How Dumb Policies Scare Tech Giants Away From Federal Projects

An anonymous reader writes "A study published in March found that that the reason why the U.S. government has sub-par IT programs is because leading commercial IT companies established in the U.S. aren't involved in government contracting. Either the government holds closed bidding, essentially stifling competition to its own disadvantage, or prospective companies are put off by the cost-prohibitive regulations associated with government acquisition given the low returns (less than 10% as compared to 20% or more in the commercial world). The dysfunction that results has been documented by the Government Accountability Office: of 15 Department of Defense IT projects studied, 11 had cost increases (one of which was by 2,333%), 13 had schedule slippages (one of which was by six years), and only three met system performance goals. If the U.S. wants to lead other governments in technical capabilities by tapping into the technology being developed within its own borders, then some say that instead of exemptions and workarounds such as was applied with Healthcare.gov, a complete rebuild of the whole acquisition program would need to be implemented."

Comments

It's just corruption

[rsilvergun]

Juicy contracts go to people that donate. I remember seeing a study that showed that donating to Senators had something like a 50% return on investment. It's not surprising that all that's left after the cronies get a pick are bum contracts. The good contracts go to the Kochs of the world.

Re:It's just corruption

[ShanghaiBill]

Juicy contracts go to people that donate.

Another big part of the problem is the lack of accountability. Even in the event of massive cost overruns, no one, either government employee or contractor, is held accountable. No one is punished. Nobody's career ends. If project mismanagement meant that the responsible government employee would lose his job (and pension) and the contractors would finish the job on their own dime, things would change.

Re:It's just corruption

[Strudelkugel]

Actually it's a bit different from what you describe. The government loads contracts with all kinds of deliverables beyond the actual product being requested, such as documentation that never reflects reality since there is never enough time to do all of it and deliver a product. Everyone knows it won't be read anyway.As often as not these things distract the contractors. Then there are the process mandates and contract requirements that employ large numbers of people who are all busy checking checkboxes. All of this is done to prevent failures, but obviously the failures occur anyway. Part of this is often because the government tries to create a Facebook or Google in a couple of years, but also because the regulatory environment designed to prevent failure is so complicated critical information can be lost or obscured. It's not that the "accountable ones" are not held to account because they work for government, it's more the case that the contract complexity almost makes it impossible to determine who really is accountable.

Obviously when you don't really know who is accountable for something you don't know who to ask for reliable information, so people start making assumptions. "You want escalators, not elevators? But the contract says vertical lift system. We interpreted that to as..."

Re: It's just corruption

[deKernel]

So let me get this straight...to not have corruption you need to have a big government... WOW.

Why not have an in House IT for the work?

[Anonymous Coward]

In house can lead to cost saving from both less overhead and from being able to consolidate stuff as well having more buying power as one big unit.

also you can more to getter better people as you are not paying all of the contacting overhead.

Re: Why not have an in House IT for the work?

[Anonymous Coward]

I'm a federal IT worker. One of the systems in the GAO report is managed inside our organization. It's an absolute cluster. The government pays easily 10 times what it would cost to do the development in-house. Requirements take forever to get vetted and into the actual software product, and then they're often not implemented correctly because the developers are 8 or 10 levels removed from the actual customer. They're working from paper requirements that may as well be Greek.

But the government doesn't really have much option due to the way the system is setup. We can't pay developers what they're worth. Having to deal with the stupid rules and red tape is straight up soul crushing. If you do manage to find someone qualified for the job, they usually bail because of the avalanche of incompetence and injustice they're faced with day in and day out.

My favorite is when managers do the exact opposite of what their technical experts advise them to do. Oh, we already have a system that does X? Let's pay this contractor seven figures to replicate that 6 months from now.

Complex rules == easily gamed systems

[Anonymous Coward]

There must be a theorem like Godel's that says that any interestingly complex set of rules is gameable.

There are a lot of studies showing that the contracting procedures of NYC and other larger political entities result in fewer, larger, more politically-connected contractors, and that is the result of several rounds of voters getting fed up with the corruption, voting in 'reformers' and giving them the power to correct the corruption, rinse and repeat.

By this time in history, we surely understand that more rules does not produce more honesty, more justice? But we keep on making more law, more rules, the inertia of the Status Quo.

Cost Plus

[wiredlogic]

There's also the lovely open-ended cost plus contracts that force everyone to dramatically underbid in order to win them. The lucky winner gets to write their own checks and rob the government blind.

Government attracts parasites

[hessian]

First, there's all the rules that make sure rules first go to minority- or female-owned companies, or to companies in at risk zones.

Next there's all the regulation.

Next there's government slowness. It's not market responsive.

The result is that people who are interested in running a business go away, UNLESS their business model is making money off government by charging it extra for all of its special demands.

It's no wonder the DC area is growing faster than anywhere else and salaries are higher there.

Re:Government attracts parasites

[DoofusOfDeath]

Don't forget another factor: the government is too well armed to fail.

Complete restructure???

[prisoner-of-enigma]

What? And destroy the current lucrative system of kickbacks, cronyism, and propping up otherwise unprofitable, unaffordable, unworkable systems and businesses? How will Senators and members ever get elected properly without the subtle system of bribes that currently grease the wheels of professional politics? Don't you know *anything* about how to get stuff done inside the Beltway?

Sheesh...you people need to get a grip and understand how power works in this country.

AC for reasons.

[Anonymous Coward]

I've been an employee of one of these contract IT companies for a little over 2 years, and I can tell you that my contract is undoubtedly no different.

From my perspective as a software developer, it seems like the issues are all deliberate. There's been a pattern since I've worked here. Everytime a competent developer leaves, they're replaced by someone who can't develop software. Sometimes it's the chief's friend, or some government employee's wife, or whatever. But no fewer than 3 positions on my team have been taken up by people who have no computer science education, no interest in software development, and no inclination to learn.

Last person that was hired, someone came over to tell me 4 minutes before his interview. I printed off a ludicrously simple programming problem and handed it to him, asked him if he'd have the guy "solve" it. The manager interviewing let the candidate hesitate on the problem for 4 seconds before pulling it from him, and saying "don't worry about it, I want to keep this interview short.". So my team is down another programmer and + another welfare recipient.

The only reason I've stayed her so long is that the work is occasionally incredibly interesting, but recently my boss decided to pull me so I could do something to "help the team" it involves clicking links and typing into a spreadsheet for 8 hours a day.

A few months a government employee decided they needed the area that my team's revision control server occupied as their office. My server was decomissioned, the area was converted to an office, and the government employee transferred to another location less than a month later.

I complain every few months, but the only thing complaining seems to do is make everyone suspicious of me. I need to get out of here.

Re:AC for reasons.

[Charliemopps]

You're describing any IT shop in the country where budgets aren't tight. Before the financial collapse I had a director that literally didn't have a job. He just sat in his office watching girls come in and out of the deli next door for 2years. When the layoffs hit, boy did we get to hear all about how the place would fall apart without him. It didn't.

Re:true, but partially because govt pays 10X too m

[Obfuscant]

To avoid HAVING a juicy contract at all, government agencies should be able to just use Walmart.com.

If we could guarantee that the widgets they buy from Walmart are made to acceptable standards and with verifiable provenance when necessary, I'd say sure.

But even though a 30 cent bolt from Walmart looks like a $5 bolt from McDonnell Douglas, the latter has been certified as to material and strength. There is an issue with counterfeit aircraft parts, and aircraft do break when the wrong parts are installed. You wouldn't trust Walmart to provide your aircraft parts, I hope, so buying them there would be a mistake.

Sounds like the rest of the world

[aXis100]

I get the feeling that it's nothing to do with being a Government agency. I've seen more than 50% failure rate on very large IT projects for other regular businesses and corporations.

There seems to be a major problem with sotware projects producing an accurate requirements spec, and following that though to implementation. End users have no idea what they want, fill the requirements full of edge cases, and keep moving the goalposts. Programmers often have no idea how the software will be used so whenever there are gaps they improvise with the most ridiculous schemes. And software architects always say "technology XXXX will save us, it makes YYY so easy", forgetting entirely that you still have to produce a sensible user interface with a sane workflow and that takes 80% of the effort.

Personally I cant see this getting better for a while. It's not the fault of any one person, it's just human nature when trying to deal with highly complex systems. We need to use a radically different design approach and employ exceptionally good project managers, and even then we might still want to cross our fingers.

Re:true, but partially because govt pays 10X too m

[Obfuscant]

In all likelihood, except for a very limited number of military-grade equipment (and sometmes even then) the widgets are probably made on the same assembly line in China.

I used aircraft parts as an example, and the likelyhood that the correct parts are made on the same assembly lines in China as the 30 cent Walmart versions is vanishingly small.

Re: true, but partially because govt pays 10X too

[tsqr]

In all likelihood, except for a very limited number of military-grade equipment (and sometmes even then) the widgets are probably made on the same assembly line in China.

Apparently, you have no familiarity with Federal Acquisition Regulations, and just like to make stuff up that will make all the equally uninformed folks here nod their heads wisely.

That's not a problem...

[evilviper]

prospective companies are put off by the cost-prohibitive regulations associated with government acquisition given the low returns (less than 10% as compared to 20% or more in the commercial world).

The head of a major company, that has interests in both defense and private contracts, described it quite simply (paraphrasing):

You get larger profit margins in the commercial space, but it's uneven and uncertain. The defense contracts offer long-term stable and predictable profits.

Of course the defense contracts require a bit of revolving-door politics... Hiring former government employees who know all the exhaustive rules and regulations, and can write a contract proposal in such a way that it will get accepted... and a whole team of people similarly focused on the government relationship, and compliance with rules and regulations.

In the end, on balance the two come out roughly even. But, of course a company that doesn't do any government contracts, can't hope to start getting some without a big investment in a team that get you off the ground.

Re:true, but partially because govt pays 10X too m

[icebike]

Government routinely pays a lot more than what they could purchase the same item for at Walmart. I've seen it with my own eyes. A government agency can only buy from a vendor approved for the project, after 400 pages of paperwork to get approved. The vendor charges $150 for a widget. Walmart charges $30 for the same widget. The vendor buys the item for $30 and sells it to the government for $150. To avoid HAVING a juicy contract at all, government agencies should be able to just use Walmart.com.

The paperwork just to get on the bidders list can be enormous. So much so, that our company just told any government bidders to go through on of our resellers, because we were not going to jump through all those hoops. Suddenly, a short track paper work trail was available. Still not interested. (We had been down that way before, and wasn't really any shorter.) We got the sales anyway, just had to give our resellers their cut, which was less costly than the paperwork.

Re:true, but partially because govt pays 10X too m

[BLKMGK]

Or perhaps he actually has some experience with aircraft. Counterfeit bolts are a HUGE issue as is quite a few other things that are supposed to be specced properly and are built in China. Everything from bolts to beams for bridges have had problems - ask San Fran about the latter. It takes all of 5 seconds to find PLENTY of evidence that counterfeit bolts are a problem in multiple industries. Counterfeit electronics are also an issue and for the military this is 100% unacceptable unless you would like to find yourself in a jet fighter coming apart because of it. If you think that it all comes off of the same assembly line you've got a screw loose yourself...

http://www.choice-distribution...

http://en.wikipedia.org/wiki/P...

www.asminternational.org/pdf/Aug8-12.pdf

And is business better?

[Zalgon 26 McGee]

Government can't hide its mistakes as well as industry can. How many SAP implementations have delivered on time and on budget? How many other projects have cost companies millions more than planned?

Yes, government IT is bad, but its not unique in that...

Re:true, but partially because govt pays 10X too m

[Mashiki]

I used aircraft parts as an example, and the likelyhood that the correct parts are made on the same assembly lines in China as the 30 cent Walmart versions is vanishingly small.

Actually the chances of them being made on the same assembly line is pretty high. The difference of course is that the line that has to "have" the certification, they'll use a higher grade material and take random samples for stress testing to ensure that it's right. They may even go as far as x-raying the materials before it goes through processing, and after to look for material defects.

I used to work in heavy industry back oh 15 years ago now. The stuff we sold went to the US military, and was used for scraping your ICBM's(particularly the minutemans). Everything had to be checked like that before it went out, but the differences were trivial in terms of what we sold to the general public and what went to the military.

Have you ever worked for a big corp?

[rsilvergun]

It's like that everywhere except small business. Scott Adams was only half joking when he made that Dilbert strip about nobody remembering the outcome of the projects you've been on...

Re:Constitutional Loophole?

[M8e]

Lobby, lobbier, lobbiest.

Re:true, but partially because govt pays 10X too m

[rtb61]

Don't get pulled in by the initial distortion. It has nothing to do with buying a particular widget. It is all down to 'VERY LARGE' tenders and contracts. Specifically tenders written in such a way as to exclude the majority of smaller suppliers and targeted at a particular cartel of very large suppliers, this all done purposefully. The cartels pretty much write the tenders they 'er' bid on, it reality just ration them out amongst themselves.

This all happened when lobbyists fought hard to shrink government ie smaller purchasing and managing units of government were no longer able to manage a complex multifaceted supply chain made up of internal labour and many smaller contracts and were forced to hand out major contracts. These of course come under the purview of lawyers with extraordinarily complex contracts, which the shrunken government departments are not able to audit due to lack of personal. This is top down corruption, facilitated by corrupt corporations, funding corrupt lobbyists who seek to ensure corrupt politicians get elected who in turn insert corrupt political appointees into what is left of government departments. So a straight up conspiracy from the get go by corporations to defraud the treasury, with the rally cry of shrinking government, whilst the reality was, make government agencies incapable of properly managing anything so making easy to steal millions and billions from the public and screw the consequences.

Reality was and is, things go a whole lot smoother when government does as much work for itself in house as possible and avoids contracting out anything as those contracts feed corruption. The bigger the contracts the greater the corruption and one need look no further than the glaring example of Darth Cheney and Halliburton, billions stolen and hundreds of thousands dead so that 'NO BID' contracts could be handed out with massive profits (not that it was the only element of a particularly corrupt war).

Or the opposite...

[jopsen]

Another big part of the problem is the lack of accountability.

More likely it's too much accountability, everything being defined in water-fall style specifications, which can't possibly be implemented.
Less accountability, trust and iterative development have been identified to provide higher project success rates...

the responsible government employee would lose his job (and pension)

WTF? Pension is money saved up. Why should anybody ever loose that. In any line of work, that's just messed up.
There is talk of criminal neglect, do a criminal case...

But this kind of "accountability", which is more about assigning blame to someone and ruining their career, is exactly why nobody wants to do government contracts.

and the contractors would finish the job on their own dime, things would change

Yes, contractor would factor in the risk of failure, or risk of going over price and raise his prices by a factor of 10.
Or just use a shell company and let that go bankrupts if he fails to deliver the contract. Bottom line: software development is high risk, from a study of 4500 projects over $15M, 45% of it projects goes above budget and 17% threatens the existence of the company.
See: http://www.mckinsey.com/insigh...

The inflexibility of contract and specification governed software development is at the heart of the problem here. More accountability isn't going to fix that. More punishment will only cause officials and contractors to do more work to cover their own ass... Instead of taking an actual risk, which is what software project management is all about, it's about managing risk and uncertainty.

Re:Oof - numerous problems

[nctritech]

The use of "woman-owned" and "minority-owned" as heavy biases (and sometimes hard requirements) is very much sexist and racist, and needs to stop.