Amazon: Government Has An Ongoing Problem Issuing Monopoly, Crony Contracts

by Seton Motley, Contributing Author: We’ve oft noted the government’s inability to do well…just about anything.

It’s why our Founding Fathers drafted our Constitution to severely proscribe what the federal government is supposed to do. And why they highly recommended all other levels of government follow their limited prescription.

We less government types see our $4-trillion-per-year federal government – and are rendered nauseous. The Feds are doing countless things the Constitution says they shouldn’t be doing.

So we less government types look for any way of which we can think to minimize the government’s role in any of them. As we look to for any way possible to compromise with the unyielding Government-Should-Do-Everything types.

One of the “half-loaf” ways we have attempted to minimize ever-so-slightly government doing quite so much – is to have the government contract out things to the private sector.

Our thinking being: The private sector does everything better than government (and it absolutely does) – so having the private sector handle something for the government will improve the performance and price of that something.

Private sector contracting is a good idea…in theory. Unfortunately, in practice it has far too often turned out to be…not so much the good idea.

Because ultimately – government is still in charge. They are spending the money – so they are doing the hiring. So ultimately – things only get ever-so-slightly better when government contracts out what it was originally doing itself.

Government bureaucrats are, on the main, uninformed and lazy. Because human nature…is human nature. The people drawn to government gigs…aren’t particularly ambitious. In no small part because they possess very few skills and abilities to warrant any ambition.

And government bureaucrat bosses are uninformed, lazy – and prone to cronyism. They laze their way into the default government position – awful contracts ham-handedly handed to the government’s biggest cronies.

It’s why putting these people in charge of…anything is such a lousy idea.

We less government types understand this – so we proffer explicit rules and guidelines for how the contracting process is supposed to go. So as to minimize the damage government can do – while maximizing the advantages private sector involvement can provide.

Perhaps the fundamental component of private contracting? Government bidding out to the private sector – is supposed to involve bids. Plural. More than just one.

Multiple private companies submitting bids – offering the best possible goods and services at the lowest possible prices. The government then is supposed to pore over the numerous bids afore them – and choose the best.

The government can’t even get the bid process right. They’re uninformed – so they rarely know at what they are looking. They’re lazy – and all those bid contracts is a LOT of reading.

So government nigh always defaults to its cronyism. It hires the company(ies) that donated the most campaign coin – and/or whose owner(s) most closely hue to the bureaucrat bosses’ big government worldview.

Often: Government hires multiple cronies…for the exact same job that requires no redundancy-backup whatsoever. Thereby creating all sorts of wasteful duplication (and triplication, and…) – of work that needs no duplication. All the better to spread the government money around. After all – it isn’t their money they’re wasting.

And often – and even more obnoxious: When a really huge job is under consideration – which absolutely should be divided up amongst multiple contractors for competition, workload reduction and redundancy-backup reasons – the gig is instead lazily, monopolistically given to the single biggest crony in the room. Because dividing up all that work amongst multiple providers is SO HARD.

Oh: And when the next government contracts come up – even in only tangentially related areas – government lazily defaults to yet again hiring the same old cronies. In the same old stupid ways.

Over, and over, and over again….

All of which tends to defeat the purpose of contracting out.

The examples of all of this are myriad. A simple Web search nets you plenty.

Here are but a couple of government creating redundancies – when none are needed.

Federal IT Outsourcing Alarmingly Poorly Managed: “The U.S. government is leaving billions of dollars on the table due to poorly managed and duplicative IT outsourcing deals, according to a recent report by the Government Accountability Office.”

Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors

And here we begin looking at government creating monopolies – when safety-protecting redundancies are absolutely necessary.

Crony Defense Budget Hands SpaceX a Monopoly – Why?

And then perhaps the crown jeweler of awful monopoly government contracting: Jeff Bezos – and his Amazon.

The Details About the CIA’s Deal With Amazon: “(A) $600 million computing cloud developed by Amazon Web Services for the Central Intelligence Agency over the past year will begin servicing all 17 agencies that make up the intelligence community.”

Pentagon’s Next Cloud Contract Could Be Worth Billions: “The contract would call on one commercial cloud service provider to host unclassified, secret and top secret Defense Department data, and the Pentagon’s approach mirrors the CIA’s enterprisewide approach to cloud four years ago, which resulted in a 10-year, $600 million contract with Amazon Web Services….

“The similarities between the Defense’s early cloud strategy and the CIA’s has rival tech companies worried that the department’s acquisition may lean toward AWS. In any case, such a massive contract could disrupt the $100 billion federal IT market and leave the winner in a position to dominate it for years to come.

“Industry fears were further stoked last week when Pentagon acquisition chief Ellen Lord essentially confirmed the department’s intent. Lord chairs an executive steering committee to accelerate cloud adoption created by Deputy Secretary Patrick Shanahan and backed by Defense Secretary Jim Mattis, who visited Seattle and Silicon Valley earlier this year.”

A multi-billion-dollar, ten-year monopoly contract – to handle ALL of the Defense Department’s cloud computing. This is a TERIBLE idea – for several reasons:

“One provider – is going to inherently become complacent. And slack off in attending to short-term needs – and innovating long-term betterments. One provider with a ten-year contract – is thus a REALLY bad idea.

“And any sort of ten-year contract in Tech – is egregiously awful. A decade in Tech – is an eon in evolutionary terms. If you’ve got inherent complacency – in the Tech world, for a decade – you end up with REALLY bad problems. You want a much shorter-term contract for any government service. For Tech – year-to-year is probably the best way to go.”

If EVER there were a time for multiple redundancies – this would be it. As we discussed a fortnight ago:

“(Y)ou want multiple providers – each offering overlapping portions of the Defense Department’s very many needs….

“One reason: You have multiple providers constantly competing with each other – to constantly provide the best possible service. No complacency there.

“And then there are the national security implications.

“If you have but one provider – and it suffers a service interruption – the entire Defense Department suffers a service interruption.

“And for our military men and women serving in some really bad areas around the globe – service interruptions can and will be deadly.

“The Defense Department should build-in to their cloud computing what they build-in to just about everything else they do – multiple redundancies.

“Defense should have at least two providers providing each portion of the cloud service – so that if one crashes, you have at least one at-the-ready backup.

“So, say, at a bare minimum: Five providers – each providing 40% of the necessary services.

“For government school victims – that makes 200%. Which means two providers each are providing every part of the total cloud service.

“Backup. Fail-safe. Redundancy.”

Thankfully, the Defense Department appears to be backing off a bit from their initial massive Amazon monopoly. But the deal is still WAY too one-sided, crony – and dangerous.

We need to fully reopen this contract bidding process.

To ALL comers.

And this time adhere to the contracting guidelines – that help government avoid just this sort of monopolistic, crony nightmare mess.
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Seton Motley is the President of Less Government and he contributes to ARRA News Service. Please feel free to follow him him on Twitter   /   Facebook.

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