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The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of peo

The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of people grandstanding for the next election accusing them of taking care of cronies. Particularly at the rate we build ships these days, if you only chose companies that have done it before you're not going to have many bids to choose from.

stcredzero 9y ago
The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of people grandstanding for the next election accusing them of taking care of cronies. Isn't there some famous economics paper somewhere that shows strategies like median bid produce much better outcomes?
- teddyh 9y ago
  Do you have a reference to this? I’m particularly curious if they address the secondary effects this will have on bids, and if the strategy then remains viable.
- ams6110 9y ago
  Could you do something like adjust the bids by the average percentage overrun the contractor has on prior projects?
dragonwriter 9y ago
> The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of people grandstanding for the next election accusing them of taking care of cronies. No, they (or, rather, contractors) solved that problem by assuring that all contracts are divied up between as many states and Congressional districts as possible, so that anyone in Congress attacking any procurement is attacking jobs in their own district, and cost controls are less important because the overruns are also producing work, often also widely distributed. Of course, this also produces the problem (for the military, not contractors) that any attempt to impose accountability on contractors has political problems that are similarly widespread.
scottLobster 9y ago
No relation to the Ford, but speaking as someone who works for one of the big defense contractors the underbidding thing is a real issue. One of our competitors (also not related to the Ford) that stole some business from us a while back is currently eating some serious crow on some promises they couldn't fulfill... but they did get the contract. That's serious money in their pocket. Likewise I'm pretty sure the average Dog Dating App startup has better equipment than we're given, although to be fair what we have does the job, just not nearly as well as it could. Not to mention the mountain of legacy equipment and code that no one ever wants to spend money to replace or upgrade properly (once again, underbidding). For every F-35 or USS Ford there are hundreds of smaller programs wither much tighter (also underbid) budgets that you never hear about (either because they're classified or just too boring for media coverage). But it has to be that way, otherwise we don't get the business at all. Don't get me wrong I like my work and my coworkers, I'd certainly rather be where I am than Silicon Valley, but the red tape and budgetary constraints are a repeating source of frustration at all levels, and it sucks that there's not really all that much we (at least anyone remotely close to my pay grade) can do about it. At the end of the day it's up to our customers to set the bidding process and pick the winners. A realistic bid is likely a lost contract.
- gozur88 9y ago
  I've been there. This is not an easy problem to solve - they do have vetting procedures and sometimes reject bids because they think the contractor can't do the job. But companies are pretty good at making sure the boxes are all checked during the bidding process. I had a relative in the Air Force, and his group was in charge of salvaging programs that failed because the contractor couldn't deliver. They would get half-finished satellites and boxes of parts arriving at the loading dock and then try to figure out what to do. Is someone criminally culpable? Can we do a contract to finish this, or do we need to start over? According to him you could just never tell - sometimes the contractors you were sure would fail actually delivered, and sometimes the old reliables went belly up or just kept asking for more money.
  - scottLobster 9y ago
    Yeah I'd say the issue there is that traditional defense contractors are highly silo-ed, quality can vary drastically from program to program. I've worked on programs that I'd pit against Google and programs where the culture was a bunch of math majors who learned to code in the 70s and haven't updated since the 90s. Just last year I had to review a 500 line FUNCTION in NEW CODE. Thankfully I'm no longer attached to that program, had to continuously bite my tongue and pick my battles in code reviews to avoid getting a reputation. Even nicely telling people 15-20 years my senior "go spend two days refactoring this crap" was a non-starter. To be fair the code did work, I doubt a user would ever notice. But I felt bad signing off on the review all the same. I sdhould point out that not all the old-timers are a problem. I'm currently working with some 20-year guys who are VERY up to date and open to new ideas; and the company is trying to modernize from the top-down, but some programs have taken to it better than others and some have outright resisted. Given that these programs are only staffed after a bid is won, I'm not sure what kind of vetting process could catch these kinds of inefficiencies.

stcredzero 9y ago

The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of people grandstanding for the next election accusing them of taking care of cronies. Isn't there some famous economics paper somewhere that shows strategies like median bid produce much better outcomes?

teddyh 9y ago
Do you have a reference to this? I’m particularly curious if they address the secondary effects this will have on bids, and if the strategy then remains viable.
ams6110 9y ago
Could you do something like adjust the bids by the average percentage overrun the contractor has on prior projects?

dragonwriter 9y ago

> The military is always in a bind with contractor selection. If the don't choose the lowest bidder they get hauled up in front of a Senate committee full of people grandstanding for the next election accusing them of taking care of cronies. No, they (or, rather, contractors) solved that problem by assuring that all contracts are divied up between as many states and Congressional districts as possible, so that anyone in Congress attacking any procurement is attacking jobs in their own district, and cost controls are less important because the overruns are also producing work, often also widely distributed. Of course, this also produces the problem (for the military, not contractors) that any attempt to impose accountability on contractors has political problems that are similarly widespread.

scottLobster 9y ago

No relation to the Ford, but speaking as someone who works for one of the big defense contractors the underbidding thing is a real issue. One of our competitors (also not related to the Ford) that stole some business from us a while back is currently eating some serious crow on some promises they couldn't fulfill... but they did get the contract. That's serious money in their pocket. Likewise I'm pretty sure the average Dog Dating App startup has better equipment than we're given, although to be fair what we have does the job, just not nearly as well as it could. Not to mention the mountain of legacy equipment and code that no one ever wants to spend money to replace or upgrade properly (once again, underbidding). For every F-35 or USS Ford there are hundreds of smaller programs wither much tighter (also underbid) budgets that you never hear about (either because they're classified or just too boring for media coverage). But it has to be that way, otherwise we don't get the business at all. Don't get me wrong I like my work and my coworkers, I'd certainly rather be where I am than Silicon Valley, but the red tape and budgetary constraints are a repeating source of frustration at all levels, and it sucks that there's not really all that much we (at least anyone remotely close to my pay grade) can do about it. At the end of the day it's up to our customers to set the bidding process and pick the winners. A realistic bid is likely a lost contract.

gozur88 9y ago
I've been there. This is not an easy problem to solve - they do have vetting procedures and sometimes reject bids because they think the contractor can't do the job. But companies are pretty good at making sure the boxes are all checked during the bidding process. I had a relative in the Air Force, and his group was in charge of salvaging programs that failed because the contractor couldn't deliver. They would get half-finished satellites and boxes of parts arriving at the loading dock and then try to figure out what to do. Is someone criminally culpable? Can we do a contract to finish this, or do we need to start over? According to him you could just never tell - sometimes the contractors you were sure would fail actually delivered, and sometimes the old reliables went belly up or just kept asking for more money.
- scottLobster 9y ago
  Yeah I'd say the issue there is that traditional defense contractors are highly silo-ed, quality can vary drastically from program to program. I've worked on programs that I'd pit against Google and programs where the culture was a bunch of math majors who learned to code in the 70s and haven't updated since the 90s. Just last year I had to review a 500 line FUNCTION in NEW CODE. Thankfully I'm no longer attached to that program, had to continuously bite my tongue and pick my battles in code reviews to avoid getting a reputation. Even nicely telling people 15-20 years my senior "go spend two days refactoring this crap" was a non-starter. To be fair the code did work, I doubt a user would ever notice. But I felt bad signing off on the review all the same. I sdhould point out that not all the old-timers are a problem. I'm currently working with some 20-year guys who are VERY up to date and open to new ideas; and the company is trying to modernize from the top-down, but some programs have taken to it better than others and some have outright resisted. Given that these programs are only staffed after a bid is won, I'm not sure what kind of vetting process could catch these kinds of inefficiencies.