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Federal Contractors are $600 Toilet Seats

ideonexus (1257332) writes | more than 2 years ago

Government 3

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."
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Multiple levels of contractors make it worse (1)

patternbuilder (1183591) | more than 2 years ago | (#37893310)

I was involved in bidding for a USDA emergency outbreak software system and our 26 person company had to team up with IBM to qualify to bid for the contract. IBM added multiple layers of managers until our base rate was $300 per hour. Our programmers weren't getting that, no, IBM was getting that and we'd get a small fraction. Ridiculous.

Missing info (1)

Lurching (1242238) | more than 2 years ago | (#37895164)

Some critical data is missing from this "report".

Salaries stated for Government workers do NOT include their retirement, medical, etc. costs. What a contractor charges does include those costs for their people. Including those costs will make the comparison more equitable, if not tip it the other way.

Doing business with the Federal Government is expensive for a company just because of the amount of paperwork and tracking that is required. Those costs are not part of the internal Federal IT costs.

A very small percentage of federal contractors work in Government facilities. Those that do get charged for at a considerably lower rate than those that work in contractor facilities. All of the facility, training, retirement, etc. costs cited are overhead - added as a percentage of the direct contract costs. Federal contractors go through incredible machinations to cut those overhead costs. They are a major component of a competitive bid, and you can easily lose a bid if they are higher than your competitor.

Government IT can often be cheaper than contractor, but not always, and Government personnel regulations and processes can make hiring new IT personnel a year-long (or more) nightmare. Personnel limits imposed by Congress, whether designed to cut Federal numbers or to benefit contractors, can also make an agency or department go outside for IT support.

The full reasons and costs are NOT easy to tease out, and a simple analysis does NOT get you the real reasons/problems, nor does it provide for valid fixes.

I'm not a slashdot editor, but... (1)

skids (119237) | more than 2 years ago | (#37895170)

I'm not inside the heads of the Slashdot editors who make the final call on submissions, but while your article does contain multiple links, background, and a tie-in to a running subject -- all great things that more submissions should have -- you might want to either reword it from "us/our" to "them/their" etc to make it more in-line with journalistic conventions, even though you obviously worked at such a place and have first hand knowledge. Editors might be reluctant to post a main news article that seems to be "about the poster himself" even though it is a worthy subject. Either that, or if you want to keep it like that, reword it as an "ask slashdot" question e.g. "Federal contractors, how much do/should they pay employees?" and ask for input from fellow Slashdotters who also work in this sector. Right now the article is kind of straddling those two categories.

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