Saturday, November 05, 2011

Contractor Corruption

If you have your ear open for corruption in the US government, you will have noticed that contractors seem to be a big part of the problem, because they not only cost a lot of money, but frequently allow their projects to fail or go vastly overbudget--especially when it comes to software, my specialty. Consider the New York CityTime software system for managing the city's payroll. Initially budgeted at $63 million, this ballooned to $600 million over time, until the city realized that the project was plauged by corruption and decided that it wanted its money back.

During the same time that New York was paying hundreds of millions of dollars for their software system, my own employer paid one employee (me) well under half a million dollars to produce a GPS navigation system that is probably deployed in thousands of commercial vehicles across North America (I mean, I think so; I don't have figures). So, I am at a loss to understand how some of these software systems end up costing hundreds of millions of dollars.

In the federal sphere, meanwhile, corruption seems to be standardized and entrenched through a network of government contractors. I had the impression that these government contractors were a giant rip-off of taxpayers, but what I didn't know was that despite the high price to the government, the individual contract workers enjoy no more in benefits than their government worker bretheren. "ideonexus" explains in his must-read posting:
A study by the Project on Government Oversight (POGO) found the Government pays IT Contractors nearly twice as much as its own IT Workers.
Why so much? The government also pays for office space, equipment, utility bills, and even employs its own management. Yet the contract workers temselves are paid no more than government employees:
Whenever a government position would open up in our department, contractor employees would jump at the opportunity for stability and better benefits.
That is, the government pays double for contractors, but only half of that money actually goes to the workers they are paying for, and none of it pays for office space or equipment. So where does that extra money go? Corruption, my dear boy! Corruption!

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