Consultancy and Government Work

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Always remember that the United States Government is the largest purchaser of consulting services in the world. Remember, too, that the United States Government always pays its bills." This is one of the first enticing things a consultant hears when he opens his office. Indeed, it is often this truism that originally lures him to the consulting profession. As of this writing, the federal government spends so much money on outside consultants that it has lost track of the amount; neither the Office of Management and Budget nor the General Accounting Office knows for certain how much it pays out for this service. (They are even hiring consultants to find out for them!) One educated guess is several million dollars per hour.

On the face of it, that's quite an inducement. Any consultant could easily rationalize that:
  1. He is a nice guy, so why shouldn't it happen to him?
  2. He has been a diligent taxpayer, so why not get some of this money back legitimately?
  3. He is finally in a position to make his expertise work for his country.
And all of this is true.

The obverse side of this, however, is rarely discussed.

That side consists of two negative aspects:

1. Recent media investigations have brought to light and confirmed a long-suspected fact: most government consulting contracts (percentage as yet undetermined) are "wired." That is to say that some consultant got there first-whether by friendship, graft, influence, or his extreme competence on a previous assignment. Because most government agencies have policies that require, minimally, three bids when the contract is let for anything over a minimum dollar amount (usually $5,000), those "in" consultants must be put into "competition" with other consultants on any given project. This makes everything "kosher" and in compliance with the Federal Code. It is here that you enter the picture by being invited to bid on that project. In the case of the wired contract, no matter how high your qualifications or how low your bid, you don't stand a chance. If, for example, the project is wired to a man who recently retired from that government agency to set up his own consultancy or to join a large consulting firm, kiss the project goodbye. (This is what is meant by the revolving-door personnel policy.) Of course, these wired bids are neither asterisked nor earmarked for the public in advance. They look like any other legitimate invitation to bid, so you have no way of knowing. And no one will tip you off, because wiring is shady. The point is that you will be spending a lot of time for nothing, and time is the consultant's primary investment and inventory.

2. In the case of a legitimate non-wired bid, an inordinate amount of your time will be required. The bureaucracy thrives on paperwork. It is not uncommon for an agency to accompany a twenty-page bidding form with a forty-page booklet explaining how to fill out that form. Intense, endless study is required to wade through this bureaucratese to arrive at an understanding of the rules and requirements. All of this time is spent whether you win or lose the bid. In most cases, the winning consultants never include this prefatory time in their fee estimates. Of course, if they did show it in their publicly disclosed estimates, they would automatically forfeit the project. The government expects and requires this enormous up-front risk investment from all contending consultants. This is your dues.

Despite the saber rattling by each successive administration, wired consulting contracts will persist for the simple reason that there is no way to stop them. Nepotism of one sort or another is a human characteristic; it dates back to ancient Rome and even earlier to biblical times. So let us postpone the discussion of this nefarious practice and deal with the legitimate means of winning a government contract-since there are still thousands of them in the offing every year.

Considering the prodigious amount of red tape (time) the consultant must withstand to properly present his qualifications, the question persists: Is this what you want? The answer, of course, is always a qualified one: Yes, if I can make a profit; no, if I can't. Many consultants who achieve legitimate project awards from the government can and do earn a profit, and many of them do it often; indeed, they find the work quite rewarding. Who are they?

Strangely enough, they come from the two extreme ends of the consulting spectrum. They are either neophytes who cannot and do not consider all the requisite preparation time of value, since they have no other clients anyhow; or they are large consulting firms that specialize in government work and have, over a period of time, acquired a particular expertise more important and significant than that in their original fields, that is, bureaucratic paperwork. They have trained staffs that do nothing else. This is built into the company overhead and is more than amortized by the large volume of government work billed each month.

The vast number of consultants in between those two extremes are far too busy "doing their thing" and sharpening their professional competence to be bothered with red tape and nonsensical administrative procedures. There is one major exception to this, however. The successful, competent professional independent consultant will often accept government work on an hourly, daily, weekly, or monthly basis. This usually deals with a fee below the compulsory bidding minimum. It allows the consultant to work effectively, terminate the project swiftly, leave, submit his bill, and get paid without any hassle. We shall discuss the methods of getting this and other kinds of work later in this chapter.

So the question prevails: Is this work for you? Think carefully before you embark upon this quest, this gamble, this treasure-hunt for the holy grail of the consulting profession - the government contract.

Which Government?

Thus far, we have been discussing the federal government. But by and large, the same principles of avoiding and seeking consulting work apply to other governments as well-state, county, city, and even foreign. Even though our constitution prohibits the federal government from interfering in state and local matters, the latter have notoriously mirrored the federal government in policy and practice. Indeed, the U.S. Government Printing Office has published the "Code for Better Government." Part of its advertised description is …for use as a model for State and local legislation. The goal of this code is to simplify, modernize, and professionalize the purchasing practices of State and local governments." So substitute state, county, or city whenever we talk about government contracts. Beware, however, of the American city today. One after the other is admitting that they are fiscally unsound; their credit ratings for the sale of municipal bonds keep dropping. Further, their mayors are declaring that there seems to be no way out of this catastrophic financial morass. As with private corporations, the first fiscal obligation for a city is its payroll. If there is anything left, the outside consultant may get paid. But many cities are not meeting their payrolls. So be very careful about the city you choose as a client.

Foreign governments necessitate another word of caution. Different cultures have different mind-sets and attitudes. A promise in one country can mean something totally different in another. A contractual clause in one language can mean something totally different in translation. Unless you are totally familiar with the language, social customs, and mores of another country, steer clear of foreign work. Remember, too, the differences in rates of exchange. At this writing, a Canadian contract for $10,000 will net you $8,000 in American money, unless otherwise specified.
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