Does Schedule 70 Waste Money?
Here's an interesting blog post from the blog GovOnline. The company behind the blog (a client of mine, Edaptive Systems), just went through the Schedule 70 process. The author lays out ways the schedule inflates the costs of services rendered.
Here's the link. What's your experience?
Tags: 70, Schedule, acquisitions, contracting, government
Replies to This Discussion
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Permalink Reply by Jaime Gracia on -
I don't necessarily agree with the premise of the article. Although I agree that all contracts should be considered, it is not necessarily correct that cost reimbursable contracts provide the level of transparency providing the best options to not inflate costs. I am sure the Commission on Wartime Contracting in Iraq would disagree, and they did with their last report on the Iraq contracts (a vast majority cost type).
The author also makes a false argument without context:
Fixed price contracts are better for government agencies, but still not perfect. Although the potential for cost overruns is eliminated since a firm price is established in advance, the price being charged to the government for each individual contractor can be inflated, costing the government more than it should. (emphasis added).
Contract costs are higher simply because industry needs to add a multiplier for the risk being assumed for completion, as the ideal fixed-price contract transfers risk completely to the contractor to execute baselined, and set and established requirements. Certainly the potential for "inflation" exists, but that is what fixed-priced incentive contracts are for; namely to control costs.
The main thing needed are for aggressive negotiations by the government to save money. The real waste is in the moneys lost to administrative bureaucracy on both sides.
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