Howard_T

Will We See the Gradual Nationalization of Government Contractors?

How easy is it to convert private employees to civil service? Not as easy as some might think. Several years ago, the company from which I am now retired had a contract with the US Navy to provide equipment and technical services for a shore-based radar program. (I was not involved in the program, but a number of friends were.) The Navy put it out for competitive bid, but for quite a while, no one was able to bid low enough and provide the technical competence to take the contract away. Finally, one firm underbid us. This firm had counted on being able to hire the employees who were currently on the program, and thus spare themselves the expense of recruiting and training new employees. Their offer was generous enough, but of the several dozen people on the contract,only one, a local hire, was willing to switch. The rest packed up, came home, and were given other job assignments. The company that won the contract from us took a loss on it.

My point is that not all employees identify so closely with the customer that it makes no difference who signs the paychecks. there are other things to consider. Also, is it not more expensive to hire a full-time civil servant than it is to employ a contractor? You are stuck with the civil servant, his retirement pay, his normal salary step increases, his benefits, and the rest for at least a twenty-year or more career. If the demand for his services goes away, the termination process is costly. A contractor can be let go on the spot, and his employer is then responsible for him. I could go on and on about how much expense is added to the cost of goods and services to the government because of the layer on layer of bureaucracy that is overseeing contracts. For the most part, these overseers are not familiar enough with the technical aspects of the job to intelligently evaluate what they are seeing, and require companies to perform extensive and unnecessary testing, verification, and paperwork before they can be satisfied. This adds enormous costs to a program. If the government wants effective program management, they need to be able to attract people who are as talented as those in industry. This will never happen until civil service is reformed to the point where it is a true meritocracy, and not a repository for those who value security over performance.

What scares me is that the government might make up some sort of "emergency" and nationalize the defense industry. Should this happen, I would strongly suggest investing in a reinforced concrete bunker, canned goods, weapons, and ammunition. Our defense will soon become a hollow shell.