Typically it goes like this:
Bureaucrats: Here is a 1000-page spec document that we have spent 3 years writing. We captured all the requirements at the beginning
Consultants: We can do this project for $X. However it will take a long time and a lot of people for us just to understand your spec, so any changes to it will cost $Y.
Bureaucrats: OK whatever.
Consultants: work work
Bureaucrats: Wait, we've changed our mind about this!
Consultants: lick lips
Incentives are everything, and if you look at most things without keeping that foremost in your mind, you'll see a hodgepodge of weird random effects ... but use that perspective, and most things make a ton of sense.
1) Government Software jobs pay less than civilian. It can take up to 6 months of paperwork to hire someone. While that paperwork is in process the job applicant must wait and can't be hired. Guess what kind of developers the government gets?
2) Requirements, they've never heard of them (sarcasm.) My last project had the language changed 3 times, went from a plug-in to a stand-alone app to an API, and during the 4 years had 3 different "final" decision makers. Feature creep was more like feature tidal wave.
3) Paperwork. There's massive amounts of it. One of my coworkers spent 1 month writing paperwork for 10 lines of code.
I could go on but the government does everything in its power to interfere with rapid development and then wonders why costs overrun.
Which New York City law mandates this? (not doubting that there may be one)
Hiring someone for the New York City government can take up to 6 months? What is it typically? (which is the only thing we should care about here without reason to believe it would be atypical)
>3) Paperwork. There's massive amounts of it. One of my coworkers spent 1 month writing paperwork for 10 lines of code.
Do you guys work for the city government in NYC? Somewhere comparable?
So you're arguing that the NYC government is incompetent at running a project done by contractors, but it would be better at both FORMING and RUNNING its own team of contractors?
Sounds like nonsense to me.
New IT systems often come along with changes in process, a well defined IT project should produce a system that follows and complements those processes. Instead what we often get are "boil the ocean" projects that attempt to fix process issues under the guise of an IT implementation.
"How could the project fail? We hired some of the most highly recommended and expensive consultants. They didn't deliver."
A team that can do that AND is willing to navigate the treacherous minefields of internal politics at a government department doesn't exist.
What they should do is just create an open bidding system for the work and make sure that the bids are well publicized, so that not only IBM and accenture will bid. And then they will pay the bid amount only when the whole system is ready and functioning according to specs and schedule.
Thus any cost overruns are not NYC's problem.
There is a million time keeping apps out there, I am sure there will be plenty of candidates willing to modify their app to the city's requirements.
Juan Gonzalez says this is happening all around the country with cities and states converting to digital systems.
The consultants are being paid $400,000 a year. Nice. Because it is a capital expenditure no one knew what these people were being paid so you have to dig into the city records.
Basically a digital payroll and time-keeping system with features such as "biometric hand scanners to avoid city workers punching in for other workers" and digital timecards.
Anyone up for going after cities and governments who are doing this or looking to do this? It's taken 7 years in New York at a cost of almost $1 billion, I say we can do it for... oh, I don't know, 1% of that and in 1/7th the time?
I used to put together proposals for a huge general contractor as a marketing assistant. The completed government proposals usually consisted of between 15 and 30 three inch ring binders of information. It would take me 20 minutes just to load it into FedEx via hand truck from my car. (This would be for something like a military barracks, I'm not talking about skyscrapers or stadiums. Not to mention that it wasn't uncommon to have several rounds of RFP's.) Contrast that with a civilian proposal that would be two or three binders. Software is not construction, but I'm willing to bet the process of bidding is similar.
In other words, it's a fat payday if you can stomach the process, but few can. This is also doubly sinister in that it's a process that is going to be particularly distasteful to just the sort of person that would make a great developer; one who holds efficiency and ingenuity on high, etc... Which is exactly how you end up with terrible DMV sites and CIA, FBI and DHSA databases that are unsearchable, and won't talk to each other.
Addenda: I'm not trying to put people off. I just want to shed some light on exactly how much pain is here: A LOT. Maybe the game-changer isn't someone getting the contracts and doing great, but someone rejiggering the bidding process?
Another point to consider is that you're going to be building something that needs to last for many-many years and can take on new interfaces over the coming years (e.g. iPhones, web, portable devices, etc). You need to build something that is going to be durable, grow, and be maintainable for years to come. Along this point, you'll need to import, manage, and parse old data.
Did you forget the training costs for city employees and the programmers that will maintain these systems? How about documentation?
I know you're being flip and trying to make a point that the city is being milked (and they are), but there's a reason for this. These contractors are doing a difficult, high stress job with lots of visibility. Their compensation, though high, is understandable -- as are their delays.
This was said by PG or someone definitely smarter than me.
It seems that if you know how to navigate the red tape and can deliver a compelling product you can make millions.
I'd say that our commercial customers are quite a bit higher touch than our government customers. The government also seems to have a much better handle on their business processes than any of the fortune-500 companies we deal with.
This is misleading. The figures in the article are based on the hourly rates charged by the contractor that employs these consultants, not their take home salaries.
This is noted only later in the article:
The actual amounts individual SAIC employees took home are most likely lower than their stated rates, since computer firms typically take a cut of each consultant's charges. Nonetheless, these are breathtaking numbers.
This too is misleading because it suggests that the hourly rate is comparable to the individuals' salaries except for a "cut". In reality, this "cut" is likely 50 percent or more. 60-70% would not be unusual.
This is typical of newspaper coverage of "scandalous" IT contractor pay. The project may indeed be a disaster, but those consultants are not making nearly the money that the article suggests.
When you buy consulting, you're buying a commodity. The premium is meant to insure you against natural variation, key people quitting, and so forth. Joe Accenture is meant to be interchangeable with any other Accenture consultant. A lot of the overhead is the extremely rigid, prescriptive methodologies that are supposed to make this possible. For multi-year projects, enough budget-holders believe that this is worthwhile for the entire Big Consulting industry to exist.
For example, the 400k/year figure quoted only amounts to about a $200/hr bill rate. That's far from the worst I've ever heard on a project like this.
Granted, this was in fly-over country, but the gap between billable-hour and developer-hour is quite often massive.
Integration of systems can be a nightmare.
As the UK can attest, large systems fail from sheer complexity, if the politics, internal resistance, and silo mentality don't screw you.
One of the reasons SAP succeeded was that in order to implement the software you had to rearrange how your company worked - not the other way around, modify the software to fit your unique business processes. Yes, SAP consultants make a lot modifying the software but those modifications are constrained.
Enterprise software is lucrative but you give up the freedom to do what you ever want. Design by committee.
edit: amused to see another comment on a different thread that uses the phrases "cronyism and incompetence". Did I subconsciously read that and copy it, or is it just the most apt description?
Test. Because if people don't get their paychecks, you have a very angry group of customers.
They're now in Ireland after having been in Bermuda for the sole purpose of avoiding paying the US governtment taxes on their international business.
So in reality our tax dollars are going to fund a multi-national conglomerate that's making the spread between the $100/hr consultants and the $400/hr billings.
I can't wait to see the tricks these companies come up with to service the $100,000,000,000 a year that we just dumped in the pork barrel for health care.
Also, it's not as if anywhere near the majority of those people have access to any given personal information. How many people does the city employee... 100,000? Every single one of those people will use the payroll system. By comparison, how many people have access to your birth certificate directly... 50? 100?
or something like that.
Unless these 'consultants' were already promised the job and the RFP was just a formality, as is in most city contracts.
What makes you think that those rates aren't competitive?
Govt projects have lots of overhead. Some comes from procedures intended to keep them from being cheated. Some comes from trying to make sure that the "right" people get the job. (Some sounds okay, such as"diversity", but is actually a cover for graft.) Some comes from all of the stakeholders. And on and on.
"The problem is no one knew how much these people were being paid, because their salaries don’t appear in normal city records."
I've dealt with city contracts and it's a culture where the oldest members of the club always land the contracts, no matter what. Finding ways to bury the actual amounts through loopholes or channels is what keeps city officials at work. ha!
But this is business and this is why these companies make as much money as they do. When you are in charge of such a project and your ass is on the line who better to blame than a large Fortune 500 type of company (i.e. Accenture, Deloitte, IBM, etc). You can't get fired for failing a project with a vendor that is considered the "best" but you can for using "Jim's Custom Development Shack".
He likely bills $60/hr to a sub-contractor, who then adds in his likely $100 profit and bills SAIC (the main contractor on this project). SAIC probably bills the city $250/hr for my friend's services!
The numbers are guesses but I spoke to my friend and he said that the vast majority of the billing goes to the main contractor and subcontractors.
At any rate, its a big waste.
There seems to be a huge opportunity for a website like ChallengePost to get local governments to post IT contracts online.