

Dept of Health and Human Services spends $146 per month per user for email [pdf] - adventured
http://www.gao.gov/assets/670/661829.pdf

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rdtsc
Welcome to the world of government contracting. There is lots of money to be
made in this area if you know how/who to talk to, and the red tape to jump
through. Lockheed, L3 and Northrop, make a pretty penny, along with many many
bottom feeders (some hiding behind a shell companies that fit labels like
"disable business veteran" owner or other such preferential categories).

It is a multi-billion dollar world, with its own rules, players, business
cycles, customers, marketing and so on. You get to use exciting technologies
such as Window Vista (still XP up until not too long ago) and RHEL 4 and 5.

~~~
colinbartlett
I had a government customer once. And they had another vendor I met which was
"owned" by a woman. But the real operator of the business made no bones about
the fact the the entire thing was setup in his wife's name solely in order to
enable contracting with said government agency.

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cfontes
I don't live in th US so this is not clear to me.

Could you explain why would they do that?

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dmckeon
Officially, " _to help small businesses build their potential to successfully
compete in the federal sector_ " but effectively to promote businesses owned
by various populations, either historically disadvantaged (minorities, women)
or seen as deserving of promotion (military veterans, disabled veterans).

[http://www.sba.gov/category/navigation-
structure/contracting...](http://www.sba.gov/category/navigation-
structure/contracting/working-with-government)

" _The Women-Owned Small Business (WOSB) Federal Contract program authorizes
contracting officers to set aside certain federal contracts for eligible
women-owned small businesses._ "

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rodrodrod
Relevant bit (footnote 8 on pg. 4):

    
    
      HHS told us that HHS pays $146.64 per month per user for e-mail; that this
      charge covers connect ivity, storage, and other e-mail services; and that this
      charge is independent of the number of e-mails that are sent or received. HHS
      also told us that the Office of the Secretary pays $10.44 per month per
      telephone line, that this charge covers all featu res associated with the
      lines and the phones, and that this charge is independent of the number of
      phone calls made per month. Each phone call, whether local or long distance,
      is charged at a unit cost of $0.014 per minute.
    

I wonder what the breakdown of the costs is. That number seems way steep.

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vidarh
My first question would be what archival requirements they have for e-mail.

Some governments have legal requirements for incoming official mail - whether
on paper or electronic - to be printed off and stamped with the time and date,
and manually entered into a journal and archived in multiple copies in
separate locations for audit and open access purposes. Others may "just"
require an electronic journal, but tend to still have very strict requirements
on access, and particular security mechanisms to prevent modification of the
journal.

Archival requirements can easily make up the vast majority of cost of
processing mail if the rules are complicated enough.

Depending on the extent of "unusual" requirements like that, it may not be
that bad. In any case, without more details about exactly what is included
it's not very easy to assess whether or not the cost is unreasonable...

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pmorici
If you've ever worked for or with the government this isn't shocking news. In
fact I also wouldn't be surprised to find that their email is also unreliable.

There just isn't much accountability with these things it's a HUGE problem. I
don't know what the solution is.

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jeffdavis
"I don't know what the solution is."

Not have such a massive federal government that is always spending other
people's money?

When people spend their own money, they often find much more efficient use of
it.

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pmorici
Yeah, sure, but we all know it is inevitable the government is going to spend
some money so as a practical matter just cutting government doesn't really
address the problem of making the remaining parts more efficient.

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jeffdavis
The smaller the government (or any entity) the fewer things look like a "drop
in the bucket that's not worth looking at". So reducing the size of government
will (I believe) increase the efficiency.

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pmorici
I think you misunderstand the fundamental problem. Even if the Federal
government were cut by 50% in terms of $ spent it would still be massive. they
wouldn't all of a sudden have an epiphany and realize they were being ripped
off by all these beltway bandits. They would just do less stuff in the same
inefficient way. You might feel better about it because you would be paying
lower taxes but the taxes you are paying would still be spent inefficiently.

~~~
AnthonyMouse
That isn't necessarily true. The number of e.g. Senators is set by the
constitution. If the government were doing half as much stuff, each Senator
would have twice as much time to allocate to each thing. Then they might find
more waste to remove and reduce the budget even more.

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realityseries
> If the government were doing half as much stuff, each Senator would have
> twice as much time to allocate to each thing

I find the assumption that 'How much stuff the government is doing is
proportionate to how much time each Senator has to act as a finder and remover
of waste' as an assumption based on a normative view of what Senators should
be doing in the Senate, rather than what their schedules would reveal.

This image of Senators is questionable, given what Senators actually do as
part of their jobs (campaigning, meeting with lobbyists, reviewing poll data
with advisors to refine their message and image). In terms of the priorities
of politicians keeping their jobs and raising more money, I would estimate
they probably have a much higher margin of return by campaigning, meeting with
lobbyists, and reviewing poll data with their advisors than they do by going
page by page through the federal register and legislation to find waste.
Indeed, many if not most bills get passed without even a single Senator
reading its contents in entirety.

Some Senators that claim fiscal responsibility as part of their Senatorial
passions pay people to do this for them from time to time. But each little bit
that has to change has to go through an enormously long process, so it's far
easier to just focus on the hot button issue of the day that the party
leadership can whip everyone (politicians and lobbyists included) into
agreement on. Typically this never results in reduced government waste, but
quite the opposite given the nature of the relationship between politicians
and industry lobbies.

The problems with any given piece of legislation are clear as day, but given
how much skin in the game the interest-groups and lobbyists each have in their
own pet bills, there's little chance the current legislative modification
apparatus could successfully change 50% of it within decades, even if the
accumulation of waste stopped today.

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JumpCrisscross
My first job out of college was at a large investment bank. As a trader, I
spent much of my time on the phone. I remember discovering that we paid
several hundreds of dollars a month for those lines. The contract was signed
in the seventies and nobody had thought to revisit it.

That is a story about how sensible constructs drift apart over time. Splitting
costs into line items is difficult and expensive. Sometimes it isn't worth the
hassle. If the HHS overpaid for email but underpaid for something else, that
is okay for now. Cost-effectiveness should be calculated on the aggregate for
complex contracts.

~~~
grecy
I work for a small Telco.

We charge two state governments ~$10k a month each for ~200 phone lines.

They both pay well over $25k/month for Internet - and it's about 50 5Mbps DSL
lines, with capped usage.

This is today.

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jagger27
How are these ridiculous contracts negotiated?

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realityseries
[http://en.wikipedia.org/wiki/Corruption](http://en.wikipedia.org/wiki/Corruption)

It comes in many flavors and fashions, and is easily recast in a different
image.

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technotheory
As someone who is working with HHS in their innovation fellowship, I'd like to
point out that HHS is very much moving to lower their email costs. I'm not
certain the public information available, but much has happened since this
information here was published:
[http://www.federalnewsradio.com/536/3384131/HHS-pacing-
its-m...](http://www.federalnewsradio.com/536/3384131/HHS-pacing-its-move-to-
the-cloud)

Any high price for HHS mailboxes is related to the fact that there are several
agencies with different rates (NIH, CDC, FDA, ACF, HRSA, etc are all part of
the departmental umbrella of HHS) and some likely have different (and not as
competitive) rates. My guess is that the rate quoted above is from one of the
smaller agencies with a less competitively negotiated rate...but that's only
an educated guess because if I knew the exact numbers I wouldn't comment on
them publicly.

What's worth noting here though is that HHS is well aware of their costs, and
if the procurement documents referenced above are any indication, then they
are working to actively address this.

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damian2000
There's some data on the FY2011 contracts available here

[http://www.hhs.gov/grants/servicecontractsfy11.html](http://www.hhs.gov/grants/servicecontractsfy11.html)

CSV (a few mb):
[http://www.hhs.gov/grants/hhsfy11scinventory-c.csv](http://www.hhs.gov/grants/hhsfy11scinventory-c.csv)

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pmorici
Looks like "Lockheed Martin Services" might be the company providing their IT.
They have 3 contracts with HHS totaling over $200 million described as,
"CONSOLIDATED INFORMATION TECHNOLOGY INFRASTRUCTURE CONTRACT"

[http://www.hhs.gov/about/smallbusiness/smallbusiness/pdf/cms...](http://www.hhs.gov/about/smallbusiness/smallbusiness/pdf/cms.pdf)

Edit: It looks like the 200 million is only for IT services for the Center for
Medicare and Medicaid so HHS as a whole probably spends even more on IT.

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nppc
Hey startups, stop wasting your time on those crazy mashups and 'Yet another
XYZ clone with a twist'.

Try getting a Govt contract or two !

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source99
Who are they paying $146 / month for email?

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jliptzin
CompuServe

