorb the same cost so competition will not eliminate this. When you pay for goods, about 22% of what you pay is a hidden, embedded cost that comes directly from the income tax on the corporation. For services, it's slightly higher. Corporations don't pay taxes so much as they pass them on and act as collection agents for the government.

The Fair Tax would throw out the income tax entirely, eliminate the IRS, and replace them with a national sales tax. This sales tax has a built-in rebate to guarantee it does not apply to the basic necessities of life, reducing its impact on poor people. As a consumption tax, it does not punish the earning of

The danger is Goverment, not contractors.

[wilby]

The original poster wrote- "My opinion is this is a dangerous trend that needs to be reversed. We're being fleeced while being put at risk."

The problem is government. Government and mismanagement have gone together for at least the last 50+ years. To think that government employees would perform better than contractors is pure fantasy.

Re:Zero Incentive for Success Equals Certain Failu

[lukas84]

Good teams do good work no matter who they work for.

I'm not that sure about this. I work for an IT contractor, and if you try to do a good job you'll run into a conflict of interest, sooner or later. Typical scenario is that the sales guys from your company want to sell the customer something he doesn't really need - and then you get asked about your opinion on whether he should buy it or not.

a) Stab the customer in the back, telling him he really needs to buy this
b) Stab your employer in the back, telling the customer that he doesn't really need it
c) Try to give a nonsensical answer that doesn't help the customer
d) Refuse to comment
e) Tell the customer he doesn't x, and instead should buy y.

Which one is the right choice? Of course you can always construct another option like talking to your sales guys, but this might not work if his bonus is on the line. Techies don't get bonuses, so they don't care about selling stuff.

I usually take option e), because there's always something you should do. But it's not a perfect solution, since you're basically saying your sales guys are incompetent and they should buy something else.

Maintenance

[michaelmalak]

All four examples from TFA have the common theme of one outsourced group does the development, and a different group does the maintenance, resulting in loss of institutional and system knowledge. This is a flaw in outsourcing approach. The solitication should be for development and system lifetime maintenance, with contractual penalties for failure to respond to or fix problems.

Even dumber

[tjstork]

Is that ultimately, disabling an in-house government operation actually winds up raising overall costs in the long run. Initially, yeah, the venture capitalists that fund the privatization give the feds a pretty good deal, but contrary to all the babble about short sightedness, these folks are in it for the long haul. They bide their time, and let the inevitable churn of politics and government action mean a greater demand for services, which they provide.

Seriously, right now we are spending record peacetime levels on defense, and what do we have, but only 1700 fighter aircraft for the USAF, not even 300 ships for the USN, and the whole time the contractors wave around "complexity" as if it is a magic bullet to allow brute force engineering that costs a fortune, cost overruns and bad designs papered over in "blocks".

I point at the F-22, as exhibit A, the littoral combat ship, the next generation aircraft carrier. All of this stuff is, well, pretty feature rich, but, the F-22 needs a thousand people a pop to get it off the ground, which is insane, the LCS is now too expensive to be the disposable combat vessel it was supposed to be, and the next generation aircraft carrier is insane.

When you are down to just -one- possible vendor for the government, at that point, you almost have to just nationalize the business.

Re:Even dumber

[raddan]

Seriously, right now we are spending record peacetime levels on defense

I assume you're in the U.S., so I have to say... wha? We're in two wars right now! Maybe you mean that, in our current state of war, we're spending many multiples of peacetime levels?

Of course, your point is still valid-- military spending is extremely high even in peacetime. Sadly, that is the cost of being the first to do something. There's a very good account of this phenomena in the book Red Moon Rising: Sputnik and the Hidden Rivalries that Ignited the Space Age. Eisenhower was keenly aware of and attempted to avoid the problems of a large and influential military-industrial complex, and yet, he is largely responsible for getting it off the ground. In the end, pressure from both the American people and his own military forced his hand.

Re:And this is news... how?

[1s44c]

Guess what, this is exactly how the military has been run for decades. What makes a contractor any better or worse at managing information than the government itself?

It's not contractors you want to worry about. It's large amounts of your data ended up in India being worked on by people paid pennies. It's easy to bribe people if their monthly pay is about what you spent on lunch today.

On what planet do you reside? !!!

[Anonymous Coward]

Regarding... Bottom-line management style approach to everything with only the lowest budget in mind.

You're just kidding, right? I actually wish there was some truth to that but it's just patently false.

Govt "management style" includes petty power plays to protect their little fiefdoms at all costs including inpenetrable and unaccountable bureaucracy with endless and meaningless rules. The more rules you make, the more powerful you are.

They measure their personal success in terms of the size of their budget- it has nothing to do with what you actually accomplish. The more you spend the more important you are. And you never, never want to end the year with any budget unspent because that will present a problem in getting more budget the next year. To extend your power the goal is to ask for way more budget than you could possible need then add some to that. Appearances of holding down costs are made as some of the budget requests are cut but the game has been played and the end result is anything but cost conscious.

In choosing the winning bid the contractor with the highest bid often wins. This is because they are with the in crowd having developed a reputation with govt bureaucrats. The bureaucrats are not interested in cost but in the safest, least risky route where they protect their power by doing business with a known quantity like contractors they've worked with before. If things go bad the bureaucrats protect themselves with finger pointing and the contractors are impersonal and handy. But if the sly contractor accepts the finger pointing and actually helps his client politically, he'll be on track to win future bids. The contractors learn to game the system and become experts by learning how to craft winning bids. Crafting winning bids becomes more important than performing on contracts won. One strategy is to make a lot of high bids knowing you will lose many but one will pass. Sometimes the contractors actually get busy with contracts won but they are still asked to put in a bid on a bureaucrat's meaningless pet project anyway. Since they are already busy they just submit an outrageously high bid in an effort to lose the bid so they don't get overextended... Then they actually win it. That's when the contractor hires a bunch of inexperienced people and starts throwing warm bodies at and ever increasing and unmanageable bunch of projects.

I know this from personal experience having learned how to game the system. I made a lot of money with winning IT bids and networkings with other contractors, comparing notes and laughing at and ridiculing our govt clients. This experience goes way back to when I was a teenager working for my Dad who was a construction contractor. I particularly remember one govt contract to put a roof on a 2 car garage. We were given a printed manual explaining how to do the job that was over 100 pages. The man hours spent to prepare this manual were obviously greater than the man hours to actually do the job. We were told to use this tapered, specially machined insulation which served no practicle purpose but was incredibly expensive. For the gravel on top of the roof we were forced to use expensive indoor flowerpot gravel instead of the typical industrial roofing gravel. It was great for me as a teenager because the govt required that my Dad pay me and all unskilled labor an outrageously high hourly rate way more than would even be paid to a journeyman carpenter in the real world. Curiously the journeyman rates were only a dollar an hour more. Probably had something to do with supporting a political agenda to redistribute the wealth to unionized labor like the "workers of the world unite" slogan from SIEU and the failed Soviet system.

After a few years of this my moral conscious finally kicked in to rescue my soul so I got out of the govt contract system. Now I make less but I live better.

Re:Zero Incentive for Success Equals Certain Failu

[TheRaven64]

That's exactly the point of the original poster in this thread:

When employees incentives are not aligned with the company's goals, the goals suffer

This holds whether the employee in question is the CEO, a system administrator, or a sales guy. The CEO's incentives are aligned with the current share price. That means that he will push for short-term profits at the expense of a longer-term future for the company. The sales guy's incentives are aligned with making a sale now, rather than building customer relations.

There are a couple of things you can do to address this. You can defer the majority of the CEO's renumeration and have it linked to the share price 5-10 years later. To get the most money, the CEO needs to leave the company in such a state that its value will continue to increase (or, at least, not decrease) over his successor's tenure.

You can give sales staff bonuses for indirect sales, so they get a bonus if one of your customers buys something from you in the future. You can make these cumulative, so sales to companies that the sales rep has worked with for a long time are worth more. This means that it's in his or her best interest to build long-term relationships with clients. If telling them not to buy anything today means that they'll buy more tomorrow, then the sales rep gets more money. Importantly, make sure this happens even if another sales rep takes over that client's account.

Re:Where's the risk?

[duffbeer703]

I am a state government employee who worked for several years in the private sector. By my reckoning, the distribution of incompetent people is about the same than at your average large company -- they just look different. Most state governments expanded rapidly in the 70's and 80's, so you have this massive cadre of 45-60 year olds who are burnt out and useless. Big corporate places purge the old people, replace them with clueless foreigners (working for a bodyshops that happen to be run by some Exec VP's wife in most cases), laid off corporate types who are now consulting, and recent graduates without clue.

The real problem with government is the leadership. In the past, the professional managers blunted the effect of politically appointed executives who couldn't find their ass with both hands. Today, the corps of those professionals is in dire straits in most states, because most states did not hire and "grow" new employees in the 90's and 00's. So the smart people are retiring, only to be replaced by people who will be retiring in 3 years.

Re:Even dumber - Peacetime???

[haus]

Seriously, right now we are spending record peacetime levels on defense...

Peacetime??? We have admitted wars in Iraq and Afghanistan. This does not count the military efforts in Pakistan and Yeman. This is far from any definition of Peacetime.

Unfortunately it seems that a vast amount of our military spending is for equipment not well suited for the types of demands that we have placed upon or military.

Re:Zero Incentive for Success Equals Certain Failu

[Kaboom13]

I also work for an IT contractor, although fairly small so I can go smack the sales guys on the head a few doors over as needed. I go for option B/E all the time. In my view, IT is kind of like a a bottomless pit you throw money into. You can throw more and more, but there is ALWAYS something else you can do. There's always an extra backup system you can add, an extra redundancy, an user experience you can improve, etc. But businesses have finite IT budgets, and all the slick sales guys in the world won't change that. So seeing as how there's a practically infinite opportunities to spend IT money in an organization that will have tangible benefits, I don't see the point in letting the sales guys get away with wasting their money. If I feel its a waste, I tell them that, and point out 2 or 3 things to them and the sales guys that should be higher priority. In my experience, the sales guys in IT are some of the most easily influenced by other salesmen I've ever met. A vendor comes through, gives a demonstration of their network appliance or software package of the week, tells them how all their customers will be knocking down the door to give them their money to buy it, and uses every tired old pitch technique in the book. The same techniques the sales guys use on their customers every day. And they buy it hook, line, and sinker. They go out and tell all their customers they have to have X, even when they themselves don't really understand what it does, but the vendors salesman told them so. Someone needs to inject some reality into the situation, or you wind up with a customer that has spent their entire budget on the latest buzzwords and their basic IT infrastructure is a disaster. Whether we spent their IT money on buzzwords, or we spent their IT money on things they needed, we still got their money. But one way leads to the customer saying at the end of the year "We spent $x on IT with you guys, and we still have tons of problems! Our PC's crash, our network is slow, our backups don't work, wtf?" and the other way leads to building a long term relationship with the customer that will keep them as our customer.

    Uncontrolled greed is the enemy of IT contracting in my mind. We are all in business to make money, but wanting to make money and being blinded by greed are very different. If every time you went to the doctor, he tried to sell you some new wonder drug you can only get from him, the first you might be inclined to believe him, after all he is the doctor, he knows more about medicine then you do. So you would buy it, and the doctor would make extra money. But when the medicine didn't make you feel better, and everytime you went back he wanted to sell you a new, different wonder drug, that THIS time would solve all your problems, pretty quickly you would find a new doctor. Next thing you know, the practice that doctor has built up over a decade is gone. The same thing for IT. Most of our customers don't know what they have, they don't understand it, they don't know what they need. They rely on us to tell them. But if we tell them lies, we will make a lot of money in the short term, but eventually they will get tired of shoveling money at us and seeing no results.

Besides, is helping some sleazebag salesman make an extra $1000 in commission (that he would not share with you even if he saw you laying half dead in the gutter) worth your professional ethics?

Who's Controlling Our Vital Information Systems?

[jeremyflores]

I AM.

Now, give me mod points or Something Terrible will happen. Muahahaha.

Medicaid

[caramuru]

I can't speak to all of the poster's comments, but I can address the Medicaid point. I have worked for over 25 years for Medicaid contractors and have done so in 14 states, so I have a pretty good perspective on the pluses and minuses of outsourcing this service. Medicaid is usually the largest line item in a state's budget. Consequently, IT and other services required to run the program are not only expensive, but highly visible. Many state bureaucracies have concluded that they do not want to risk such exposure and are willing to pay for the privilege of pointing their fingers at a contractor whenever there are problems. Most of these contracts' operational expenses pay for non-IT services such as mail room, data entry, call center, and other staff. These personnel fall into the same category as the janitors, security personnel, and others that the poster identifies. Most of these contracts require the contractor to develop at a fixed price a system for the state to be used in the operations phase of the contract. State IT units are unwilling to take on such risk and, instead, only develop systems on a cost-plus basis. Most of these contracts require the contractor to supply a minimum number of IT staff devoted to change orders, so the contractor only makes additional money when the volume of change orders exceeds the capacity of the contracted minimum of staff. Additionally, maintenance required for bug fixes is usually not a reimbursable expense. Again, contractors are required to assume risk that states will not take on. Health care administration is a rapidly changing (You cannot imagine the impact of HIPAA on health care administrators, public and private), and contractors with multiple contracts are much better able to understand the changing environment, develop solutions for the changes, and leverage experience from all of their contracts for the benefit of each individual contract. Although there are only about five contractors in this market, the competition is brutal, resulting in lower prices for states. Although it would seem that states lose valuable expertise when an incumbent contractor loses a re-bid, the reality is that people working for the old contractor tend to go to work for the new contractor.

Are these contractors perfect? Absolutely not. I have seen failures that could only be resolved by kicking the contractor out. This is obviously painful to the contractor, but very disruptive to the state. States could save themselves this disruption by changing some of their procurement rules (e.g., the bidder with the lowest bid price exceeds a minimum technical score) that reward lower quality proposals. They could also increase the Medicaid program's performance by optimizing their end-to-end business processes prior to issuing an RFP. Many states' business processes are fundamentally broken. If you compare the head count used in a state-staffed operation vs. the head count used in a contractor-staffed operation, you often see a two- or three-to-one difference. Medicaid RFPs are notoriously ambiguous and routinely include phrases such as "including but limited to" in requirements statements. Fully modeled and documented processes generate fully developed use cases.

Re:Even dumber - Peacetime???

[QuantumRiff]

No, the OP is right. We are spending Record Peacetime Levels. All funding for the wars that we are currently in, come from supplemental and emergency budgets. Basically, we pay for our normal military costs, and borrow to pay for the wars. It was determined that it would be politically bad to ask for the money upfront, in a normal budget, because then the "other" party could talk about how much was getting spent. (remember when I guy got asked to resign, for saying the Iraq war could cost upwards of 150Billion!!)