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It's actually "accountability" that's a big part of the problem. Government procurement is so focused on the appearance of fairness and money saving that all o

It's actually "accountability" that's a big part of the problem. Government procurement is so focused on the appearance of fairness and money saving that all other goals, like actually getting something that works, take a back seat. You end up with over-specified requirements that remove the possibility of innovative or creative solutions. Providers are treated like a commodity, where it is assumed that all will do the same job, and cost is the only real negotiation point, maybe with some kind of scoring grid against the over-specified requirements thrown in. And the procurement decisions are made by procurement officers who are not the actual users of what is being bought (in the name of objectivity). So what happens, on a good day, is that the operational users in the purchasing department work with the preferred vendor to "wire" the RFP to reflect the scope or work that is wanted and add requirements (e.g. years of very specific experience, past projects) that heavily favor the preferred vendor. At least this way the department may get something they want, thought it obviously can be gamed. Worse though is that many contracts just go to lowest cost staffing firms that are optimized to comply with government procurement requirements and provide the minimum set of bodies that meet those requirements, usually former government folks rented back, plus some low cost IT resources, that are there to execute to the letter of what the government has over-specified, usually something that wont actually work as written. This is why so much government procurement is a failure by any objective measure. What I have seen work is when a vendor provides a credible unsolicited pitch to a known problem at a fixed cost, and the relevant departments are forced to decide if it makes sense. In Canada we had a major one like that a few years ago, the outcome was great for the department that needed it, but careers were destroyed in the process as politicians and their incumbent friends pushed back to try and stop it.

metanonsense 5y ago
Last week we lost a bid for a government contract. That's nothing unusual but I almost laughed when they described how they reached that conclusion. They weighted price against quality at a ratio of 80 to 20. I mean: really?
- g_p 5y ago
  This is fairly standard, sadly, and is why Government struggles to deliver, especially on IT and similar "intangibles" type contracts. The same issues happen in any other procurement activity that is required to rigorously follow a specific process due to spending public money, or bill-payer money of a regulated monopoly etc. In short, you need large numbers of people involved to avoid "corruption" (irrespective of the actual level of such risk), and this means you end up less flexible and less able to buy what's needed. Weighting price by 80% is common, as nobody wants to be seen to deliver "poor value for money to the tax-payer". Hence the cheapest bid almost always wins, as nobody wants to have to stand up and explain why they didn't pick the cheapest bid. There's a whole separate issue in how to handle "too cheap" bids (i.e. where you under-bid on the initial work, knowing you can get technical lock-in and be able to win future contracts uncontested, and turn those lucrative), but this is still an issue - see how the large outsourcers or consultancies do this regularly, and end up winning renewals on basis of "necessity". There's an art to writing a winning (cheap) tender, then staffing it with people who rigorously enforce the scope back onto the Government client, and force every single change through an expensive change process. That's the business model many follow, and it delivers far poorer value for money in the long run. But the headline price was cheaper, so they'll still get selected...
briffle 5y ago
> Government procurement is so focused on the appearance of fairness and money saving that all other goals, like actually getting something that works, take a back seat. I worked at a small 2 year college for many years. One time, my Dean I reported to was on vacation, so I had to go talk to the college president, and get him to sign a form for a $7 petty cash reimbursement for some zip ties I had bought to clean up some cabling. One year, our President had to travel to the capital city (about 250 miles away, over the mountains) almost every other week for some budget discussions with other colleges, legislators, etc. We could have saved the taxpayers THOUSANDS of dollars by renting a modest house to use for him (and some of the other staff members that regularly traveled to the capital). But that "might" look like we were providing them with a second home, so we spent thousands more on hotels.
- tomc1985 5y ago
  A house? A modest apartment I can see, but a house seems a bit much
  - bsder 5y ago
    Renting a furnished apartment can sometimes be almost as much as a renting a furnished house depending upon the area.
jjk166 5y ago
This is the best explanation for the phenomenon I've ever heard, thank you
xwolfi 5y ago
In France, the tiny company I was in lost a lot of gov contracts to our absolute surprise since we felt we actually had a better solution for the price. What we did to start winning was to make friends with the people judging us, offering free services making them personally look good until we started having such relations with them they d ask us out to frame the contracts and give them to us whatever our competitors would come up with. It's impossible to take decisions based on surprise proposals in a public tender and it felt it was an open secret that tenders' winners MUST be decided before publication.
crazygringo 5y ago
This is exactly it. And to be clear, there's a good reason for it: it's to prevent corruption. If things aren't overspecified and providers aren't treated like a commodity, then it's incredibly hard to prove that a government official actually awarded a contract in a fair process, rather than just sending it over to their best friend's business. Unfortunately, nobody's really come up with any reliable process for having the flexibility to get good products for good value, while reliably preventing corruption. And when there aren't these ironclad protections against corruption, experience shows it turns endemic, so much money flows through the government. It's a seriously tough problem. The reason it doesn't exist in the private sector is that the chain of accountability from managers to CEO to board seats is actually quite strong, and shareholders are incredibly motivated to extract profits. The accountability to voters in a democracy, on the otherhand, is far, far, far weaker -- as voters vote primarily along party lines or on only the absolute biggest hot-button issues.
- BadInformatics 5y ago
  I'm skeptical it's even good at that intended purpose. Perhaps one could argue it prevents blatant, direct corruption, but it does little to control for large company influence and other forms of soft power. The biggest companies in this space maintain an active revolving door, which ensures that procurement policy is moulded (either consciously or unconsciously) to their process and needs over time. Even more insidiously, they've convinced governments to gut their own IT workforce, removing the people most qualified to critically analyze software vendors. This appeals to your average bureaucrat because it appears to strike a good balance between effort and risk minimization (e.g. why bother managing multiple smaller vendors or timelines?), while in practice it does exactly the opposite.
  - crazygringo 5y ago
    It's to avoid the very specific form of corruption via kickbacks, essentially -- and if you look at the history of how politicians used to spend money in the US, you'll see that it is actually quite effective at this, and that it was once a gigantic problem -- and continues to be in some countries today. You're right that it does nothing about other forms of influence like the revolving door. And like I said, it comes at a tremendous cost of efficiency and quality. It's not trying to strike a balance between corruption and efficiency/quality, it's trying to explicitly minimize corruption at the expense of efficiency/quality.
BadInformatics 5y ago
Name and shame: https://www.cbc.ca/news/canada/ottawa/phoenix-costs-137-million-ibm-1.5135545 https://www.cbc.ca/news/canada/ottawa/phoenix-costs-137-mill...

metanonsense 5y ago

Last week we lost a bid for a government contract. That's nothing unusual but I almost laughed when they described how they reached that conclusion. They weighted price against quality at a ratio of 80 to 20. I mean: really?

g_p 5y ago
This is fairly standard, sadly, and is why Government struggles to deliver, especially on IT and similar "intangibles" type contracts. The same issues happen in any other procurement activity that is required to rigorously follow a specific process due to spending public money, or bill-payer money of a regulated monopoly etc. In short, you need large numbers of people involved to avoid "corruption" (irrespective of the actual level of such risk), and this means you end up less flexible and less able to buy what's needed. Weighting price by 80% is common, as nobody wants to be seen to deliver "poor value for money to the tax-payer". Hence the cheapest bid almost always wins, as nobody wants to have to stand up and explain why they didn't pick the cheapest bid. There's a whole separate issue in how to handle "too cheap" bids (i.e. where you under-bid on the initial work, knowing you can get technical lock-in and be able to win future contracts uncontested, and turn those lucrative), but this is still an issue - see how the large outsourcers or consultancies do this regularly, and end up winning renewals on basis of "necessity". There's an art to writing a winning (cheap) tender, then staffing it with people who rigorously enforce the scope back onto the Government client, and force every single change through an expensive change process. That's the business model many follow, and it delivers far poorer value for money in the long run. But the headline price was cheaper, so they'll still get selected...

briffle 5y ago

> Government procurement is so focused on the appearance of fairness and money saving that all other goals, like actually getting something that works, take a back seat. I worked at a small 2 year college for many years. One time, my Dean I reported to was on vacation, so I had to go talk to the college president, and get him to sign a form for a $7 petty cash reimbursement for some zip ties I had bought to clean up some cabling. One year, our President had to travel to the capital city (about 250 miles away, over the mountains) almost every other week for some budget discussions with other colleges, legislators, etc. We could have saved the taxpayers THOUSANDS of dollars by renting a modest house to use for him (and some of the other staff members that regularly traveled to the capital). But that "might" look like we were providing them with a second home, so we spent thousands more on hotels.

tomc1985 5y ago
A house? A modest apartment I can see, but a house seems a bit much
- bsder 5y ago
  Renting a furnished apartment can sometimes be almost as much as a renting a furnished house depending upon the area.

jjk166 5y ago

This is the best explanation for the phenomenon I've ever heard, thank you

xwolfi 5y ago

In France, the tiny company I was in lost a lot of gov contracts to our absolute surprise since we felt we actually had a better solution for the price. What we did to start winning was to make friends with the people judging us, offering free services making them personally look good until we started having such relations with them they d ask us out to frame the contracts and give them to us whatever our competitors would come up with. It's impossible to take decisions based on surprise proposals in a public tender and it felt it was an open secret that tenders' winners MUST be decided before publication.

crazygringo 5y ago

This is exactly it. And to be clear, there's a good reason for it: it's to prevent corruption. If things aren't overspecified and providers aren't treated like a commodity, then it's incredibly hard to prove that a government official actually awarded a contract in a fair process, rather than just sending it over to their best friend's business. Unfortunately, nobody's really come up with any reliable process for having the flexibility to get good products for good value, while reliably preventing corruption. And when there aren't these ironclad protections against corruption, experience shows it turns endemic, so much money flows through the government. It's a seriously tough problem. The reason it doesn't exist in the private sector is that the chain of accountability from managers to CEO to board seats is actually quite strong, and shareholders are incredibly motivated to extract profits. The accountability to voters in a democracy, on the otherhand, is far, far, far weaker -- as voters vote primarily along party lines or on only the absolute biggest hot-button issues.

BadInformatics 5y ago
I'm skeptical it's even good at that intended purpose. Perhaps one could argue it prevents blatant, direct corruption, but it does little to control for large company influence and other forms of soft power. The biggest companies in this space maintain an active revolving door, which ensures that procurement policy is moulded (either consciously or unconsciously) to their process and needs over time. Even more insidiously, they've convinced governments to gut their own IT workforce, removing the people most qualified to critically analyze software vendors. This appeals to your average bureaucrat because it appears to strike a good balance between effort and risk minimization (e.g. why bother managing multiple smaller vendors or timelines?), while in practice it does exactly the opposite.
- crazygringo 5y ago
  It's to avoid the very specific form of corruption via kickbacks, essentially -- and if you look at the history of how politicians used to spend money in the US, you'll see that it is actually quite effective at this, and that it was once a gigantic problem -- and continues to be in some countries today. You're right that it does nothing about other forms of influence like the revolving door. And like I said, it comes at a tremendous cost of efficiency and quality. It's not trying to strike a balance between corruption and efficiency/quality, it's trying to explicitly minimize corruption at the expense of efficiency/quality.

BadInformatics 5y ago

Name and shame: https://www.cbc.ca/news/canada/ottawa/phoenix-costs-137-million-ibm-1.5135545 https://www.cbc.ca/news/canada/ottawa/phoenix-costs-137-mill...