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I think you may not understand what the government is. The government is a collection of individuals. It is not a single borg instance. Some individuals within

I think you may not understand what the government is. The government is a collection of individuals. It is not a single borg instance. Some individuals within that collection are going to act different than other ones. Also the government does a lot of funding through different mechanisms. Many miltiary programs are a cost+ program where they pay the contractor the cost of development plus a profit% so the initial budget is a bit moot since the point is to pay for a capability. That obviously doesn't apply here and the FCC wasn't offering a Cost+ program.

jandrese 3y ago
As if cost+ contracting hasn't been a major factor in projects going overbudget and behind schedule. Even with cost+ the contractor needs to provide an estimate up front of both the time and money needed. While it is understood that it is just an estimate, having projects come in for 5x or more of the original estimated cost is egregious. SLS for example was estimated to cost $1.5B, but instead costs $11.2B and still hasn't launched.
- lesuorac 3y ago
  > SLS for example was estimated to cost $1.5B I wish it was; lol. The initial estimate was $18B [1]. I suspect you saw the $1.5B number for some sub-component of SLS. That's another common problem with government projects. The media will read some government report that says a new railroad will cost $1B and then report that the entire project will cost $1B while the report only talked about track cost and not about land acquisition, even environmental studies, or etc. That said, yes SLS is over ($23B) the $18B budget and not done. I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. Somewhat close to what the FCC did here except the FCC is giving the money ahead of milestone. But there are pros and cons to this as government contracting is a pia so when you get into the situation of a single competitor it gets awkward. Contractors not meeting their bids is a problem though. At the personal/corporate/government level I don't think people account for enough the fact that the contractor might not uphold their side of the bargin. Similar to how many people choose the cheapest insurance and then :surprise-pickachu-face: all their claims get denied. [1]: https://en.wikipedia.org/wiki/Space_Launch_System#Funding https://en.wikipedia.org/wiki/Space_Launch_System#Funding
  - _Tev 3y ago
    > I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. NASA already does this for a lot of things around ISS and Artemis. SLS is legacy bondoogle pushed by US Senate.
  - jandrese 3y ago
    It was $1.5B per launch. But that figure keeps going up as they have to amortize even more development cost into each launch, and the total number of launches remains constant or even drops.
  - robertlagrant 3y ago
    > I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. SpaceX seems to have done well out of how NASA does bids for contracts. And that's for actual work done, not for fudgeable project milestones?
kelnos 3y ago
The problem with cost+ is that contractors can inflate the actual cost of things, and pocket the difference. Obviously they can't do this to an unlimited extent, but the cynic in me would have a hard time believing this isn't a common practice.
- kulahan 3y ago
  It's much more likely that this stuff is difficult to do, and thus difficult to price out, than that somehow the managers of these companies are working with the finance people to secretly steal money from the government and hide it in their books, the government never catches it, and these very amicable ties between the government and defense contractors continues - and all of that is before we even get to what happens when you try to steal and your project falls behind. It's way more valuable, usually, to get it done quickly and done well the first time, so you can move onto another project. You leave a few people on the original program pull in tons of super easy maintenance contract money for what essentially ends up being a skeleton crew. Or, I suppose, you could try and inflate costs by a couple percentage points (not too much - you'll get caught and the risk here is MASSIVE), keep working on the same program, and hope the opportunity cost doesn't get too high. I'm sure it happens, but I doubt it happens often.
- lesuorac 3y ago
  I mean there's almost certainly crime that happens in contracting but there is a real risk of being caught if you commit fraud. Do remember that companies such as Google do pay out literally millions of dollars to random people that send in invoices for work never requested or done. Cost+ at face-value isn't that bad of an idea. An alternative to it is the government hiring a bunch of people to do a project and ideally the government only pays Cost in that case. For people that don't believe the government can do anything this is a pretty good trade off. IIRC, the `+` part is capped at 15% profit so IIUC that's similar to an operating margin of 15%. Although IIUC, executive expenses and a ton of other things come out of the `+` part so it should be lower than 15%. But the point I'm going to make here is that an operating margin of 15% isn't really impressive and that's the best that the contractor can do.
commandlinefan 3y ago
> Some individuals within that collection are going to act different than other ones Actually, no, they seem to have been acting as a (predictable) monolith for at least the past three years...
pavon 3y ago
The various FCC rural broadband programs in specific have been horrible about ISPs not completing the work and not having money clawed back.

jandrese 3y ago

As if cost+ contracting hasn't been a major factor in projects going overbudget and behind schedule. Even with cost+ the contractor needs to provide an estimate up front of both the time and money needed. While it is understood that it is just an estimate, having projects come in for 5x or more of the original estimated cost is egregious. SLS for example was estimated to cost $1.5B, but instead costs $11.2B and still hasn't launched.

lesuorac 3y ago
> SLS for example was estimated to cost $1.5B I wish it was; lol. The initial estimate was $18B [1]. I suspect you saw the $1.5B number for some sub-component of SLS. That's another common problem with government projects. The media will read some government report that says a new railroad will cost $1B and then report that the entire project will cost $1B while the report only talked about track cost and not about land acquisition, even environmental studies, or etc. That said, yes SLS is over ($23B) the $18B budget and not done. I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. Somewhat close to what the FCC did here except the FCC is giving the money ahead of milestone. But there are pros and cons to this as government contracting is a pia so when you get into the situation of a single competitor it gets awkward. Contractors not meeting their bids is a problem though. At the personal/corporate/government level I don't think people account for enough the fact that the contractor might not uphold their side of the bargin. Similar to how many people choose the cheapest insurance and then :surprise-pickachu-face: all their claims get denied. [1]: https://en.wikipedia.org/wiki/Space_Launch_System#Funding https://en.wikipedia.org/wiki/Space_Launch_System#Funding
- _Tev 3y ago
  > I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. NASA already does this for a lot of things around ISS and Artemis. SLS is legacy bondoogle pushed by US Senate.
- jandrese 3y ago
  It was $1.5B per launch. But that figure keeps going up as they have to amortize even more development cost into each launch, and the total number of launches remains constant or even drops.
- robertlagrant 3y ago
  > I do wish NASA would move closer to how DARPA does things where you payout a reward to companies that achieve some milestone. SpaceX seems to have done well out of how NASA does bids for contracts. And that's for actual work done, not for fudgeable project milestones?

kelnos 3y ago

The problem with cost+ is that contractors can inflate the actual cost of things, and pocket the difference. Obviously they can't do this to an unlimited extent, but the cynic in me would have a hard time believing this isn't a common practice.

kulahan 3y ago
It's much more likely that this stuff is difficult to do, and thus difficult to price out, than that somehow the managers of these companies are working with the finance people to secretly steal money from the government and hide it in their books, the government never catches it, and these very amicable ties between the government and defense contractors continues - and all of that is before we even get to what happens when you try to steal and your project falls behind. It's way more valuable, usually, to get it done quickly and done well the first time, so you can move onto another project. You leave a few people on the original program pull in tons of super easy maintenance contract money for what essentially ends up being a skeleton crew. Or, I suppose, you could try and inflate costs by a couple percentage points (not too much - you'll get caught and the risk here is MASSIVE), keep working on the same program, and hope the opportunity cost doesn't get too high. I'm sure it happens, but I doubt it happens often.
lesuorac 3y ago
I mean there's almost certainly crime that happens in contracting but there is a real risk of being caught if you commit fraud. Do remember that companies such as Google do pay out literally millions of dollars to random people that send in invoices for work never requested or done. Cost+ at face-value isn't that bad of an idea. An alternative to it is the government hiring a bunch of people to do a project and ideally the government only pays Cost in that case. For people that don't believe the government can do anything this is a pretty good trade off. IIRC, the `+` part is capped at 15% profit so IIUC that's similar to an operating margin of 15%. Although IIUC, executive expenses and a ton of other things come out of the `+` part so it should be lower than 15%. But the point I'm going to make here is that an operating margin of 15% isn't really impressive and that's the best that the contractor can do.

commandlinefan 3y ago

> Some individuals within that collection are going to act different than other ones Actually, no, they seem to have been acting as a (predictable) monolith for at least the past three years...

pavon 3y ago

The various FCC rural broadband programs in specific have been horrible about ISPs not completing the work and not having money clawed back.