> Any input on the impact of guarantees? Is this not something we do? Is it irrelevant because if funding isn’t there, they evaporate?
A lot of government contracting is about the process of extracting the money. Multi-year contracts can be particularly fraught with risk--Can a lawsuit shut you down? Will some Senator come shake you down to score "See how much money I just saved us?" points. Did some other project supersede your priority? Did a budget shortfall take 15% out of everybody?
It is simply smart behavior to front load payments and back load execution if you are a company dealing with the government. If you get really lucky, you bank a bunch of money, don't do anything, and then the project gets canned. If you get really unlucky, you bank the money, don't do anything, and then the project flares up in importance and you get slammed by the now looming deadline (see: the original ACA government website debacle).
Some if it is also that companies will optimize to the rules. Do bids go to lowest bidder always? Okay, then the companies will optimize to low bid and charge through the roof for change orders. Is the company responsible for maintenance? If not, then you can be sure that the project will be built to the absolute minimum quality that can be countenanced and leave the maintenance nightmare to somebody else.
You get what you actually incentivize even if it isn't what you necessarily wanted.
A lot of government contracting is about the process of extracting the money. Multi-year contracts can be particularly fraught with risk--Can a lawsuit shut you down? Will some Senator come shake you down to score "See how much money I just saved us?" points. Did some other project supersede your priority? Did a budget shortfall take 15% out of everybody?
It is simply smart behavior to front load payments and back load execution if you are a company dealing with the government. If you get really lucky, you bank a bunch of money, don't do anything, and then the project gets canned. If you get really unlucky, you bank the money, don't do anything, and then the project flares up in importance and you get slammed by the now looming deadline (see: the original ACA government website debacle).
Some if it is also that companies will optimize to the rules. Do bids go to lowest bidder always? Okay, then the companies will optimize to low bid and charge through the roof for change orders. Is the company responsible for maintenance? If not, then you can be sure that the project will be built to the absolute minimum quality that can be countenanced and leave the maintenance nightmare to somebody else.
You get what you actually incentivize even if it isn't what you necessarily wanted.