The March issue of Vanity Fair peers into the secretive world of SAIC--"the largest government contractor you've never heard of." Like many other massive contractors, SAIC turns a profit in part by using its political ties to steer defense contracts its way. Indeed, SAIC isn't necessarily more efficient than the public sector, since it never pays a price for failure--so long as it maintains political connections, the money keeps flowing. Not terribly shocking, but a good overview all the same. Here's one instance in which contracting incentives appear to have created scores of problems:
Another failed effort involves the F.B.I., which paid SAIC $124 million to bring the bureau, whose computer systems are among the most primitive in American law enforcement, into at least the late 20th century. ... Three years and a million lines of garbled computer code later, V.C.F. has been written off by a global publication for technology professionals as "the most highly publicized software failure in history." The failure was due in part to the bureau's ever shifting directives, which points up the perverse nature of government-by-contract. When the government makes unrealistic demands, the contractors go along anyway: they are being paid not to resist but to comply. If it turns out they can't deliver, new contracts will simply be drawn up. Responding to questions about the F.B.I. project, the company conceded that "there were areas in which SAIC made mistakes, particularly where we failed to adequately communicate our concerns about the way the contract was being managed."
No one in Congress seems to mind, though. The Project on Government Oversight is always suggesting that Congress deal with the revolving door between contractors and the government. I can't imagine there's much in the Vanity Fair piece that really hurts their case.