Another View: It's time for a little realism in service contracts

Howard Nevin

An eastern state negotiating an IT services contract requires a senior programmer/analyst with five years' experience. The state is willing to pay no more than $65 per hour. A West Coast state will pay maybe $75 per hour. A federal program demands programmers with masters' degree plus at least seven years' experience, but rates vary.

Program managers, it seems, are stiffening their demands on contractors to the point they are pushing off risks and costs'unfairly in some cases. Prime contractors, faced with unrealistic hourly rates and degree demands, are in turn forcing subs to work their people overtime without compensation. This downflow of risk and ignoring of real costs threatens programs that depend on service contracts.

Many requests for proposals emphasize technical standards. But government and industry need to broaden their focus by paying more serious attention to people standards'roles, job definitions, skills and fair pricing'for the good of everyone, especially the agency clients.

Outsourcing lurks as a fresh contributor to the growing problems in personnel standards. That's because outsourcing, originally intended to offload nongovernmental functions from government workers, is becoming a way to shift risk and liability to a third party.
The game has changed in the provision of services, particularly software development. Contractors used to merely augment full-time equivalents in the government. Now they are increasingly used as scapegoats for shaky programs.

Here's how it works, at least sometimes: The government wants a system, specs it, requests bids. A prime wins, agreeing to the scope of work and schedule set by the agency.

Trouble occurs when subcontractors, needing business, commit to low hourly rates, extreme position descriptions and unnecessary skill-set requirements. Risk-averse agencies in many cases make contractors hew to the position descriptions beyond reason'even when seemingly less-qualified candidates can do the jobs hands down.

Working with government agencies as well as manufacturing, health care, pharmaceutical and distribution companies I've seen repeated instances in which the required IT specialists designed systems precisely to clients' playbooks'yet thoroughly missed the point of the projects. The result? Cost overruns and major rework.

I've also seen uncertified people, possessing more real-world knowledge than any course or test could convey, have the right answers and yet be ignored. Again, the result was chagrin and rework.

Sometimes the experts use abstract technical know-how to hide bias for one technology or another'again, rework follows.

To get things done, agencies must use practical, realistic standards in position descriptions. It is time to move toward more results-oriented standards in IT position definitions. Perhaps less rote reliance on specific degrees or experience levels will produce better contract situations and ultimately better systems.

Companies are flocking to do business with the government because that's where the IT money is right now. Price and value are being defined, but not always for the good of all.

Howard Nevin has three decades' experience in government IT.
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