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TL;DR organizations respond to incentives and the incentive laid out in the legislation for the organization responsible for setting prices the government pays
by dsfyu404ed 7y ago
TL;DR organizations respond to incentives and the incentive laid out in the legislation for the organization responsible for setting prices the government pays is to spend money, not save it and McKinsey takes advantage of that.
Considering that a big player like McKinsey can't systemically overcharge the government and get away with it due to how noticeable it would be in terms of sheer dollar amount there are likely be other smaller players that are making even more absurd profits on their services and I wonder who they are since IMO their existence is more worthy of investigation than some BigCo walking right up to but not over the line drawn by the law (as BigCos do). This is not to say that the incentive structure shouldn't be changed to categorically prevent all this.
- rootusrootus 7y agoOkay, I'll ask the next question. How do I get to be one of those smaller players. Ha!
- smacktoward 7y agoYou'd need to get your business listed on the GSA's schedule of approved contractors (see https://www.gsa.gov/buying-selling/purchasing-programs/gsa-schedules https://www.gsa.gov/buying-selling/purchasing-programs/gsa-s...). Being "on the schedule" means you've already been pre-vetted and deemed a legitimate vendor by the GSA. For government agencies, doing business with a contractor on the GSA schedule lets them skip a whole bunch of approvals and paperwork that they'd otherwise have to do if they just pulled in a vendor off the street. Getting on the schedule can be a long and bureaucratic process, but once you're on it you have a privileged position when it comes to winning government business. So if you want to sell to the Feds, you really want to be on that schedule.