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Federal Contractors Are $600 Screwdrivers
ideonexus writes "Last month an article appeared on Slashdot about how the government pays IT contractors twice what it pays its own workers. Missing from the article was how much the IT contractor pays its own workers. After working for a federal contractor for 10 years, a document accidentally leaked to employees by the contractor illustrated the incredible disparity between what the contractor was paying us and what they were charging the government. Like most contracts according to the GAO, the government provided our offices, utilities, computers, and training, leaving our salaries as the only overhead to the IT contractor, giving them an incredible incentive to keep them as low as possible to maximize profits. When the top 100 defense contractors cost taxpayers $306 billion, eliminating the federal contractor middle-man seems like an obvious place to start the austerity measures."
YANATL (you are not a tax lawyer).
You also have to pay the corporate income tax on the cap. gains. But, IANATL
The salary is just one factor of the cost of employment.
If the government hired all of these sub-contractors as employees, then they would all be members of various federal unions, and the government would then be on the hook for all those unions' juice benefit plans and pensions. Also they would be paying payroll tax for them all (yes the government has to pay tax too).
If all these costs were accounted for then the supposed gap would be much narrower or potentially even non-existent.
When the top 100 Defense Contractors cost taxpayers $306 billion, eliminating the Federal Contractor middle-man seems like an obvious place to start the austerity measures.
Instead of borrowing $306 billion from Wall Street and giving it to defense contractors (owned by Wall Street), the government could create the same $306 billion and give all 300 million of us $1002 apiece.
This would be something like Cook's A Bailout for the People.
Learn the rules so you know how to break them properly.
www.teslabox.com
So the answer is outlawing unions and having all workers negotiate their own contract terms?
Sure, that worked really good for the industrial revolution. Welcome to your 112 hour work week, don't like it? Fuck off, there's a line of people behind you waiting for a job.
Every time a worker leaves the Federal Payroll to become a private-sector Federal Contractor, the President and Congress can claim to be reducing the size of government. They publicize the fact that âoe1990 total government employment⦠was 5.23 million,â which fell to âoe2.84 million in 2009.â
There you go, here's what happens when you voters keep asking for small government. That's why I've said time and time again, the problem is not quantity. It's quality. It's not the quantity of Government that matters so much as the quality.
You can have these jokers reducing the size of Government to near zero, but if everything is done by such contractors, it makes no difference or it's even worse.
Private Corporations don't even have to pretend to listen to the voters. The Government does, hence this "small government initiative".
In what world are outsourced IT workers in unions? Talk about putting the blinders on and diverting the issue. This was supposed to be that privatized haven the fiscal right is asking for, turns out the reality is just as crappy as what they complain about.
You're not supposed to reveal that "privatization" is a scam...that's "top secret".
Orwell: "In a Time of Universal Deceit, telling the Truth is a Revolutionary Act"
This summary is a confused mishmash of thoughts. First they talk about how the government pays for offices, utilities, computers, and training then they bring up defense contractors, who aren't the kind of contractors that the earlier statement is talking about (I assure you that defense contractors pay for their own overhead costs). Secondly, in what world does a company having many significant expenses mean that they don't try to optimize the largest one? Companies minimize costs and maximize revenues wherever possible, it is the one thing that they are good at (and why capitalism comes as close to working as it does). Removing some expenses doesn't especially encourage companies to reduce costs in other areas, just like increasing costs doesn't encourage them to gouge their customers, if they could get away with gouging their customers (or employees for that matter) they'd already be doing it.
Smedley Butler tried to warn us...
President Eisenhower tried to warn us...
Question is, what are we going to do about it? Either through political means or revolutionary ones, we can't wait around for other's to solve this problem for us. It's time to make the change ourselves.
And yet, there has to be a middle ground. If you give the employer too much power, they take complete advantage of it. If you give the Unions too much power, you can't keep people accountable even for basic tasks and efficiency.
We have to stop saying that any limits on union power mean a return to sweatshops, because that's just as wrong as saying that returning to no unions will fix all of our economic problems.
Do people really have that much of an issue with their own negotiation? I've worked in some very big companies, I've never been part of a collective bargaining group - and I've also never had problems negotiating my own compensation (and I hate talking money with anyone). Its not that hard to do, and its not hard for the company to accommodate individual bargaining either.
Is US employment culture that different to British employment culture?
What you get with contractors is freedom from salaries, benefits, leave, and liability. Depends on what you are wanting. As someone who has worked for the state, I can say the contractors we hired were worth 3-4 internal employees. The contractors have incentive, the in-house never did, they got paid the same no matter how hard they worked, just as long as they kept that seat warm between 8-5.
CS: It is all sink or swim...oh and did I mention there are sharks in that water?
Not true. I worked for the USG for a few years and in that time my boss fired 2 of the 15 people reporting to him (fired, not laid off).
The real issue is that people think that and then never check how the process works.
Dude here punched his boss in the face and they were unable to fire him
Something tells me there's more to this story...
Unless you're a rockstar, compensation is usually a "take it or leave it" proposition. Especially so in an economy where people are desperate for jobs and will take anything to put food on the table.
Where does the school board find them and why do they keep sending them to ME?
The government has the ability to force contractors into full disclosure agreements. A federal law should be passed that forces any business that accepts a government contract to fully disclose how the money they received is spent. A federal web site ( ie. contractors.gov) should be implemented so contractors can easily journal receipts, wages, and other payments, without specifying the names of employees specifically of course. The journal should be kept during the entire process and maintained on the site for no less than 10 years. The web site and all information should be freely accessible to all U.S. citizens.
Having to work for a living is the root of all evil.
Not every kind of worker is the same. You're an educated person, but a miner, truck driver, or some other low-end worker usually can't negotiate any kind of benefits or anything. Either because no one will hear them, for fear of being fired (or flagged...), or simply because they're too... "uneducated" to know what their rights are.
A company is always bigger than a single person. And a company can afford a lawyer (or an army of them) to screw you, while you usually don't have resources to do that. That's why unions exist.
But unions need regulations, just like companies need regulations. What folks here don't seem to understand is that any "unregulated" area WILL get exploited, and the bigger guy always wins. That's the danger, not "government intrusion".
And when they talk about how much Federal employees make vs Contractors they never factor in that a Contractor doesn't get any benefits, any life insurance, any health insurance, or anything. The Contractor has to buy his or her own and receives none of the fancy government benefits. In reality the government employee might get less in take home pay, but they get way more in benefits.
"You don't actually think they spend $20,000.00 on a hammer, $30,000.00 on a toilet seat do you?" - Independence Day, 1996
If the only way you can accept an assertion is by faith, then you are conceding that it can't be taken on its own merits
This whole concept of contracting is like outsourcing, looks good on paper as it saves costs. Then politicos can brag how they are reducing costs because there are less govt workers (though there are a zillion more contractors), i.e. NASA or number of troops overseas (much of those positions replaced by contractors). Only advantage of contractor is it is easier to fire someone than a civil servant. Don't think unions are all powerful and all members have juicy benefit plans and pensions (they don't). Now people like to say how much better contractors are at saving money (uhmm, J35 fighter has doubled cost in past five years and its contractors have a lot of political power like lobbyists and work less regulation than before so don't blame govt people. Oh, did you know the J-35 began as CALF, Common Affordable Lightweight Fighter?).
Others say contractors are good because it is private enterprise, you gotta work hard to make it successful unlike govt which don't have to make profits or deal with customers. However, pretty much all federal contractors have only one customer, the federal government so they are government. I see almost all these companies could never compete in the "real world." And those that do work in the real world are highly dependent on government contracts. Which I think is why federal spending has skyrocketed because it is the only big thing in town, as all other industries have collapsed.
There was a time when becoming a police officer or working some other govt position was considered low pay (especially NASA civil service in the 80s). Right now it looks really good because all other middle class jobs have collapsed. But even for them salaries and bennies are dubious.
mfwright@batnet.com
And unless you want to establish a Soviet-syle Department of War Production, you'll have a lot of that no matter what. Most of that $306B is spent on acquisition of military hardware that costs an incredible sum of money because it is all custom-built for a single, specialized market. There is no "adjacent market" for a F22 or nuclear air craft carrier ($5B+/ship).
Obviously, there is room to get rid of a lot of that, but the most effective process would be the following which neither liberals nor conservatives would tolerate:
1. Make civilian employment at-will (liberals: booooo)
2. Fire the dead weight left and right (liberals: boooo)
3. Change the law so that government agencies can legally poach government contractors as new employees (conservatives: booo) even if there were pre-existing non-poaching agreements.
4. Liberalize the procurement regulations so that federal managers can hire 1099s on a no-bid basis for temporary work with the caveat that the federal manager can be fired on a performance basis if their contractor cannot or did not do the work (both: boooo)
Actually, from the other citations, it would actually cost the government less to insource their work. The current evidence points to government contractors as inefficient ways to accomplish work.
Been working Federal IT at various agencies for 20 years and the story is the same today as it was twenty years ago. You can't reach high quality/niche programmers on the Federal pay scale in the DC area. Scoff if you want, but we just had a top notch contractor successfully apply and get an offer for Federal work, only to turn down $137K plus bens. Great candidate, couldn't reach his rate. I've seen this time and time again.
That same contractor bills out near $300K per annum.
The system is skewed towards the contracting companies. Keeping Federal IT pay rates down below the industry average for our area guarantees big pay days for the contracting companies. These companies were supposed to be a panacea for the inefficient Federal worker. All that they have become is YAFE (yet another Federal entitlement).
And yes, some of the contractors have been in the same position for DECADES. Same lifetime entitlement.
I run a small business where we have contractors. I have been a government contractor in the past, but my company hasn't done any government work since we got started a year ago. Our employees know their billing rates vs what they're actually paid and haven't complained.
Our top rate is $120/hr, which would work out to be 240k/year if the person worked 40 hrs a week for 50 weeks (2 weeks pto) .. 2000 hrs.
But, we don't always have our contractors out full time. Sometimes they're on the bench (working on internal projects).. We have to cover that cost, or we have to lay them off. Essentially we're building up a bank account so that we can afford to keep employees that aren't working for the client at the moment. That plus the other overheads we have really eat into the company profit.
So.. even if we're paying $110k/year to the guy we're billing at $120/hr, it can be a close thing.
What benefits do unionized federal employees received that non-unionized do not? Most federal employees are not in unions. Federal employees can not be compelled to join a union. Federal unions can’t advocate striking or actually go on strike. According to the U.S. Federal Code, federal employees are not allowed to strike. It is deemed an unfair labor practice which can result in the employment termination and the revoking of the union’s status as a recognized labor organization. Recall how all the air traffic controllers were summarily fired and replaced thirty years ago.
And you're basing this on what evidence? I see no figures on this.
The fact is, people are pocketing a significant portion of government contract payments, and it's not the people doing the actual work. It's the guy in the suit who "manages" the teams, and says "You let ME worry about that" to everything while driving a fucking $200,000 Mercedes.
The unions and payroll have absolutely nothing to do with the inflated cost of government contracting, they're just an easy target recently vilified by the far right and other class-warfare commencing scumbag motherfuckers. So go join your party on the right, tea bagger.
For what it's worth, most union dues/benefits are paid for by the employee themselves through dues and fees. It is a rare occurrence that an employer takes care of all the costs.
Pensions are a stupid employment incentive all around, but it's not the unions' faults. Keep paying people's salary even after they retire? Yeah, that's a marvelous idea for the bottom line.
If the only way you can accept an assertion is by faith, then you are conceding that it can't be taken on its own merits
Follow the money, follow the greed, find the power, find the corruption. It's a pretty common theme and has been going on for decades. Most of you may be too young to remember (http://www.wnd.com/index.php?pageId=4314)
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..haven't we pretty much known this for some time now?
Yes. It's also obvious. You'd have to be an insane contractor with no business sense to work for less, as well.
That factor of 2 has to cover pension, retirement, health insurance, gaps in employment due to being a contractor rather than a regular employee and other costs.
Not only that, but contractors are much lower risk (much easier to not renew the contract than to fire an employee) to the employer.
SJW n. One who posts facts.
Yes you can. Its done all the time, for a variety of reasons. Usually the CEO takes a $1 salary becuase the company is struggling, but there's no law that says they have to be paid market value.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
By using contractors the government is converting all the various costs (salary, benefits, tax costs, personnel management, leave, pension etc...) into an up-front payment. Much easier to manage year to year.
The 19th Century thinking here is remarkable. It makes me wonder who are the conservatives.
The 'progressives' are the modern conservatives, because they're trying to maintain an industrial-era ideology in an increasingly post-industrial society. The 'conservatives' are trying to build a society that works when most people aren't 'working for the man' in a factory twelve hours a day.
I'm sorry, but I just have to call BS on that claim. A guy gets punched in the face by a contractor, you call the police, not HR. You call management to get them banned from the building. If the contract says "you have to keep him paid until it is resolved" then fine. But just moving the offender to another department doesn't hold water even in fantasy land.
You'll have to cite references before I begin to believe that.
I have a better, though perhaps revolutionary idea. Why not save nearly the whole $306 billion by being less of an aggressive warmonger?
As a small businessperson, I can tell you that the overwhelming amount of bullshit required to bid on government contracts (especially Federal government contracts), combined with a low probability of successful bids, means that it's imperative that you inflate the bids to cover costs, or avoid bidding on them.
Want to cut the price? Cut out the red tape.
If you remember the stories about the $600 hammers, and you actually read the details, what you find out is that the hammer cost $10, and the contracting overhead cost about $500. That includes all the rules for government procurement, Federal Acquisition Regulation compliance, EEOE, small and woman/minority owned business requirements, limits on subcontracting, requirements for exhaustive financial/time accounting, etc, etc, etc.
Most of those overhead requirements are placed for good reasons, either for social policies (e.g. small business/minority business) or for fiscal or technical accountability (e.g. time accounting, facility security, etc.) But when you add them all up, you have a lot of overhead for doing government contracting that you don't have in business. It's part of the reason why government is inherently inefficient.
If a lower end worker wants to "negotiate", but there are 12 people behind him in line for the job, then why should that employee have any leverage? That's capitalism. Supply and demand works for labor, too. If somebody thinks they're worth $15/hour, but there's a line of people willing to work for $12/hour, shouldn't the employer just hire the $12/hour employee?
I don't respond to AC's.
Don't make shit up. There is no place in the world where actually violent, criminal employees are any hard to get rid of.
Football Odds
So the answer is outlawing unions and having all workers negotiate their own contract terms?
No, but there should be a middle ground.
Unions are good, but this whole "protect every employee at any cost" thing has to go. Outlawing the union is going way too far in the other direction, but there has to be a better solution.
Personally, I think that these claims that people are impossible to fire are largely made up. Maybe people are difficult to fire, but impossible? As for punching his boss in the face, I certainly don't have all the details (or any of them, really), but I'll bet there's more to that story. Certainly, if the guy punched his boss for no reason, he'd be arrested for assault and battery and I'm guessing he'd be easy to fire, union or not.
Labor unions have had policies put in place by which government employees are impossible to fire if you don't fire them within one year.
Uh, the civil service protections of federal workers have nothing to do with unions. They started with the Pendleton Civil Service Reform Act of 1883, which was motivated by various scandals around "the spoils system" and the shooting of President James Garfield by an office seeker.
When I worked for the DOD the only people I knew in unions were government contractors (many military bases and NASA installations had union staff and I don't believe that that has changed). I came to have a great respect for the Teamsters, who negotiated very hard and worked very hard.
*Knowing* it and getting a Congress that's absolutely owned by said contractors to do jackshit about it are two very different things.
SJW: Someone who has run out of real oppression, and has to fake it.
The first Model Ts were built at the Piquette Road Manufacturing Plant, the first company-owned factory. In its first full year of production, 1909, about 18,000 Model Ts were built. As demand for the car grew, the company moved production to the much larger Highland Park Plant, and in 1911, the first year of operation there, 69,762 Model Ts were produced, with 170,211 in 1912. By 1913, the company had developed all of the basic techniques of the assembly line and mass production. Ford introduced the world's first moving assembly line that year, which reduced chassis assembly time from 12ý hours in October to 2 hours 40 minutes (and ultimately 1 hour 33 minutes), and boosted annual output to 202,667 units that year After a Ford promised profit-sharing if sales hit 300,000 between August 1914 and August 1915, sales in 1914 reached 308,162, and 501,462 in 1915; by 1920, production would exceed one million a year. These innovations were hard on employees, and turnover of workers was very high, while increased productivity actually reduced labor demand. Turnover meant delays and extra costs of training, and use of slow workers. In January 1914, Ford solved the employee turnover problem by doubling pay to $5 a day, cutting shifts from nine hours to an eight hour day for a 5 day work week (which also increased sales; a line worker could buy a T with less than four months' pay), and instituting hiring practices that identified the best workers, including disabled people considered unemployable by other firms. Employee turnover plunged, productivity soared, and with it, the cost per vehicle plummeted. Ford cut prices again and again and invented the system of franchised dealers who were loyal to his brand name.
a businessman without any unions, did the following for his employees due to market regulation that came in form of high turnover: 1. Paid them 5USD/hour with 5x 8 hour days. This means he paid them 25USD/week. The price of gold was just over 19USD/ounce, that means he was paying 1.25 ounces of gold. At current gold prices of 1724/ounce, that's 2155 USD/week. That's about 112,000USD/year. 2. Without income taxes to pay, Ford's workers were taking home over 112K in current money, and that's without income taxes. So in today's equivalent and given the fact that health insurance was about $5/year per person and doctor's visits were paid out of pocket and so was education and pension savings, because all of those things didn't have gov't involvement and so they were very affordable, today's equivalent would have to be at least 2.5 times that much, near 300,000USD. Ford also hired disabled workers by the way, that nobody wanted. He needed to lower turn over and to retain talent and he did it due to market pressure by improving conditions. The work week was 5 x 8 hour days. No unions, no income taxes, no payroll taxes, no corporate taxes, near no corporate regulations, no bullshit. This is the way the market works, the OWS with the shrewed capitalist 0.1% millionaire Michael Moore successful competitive 'documentary' producer is coming up stupid shit that they think will help anybody, well that experiment has failed enough times that people shouldn't buy into it.
Steve Jobs was paid a $1 salary. Not sure about the USA, but I'm pretty sure that you are also supposed to declare non-monetary compensation. I vaguely remember one tech CxO (maybe Steve Jobs, possibly someone at Google) getting into trouble for not declaring free use of the corporate jet as taxable income.
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I was a government IT worker in the U.S. Treasury for decades. Before I retired, contractors were being brought in to replace workers in my position. One guy comes to us fresh from a front-line support position at, believe it or not, Best Buy. After a long while, he turned out to be not so bad, trainable, and useful. It took about a year to get him up to speed.
At some point, he decided he trusted me enough to talk about pay. I was shocked. Why should he treat salaries as some sort of secret? As a public employee, my pay is known to anyone who wants to look it up. I showed him how to look up what anyone in the organization made, showed him my salary, and couldn't imagine why anyone would think of this stuff as proprietary information.
In his case, though, I can see why his employer had gone to great pains to create the impression that salaries were some kind of secret. He was doing the same work as a first-tier support employee but was being paid roughly one-fourth as much money. The contract to his employer was sufficient to support employees like me (the agency was paying roughly twice the annual salary of a senior computer specialist for each contractor who reported to a job site) yet the contractor simply took the contract, took a cut, and subcontracted the rest out. The subcontractor took a cut and subcontracted the rest out. The next level subcontractor took a cut and hired an out-of-work Best Buy leftover to report to the job for a pitifully small percentage of the original contract payment.
It was a multi-level sham. I was annoyed at the waste. The contract guy was annoyed that he wasn't making any more money. Overall, contracting for these positions was a completely stupid thing to do that only accomplished just one thing - slicing off shares of pure profit to a few middlemen. Ultimately, the workers on the ground and their customers got screwed and the U.S. government got a *very* poor return for the money spent.
Naturally, once the guy was fully trained and providing real value to the organization, budget cuts forced cancellation of the support contract and he was gone in a flash. All that training time, all that productivity diverted from helping customers to bringing him up to speed was, in an instant, flushed down the toilet.
I'm sure it's not always the case, but contracting for services like this by the government is, in every case where I've gotten a close look, a completely stupid thing to do.
I was around in the Government when the Reagan administration came in, RIFed a bunch of people, and put in hiring freezes all over the place, nominally to reduce the size and cost of government. However, they didn't really reduce either departmental budgets, or the tasks that those departments had to fulfill. The result was a vast hiring of contractors, replacing people making X with people making 2X, which (with burden) was billed to the US government as 4X+. I thought at the time that this was not about cost savings at all, or better efficiency, but about funneling cash to politically well connected contractors, and I have seen nothing to make me change my mind since.
If the company is making a profit and you pay out distributions equivalent or greater to what you should be earning as an employee in order to avoid payroll taxes, you can get in trouble. And yes, there have been court cases about this very issue. See here, for example.
What are you even talking about? How are conservatives trying to do that? All I see conservatives doing is trying to maintain the status quo.
That brings me to an interesting point, / . is just "the ramblings of socially-inept, technology-literate news-mongers".
Essentially, there seems to be a debate regarding government employees vs contractors (at 2x the rate).
But the truth of the matter is those contractors never see that double income. All the talk of how 2x let's you pay for your own benefits is hogwash.
Here is how the system works for the most part. Rather than having government employees hired for a task which is likely to be short-term (1-5 years). The government contracts it out. Instead of hiring a $50K-$75K employee they pay a major contractor (Northrup, Lockheed, L3, Accenture, etc, etc, etc) $100-$150K to fill that position.
These companies then hire from vendors adding an additional tier to the puzzle. (If the contractor is a foriegnor there may be a third party involved in sponsoring their visa.) So of that $100K-$150K paid by .gov for that contractor. The contractor might see $40K-$75K. All the rest is eaten up by middle-men.
But it doesn't stop there. The way the contract system works, it is not uncommon for one of these contracting firms to mass hire dozens of people toward the end of a fiscal year. They do this so they can use up (bill the government) for every dollar the contract allows for. Upon the end of the fiscal year many of those contractors will be let go. No severance. Nothing.
Essentially, the contract system allows for an at-will hire and fire. Which in an economy that has 9%-16% unemployment becomes a gross abuse. You literally watch people hired for two weeks only to be let go. Positions are advertised as part of a long-term contract. New hires are often misled into thinking there is an element of job security. Some even leave jobs for these positions only to reach a very rude awakening.
Seriously, Unions need to quit wasting their $$$ being campaign fundraisers and get on the ball with what unions were all about. Defense of the worker.
In the current market, a potential new hire has little to no ability to negotiate on contract. And if misled, lied to, etc - has even less recourse.
There needs to be a fraud law that mandates whether a position is long-term (min. 1 year) or merely short term. If fraudulently mis-portrayed, than the hiring firm would be obligated to pay the employee for one year of time.
This would help end the abuse of contractors that is rampant in government work.
I question how much more difficult this is with a Union than firing someone with approval from the HR department at a typical bigger business. At my work, it's relatively difficult to fire someone, but if you keep very good documentation...once they've screwed up enough, their ass is grass. You need proper justification. Yeah it's annoying but quite frankly...tough shit. I'd prefer it be a little harder to fire people than the bullshit we've seen in the past. Without a good HR department, bosses pretty much do whatever the hell they want. I've seen this side too where HR basically works WITH the managers; instead of trying to prevent the firings they pretty much help them do it.
:p
I'd love to see proof of the guy punching someone in the face and not getting fired. I find that extremely hard to believe. There may be other circumstances or the poster may be lying. Like you said...I'm pretty sure he'd be arrested pretty much immediately.
"Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
There is competition for all jobs at all levels. If somebody is actually an asset (reliable, competent), it doesn't matter what their pay grade is, managers would rather keep them at a bit of a premium than train an unknown quantity from zero. The mistake people make is that they half-ass their work and then wonder why they're expendable.
The really bad situation for otherwise good workers is where upper management decides to implement threshold benefits that encourage dismissal for bullshit reasons, e.g. benefit x kicks in after y years with the company, so managers try to trim senior people without good cause to save money. This is terrible for morale and retention (duh) and leads to poor quality work.
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If all these costs were accounted for then the supposed gap would be much narrower or potentially even non-existent.
Except that they are accounted for already.
http://www.pogo.org/pogo-files/reports/contract-oversight/bad-business/co-gp-20110913.html#Summary%20of%20Methodology
Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees, POGO added OPM’s 36.25 percent benefit rate to federal employee salaries and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.
upon the advice of my lawyer, i have no sig at this time
Actually, not really. While there is plenty of bullshit, the government requires a certain portion of the work to go to small businesses. So there is a good chance that a small business will get the work.
However, the small businesses that do get the work, tend to be partnered with larger firms, who end up doing all the paperwork to help the small business win the contract. I know, I work for one of those monstrous companies and we partner with, and supply the paper framework all the time.
I came, I conquered, I coredumped
Not just labor unions support this -- as a taxpayer, I support it, too. Otherwise, every time a bad president came into office, they'd get rid of all of the "non supporters" and replace them with useless hacks. The way we have it, people can get a job with the government as a first choice ("I can make a career here" and "I won't be fired summarily") instead of a last choice ("it's only for a few years, but I need money now").
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I think you guys are thinking more so of private contractors where such incentives and the like pay off.
But what's being talked about here is mass contractor employment. Low-pay, zero incentives, in fact often they couldn't care if you sat at your desk all day and did nothing. So long as they can legally bill the government for your time.
It's an entirely differently system than corporate contract work.
If you incorporate, try to find a woman who is a military veteran and racial minority to take a 51% percent stake and act as the front. Then ride the politically correct white guilt contracts quota to the moon!
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
The way contracts work in the government is that usually they have a specific contractor they want to use anyway. So they'll word the contract in such a way that only that specific contractor can meet all the requirements. Same goes when they want to hire a specific person. Because of government regulations, they have to have an open competition for contracts and positions, but many times they already know who they want to work with. On one hand it's unfair to the others who want the contract or job. On the other hand, it's a lot less risky for them to pick somebody they know will get the job done (regardless of the cost) over someone they have never worked with before.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
If a lower end worker wants to "negotiate", but there are 12 people behind him in line for the job, then why should that employee have any leverage? That's capitalism. Supply and demand works for labor, too. If somebody thinks they're worth $15/hour, but there's a line of people willing to work for $12/hour, shouldn't the employer just hire the $12/hour employee?
That's all fine and good until every company decides to hire the cheapest workers. Then the wages of the whole working population crash to sweatshop levels and we're back to working conditions in the 1800s. The "market" doesn't work here because working is not a choice. When all employers drop their wages to $0.50/hr your choice is between $0.50/hr and not working at all. Workers can't "vote with their feet" in this case.
All I read in your post was this:
I come from a middle-class family, there was always food in my table and growing up was easy, then I started working and was always happy with my paycheck, and I even found ways to avoid overpaying taxes. I don't see why people say they can't find jobs... you just go somewhere and say "hi, here's my qualifications, i want a job" and you get it. It's not so difficult.
Which is fine, except that in real life there are other factors, like genetically stupid people, or people who didn't have proper nutrition as children, or whose mothers drank, smoked, or did drugs during pregnancy. Or teenage mothers, or many other factors that automatically get you out of the American Dream elegibility.
If you stop for a minute and think that, gee, not everyone is like you. Not everyone can negotiate, can afford to "meet people", or HEY! they don't even have the kind of job you are doing (I doubt a walmart cashier can benefit of "getting in touch with people", since she's probably there because she can't do anything else.)
(BTW, i'm from a middle-class family, I have a decent living, I got my "gigs" by meeting people, etc. But I also have empathy for other people and I can see why things are the way they are. It's either that, or we kill all idiots, "they're useless anyway")
Well, if unions in the USA are as powerful as The Incredible Hulk, they must be doing a really sloppy job. After all, you're among the countries with the highest income inequality among developed nations. And it keeps rising.
I suspect this anti-union rhetoric that floods Slashdot all the time is more a product of decades of brainwashing from the part of the corporate media propaganda machine.
In my country (Portugal), unions are pretty weak. That's one of the reasons (but not the only, mind you) we have incredibly shitty pay compared to countries where unions are powerful like Germany and France. And it hasn't helped us at all to have weak unions. Our productivity is still very low, although we work more hours than the other Europeans. Our country is bankrupt. And our managing class is one of the most illiterate, lazy, loutish and well-paid in Europe.
They won't fail because there is not a real free market. One example of a company with the 'threshold benefits' problem is Geico. The government mandates that people buy car insurance whether they think it is useful or valuable to them or not (except in NH, because they are awesome). In the absence of proper market pressures, most if not all insurance companies suck, because they are 'competing' over a captive audience. This is also why I oppose mandatory health insurance.
Until the government stops passing and repeals laws that force people to be companies' customers and that set up arbitrary barriers to entry to prevent legal competition within many industries there is no hope of any market correction. Every legislative session makes the US more and more a planned/command economy, but people don't notice because it stops short of outright nationalization. Who needs nationalization when you can just regulate everything so tight that the only freedom companies have is to move down the narrow corridor established by law? It stifles innovation and growth.
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
Why would unions give a shit about income inequality?
Not sure what's it like in the US, but the rationale behind mandatory car insurance is simple, the slipknot equation explains it: PEOPLE = SHIT. If you hit somebody with your car and don't have insurance, they will sue you to get paid. Except you could hide your money and claim you don't have any. So you get your money, walk away free, and the person you hit doesn't get medical attention (because he's broke AND doesn't have medical insurance, cause he thought he'd never need it).
You know what happens if the law gets so fucked up that paying compensation for killing someone is less than having to pay for their treatment? This:
http://www.dailymail.co.uk/news/article-2052815/Xiong-Maoke-5-dies-latest-horrific-Chinese-traffic-accident.html
So don't think people can be trusted to do anything that won't give them a direct AND immediate benefit. People are shit, man. Everywhere.
"You don't actually think they spend $20,000.00 on a hammer, $30,000.00 on a toilet seat do you?" - Independence Day, 1996
See, this is the thing. Golden Fleeces were being handed out, fingers pointed, voices of indignation were hollering at every microphone and camera they could find - it was like a scene out of Bloom County - so preposterous and yet happening.
Forward a few years and instead of buying a special model of hammer or seat meeting a particular specification, we now have contracted out an enormous amount of work - and from what I've seen, a lot of the result is garbage - it's far worse now than $600 toilet seats. The contractors who flooded Iraq were taking home tons of money, while much of the work was done by sub-standard hires - and we saw some of the results in the news, but Cheney's old company made a sickening haul and nobody seemed to do more than bat an eye at this seeming corruption - Just how was it that Halliburton was awarded a giant no-bid contract, because they were the only company seen to be prepared to handle it? Talk of inside information .. there must have been a conversation including something like this from Cheney, "Get oil, security, contruction, everything ready now, because we're going to invade Iraq in a year and if you are ready, we give you a fat no-bid contract, OK?"
Old advice, too, from someone in my past - if you want to make money, get contracts for government - education, too. You can sell rubbish which you could never get away with in the private sector markets.
A feeling of having made the same mistake before: Deja Foobar
Here's a good starting point.
http://www.fedaccess.com/8%28a%29-sdb-minorities-women-disabled.htm
Eligibility Criteria for 8(a) and/or SDB Program Participation
In order to qualify for access to the 8(a) or SDB program, a company must qualify as a small business with potential for success that is owned and controlled by individuals who are socially and economically disadvantaged. The owners of the company must submit an application to the SBA which details how the company meets these criteria. Here are a few tips on meeting the SBA's requirements.
1. Small Business
To qualify as a small business, a company must compare its status with other companies operating in the same (or similar) line of business. The U.S. Department of Commerce maintains a regulatory matrix for use in determining if a company qualifies as a small business. Visit our page entitled, "What is a Small Business?" to find out more.
2. Social Disadvantage
Social disadvantage refers to any circumstances under which the owners of a company have faced racial, ethnic or cultural bias within the U.S. to the detriment of their ability to establish or grow their business. Clear examples of social disadvantage include race- and gender-based discrimination, as well as discrimination on the basis of physical disability or lack of access to traditional education.
The government has determined that a presumption of social disadvantage applies to certain racial and ethnic minorities including African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans. Other applicants, including non-minority female, veteran, and disabled business owners, must affirmatively demonstrate social disadvantage by a preponderance of the evidence.
3. Economic Disadvantage
Economic disadvantage is measured in terms of the personal income, personal net worth, and fair market value of all assets owned by each individual claiming social disadvantage in an application for 8(a) or SDB certification. In calculating personal net worth, the SBA excludes an individual's ownership interest in the company, as well as any equity held in a primary personal residence. An individual's net worth must be less than $250,000 to be eligible for the 8(a) program, or less than $750,000 to be eligible for the SDB program.
4. Ownership and Control
The ownership and control of a company are critical eligibility factors. Owners applying to the 8(a) and/or SDB program must demonstrate not only unencumbered ownership of at least 51% of the value of the company, but also that they have full control of the company's day to day operations. The SBA looks into a range of matters in assessing a company's ownership and control.
There are a number of government statutes and programs which demand that disadvantaged, small business and minority contractors be considered before others.
I don't see this as unfair. It's a way of fixing the past two centuries of injustice. If you have a better way to do that, by all means speak up.
The problem with some of these "outrageous" expenses is that they never are given with any context. Why do they need such an expensive hammer, when a hammer is like $5 from Home Depot? As it turns out, the need for the expensive hammer is found in where it's used. The hammers were used in situations where gas might be around, like in gas tanks. Therefore, they needed hammers that could hammer without giving off any sparks.
Actually, there is a law. In particular, for S corps, that don't pay corporate taxes of their own, the IRS requires all compensation in total (salary, pensions, stock options, etc, all taken together) to fall in a range that is "reasonable and customary for the position" . If that's not exactly pegged to a market value for executive compensation, that's because there is no standard amount for executive pay. This means the auditing agent has a fairly broad range to decide whether the total package is reasonable or not, but he or she has a table of dozens of cases that set precedent to go by.
For "C" corporations, a CEO taking a $1 salary is doable, because the corporation also pays taxes of its own and the money not paid to a CEO is profit to be taxed. It's not capital gains, its direct profit.
For those posting about stock options:
You can't pay at capital gains rates on a standard non-qualified stock option (which is what most executive options are). You may qualify for the better capital gains rate on the profit from sale of stock, if you hold the stock for at least a year, but that's not exercising an awarded option.
Here's an example: In 2008, CEO Bob gets a 1$ salary, plus the award of a stock option to buy 1000 shares of his company at 50$ each. That option spans a period that is part or all of 2009. In Sept. 2009, Bob exercises that stock option. He has turned the company around as the saying goes, and that stock is normally worth $63.47 a share. When Bob files his 2009 taxes (in 2010), he has to pay on that profit of $13.47 a share, and he pays at his normal rate, not long term capital gains. If Bob holds that stock for a year or more, he can sell it, say in Oct. 2010, and get the better capital gains rate on the sale, so if in Oct 2010 the stock is worth $68.47, Bob makes $5 profit at that time, and when he files his 2010 personal taxes in 2011, he gets the better capital gains rate on that profit.
That 1 year rule means that Bob is never even paying the same year's taxes for exercising the option and for selling the stock. If he sold the stock in the same year he exercised his option to buy it, he'd have to pay the full rate on all the profit in the same tax year.
There are Incentive stock options. There, the time from the granting of the option until it is exercised has to be at least a full year, and then the sale has to happen at least a full year after that.(Making 2 years minimum total). Here capital gains rates can apply to the whole thing as though, in some ways, the exercise and the sale were a single operation. This has some potential for the sort of abuse people are suggesting, but one of the many additional limiting rules about ISOs is that the employee must not, at the time of grant, own stock representing more than 10% of voting power of all stock outstanding (with some additional modifiers). So a corp held by a single person or small group can't do an ISO. Another rule is that the offer has to be made to an actual employee (so you can't offer it to yourself as Chairman of the Board, for example). There are dozens of other restrictions.
Who is John Cabal?
I went to a class on Federal Contracts and we were taught that only about 15% of contracts are really open for competition. The rest are wired for the incumbent and surviving in the industry is based on identifying which contracts are wired and not bothering to bid on them.
And this is my problem how?
Because you assume your privileged ass is the norm, so you decide that anything that benefits those that don't have it so great is unneeded. Pull your head out of your ass sometime, and you'll see that your situation is not the norm.
I mean, no one said the world was fair, nor that everyone starts out on the same level, some have it harder than others.
So we should continue trying to keep it unfair?
This biggest issue caused by the unions is an unwillingness to reduce benefits to match the current economic state.
Which economic state are you talking about? If the few rich are richer than ever before, why should the be workers who accept to reduce their benefits? Clearly there's enough money to satisfy their benefits, it's just poorly distributed.
No, the point of the story is that nobody knows shit, especially about how to do their jobs. If someone punches another employee in the face, and you can't get them fired, then you are the one that doesn't know how to do your job.
1) Ampco Non-Sparking Safety Hammer from Amazon: $56.99
2) Bill $500 to the Feds
3) Profit
Dude here punched his boss in the face and they were unable to fire him Something tells me there's more to this story...
Yeah, but you aren't going to get it. No, not even the real story, if there even is one.
Oh noes! Unions actually fight to keep decent benefits for their members! The horror! They should be willing to gut everything for the enrichment of their employers, just like everyone else has!
Next time you want to rant against union benefits, remember, the correct position is not "Why do they still have this when I don't!", it's "Why do I not have this while they do?" Don't be pissed off because someone was able to negotiate a better deal than you.
The real problem is the way the produce billing. Say they need a toolkit for a specific plane. They get the specs for space and everything. Someone specs out and tests each component of the toolkit. The time and materials comes out to $6k, for a 10 piece tool kit, ok $6k divided by ten pieces, $600 per tool.
Cheap storage VM.
The first time I did it, I looked up an insurance broker in the yellow pages who offered a number of plans. It was relatively simple, and they paid a couple of high dollar claims without question (CT scan and a surgery). The cost was less than a policy through an employer, with employer contributions considered. They charged me about 20% more because I was a smoker.
The second time I went with Kaiser. It was, and still is, less expensive than my share of my employer provided insurance. HMO's have their share of problems, but the same problems as an individual or as a group.
I know there are people who are uninsurable, but the idea that most people can't get individual health care is a myth.
Godaddy is a scam and a ripoff.
I have a friend that was doing help desk work for a large software company around the time that the whole Iraq thing started. He was a competent guy, but he didn't posses any special tech skills. I suspect that he was making about 35k a year with a few benefits. He caught wind of a job that was providing help desk support to the troops in Iraq that paid something like 90 or 100k per year, and jumped on it.
At the time, I was rather shocked at the rate of pay. He was making something like 2 to 3 times what you would realistically pay someone for the same thing stateside. Then I heard a few stories from him as time passed. They were sequestered in a military base 24/7 for the duration of their time in country, so they wouldn't get murdered. I asked him once about why he slept in a tent in their base, and his reply was that 'The buildings tend to draw mortar fire', so there were some dynamics that made life more interesting than most help desk gigs.
As an outsider who just sees the 100k a year job without understanding what it entails, it seems like a $600 hammer. The government isn't stupid (well, mostly not stupid), so there is usually a reason for things.
I could have taken the job, but getting possibly shelled, shot at, and trapped in a desert base surrounded by 18 year old marines with SAWs for 10 months, no benefits and no promise of a job past the current contract wasn't worth the money.
HA! I just wasted some of your bandwidth with a frivolous sig!
On top of that, if you have ANY health condition whatsoever, good luck finding insurance to cover it
You know, if it has already happened, then you are not looking for insurance. You are looking for subsidies.
How inappropriate to call this planet Earth, when clearly it is Ocean.
Exactly.
A lot of those contracts were to deliver X thing that costs $15 at any hardware store. But the delivery was to the middle of Afghanistan on a specific time table while people are shooting. It turns out it costs more to deliver a thing to Kandahar than it does to Baltimore.
(1) Amazon did not exist in 1980 when this story emerged.
(2) There never actually was a $600 hammer. The actual (averaged) price to the program was $435.
(3) That $435 included $420 the design and testing of the toolkit, amortized over each thing in it. For example, if you paid the vendor a nickel for an allen key, you'd call that $420.05, even though you only paid a nickel. The actual marginal cost (i.e. what the government actually paid the vendor) for the hammer in question was $15.
(4) Using the same accounting methods that arrived at $435 for the hammer would yield $476.99 for your Ampco hammer, regardless of what you actually paid the vendor for it.
What does this show? That you should beware when somebody peddles this kind of story. They're more interested in how effectively the story sways your opinion than whether the story is true.
Many of the biggest money wasters in government are stupid attempts to save money, as in the case we are discussion here.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I used to work at the Air Force Base where they used the $700 wrench (or whatever cost it was), and I heard the context. It turns out that "$700 wrench" was a custom hand tool that saved a day of disassembly and another day or reassembly work on an F-111. (Many planes in the fleet was disassembled completely and reassembled 6 or 7 times in their lifetimes.) There only a handfull of those tools made.
We also heard about the $7,000 coffee maker scandal. It turns out that was the drinking water heater in the C-5 Galaxy. The plane was used primarily for long-haul heavy-lift missions, but also carried passengers along on many flights. Think flights of 10+ hours - the pilots and passengers are going to want something hot to drink. A standard coffee maker takes electricity (but only costs $20.00). The electricity has to be generated by the APU, which takes jet fuel. The designers calculated the extra cost for jet fuel to generate that electricity over the life of the aircraft was several times more than the $7,000 hot water heater, which used waste heat from the engines for heating water.