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Unsung, Unpaid Coders Behind Federal IT Dashboard

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  • Re:This is great! (Score:3, Informative)

    by JWSmythe (446288) <jwsmythe@@@jwsmythe...com> on Monday July 13, 2009 @01:45AM (#28672901) Homepage Journal

    Budgets are a wonderful thing. If you've ever known anyone who works with the government, you'll have heard of it in action. Say a department is budgeted $1,000,000 USD (a low number by gov't standards). Now say that they've spent $750,000 USD by the end of the month, quarter, or fiscal year depending on the period of that budget. They have two choices. Either they can say "Oh, our job only really requires $750,000", and that's what will be budgeted for the next period, or they can spend the money on something (within guidelines, of course). They'll have "the following 20 people will be off at training for the next 3 weeks", which of course not only covers the outrageously priced training, but air fare, and per diem. They may have a new round of desktop and network upgrades. They may find it is time to retire several vehicles from the motor pool. Maybe they came in under budget because they are actually behind on the projects. Time to hire 20 new people.

    I thought it was a joke when I heard about contracts for road construction. Over the years, it has become abundantly obvious that it is no joke. The way many road construction contracts go is like this. The companies bid at a rather high rate, to get it done in at least 2x the time required. The companies don't undercut each other by much. They all want the lucrative contract. Of course, there's enough included to help out with kickbacks and other assorted favors. Oh, did I say that last part? No, that never happens in the gov't at any level. So, back to the story. The job will read that it must start by Jan 1 of 2010, and be completed by Jan 1 of 2015. They get paid $15,385 for every day during the construction period, and get a $100,000 incentive if they complete it by Jan 1 2014.

    The company who won the contract looks at it and realized:

    $15,385 * 1300 days = $20,000,500
    ($15,385 * 1040 days) + $100,000 = 16,100,400
    or
    $15,385 * (1300 days + 260 days overrun) = $24,000,600

    They already know this is only a 6 month job. On Jan 1 2010 and dig up a section of road, to indicate that they are actually working. They park equipment on it (which necessitates the fees, since that equipment cannot be used elsewhere), place cones, etc, etc. They spend a few weeks accomplishing this. Traffic backs up. People get mad. Stuff doesn't happen. Every few months, you'll see a little bit of work being done, but you never see any notable progress. Then comes April 30, 2015. An amazing flurry of construction begins. If they're lucky, they don't have any unexpected problems (weather, increases in costs, etc), and by Dec 20, 2015 they've completed the job. Everyone goes home and has a nice holiday with their families.

    What really came of that? A contracted paid on a day basis should have run for approx 150 days of continued work. Still, that was a $2,307,750 job. Yet, the taxpayers still paid the $20,000,000 for the work to be accomplished.

    That, my son, is where your tax dollars go. It's not a mistake, or any sort of laziness by anyone in the system. It's simply the way it works.

    And why didn't they go for the $24,000,600 goal? There may be something in the contract which would limit them from participating in future contracts if x% of previous contracts were overruns. It's a short term gain, but a long term loss. Sure, an extra $4 million in my company sounds good, but why not take another $20 million contract that only really costs about $2.3 million. That $17.7 million profit sounds really nice.

    I serious oversimplified this. There are some factors like surveying; procurement of materials; re-engineering various aspects; finding Indian burial grounds along the proposed route; special interest groups tying things up with lawsuits and petitions (oh god, who gives a heck about the spotted red-headed cocksucker?); or a billion other things that can go wrong.

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