DoD Procurement Esoterica

Now for something closer to my heart.  I recently heard a radio commentator summarize conservative attacks on health care as "Not a critique of whether the Government can provide effective health care but whether it can provide effective anything".  This has been a standard trope in several ways in the defense world I work in.  For example, outsourcing to contractors of many jobs previously held by civil servants.  The argument being that contractors provide the service more effectively and the evils of the civil service system keep poor workers from being removed.  Basically a critique that suggests private corporations are better suppliers of almost anything.  A couple of examples of interesting services done by contractors -

If you apply for a security clearance the investigator is a contractor. (I would have thought this wss a pretty important government service that should be held close?)

If you submit a proposal most, if not all, of the evaluation and processing work may be done by private contractors. (Again, wouldn't you think competition issues may suggest possible conflicts of interest?)

Large systems manufacturers also have groups that provide technical services in analytical organizations assigned to evaluate and budget for those system. (Can you say conflict of interest again?)

Recently the new administration issued new directives regarding this, and other bizarre practices resulting from the "The government can do nothing well" stream of "thought".

Attached are links to two articles that cover new changes that are either policy or legislatively moving forward.

http://www.fcw.com/Articles/2009/10/19/WEEK-DOD-authorization-acquisition-changes.aspx has several proposed changes.  An excerpt of interest -

Of particular concern is the relationship between agencies and contractors. Lawmakers say contractors are being allowed too far into the inner workings of agencies and coming too close to inherently governmental functions.  Of particular concern is the relationship between agencies and contractors. Lawmakers say contractors are being allowed too far into the inner workings of agencies and coming too close to inherently governmental functions.

Companies are selling services more than commodities, and the analytical and advisory services they sell put contractors next to agencies’ decision-makers, according to Congress.

As a result, lawmakers are mandating a review of those services. In particular, they want to know whether regulations and official guidance are keeping contractors in check.

They also want DOD’s annual budget justifications to include information on the types of services the department intends to outsource and how many contractor employees are needed to do the work. DOD officials will then need to justify why those services are necessary, according to the report.

Seems to make sense to me.  Shocking that it is even an issue!

The second article (http://www.ombwatch.org/node/10316) gives details on an interesting contracting form called "Cost Plus Award Fee".  Somewhat esoteric but here is the basic idea -

Used to outsource for products or services where the government cannot objectively measure contractor performance, award fee contracts are supposed to motivate a contractor to increase quality and control costs. If the contractor does not deliver, the government pays only the base fee and withholds any award fees that the two parties agreed upon during the negotiation of the contract. According to a series of GAO investigations, however, federal agencies have long supplied contractors with award fees for subpar work.

So we base fee on the quality of work, yet don't take into account the quality of the work?  Little accountability top to bottom.  And we wonder why we spend more than the rest of the world combined on defense??

Comments

[Dianne Foster]

I pay about $400 per month for Medicare and a helath insurance policy that basically covers my prescription drugs. In addition, I pay about $150 per month for the drugs I take (co-pay for 8 prescriptions).

However, when I went to get my flu shots, which I do every year, I had three choices:

1/ drive to my old place of employment to get a free shot;

2/ go to my doctor's office.

3/ go to a local pharmacy for a shot (they only had the regular flu shot owing to government delivery issues);

1/ was not a consideration because it is a 45 minute drive;

2/ my doctor no longer gives flu shots; he is the last GP in McLean to treat Medicare patients, and will not do anything extraneous as he loses money.

3/ I got it at the pharamacy.

My husband and I stood in line for 3 hours. A kind young woman brought me a chair, but my husband, being a macho kinda guy chose to stand although he is 80 and walks with a cane. The kind young woman said to me, "If we get socialized medicine, it will be worse than this."

Can contractors do any better?

[Wayne Z.]

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Of course, everyone forgets that Medicare is indeed a government-run health insurance program that few who participate would give up. Having had a spouse that had Medicare I understand the difference between private insurance and Medicare. Basically Medicare has its limits and issues, but compared to the battles we fought with our private insurer (BC/BS), it was luxury!!

Our government does reasonably well providing fire and police protection. I would have included military in that list of services provided but most of that has been outsourced. Not sure but I am betting many of the folks working on the drones that target folks in Pakistan are contractors versus soldiers. We all attend a state-run university, so I am guessing we dont object overwhelmingly to the way the government provides education services (it has to be better than a totally privatized system). Similarly we havent yet outsourced our judges and prosecuting attorneys. So we have safety, education, and justice provided pretty much solely by the government. How does health differ from these basic services? I would argue it doesnt.

[Dianne Foster]

Medicare is well run, compared to private insurance, and it depends on contractors to do the work.

My daughter who was on Medicaid for several years swears it is better run than the private insurance company she deals with now. After Connie's husband died, Medicaid and Social Security stepped in and assisted in the raising of her four children (until they reach age 18).

Many folks forget Medicaid and Social Security are insurance programs. SS= Old Age, Survivors, and Disability Insurance. The small amount you pay through your working life is a premium payment. If you live long enough, or (God forbid) suffer some traumatic event, you will collect in the future.

The real issues are waste, fraud and abuse, and there is plenty to go around, mostly engaged in by folks who are not age 65 or older.

As the American ethos seems to be "ripping off the system" the challenge for the government is to investigate and crack down on liars and cheaters.

[Dianne Foster]

Of course I meant Medicare is an insurance. Look at your paycheck stub. Medicaid is for impoverished people who fall below a certain level of income as measured by criteria set up 20-30 years ago. Hence the need for S-CHIP, which is for children and some adults. The latter two progrms are run by states with block grants from the FEDS, and cover most "poor" people.

I pray if that if the FEDS succeed in passing an omnibus health care bill they have the good sense to distribute the $$ in the form of block grants and let states and counties run the programs. I maintian that states and counties generally do a better job with social programs. The FEDS do a better job of monitoring the programs, checking for waste, fraud and abuse.

When it comes to running programs, the FEDS should stick to things that affect national defense.

Too often the FEDS mandate something for the states and then fail to provide adequate funds for the mandate. The "no-child" program in schools as well as bilingual education, spring to mind, as well as other items associated with law enforcement such as food safety issues.

[Bill]

Beyond all the anecdotal complaints (often many years old) about government employees, the reality is that the vast majority are dedicated to doing their job and to serving the public, and most do an excellent job. The problem is that, as with Ronald Reagan's imagined "welfare queen", anecdotes and ideology tend to trump reality. Sometimes that is due to unthinking reliance on particular news or political sources who keep repeating the same old tropes. Sometimes it is due to repetition by self-interested potential competitors (e.g., contractors or health care providers) or by politicians who get campaign donations from the contractors or competitors.

But stop and think about the alleged glories and efficiencies of private businesses. Start with familiar areas, such as auto repairs, home improvements, real estate lenders, health insururers. Do you trust their competence or honesty? Then there are the less familiar but critical players like investment bankers or buyout specialists (grab, borrow, cut employees, and strip assets before dumping). Then there are the often-impenetrable bureaucracies of large corporations (e.g., the auto companies). And, too, there are the government contractors with their plethora of overruns and under performances.

So why do "government bureaucrats" get all the scorn, particularly from the right. Compared to many private businesses, the allegedly nasty and incompetent bureaucrats look pretty good. Often the alleged problem is the law, not the employee who enforces it. Moreover, if we went back to respecting and paying a competitive wage to government employees, we could expect that they would do even better.

[Dianne Foster]

Bill,

I don't disagree with you that there are dedicated civil servants. Unfortunately, during my tenure, I saw many career Civil Servants forced out of jobs to make way for "younger" "brighter(?)" "better-educated (?)", new recruits, political hacks, or contractors of foreign extraction.

Now these comments are not designed to knock youngsters or foreigners who need jobs, but it does seem a bit unfair when experienced people who worked diligently and with integrity (and often for lower pay than they could make elsewhere) are pushed aside and placed in front of a PC monitor and told to do some repetitive, mindless task that will drive them to retire.

On top of that they are called "deadwood" to further disgrace them, when what the new managers really mean is that they believe they can get little of their agenda carried out because what they believe to be redidue from the previous administration is buried in the bureacracy (whether it is or not) and somewhat difficult to dislodge honestly.

I saw plenty of this at my old job in the private sector, and was disgusted to find the FEDS doing the same thing after the 'reinventing government process began under Clinton.

Since 1980,(and maybe before) the Civil Service was almost wrecked by political hacks "burrowing in" when the elected official who brought them to town lost an election. In addition, the layers of GSC service penetrated by political appointments have also increased dramatically since Kennedy's era.

Both parties engage in this spoils systerm...this is not a right or left wing phenomena. It happens on the Hill and in the Executive Branch with Civil Servants.

So, when newly elected officials complain bitterly to their constituents that they can't get anything done in Washington because "fighting the bureacracy is like fighting a feather bed" as John Kennedy said, you can read between the lines.

Beware of elected officials holding up brooms and saying they are going to "clean house."

We spoke of Marx in class last week, but it would behoove us to look at Durkheim (Division of Labor) and Weber ((bureaucracy) as we try to explain why huge organizations have difficulty being responsive, i.e., Katrina and H1N1.

This hackiness probably goes on at state and local levels too, but is more easily discovered and exposed with smaller government.

[Lindsey Bestebreurtje]

I can't believe that security clearences are out sourced. It takes more than a year to pass through initial clearance to work at the DOJ or DOD. I thought for sure it was because it was government run. I don't know who they outsource to, but they aren't going a great job.

Tangent: Unfunded mandates keep this country running. They include legislation like requiring state's to build wheelchair ramps. And if you don't like unfunded mandates then you better support higher taxes. You may recall from a few posts ago that I do infact support higher taxes. But I'm betting I'm pretty close to alone on this one... so I would not complain too much about unfunded mandates.

[Dianne Foster]

Leslie,

The complaints about unfunded mandates I am channeling come from state and local officials. Many school principals of my acquaintence also complain.

Also, my oldest son was visiting this week, and as a resident of California, he had a few choice things to say.

As far as taxes and programs go, sometimes I think the members of Congress are playing 'chicken' waiting to see who will dodge first.

What about putting our house in order before we establish new programs?

I for one am tired of the "my way or the highway" mentality.

I could tell you countless stories of people I know who are elderly and lost their homes owing to property taxes to support unfunded FED mandates.

Dianne