It bugs me that so much more public and media ire is directed toward tech companies than defense contractors when the latter industry is of comparable size, way more opaque, and dominated by very very old companies [1] with excellent lobbying.
I understand that people have far less personal interaction with defense contractors. But hey, it’s your tax dollars.
Snowden discusses the issues with defense contractors and how they came to be in his book. It's pretty interesting. I'm not saying you can be sure about some guy saying something in a book, but it's pretty convincing and I wouldn't be surprised if a lot of it is true.
The only reason Eisenhower was allowed to say the little he did say was that he had already surrendered. He stood by while Korean War funding metastasized into "the military-industrial complex". If anyone could have stopped it, it was a reelected President and five-star general war hero. Ike DGAF. BTW he was also the moron who let CIA off the leash, to the world's continuing sorrow. Just this week another chicken has come home to roost.
I don't think animosity is a zero sum game. Tech companies being hated doesn't mean there is less hate to be allocated to defense contractors, nor would defense contractors receiving more hate take the heat off the tech industry.
The journalists who specialize in covering the tech industry would not necessarily be in their element when covering the defense industry, and vice versa. What you've got here is basically the "why are you working for an internet advertiser when you could be working on a cure of cancer" argument.
Tech companies make products that every consumer interacts with. Defense contractors make products that every consumer pays for but rarely interact with, especially since the draft was eliminated and military service in the US became all volunteer. While I agree with that change, the lack of “in-your-face”-ness of the defense industry means our endless wars and endless payments to the war factories go unexamined.
Plus the hero-worship of soldiers, even those that spend a career washing dishes in Texas, has made any criticism politically untenable.
> ... abusing programs intended for small businesses owned by “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals;”
Yap, saw that while bidding on projects. So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.
Some schemes were running for 20 some years. For instance case 30 running since 1999, awarded $52M.
In case 18, they received over $200M. That's a lot of money wasted.
But good thing they were caught, surely they will receive harsh sentences?
> POGO determined is likely a recent case involving a Kansas City, Missouri-area construction company owner who was sentenced to 18 months in prison.
No, not really. Just 1.5 years after stealing $13.7 million.
There are more instances that are shady but harder to track, such as the government entity writing the specs to match exactly one company's product. Let's just say by a company owned by their college buddy. So on paper they may be lots of bids, but surprise, only this one company ends up matching up.
So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.
They don't even have to go to that much trouble. There's a whole ecosystem of 8(a) companies set up to take advantage of these contracts and then subcontract the work out to ineligible companies. They usually walk the halls to find the contract, handle some paperwork, provide the corporate history/legitimacy and take a bit off the top. And what you get is some tiny shop winning multi-million dollar contracts allocated for disadvantaged businesses, then turning around and farming out the work to Northrup-Grumman or SAIC or some other tradition, giant defense/government contractor (whom they usually have already worked out arrangements).
I spent a few years as a DoD contractor, and both companies I worked for were the bigger company on the contract, but the lead contractor what some small company that fit a specific category. I'll admit that I considered starting my own company,being a compensated disabled veteran, to get in the same action, but it didn't seem right and I wanted to get away from government contracting anyway.
Can confirm the same. There was always some one-person “company” who was the prime contractor simply because he was a disabled-Alaskan-native-owned-small-business, who did nothing but skim a little $$ and pass all communications back and forth between the government and the actual contractors who were doing all the work. Nice work if you can get it!
This is annoying but ultimately a small cost to work around bad legislation. The fix is to stop this sort off I'll thought out micro-managing and social engineering. There are better ways to make women and minorities more wealthy and powerful.
The 8(a) company, or similarly situated subcontractors, have to get at least 50% of the $, more than a bit off of the top. You can't sub more than half of the work to large businesses.
Yeah, it is insane. I know someone who works for the state of Virginia. All purchases must be through one of these small businesses. But a lot of them are just a single person with a laptop who just goes online to the actual vendor and orders it and adds a considerable markup. The state organization is not allowed to buy from the vendor directly. I'm not opposed to jobs programs but ostensibly we can find some that actually provide value.
Yep, a lot of shell companies as well basically 'owned' by their parent company.
I think about NYS and Guy Brown, which is a certified MWBE/WOSB but just orders from Staples with added markup. They'll win procurement contracts because of the MWBE/WOSB scoring alone.
Ah but if you propose legislation to change the acquisition process then you're taking economic opportunity away from veteran/disability/minority/[disadvantaged group part of x party's coalition] and therefore are evil.
have been in the contractor side of this, and have had a couple of contracts written with me in mind, but... one had a twist.
Used to do tech training. Had a syllabus up on our website - "onsite training with topics X, Y and Z". A school put out an RFQ on this, and essentially used our syllabus (basically word for word). We'd talked on the phone - they wanted us to come there and do the training (relatively niche at the time).
Someone else submitted a bid using our syllabus and "won" - they were local, and so didn't have to include travel costs, and were 'cheaper'. They didn't have our material, but... were the "lowest bidder" so had to be chosen.
I've also had a couple projects 'single sourced' to me via govt purchasing process, and it always raises some eyebrows, but I'm generally the only contractor who would be qualified (because... I wrote the system years ago, it's very niche, not much budget, old tech, and no political will to pay to move it to something modern).
This is why the low and high bid are automatically thrown out, and then the remaining bidders are investigated for ability to actually deliver. For real world contracts change orders are where the real money is - that is places where your specification is wrong for some reason not known in advance and you will need to pay for the fix. The low bidders are experts in figuring out how meet the letter of the specs while building something that doesn't make sense (By spec the toilet drains pipes won't connect to the toilet, we can fix that for only $$$). A more reasonable contractor will see that and make the obvious fixes while for no extra charge, but not the low bidder - this makes the low bidder more expensive.
ASRC is a fun case. The Alaska Native corporations were set up in the 70s to settle land claim lawsuits and to provide Alaska Natives a way to a better economic future.
From what I understand, the federal government sets aside contracts for small businesses owned by certain disadvantaged classes (disabled veterans, women, Alaska Natives, etc). But apparently ASRC is able to continually spin off wholly-owned subsidiaries that are considered Alaska Native-owned small businesses, even if the overall ASRC is too big to qualify for those set-aside contracts.
Today ASRC is the most successful of the Alaska Native corporations, but along the way has basically become an evil oil company mixed with an evil government contracting company. But hey, they give each of their Inupiat shareholders a multi-thousand dollar dividend every year, so they seem to be a necessary evil.
Notably, ASRC just quit the Alaska Federation of Natives, basically because the AFN acknowledges a climate emergency but ASRC just wants to keep drilling for more oil.
I've also noticed ASRC contains a fair amount of what might be seen as nepotism elsewhere. The CEO's family and the chairman's family are certainly well represented in the company's ranks. But on the other hand there aren't a whole lot of employers in the North Slope so maybe that's just to be expected.
I'm sure the 'ASRC Federal' holding company acts as a nice firewall between ASRC proper and the Federal subsidiaries actually getting the government contracts. It's probably just about impossible for the board to keep tabs on what's going on (esp from Barrow).
I did some work for them about 10 years ago and the setup seemed pretty gross at the time (although the people i actually worked with were great).
Yeah, the whole concept of a modern corporation that restricts ownership to members of a certain ethnic background feels backward in this day and age. Yes, I know the actual requirement to be a shareholder is tribal membership and as Elizabeth Warren will tell you, tribal membership is not equivalent to ethnicity ... but it's a pretty close proxy here.
Apparently when the Alaska Native Corporations were set up, folks were aware of what a terrible failure the Indian Reservation system had been in the lower 48 and knew they had to do something different. And as far as I can tell, Alaska Natives have a much higher opinion of their native corporations than American Indians do of their reservations. So I dunno ... it's a gross corporation, like many others around the world, but it's a gross corporation that belongs to, and works on behalf of a population that could easily just be victims of said corporations. At least they've got one deep-pocketed organization in their corner.
Mixed feelings about the board too. I wonder how many other multi-billion dollar companies have a board member without a college degree? ASRC has several! On the other hand, 4 board members are female and there are a wide range of ages too, so their democratic board selection might yield a good diversity of experience and outlook.
It sounds as if, even if you agree that race-and-sex-based bias is defensible and desirable, it not only doesn't work, but is actually detrimental to the whole process, since the people doing the bidding have to pay extra money to circumvent these restrictions which they undoubtedly end up passing on to the taxpayers.
Just want to chime in and say the vast majority of people working on government contracts fall into two categories:
1. Hard working folks trying to do the right thing (approx 20-50% of the people)
2. People who are coasting and nominally meet whatever requirement for the position (some combination of experience and certification usually) who can barely get the job done, but they are friendly and don't cause trouble (by getting in the way of the people who actually DO get something done) so no one bothers them and they get to collect a paycheck. (50-80%)
Many from category one turn into category 2 as time goes by, because #2 is actually the optimal strategy.
Most companies also tolerate #2 because the client isn't complaining and they are making their cut on the person's hourly rate. So everyone's more or less happy and life goes on.
Also note that the distribution of people doesn't significantly vary based on whether the employer is SDVOSB/WOSB/whatever. However, the largest companies (like Accenture) do tend to have a higher proportion of #2s, but also a higher proportion of extremely charismatic "relationship managers" who flatter, gladhand, and overall stroke the client representative's egos and fantasies to cover up for it.
The government contracting business has plenty of well-meaning, hard working professionals in it. But there's also a lot of not so much waste, fraud, and abuse, but "skating by" going on as well.
The main reason is due to the obstreperous rules, bureaucracy, stagnation, and old tech, the jobs pay above market AND tend to provide excellent work/life balance.
Source: I've been a gov't employee, then worked in contracting, went to private sector, now back in contracting. I'd like to think I'm in category 1, and I have many, many days when I am extremely jealous of my colleagues in category 2, who make just as much money as I do but do about 20% of the work.
One last edit: I find it funny that one SDVOSB owner was considered "Service Disabled" because he tore his ACL playing football for Navy. But I'm a little bit in the "don't hate the player, hate the game" camp on that one. I'd start a company, too, in that position. Doesn't mean I'm doing shitty work, just means it's easier to award me the work. They are two different things.
I don't think framing it as intentions really captures what's going on. I think the basic intention of a contractor is the same as anyone else: come in to do some work, and go home when it's done.
When I worked as a contractor, a few times I was full of righteous fury and ran my mouth to colleagues about their work. In hindsight, I'm convinced they absolutely believed they worked hard and delivered a high quality product, that what I was complaining about was a reasonable compromise. And, frankly, when I left for the private sector, it was a bit of a shock to learn that I really hadn't been working as hard or as well as I thought.
Instead, I'd frame it as incentives over time. There have to be outside pressures to keep everyone honest. In the private sector, they have to compete with other companies, and indeed you see similar problems in firms or departments that are insulated from competition.
In contracting, you've got a negative feedback loop: as contractors underdeliver, the clients scale back their expectations. As those expectations scale back, the contractors relax hiring to meet them. This has led to the population of contract workers stagnating to where it's well behind the private sector.
Having done interviews of contract workers trying to transition out, they are frequently technically way more junior than they should be for the years of experience. And I think the companies trying to attract better people have a hard time when the candidates aren't impressed with the teams.
Yep, I'm turning 40 in a few months and have been working in the defense industry my entire career (and I spent 4 years in the Army before that, so I suppose that counts too).
Most of my jobs have lasted 1-2 years. I get fed up and leave for another company working on a different program - thinking that the next one will be different.
Small firms that are still trying to prove themselves and grow are usually the best to work for. Because they no-shit need to deliver and keep customers happy. As they get larger (and merge, etc.), defense firms all seem to resemble each other. Benefits get cut, pay gets stagnant, and standards for hiring start to slip. Eventually they become a butts-in-seats shop like the huge firms with names everyone knows. Time to move on.
I've tried interviewing in the private sector (usually all of my job hunts every couple of years begin with a string of failed interviews in the private sector, and end with me just taking another job in the industry), never managed to get an offer, but if I walk into a defense industry interview, I can land an offer well over 50% of the time. Some contractors have thrown offers at me after a single 30 minute phone interview (tip: never accept those).
Another part of the issue is the defense industry is definitely a bubble and you kind of get trapped after a while. If I'm desperate and need a new job, I have a list of contacts I can reach out to and easily get another contracting gig. In the private sector, I don't know anyone and I'd be trying to get in through the front door.
I was freaking out when I lost my first job after I left DC.
"You mean I actually have to APPLY for a new one? I can't just walk into the recruiters office and pick from a list of 3 letter agencies looking for XYZ role?"
Still get emails every day looking for an architect, or windows engineer, or TS/SCI cleared helpdesk technician. Don't let your clearance expire, folks.
I did a bit of government contracting early on in my career and this seems about right to me.
I think overall the government contracting experiment has failed. I saw my fair share of corruption and ineptitude on the side of the contractors who did everything they could to stall out projects, under deliver or embed themselves hard so that the government was forced to keep using their horrific product.
I think there's just too much incentive for contractors to cheat the system that it results in poor quality software. The people I met were fantastic engineers and smart workers, but management would hold people back or actively engaged in efforts to sabotage developers because getting work done actually meant less profits for them.
I worked on a government contract that Boeing lost to Ford Aerospace. What happened was the top few executives that interfaced between Boeing and NASA were replaced when the contract was taken over by Ford. Every other employee simply left Boeing on Friday and were Ford employees on Monday. I discovered this after asking why all the secured and padlocked cabinets had Boeing asset tags on them. So even when the government tries to "do the right thing" by switching contractors it may not mean much.
I did government contracting work straight out of college. I don't know anyone competent who stayed working with the government. It is almost impossible to underestimate the amount of waste, bureaucracy, and BS you have to deal with on a day to day basis. Anyone competent with an ounce of integrity can't stand it. Literally in the private sector I do in a week what would be 3 months work in government.
DoD doesn't use the resources it receives wisely. Therefore, it should receive fewer resources.
Unfortunately, what will happen instead is that DoD will only buy from giant firms on an "approved" list, which is exactly what those giant firms have paid their lobbyists to bring about.
It appears to be effectively impossible to even audit the Pentagon. When they tried, it cost $400M and less than 25% if the sub-audits received passing grades.
"The Pentagon’s first-ever audit discovered major flaws in how it handles IT processes and challenges with its internal tracking databases, but did not discover any major cases of fraud or abuse."
The $400M covers 2.7T of assets, and, as the article lists, is less than 1/30th of one percent of the budget audited.
So it's not as inefficient an audit as listing a number without context implies.
Again, I chose that article because it is about the best possible lipstick that can be put on that pig.
The audit was a farce. From another article,
"In fiscal year 2015, for example, Congress appropriated $122 billion for the US Army. Yet DoD financial records for the Army’s 2015 budget included a whopping $6.5 trillion (yes, trillion) in plugs. Most of these plugs “lack[ed] supporting documentation, [...]”
“Because of the plugs, there is no auditable way to track Pentagon funding and spending,” explains Asif Khan of the Government Accountability Office"
I'd believe the former article, since the quote you posted from the latter is far beyond any yearly budget even mathematically possible.
You quoted "Yet DoD financial records for the Army’s 2015 budget included a whopping $6.5 trillion (yes, trillion) in plugs."
The entire US annual federal budget is on order of 4 trillion. So that number alone is fearmongering. Total DoD annual budget is around $700B. Army is a fraction of that. A significant amount of the money is simply paying the 2.8 million DoD employees, another decent portion is benefits to retirees, another is equipment maintenance and purchases , and none of these are places you can simply lose all or much of the money - employees notice when they don't get paychecks.
So the 6.5 trillion in a single year plugs is either nonsense or seriously misreported in the latter article.
Another way to see it - the article says Congress allocated $122B on 2015 for Army. At that rate Army would take 60+ years to have 6.5T in funny money floating around, and that only if it was not paying anyone for anything else, and that requires them to get 122B a year for the past 60 years, which they did not (60 years ago total DoD budget budget was ~50B, Army was a small fraction of that).
Thus it's easy to see the article is some mix of lying, ignorance, miscounting, multiple counting, or other nonsense. It's mathematically impossible for Army to have misplaced or hidden or defrauded that much money.
Care to explain their math while tying it down to actual budget numbers?
> Thus it's easy to see the article is some mix of lying, ignorance, miscounting, multiple counting, or other nonsense
This reminds me of an economics joke.
A professor and a student are walking across campus. The student points to the ground and says, "Look! a $20 bill!" Without looking, the professor says, "Nonsense! If there were, someone would have picked it up."
> Care to explain their math while tying it down to actual budget numbers?
Since you don't seem to sully your assumptions with facts, no, I don't care to. You can stop reading here and just keep on being right all the time.
If anyone reading along is confused, here's some copy-paste from the article that could have saved the parent poster time and mockery:
Among the laundering tactics the Pentagon uses: So-called “one-year money”—funds that Congress intends to be spent in a single fiscal year—gets shifted into a pool of five-year money. This maneuver exploits the fact that federal law does not require the return of unspent “five-year money” during that five-year allocation period.
The phony numbers are referred to inside the Pentagon as “plugs,” as in plugging a hole, said current and former officials. “Nippering,” a reference to a sharp-nosed tool used to snip off bits of wire or metal, is Pentagon slang for shifting money from its congressionally authorized purpose to a different purpose. Such nippering can be repeated multiple times “until the funds become virtually untraceable,” says one Pentagon-budgeting veteran who insisted on anonymity in order to keep his job as a lobbyist at the Pentagon."
[...] In other words, there were no ledger entries or receipts to back up how that $6.5 trillion supposedly was spent. Indeed, more than 16,000 records that might reveal either the source or the destination of some of that $6.5 trillion had been “removed,” the inspector general’s office reported.
Again, this implies that Army spent 6.5 trillion, and I quote "there were no ledger entries or receipts to back up how that $6.5 trillion supposedly was spent".
Army has received far less than that in total money in their entire history, which is very easy to check.
So which is incorrect? The article? Or every other place you can check historical US federal budgets?
>no, I don't care to.
I suspected as much. It's trivial to check this number is nonsense.
If you will believe DoD, and we'll understand if you won't, you'll find the $6.5T figure on page "i" of this document. [0] (click through soon, because they take down these embarrassing reports all the time!) Of course the gigantic figure is nonsense, but that indicts DoD accounting rather than the journalists who've noticed its shabby nature. By producing meaningless numbers, the accountants have completely obscured what's really going on, in violation of Article I, Section 9 of the Constitution.
And here is the same audit done in 2018, again from the Inspector General (your report was 2016). It's the most recent followup to your report, which is now outdated.
Seems the 6.5T must have evaporated. As expected.
This is why using simple smell tests to raise suspicion is worth noting.
Just look at the first page of each document. The one I linked clearly states on page "i" both an Objective and a Finding ("did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in yearend"). Your document neither addresses this issue nor does it include any stated objective nor does it include any stated findings. No one who even skimmed this document would suspect it even addresses this topic. We can't just assume, as you would like to do, that a massive problem of long standing would just disappear in a couple of years. No one thinks that the Pentagon stole $6.5T in one year. The fact that the $6.5T figure appears anywhere on Pentagon account books is the problem. When "adjustments" with no reasonable explanation overwhelm real assets and transactions, the accounts are without meaning. In such a situation, we can be sure that lots of resources are being diverted to unapproved purposes, even if those diversions don't tally to the trillions. (Although, when the budget is 3/4 of a trillion per year, it's not going to take long to get there.)
Frankly you seem to be arguing with straw men. Why is that? Do you have any professional experience with accounting? Have you ever produced a balance sheet? Have you ever read one?
>The fact that the $6.5T figure appears anywhere on Pentagon account books is the problem
It doesn't as I linked. It's derived from a (quote) "non-statistical sample" and is full of double billing. I pointed this out with sources. This number is not from tallying items on books - it's from taking not statistically controlled sample and extrapolating, using poor methodology (as pointed out in the links I provided). This is basic stats and arithmetic.
When X money comes from gov to dept A, goes on a book, then goes to dept B, goes on a book, this is not 2X dollars. This is how they get such ridiculous numbers by not balancing books. This is pointed out in enough well sources internet places besides what I posted that it's not worth digging it up more.
Coincidentally, the DoD recently completed it's second complete audit [1] in late 2019, even later than the 2018 one I posted above. Again, they found "No evidence of fraud". If you search that gov site, you'll find documents in depth about the audit(s).
I get that you want to stick to a clearly incorrect audit from 2016 for your narrative of incompetence and fraud, but when I've provided 2 annual audits that show otherwise, it's clear you're holding onto a belief over fact.
You're linking to press releases now, so this discussion has run its course. You refuse to acknowledge that unjustified adjustments have overwhelmed the rest of the books. Reading the press release, we find it's bragging about a few parts of DoD, not even including USArmy which is what we were talking about.
So your first link in this thread, which is a press release, and your second link, which is a Dave Lindoff opinion piece, are valid, but linking a .gov release with a link to the actual audit means this thread has run it's course? That's intellectually dishonest.
>not even including USArmy which is what we were talking about.
The linked audit clearly states Army. Look at the audit page. Search the word "Army". First (and only) Army link goes to the Army section of the audit. Since you didn't even look, I'll post the Army section for you [1].
This has become completely dishonest. You're not even looking at the audits from the DoD, including the one you care about, to update your world view.
>You refuse to acknowledge that unjustified adjustments have overwhelmed the rest of the books.
I admit they did in 2016. The 2018 and 2019 audits no longer have that result. Do you acknowledge subsequent audits resolved the discrepancies and found no evidence of fraud?
I'm guessing those were positive and negative fudge factors. Most cancelled out, but the end result is the footnote level corrections are larger in absolute magnitude than the underlying budget, making it very difficult to parse (imagine if you had so much monkey patching nothing of the original code base remained).
The whole problem is caused by ridiculous policies such as explicit advantages for "small businesses owned by “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals".
It's obvious why they're passed (and would be nearly impossible to repeal), because it's a useful PR trick that sounds good and attractive to the voters. However, that's bullshit - it does not matter by whom the business is 'owned' (because actual control and benefit does not map cleanly to legal ownership), if you want to subsidize a particular group of people, well, just give them an appropriate amount cash directly, or give advantages to the particular “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals" themselves, but you definitely should have the businesses still compete based on proper merits instead of legalizing advantages for ticking arbitrary boxes, which only invites abuse such as described in this article.
It's hilarious that this issue hurting the US is entirely and wholly made by the US. The various ridiculous ways you can mask corporate ownership in the US all come straight out of the mass of company control, ownership and revenue disbursement that have evolved over time - it also hits common folk too, but it's amusing that the DoD gets hit by it so hard.
My 2018 copy of the 1040ES for estimated tax payments states.
"You don’t have to make the payment due January 15, 2020, if you file your 2019 tax return by January 31, 2020, and pay the entire balance due with your return."
So, if the window doesn't open until Jan 27, it looks like I'll be making the Jan 15 estimated payment. I'm surprised that window doesn't open until Jan 31.
Because the public can see their crappy audits and complain enough that some congressman sees an opportunity to clean that crap up so he can put "saved billions of dollars by rooting out waste" in his re-election TV ad and peddle to a special interest group (the people who want to minimize government waste).
At least that's how the theory goes. You need people to actually care instead of just shrugging and saying "well that's government, nothing you can do about it" like they do for my state government (though I have lived in other states where the general populace did not seem to take government waste for granted like that).
So..the whole idea of governments disgusts you? (Not a trick question! I Was An Anarchist for a lil while, as a teen, until I went to an anarchist conference)
Anytime anyone in a state with a government obeys any law, you could talk like that. Obey the road speed limit? Omg, your speed is literally being crippled under threat of physical violence to your body.
Disillusionment? It seemed everyone there was very naïve and optimistic. Grungy teens that had read a few philosophy/politics books. There was one very impressive guy there, a christian anarchist pacifist – probably the only christian there.
I googled "christian anarchist pacifist" just now and found this very sensible article, which answers your question, and explains better than I could what we were thinking, and what I came to think.
I understand that people have far less personal interaction with defense contractors. But hey, it’s your tax dollars.
[1] https://en.m.wikipedia.org/wiki/List_of_defense_contractors