Working Up

by Dwayne Phillips

This should be fun, right? A billion dollars to spend on technology to stimulate the economy. I mean, the new Administration is proposing spending $37Billion in 18 months on technology.

Let’s do some calculations on a napkin (I am literally doing that here at the table).

• $1Million hires four technically skilled people for 12 months (that sounds like a lot per person, but I have done this and given all the overhead of government contracts, this is what it costs).
• Let’s spread the $1Million over 18 months. This means that we can only hire just under three technically skilled people. Let’s round that up to three people.
• $1Billion is 1,000 times $1Million. We can hire 3,000 technically skilled people for 18 months.
• The cost of computing and communications hardware is lost in round off errors.

Now we have 3,000 techies to work for 18 months.

• Someone has to manage these people. Let’s be really aggressive and have one manager manage ten people.
• That gives us 300 managers and only 2,700 techies working.

Someone in the government has to over see the spending of this money.

• A well-qualified government team of two people can over see the spending of $50Million in 18 months.
• I have done this job, so believe me this is about the limit. The average government employee can only over see the spending of $10Million in this period of time. I am assuming the best case.
• We need 20 teams of two government employees to over see the money being spent. That is 40 people. The cost of these people is higher than the cost of the techies above.

Now we are down to maybe 2,500 techies working for 18 months.

Well, they really won’t be working 18 months.

• It will take the government at least six months to write and sign the contracts. Again, that is best case. Worst case is 12 months to write and sign the contracts. We use the Federal Acquisition Regulations so we won’t waste the money.
• Let’s go half way between the best and worst cases and say it takes nine months for the work to go under contract.
• Maybe half of the techies will sit twiddling their thumbs while the contracts are in work, so perhaps a third of the $1Billion is spent on doing nothing.

Let’s multiply all this by 37 because we are going to spend $37Billion, not $1Billion.

Ouch.

And one more thing – and this is the hardest thing. Those 40 well-qualified government employees needed to over see the contracts (1,480 if we spend $37Billion) – they don’t exist. They are not sitting on the sidelines waiting for the money to come. We have to find them, hire them, train them, and give them instant expertise that only comes from experience. We can chant “yes we can” forever, but that won’t do these tasks.

Most Federal agencies have never attempted to spend this much money in this short period of time. They don’t have this expertise. Expect at least 50% waste of the money.

My suggestion for a billion dollars? At an average of $25,000 to educate a person in computer science or engineering for one year, $100,000 will produce a BS degree’d American. A $1Billion will produce 10,000 BS degree’d Americans. That is what I would do with the money. Knowledge is something no one can take away from you.