The last posting discussed one of the tactics used by a
so-called federal agency “partner”: to confound and confuse the agency through
administrative and procedural ‘hanky-panky’.
This post discusses two more of the set of tactics listed in the earlier
post:
·
Using procedural
and administrative steps to confound managers (discussed in previous post)
· Obfuscating rather than clarifying task
substance and schedule, and
· Staffing and rate anomalies
- I Inflating effort for tasks
- · Transferring and avoiding risk
- · Manipulating travel and expenses
- · Overwhelming the government legal and contracting staff
- · Violating ‘best customer’ pricing guarantees and requirements
Obfuscating
rather than clarifying task substance and schedule
One of the more clever techniques the ‘partner’ almost
always used was to include a long list of assumptions and
conditions in the task proposals. This ‘fine print’ usually
attached at the back of a task proposal was often 3-5 pages long, and contained
items that actually rendered key parts of the task proposal improbable if not impossible. With the shear number of the assumptions and
conditions, the probability of them all being met was zero, leaving a
virtual escape clause for the partner. It turned out that many of the technical managers OVERLOOKED this (boring) detail and focused on the technical substance of the task proposals. One really neat, seemingly innocuous
assumption was having a specific named person from the agency available at a
particular time, for example for full time for the first two weeks of
February. Reasonable? Yes!
Yes if.
In one analysis we decided to look at all
of the staffing conditions ACROSS ALL TASK PROPOSALS.
As you may have suspected, the partner included similar conditions in
different task proposals for the same person, same period of time such that the
named government person was scheduled over 100% of his available time, sometimes 200%. Without very close examination of the fine
print, the agency would never have known BEFOREHAND that some proposals from the partner COMBINED, created what contract law calls “impossibility of
performance”. In other words, if ever
challenged legally, the contract would be ruled void, due to the impossible
circumstances stipulated in the language of the agreement (actually missing
the essential component of contracting ‘a meeting of the minds’). This is not the kind of behavior, or need for deep analysis that the agency was expecting from it's selected strategic partner. I suspect that other agencies attempting to make PARTNER relationships work are experiencing similar issues.
Staffing and
rate anomalies
Another tactic that drove my costing
analysis team bonkers was the issue of: who was proposed to do what at what
labor rate. The agency needed to ensure that they were paying legitimate rates
for legitimate skill-experience. For this we used well known industry models that used IT function complexity and other factors to estimate the level of effort (LOE) that would be required. Actually, we used several of them for cross checking, and varied the key drivers to determine upper and lower bounds of OUR estimates.
The partner often proposed generic people rather than named individuals with resumes on file (as was required). We found a pattern of abuses including ‘phantom staff’ where the proposed staffing detail (names, hours, qualifications) did not match with the LOE and/or pricing and pre-negotiated staff rate tables. It seemed that the partner planned to bill hours for which the partner would have no staff, or they were padding labor for contingency or profit. Or perhaps the staff they would eventually bill were not being identified for an undisclosed reason (offshore? unqualified? Non-existent? We-don’t-know-yet?). Another staffing practice was to propose staff from distant locations. People needed in the D.C. Metro area would be coming from Chicago; ones needed in Minnesota would come from Virginia. One proposal claimed that the only COBOL (yes, I said COBOL) programmer they could locate was in Australia, and needed to be flown in and housed in the D.C. Metro area. As the House majority leader, John Boehner recently bellowed “ARE YOU KIDDING ME !!!?”
The partner often proposed generic people rather than named individuals with resumes on file (as was required). We found a pattern of abuses including ‘phantom staff’ where the proposed staffing detail (names, hours, qualifications) did not match with the LOE and/or pricing and pre-negotiated staff rate tables. It seemed that the partner planned to bill hours for which the partner would have no staff, or they were padding labor for contingency or profit. Or perhaps the staff they would eventually bill were not being identified for an undisclosed reason (offshore? unqualified? Non-existent? We-don’t-know-yet?). Another staffing practice was to propose staff from distant locations. People needed in the D.C. Metro area would be coming from Chicago; ones needed in Minnesota would come from Virginia. One proposal claimed that the only COBOL (yes, I said COBOL) programmer they could locate was in Australia, and needed to be flown in and housed in the D.C. Metro area. As the House majority leader, John Boehner recently bellowed “ARE YOU KIDDING ME !!!?”
What was more ummm…interesting
was the fact that the partner also operated a corporate housing business unit and profit center. I’m not sure if this was ever ruled to be a conflict of interest, but
it certainly created the appearance
of one. We later discovered that the
partner was also charging the agency a ‘plumping fee’. A WHAT?
It was a fee to have housekeeping come in and “plump” the pillows and
generally tidy up regularly (presumably even if the unit went vacant for a
period). There were a few other
practices that we detected through our examination and analysis such as:
-- pricing offshore staff at ‘regular’ rates (offshore was not allowed, apparently they decided to use them but hide that fact by charging regular rates);
-- charging different rates for the same person;
-- using higher cost staff than otherwise required;
-- billing of contracts and administrative personnel on technical tasks (rather than appropriately charging to corporate overhead).
-- pricing offshore staff at ‘regular’ rates (offshore was not allowed, apparently they decided to use them but hide that fact by charging regular rates);
-- charging different rates for the same person;
-- using higher cost staff than otherwise required;
-- billing of contracts and administrative personnel on technical tasks (rather than appropriately charging to corporate overhead).
As Federal agencies look
to the private sector for a close working and workable relationships, they must not forget the nature of profit-seeking entities, and must continue to be guided by
hundreds of years of history of government contracting and case law. They must reject the notion that government can be run as businesses are. There isn't inherent profit in everything that the government does. Barkeeps and hoteliers for George
Washington’s army overbilled and cheated. The courts continue to be filled with cases of contractor illegal behavior and misdeeds. Nothing has changed other than the sophistication and complexity of the
methods that profit-seeking entities can employ to maximize profit.
It may be that some of these are accepted business practices between private companies (where the cost can be passed on to customers) but in the federal environment the customers are the taxpayers.
P.S. If you are thinking that these are exaggerations you should visit http://www.contractormisconduct.org and look at some of the cases concerning contractor misdeeds. You can also track current cases and hot topics on The Project on Government Oversight's blog at www.pogo.org. POGO.org has worked long and hard to keep an eye on alleged as well as proven cases of fraud, waste and abuse in Federal Programs. You'll find a long list of well known, otherwise respected firms that have been caught raiding the taxpayers' cookie jar.
It may be that some of these are accepted business practices between private companies (where the cost can be passed on to customers) but in the federal environment the customers are the taxpayers.
P.S. If you are thinking that these are exaggerations you should visit http://www.contractormisconduct.org and look at some of the cases concerning contractor misdeeds. You can also track current cases and hot topics on The Project on Government Oversight's blog at www.pogo.org. POGO.org has worked long and hard to keep an eye on alleged as well as proven cases of fraud, waste and abuse in Federal Programs. You'll find a long list of well known, otherwise respected firms that have been caught raiding the taxpayers' cookie jar.
Next post: Federal Contractor Games Part 3: More contractor tricks
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