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Having observed and been part of contracts involving these companies, it would take a lot to convince me that at least 80% of them don’t cost an order of magnit

Having observed and been part of contracts involving these companies, it would take a lot to convince me that at least 80% of them don’t cost an order of magnitude (or more) more than they should. It’s not usually the type of work, it’s the specific commercial model and mode of engagement with them that’s generally at fault, often aided and abetted by procurement processes.

calvinmorrison 2y ago
they're a order of magnitude higher for some reasons though. I work in consulting, and occasionally larger enterprises approach our firm. We almost always decline because their requirements from vendor screening, to change review boards, to just the amount of sheer meetings it takes to enact a change to a title change on the website home page - its not worth it. A couple times we made the mistake of giving a 'go away' number and they took it, and then i had to deal with the insanity of F500 business...
- ethbr1 2y ago
  This ^ and uncertainty If I had to break down how consulting contracts are actually priced, it'd be: - 50% work - 35% requirement ambiguity - 15% customer management overhead
  - icedchai 2y ago
    Based on my experience with a smaller contractor, I think your overhead number is low. ;)
  - calvinmorrison 2y ago
    Basically, but with big companies with on hand lawyer litigation is much more likely. They want things like contingency plans, licensing information, even asking what our own financials look like. We just walk and focus on clients who don't have so much risk
- curiouscavalier 2y ago
  Yep, the procurement process (and related) requires a lot be baked into pricing. I’d also be curious what the fully burdened rate of in-house staff is compared to consultants. I’ve seen situations in the gov (not DoD) where despite high consulting rates, the full cost of hiring was even higher per hour. But I’m loath to defend the big firms. Generally, quality plus the ever push for expanding scope leaves a sensation of waste. The solution is just going to need more than simply tossing them out.
  - calvinmorrison 2y ago
    thats part of it. onboarding vendors is such a PITA bringing on a DO-ALL-KINDA-BADLY vendor is preferred over a specialist vendor.
Aurornis 2y ago
> it would take a lot to convince me that at least 80% of them don’t cost an order of magnitude (or more) more than they should. I have enough friends who work in University systems and government roles (both similarly heavy in red tape) to know that many of these institutions would also spend an order of magnitude doing it in house. It’s misleading to compare to an idealistic efficient organization with no red tape, because government jobs are very heavy on red tape. That’s where most of the inefficiency gets spent, whether it’s done in house or by consultants.

calvinmorrison 2y ago

they're a order of magnitude higher for some reasons though. I work in consulting, and occasionally larger enterprises approach our firm. We almost always decline because their requirements from vendor screening, to change review boards, to just the amount of sheer meetings it takes to enact a change to a title change on the website home page - its not worth it. A couple times we made the mistake of giving a 'go away' number and they took it, and then i had to deal with the insanity of F500 business...

ethbr1 2y ago
This ^ and uncertainty If I had to break down how consulting contracts are actually priced, it'd be: - 50% work - 35% requirement ambiguity - 15% customer management overhead
- icedchai 2y ago
  Based on my experience with a smaller contractor, I think your overhead number is low. ;)
- calvinmorrison 2y ago
  Basically, but with big companies with on hand lawyer litigation is much more likely. They want things like contingency plans, licensing information, even asking what our own financials look like. We just walk and focus on clients who don't have so much risk
curiouscavalier 2y ago
Yep, the procurement process (and related) requires a lot be baked into pricing. I’d also be curious what the fully burdened rate of in-house staff is compared to consultants. I’ve seen situations in the gov (not DoD) where despite high consulting rates, the full cost of hiring was even higher per hour. But I’m loath to defend the big firms. Generally, quality plus the ever push for expanding scope leaves a sensation of waste. The solution is just going to need more than simply tossing them out.
- calvinmorrison 2y ago
  thats part of it. onboarding vendors is such a PITA bringing on a DO-ALL-KINDA-BADLY vendor is preferred over a specialist vendor.

Aurornis 2y ago

> it would take a lot to convince me that at least 80% of them don’t cost an order of magnitude (or more) more than they should. I have enough friends who work in University systems and government roles (both similarly heavy in red tape) to know that many of these institutions would also spend an order of magnitude doing it in house. It’s misleading to compare to an idealistic efficient organization with no red tape, because government jobs are very heavy on red tape. That’s where most of the inefficiency gets spent, whether it’s done in house or by consultants.