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Everyone replying answered this, I'd just like to point out that the answer to 'could you elaborate a bit more' is to read the parent article. Another excerpt:

Everyone replying answered this, I'd just like to point out that the answer to 'could you elaborate a bit more' is to read the parent article. Another excerpt: > In 2013, the GSA Inspector General traced a similar situation with different contractors. Managers at GSA overruled line contracting officers to raise prices taxpayer pay for contractors Carahsoft, Deloitte and Oracle. Government managers at GSA micro-managed and harassed their subordinates and damaged the careers of contracting officers trying to negotiate fair prices for the taxpayer.

bumby 7y ago
Thanks, what I'm not quite getting is that the other contractors are listed. What seems to get lost is that the GSA doesn't select the contractors, they just list them. The connecting dot that's missing is why agencies choose the more expensive option when it benefits the GSA, not the agency using their schedule. For the perverse IFF incentive structure logic to hold true, it seems like GSA would be incentivized to approve rate increases across the board. Why just McKinsey? In other words, the GSA sets the contract but not the order. If there are cheaper contracts available in place on the GSA schedule, I would think agencies are incentivized to choose the lower bid. edit: mistakenly stated "agencies" instead of "contractors" regarding what gets listed
- ndarwincorn 7y ago
  This is reading more and more like you're begging the question. One of the sibling replies that predates this comment by a quarter of an hour already addresses your specific missing connecting dot here. Not to mention the article itself, which is also well cited. It's good. I suggest you read it. Interrogating my two sentence oversimplification of the forest is not a useful way to learn about this.
  - bumby 7y ago
    I get the impression some of the commenters don't really have experience with government contracts on either the public or private side. The IG report points out real problems, but I think people are extrapolating too far because they don't truly understand how contracts are awarded via the GSA schedule. I think people are confusing being awarded a listing on a GSA schedule with an actual order. Being on the GSA schedule just means is there is an agreed upon price for a product or service. An agency still needs to chose that product or service before any money changes hands. The GSA essentially produces a catalogue of products and services. Like the article mentions, it seems like the GSA allowed McKinsey to name their price and that is, as the article says, "honest graft". The article also implies other contractors are also listed, although they don't get similar preferential price treatment. So the GSA isn't down-selecting the number of "items" listed in the "catalogue" to force agencies into selecting the expensive McKinsey. It's just inflating the price of one item. What isn't covered is why agencies are selecting the more expensive item. To me, that is where the real corruption would be. To play devil's advocate, the whole IG issue could potentially be attributed to a bad contracting supervisor who reassigned the contracting officer who was fighting against the price increase. The fact that the other companies were denied similar price increases indicates to me that it's not a cultural issue of "honest graft".
    - ndarwincorn 7y ago
      I get the impression you're over-simplifying this and grasping for whatever assumption you need just to try to make your point. While some of us have run with my oversimplification, there are plenty of comments in this sub-thread about down-selecting. Your answer to that is a giant assumption on what the article (which again is rigorously sourced) 'implies'. > The article also implies other contractors are also listed, although they don't get similar preferential price treatment. In fact, the IG report[0] that is cited in the selection of the article I replied with has nothing to do with McKinsey, but a different contractor altogether. Reading comprehension is your friend here: "In 2013, the GSA Inspector General traced a similar situation with different contractors." Agencies aren't necessarily selecting the more expensive item. As you point out, in most cases they have a mandate not to. They're awarding the bid to an already-short list designed to generate the highest IFF possible for the GSA. Which is what the article's about. [0]https://www.gsaig.gov/sites/default/files/audit-reports/A120161_1.pdf https://www.gsaig.gov/sites/default/files/audit-reports/A120...
      - bumby 7y ago
        If anything, my intent was to guard against the oversimplified conclusions by adding some nuance. I concede the point that it's larger than just McKinsey. But it seems like people are extrapolating to make a point that the government is forced into picking between just a few favored firms. That point is central to the author's larger theme about the politics of monopolies. The issue I have is, while there seems to be some graft, it doesn't mean there is a monopoly. In the same vein: > They're awarding the bid to an already-short list This makes it sound like the GSA is forcing agencies to select from a small handful of contractors from a list catered to make the GSA the most money. I don't think it's actually true and it seems like it's inferred from the article without evidence. There are literally thousands of vendors just in the IT Services schedule mentioned in the article[1]. What seems more likely is what another commenter stated. Agencies select the excessively expensive McKinsey because they are essentially buying social capital. Edit: there’s actually over 13k vendors listed under IT services [2] [1]https://www.gsa.gov/technology/technology-purchasing-programs/it-schedule-70 https://www.gsa.gov/technology/technology-purchasing-program... [2] https://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?scheduleNumber=70&id=71 https://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?...

bumby 7y ago

Thanks, what I'm not quite getting is that the other contractors are listed. What seems to get lost is that the GSA doesn't select the contractors, they just list them. The connecting dot that's missing is why agencies choose the more expensive option when it benefits the GSA, not the agency using their schedule. For the perverse IFF incentive structure logic to hold true, it seems like GSA would be incentivized to approve rate increases across the board. Why just McKinsey? In other words, the GSA sets the contract but not the order. If there are cheaper contracts available in place on the GSA schedule, I would think agencies are incentivized to choose the lower bid. edit: mistakenly stated "agencies" instead of "contractors" regarding what gets listed

ndarwincorn 7y ago
This is reading more and more like you're begging the question. One of the sibling replies that predates this comment by a quarter of an hour already addresses your specific missing connecting dot here. Not to mention the article itself, which is also well cited. It's good. I suggest you read it. Interrogating my two sentence oversimplification of the forest is not a useful way to learn about this.
- bumby 7y ago
  I get the impression some of the commenters don't really have experience with government contracts on either the public or private side. The IG report points out real problems, but I think people are extrapolating too far because they don't truly understand how contracts are awarded via the GSA schedule. I think people are confusing being awarded a listing on a GSA schedule with an actual order. Being on the GSA schedule just means is there is an agreed upon price for a product or service. An agency still needs to chose that product or service before any money changes hands. The GSA essentially produces a catalogue of products and services. Like the article mentions, it seems like the GSA allowed McKinsey to name their price and that is, as the article says, "honest graft". The article also implies other contractors are also listed, although they don't get similar preferential price treatment. So the GSA isn't down-selecting the number of "items" listed in the "catalogue" to force agencies into selecting the expensive McKinsey. It's just inflating the price of one item. What isn't covered is why agencies are selecting the more expensive item. To me, that is where the real corruption would be. To play devil's advocate, the whole IG issue could potentially be attributed to a bad contracting supervisor who reassigned the contracting officer who was fighting against the price increase. The fact that the other companies were denied similar price increases indicates to me that it's not a cultural issue of "honest graft".
  - ndarwincorn 7y ago
    I get the impression you're over-simplifying this and grasping for whatever assumption you need just to try to make your point. While some of us have run with my oversimplification, there are plenty of comments in this sub-thread about down-selecting. Your answer to that is a giant assumption on what the article (which again is rigorously sourced) 'implies'. > The article also implies other contractors are also listed, although they don't get similar preferential price treatment. In fact, the IG report[0] that is cited in the selection of the article I replied with has nothing to do with McKinsey, but a different contractor altogether. Reading comprehension is your friend here: "In 2013, the GSA Inspector General traced a similar situation with different contractors." Agencies aren't necessarily selecting the more expensive item. As you point out, in most cases they have a mandate not to. They're awarding the bid to an already-short list designed to generate the highest IFF possible for the GSA. Which is what the article's about. [0]https://www.gsaig.gov/sites/default/files/audit-reports/A120161_1.pdf https://www.gsaig.gov/sites/default/files/audit-reports/A120...
    - bumby 7y ago
      If anything, my intent was to guard against the oversimplified conclusions by adding some nuance. I concede the point that it's larger than just McKinsey. But it seems like people are extrapolating to make a point that the government is forced into picking between just a few favored firms. That point is central to the author's larger theme about the politics of monopolies. The issue I have is, while there seems to be some graft, it doesn't mean there is a monopoly. In the same vein: > They're awarding the bid to an already-short list This makes it sound like the GSA is forcing agencies to select from a small handful of contractors from a list catered to make the GSA the most money. I don't think it's actually true and it seems like it's inferred from the article without evidence. There are literally thousands of vendors just in the IT Services schedule mentioned in the article[1]. What seems more likely is what another commenter stated. Agencies select the excessively expensive McKinsey because they are essentially buying social capital. Edit: there’s actually over 13k vendors listed under IT services [2] [1]https://www.gsa.gov/technology/technology-purchasing-programs/it-schedule-70 https://www.gsa.gov/technology/technology-purchasing-program... [2] https://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?scheduleNumber=70&id=71 https://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?...