But thanks to the libertarian narrative you’re furthering, government is obliged to contract so many things to private companies, so now you get all the worst of both worlds (contractors charge high rates to government and waste lots of money, and government now compels us to pay the bill for companies we don’t like).
If you read the article again, notice how the fast majority of those millions of dollars have gone to private companies who failed to deliver working systems. Each of those companies passed multiple rounds of competitive bidding, too. The government staff processing things by hand can at least point to a ton of successfully processed requests rather than a complete write-off.
Outside of shallow libertarian magical thinking, privatization isn't a panacea. Anyone who has worked for or with a large corporation has stories which are at least this bad — the main difference being that you rarely about about the failures unless it leads to a major lawsuit. The usual argument is that you aren't required to do business with those companies but … just try to live without insurance, telecommunications, cars, etc. Markets allow you to select the least-bad option but it often takes regulation or changing the problem to make significant improvements. Before someone mentions Google: consider how happy you'd be if their QA-in-production / no live support mentality was applied to your retirement checks rather than your free email…
There are two real problems here: the first is the well-known fact that we're still figuring out how to deal with large-scale IT projects, which affects everyone, and the fact that government agencies are significantly blocked from doing things the right way. For the last couple decades, politicians have “shrunk” government by giving jobs to the private sector rather than hiring lazy government workers. What this actually means is that instead of hiring the same person directly they're hired at a significant markup – equal or greater pay plus the overhead costs of all of the contracting company's staff and profits – and all of the work is pushed into a procurement process which forces you into the worst possible form of waterfall.
You're not the first person to notice that things aren't efficient – and I'm certain that staff at OPM would agree, given how many of them were quoted saying just that. The solution is easy – allow them to hire good people in house at market rates and give them the needed support / autonomy – but that's politically dicey. This and your proposed solution are both likely to fail as long as Congress has a sizable contingent of people who benefit from problems, even those created by their policies, and everyone receives donations from companies which do business with the government. This also won't magically go away with privatization, as anyone who has seen large deals go to the company which bought the best lunch can tell you, but at least in the case of the government the details are public knowledge.
I don’t understand though, why upon learning the government does something poorly the first reaction would be to replace it with private contractors rather than demand your government does better? Some things are public services and shouldn’t be profit motivated.
1: The real kind, where the government simply stops doing an activity (or does it too ineffectively) and a market appears out of opportunity - like SpaceX. Libertarians like this because it makes the government smaller.
2: The fake kind, where a government decides that something it does should now be done by a private entity under contract. Blackwater is one example, most privatized railways are another. These seem to port the annoying bits from government (the private operator is accountable to the government, not the "customer", and there is still no competition) and while the typically predictable cost is good for budgeting, the real benefit is too often in keeping politicians' fingers out of day-to-day operations. Most libertarians would prefer you'd just get the governments hands out of the operation altogether.
Like the price of phone calls, mail, and even water. It's all absolutely criminally exploitative and government gets a cut of those private contractor's profits.
Far more so. Government corporate welfare is a terrible idea. Yes the government can and should contract to private businesses but at that point they are the customer and there should be huge amounts of scrutiny on how the money is spent. This should also apply to infrastructure if the government is spending too much on a contract but keeps using that business that is clear and present corruption.
I attribute a lot of the higher expenditure and lower efficiency to the continued insistence that outsourcing to contractors, effectively picking winners in a "market" to give monopoly status, is a better way to provide government services. These firms have little if any accountability to the electorate, no incentive to set reasonable prices, get anything done efficiently, and in some cases don't even produce working services
Similarly, bringing a drug to market with a patent is not a competitive marketplace, by design, and it consistently creates an outcome wherein people are charged exorbitant sums of money because of this non-competitive market. Doing a bunch of government-backed R&D and then getting a patent for it is the government picking a winner, not creating a market
Basically, it seems like the government was and remains a lot more efficient when it directly builds the capacity to provide goods and services it determines to have an interest in providing, rather than try to do this through "the market" (again, this is almost never an actual market)
> The government is rarely the service provider for most of what they "provide" - roads are built by construction firms, medical care is mostly private doctors (the VA and HHS has some), the TSA is replaced by private firms in some places, and even nuclear missiles are manufactured by companies.
That's a deliberate policy choice. It doesn't have to be that way, but our politicians tend to be corrupted by campaign contributions and lucrative post-political jobs or (inclusive or) free-market ideologues who demand contractor bidding for any government services.
But when the government privatizes services, that agency problem always exists. Instead of contracting to one service like any other entity, government would always need to contract with several. You're just making a stronger argument for not privitizing government services.
Moreover, laying all the blame at the feet of government for these companies being scumbags is precisely why I said private industry has the wrong culture for this sort of thing.
That just seems like choosing the worst of both theoretical worlds you described. The local gov't still has final control over your infrastructure but you also have private industry skimming profits off something you already paid for with taxes.
For essential services, the government should be paying competitive salaries with the private industry. Contracting rarely makes things cheaper due to all the grift and lack of persistent oversight.
I agree that exclusive contracts should be abandoned where they can be, but for a much different reason: I have little or no confidence at all in the private sector to meet the requirements properly. A lot of the work done by private contractors ought to be done and maintained directly the government. The current system is not one of efficiency; it's one of corporate welfare.
i disagree , government is prone to corruption when it envolves contractors, also a private company has way more interest in running things as efficiently as possible , that being said there should be very nicely tailored rules and regulations in which companies participate or at least make suggestions.
> private companies padding out the contract not government employees
I have no references to back this theory up, but I feel like this is where most of the waste happens.
[Gov spend public money] -> [pay private company]
The government isn't incentivized to get the best deal for our money which results in overpaying or just flat out corruption. eg. I'll overpay my friend's company and they will kick me back some money for choosing their contract.
Yes to both? In order to improve 'efficiency' the government delegates everything to private contractors whose incentive is to get the longest and most profitable government contract possible. The entire goal of neoliberalism is as much privatization as possible.
I used to work as a government contractor and I came out of it with the strong opinion that it's nothing but wasted tax payer dollars designed to enrich private companies over actually getting work done.
"For some weird and unexplainable reason, people normally expect better services from private companies than from their own governments."
Right or wrong, it's not that unexplainable. People leave their cell phone carrier over bad customer service. They buy their things from a different website because of poor service, or go to a different store. It's cheap to change your allegiance to a different brand. It's a lot more expensive to change your allegiance to a different government. Governments in most places in the world have little incentive to improve.
Governments and private companies are both institutions, they just face different incentive structures. Governments aren't somehow magically protected from the people that run them having incentives.
Except it's usually the government selling these projects to private firms, so the tax payer gets the worst of both sides of the coin. There are some things that are fundamentally necessary (e. g. roads and highways, water) that should not be sold to private industry as for public interest vs profit should be priority number 1.
Yeah that's bad. Another big concentration is government contractors, especially huge ones. We had this idea that we would eliminate waste by privatizing government work. Hahahahahahahah...
> By that logic, every contractor hired mainly by government would have to behave like a public organization.
You say that like it's a bad thing. In fact, on major criticism of outsourcing and privatisation is that it becomes way to shelter dubious activities from Freedom-Of-Information requests that would apply if the work was done by a public organization.
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