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Fix-it
An article I was reading recently (LINK) had me wondering;

Why does the US government out-source it's intelligence apparatus?

is it cheaper?
it certainly isn't more effective.

Neil Stephenson's Snow Crash has most people, (if not everyone) outsourcing their intel to the Central Intelligence Corporation, which is basically the CIA+The library of congress+ an IPO.

then there's Shadowrun.

I think most corporations and governments in the sixth world would rather piss off a Great Dragon then have their intelligence apparatus run by anyone else. Sure, there's lone star and others doing the actual grunt police work, and runners when you need deniable black ops, but most corporations seem to do their own thinking.

Are they perhaps, the wiser for doing so?
Aaron
I had something intelligent to say about this, but then changed my mind. Move along.
CanRay
Intelligence is probably an in-house operation, with lots of out-sourcing of deniable assets.

I see the Corporations having a Spy Department (Or two, or three, or so on) just like Goverments have Spy Agencies. They are, after all, their own "Country" now.
WearzManySkins
QUOTE (Fix-it @ Apr 30 2008, 10:17 PM) *
An article I was reading recently (LINK) had me wondering;

Why does the US government out-source it's intelligence apparatus?

is it cheaper?
it certainly isn't more effective.

Neil Stephenson's Snow Crash has most people, (if not everyone) outsourcing their intel to the Central Intelligence Corporation, which is basically the CIA+The library of congress+ an IPO.

then there's Shadowrun.

I think most corporations and governments in the sixth world would rather piss off a Great Dragon then have their intelligence apparatus run by anyone else. Sure, there's lone star and others doing the actual grunt police work, and runners when you need deniable black ops, but most corporations seem to do their own thinking.

Are they perhaps, the wiser for doing so?


grinbig.gif
Well lets see, a KBR Truck Driver over there can make up 100,000 tax free, I imagine KBR bills Uncle Sugar for at least twice that amount. The KBR replaces a Army/Marine soldier who makes 25,000 before taxes. sarcastic.gif Yea outsourcing military assets is a great idea. We save tons of dollars that way. So doing so for Intelligence was be prize winning idea, for the contractors/Politicos, the public gets to see its tax monies get squandered big time.

WMS
DocTaotsu
Ooo oOo! Cost plus contracts for the win! You really do have to spend (someone elses) money to make (your own) money!
Cthulhudreams
Lots of contracts are cost plus. Most contractors work on a time and materials basis, it's just the done thing, particularly when the scope of work cannot be nailed down, (un)surprisingly, government is spectacularly bad at nailing down a scope of work, or even knowing what the scope might look like, maybe.

Plus it really doesn't make that much money. Fixed fee makes much, much, more money. Or, atleast, a much higher gross margin smile.gif
DocTaotsu
My concern with cost plus contracts is not so much that it makes the contractor rich, it's that it essentially discourages efficiency. Fixed fees might yield a higher profit but at least the contractor is encouraged to keep costs down (maybe at the expense of quality but that's why we have "Good enough for government work"). I also tend to think that cost plus works much better in a situation where government oversight is much greater. There's less of a willingness to burn trucks on the side of the road if the GAO dogs are nipping at your heels.

But, if the government doesn't have a clue what they want and given that I'm by no means a financial genius I see your point. Although there just has to be a better solution!
Cthulhudreams
Oh fixed fee is a better solution for all the reasons you mention. But people's natural stupidity and converatism also shoots it down. It's a really tough problem that professional service firms grapple with daily.

Say I'm the worlds greatest marketing consultant. I am fantastic. I am a god amongnst marketers and everything I touch turns to awesome


Say you have a problem, and you want me to fix it, the solution will earn you 10 million. Considering the execution risk, 400k is probably a fair value for the advice. Lets examine two cases

A) I charge a fixed fee of 400,000 dollars

B) I charge a cost plus contract at 5,000 dollars an hour (a premium billing rate that most firms would be proud to achieve)

In situation A, I walk into your client site, use my insane skills to determine the correct solution, tell you in 10 power point slides that I rapidly re-branded from another client that had the same problem and leave 30 minutes later.

In situation 1, you've paid me 400k to turn up for 30 minutes work. People resent that, despite the fact I have just made you millions of dollars if you implement my advice. However, this is clearly the correct solution - you just have to deal with the fact that the guy might spent radically less time with you than you envisaged. But people cannot. The other problem is, how do I know that it's only going to take me 30 minutes before I start work. It's really hard to find this out, especially in the government tender process which tries to insulate the suppliers from the decision makers. So I need to a charge a risk premium, because your solution might take ages.

People object to risk premiums.

In situation 2 I have every incentive to spin out the contract for at least 80 hours so I get paid my money. If I just billed the time worked, I'd be jacking myself to the tune of 397500 dollars. This is why lawyers charge you absurd rates for copying for example.
DocTaotsu
But your payment is never tied to results in either example?

And I can see why people are so resistant to using contractors like "Well shit! That's easy, I could do it!" well if you could you should have, you huge retard. Bah!
Earlydawn
Contractors are good for flexibility; you can hire them for (relatively) short-term assignments that you may only have a temporary need for, without the time and expenses required to generate a dedicated unit to handle the task. It also gives you the capability to turn over elements of your supply chain over to contractors in the short term so you can free up warm bodies for more "direct" tasks when you need them. Our current situation, however, is completely out of control. We now have contractors engaging in combat of an offensive nature, and beginning to form their own internal support services and intelligence networks. I don't even like them acting as force protection. Shouldn't the best equipped military in the world be able to protect itself?
Cthulhudreams
QUOTE (DocTaotsu @ May 1 2008, 01:59 AM) *
But your payment is never tied to results in either example?

And I can see why people are so resistant to using contractors like "Well shit! That's easy, I could do it!" well if you could you should have, you huge retard. Bah!


I was assuming there was some sort of 'scope of work' associated with this, and you had to deliver against that - in this case a basic report saying what the problem was and how to fix it.

Giving contractors performance based pay is virtually impossible because they have no control over the follow on work, unless they do that to. Lets look at my example. I point out the problem, and tell you how to fix it. You take my plan and completely cock it all up. As the consultant I am going to be punished for your incompetence (because we now have a terrible outcome), and lets face it, if you were competent you wouldn't be hiring me in the first place.
DocTaotsu
Ah I'm confusing consultant and contractor. How does cost plus vs fixed fee work with contractors who are supposed be delievering a product not just a recommendation (Say, trucks that deliever supplies from one camp to another)?

@Earlydawn
It doesn't seem to me that we're really saving all that much money by employing contractors. Supposedly their higher paychecks are indicative of the fact that we don't have to train them or care for them but aren't most mercenaries prior military? We already paid for their training damnit! Now they're doing the same damn thing but for a heck of a lot more money.
Cthulhudreams
It's much better for people delivering product rather than a service, mostly. They tend to prefer to work to fixed fees because they obviously plan to leverage their infrastructure to generate high gross margins and moderate net margins. For example, IBM implementing software is very often to a fixed fee.

I would say that 'driving trucks in a warzone' is going to be very hard to apply a fixed fee too though. Say a road is blocked because of insurgent activity - does the contracting company get paid more?

The more controlled the enviroment and defined the problem, the more advantageous fixed fee solutions are.
DocTaotsu
Mmm... I certainly see where cost plus becomes the quick and dirty solution. Am I wrong in thinking that cost plus might not be all the bad under appropriate oversight?

Hold on a second, we've strayed into real world shenanigans again, let me bring this back to Shadowrun.

Mmm... I certainly see where cost plus becomes the quick and dirty solution. Am I wrong in thinking that cost plus might not be all the bad under appropriate troll oversight?

Ah, much better. wink.gif
Crusher Bob
This applies to running in that the contracts are typically fixed fee, but with a large risk premium attached. In part, the risks premiums are so high because the contractor has to do everything, up to practically determining the problem in the first place.

Sure you want me to break into a place and steal something, but you can barely identify the thing you want stolen, much less how the security of the place you want broken into operates. So I charge you a very large risk premium on the contract. You want to reduce the risk premium? Then reduce my costs and risks by giving me a complete intelligence briefing on the place you want broken into.
Cthulhudreams
QUOTE (DocTaotsu @ May 1 2008, 01:52 AM) *
Mmm... I certainly see where cost plus becomes the quick and dirty solution. Am I wrong in thinking that cost plus might not be all the bad under appropriate oversight?

Hold on a second, we've strayed into real world shenanigans again, let me bring this back to Shadowrun.

Mmm... I certainly see where cost plus becomes the quick and dirty solution. Am I wrong in thinking that cost plus might not be all the bad under appropriate troll oversight?

Ah, much better. wink.gif


Yeah, it is. And honestly most of the time no-one has any idea what they want which makes the 'controlled enviroment' for a fixed fee contract fairly abstract. Strong governance is important for any project, and one of the sad truths of the iraq war, or the entire department of homeland security is that they don;t have any governance or oversight.

Crusher bob does have a great insight into why pricing is a bit weird in shadowrun, and why I often feel runners don't get paid enough. Any 'run' has a significant risk of getting shot associated with it, and while the risk can be mitigated, a 'one way trip to morgue' is a bit risk to take implying that there should be a big risk premium. But people seem to want to pay runners like, not much at all.
Fix-it
QUOTE (DocTaotsu @ May 1 2008, 12:52 AM) *
Mmm... I certainly see where cost plus becomes the quick and dirty solution. Am I wrong in thinking that cost plus might not be all the bad under appropriate oversight?

Hold on a second, we've strayed into real world shenanigans again, let me bring this back to Shadowrun.


actually it pretty much applies, although most Shadowrunners work for fixed fees, not cost-plus.
Drogos
Correction, not pay runners much at all because there are so dag blasted many of them. Competition drives down cost.
nezumi
In real life...

I seem to recollect reading somewhere about how part of why we have so many contractors like Blackwater is because they're under contract to the executive branch, it limits the legislative's branch ability to take control of them or some such. I'd have to do some research if people were really interested in the details. But it would make sense in that case to also wrap some intelligence services in there, to keep them out of the hands of the legislative branch. Plus, really, who knows better what Kazakistan is than the Prime Minister of Kazakistan? Put him on your payroll and you're half way there already.

In Shadowrun, my general pay scheme is the cost per hour for services is relatively low, since Shadowrunners have limited job prospects, while the Johnson has a number of people to choose from for such a job. Some Johnsons will offer fixed price, some will offer fixed cost for services plus expenses (with some oversight as to how much you can spend on gear), the latter is mostly for me as a GM so I don't have to keep modifying spreadsheets to keep track of how many resources were spent on what. Regardless, the less reliable the Johnson or his information is, the higher the price goes. My runners have wisely walked out on jobs which didn't provide enough details, even when it was sold as a cakewalk.
CanRay
Just remember that payment for Shadowrunners isn't always cash, either.

Services and Items are also adequate payment. Want that shiny new Citymaster that just got it's registration ripped? Or perhaps you want parts of your criminal record to be erased?
hyzmarca
QUOTE (WearzManySkins @ Apr 30 2008, 11:31 PM) *
grinbig.gif
Well lets see, a KBR Truck Driver over there can make up 100,000 tax free, I imagine KBR bills Uncle Sugar for at least twice that amount. The KBR replaces a Army/Marine soldier who makes 25,000 before taxes. sarcastic.gif Yea outsourcing military assets is a great idea. We save tons of dollars that way. So doing so for Intelligence was be prize winning idea, for the contractors/Politicos, the public gets to see its tax monies get squandered big time.

WMS


Well, actually, we do, mostly on long term support services. The families of soldiers get free housing, free medical care, and various other free support services. They also get lifetime benefits in the event of a soldier's death in battle. And soldiers get free lifetime medical care in the event of injury. Contractors get none of these things. Contractors may not even get a tent to sleep in while on duty if the company doesn't pay for it.


QUOTE (DocTaotsu @ May 1 2008, 01:35 AM) *
There's less of a willingness to burn trucks on the side of the road if the GAO dogs are nipping at your heels.

In a war zone, setting trucks on fire can be the most tactically and strategically efficient solution given the very real possibility that the contents of disabled vehicles will be captured. There is nothing quite so annoying as being killed by your own missiles because the truck transporting them had a bad carburetor.




QUOTE (DocTaotsu @ May 1 2008, 02:42 AM) *
@Earlydawn
It doesn't seem to me that we're really saving all that much money by employing contractors. Supposedly their higher paychecks are indicative of the fact that we don't have to train them or care for them but aren't most mercenaries prior military? We already paid for their training damnit! Now they're doing the same damn thing but for a heck of a lot more money.


They did their time and they left the service. The military would have been required to train new guys to replace them, anyway.
Wounded Ronin
QUOTE (hyzmarca @ May 1 2008, 12:05 PM) *
Well, actually, we do, mostly on long term support services. The families of soldiers get free housing, free medical care, and various other free support services. They also get lifetime benefits in the event of a soldier's death in battle. And soldiers get free lifetime medical care in the event of injury. Contractors get none of these things. Contractors may not even get a tent to sleep in while on duty if the company doesn't pay for it.


But, but, John Mullins!

http://www.youtube.com/watch?v=H2yAhALM-bE

Man, Soldier of Fortune II is a true classic. I must have played it through 20 or 30 times as a grad student. I cannot believe that lots of reviewers recommended it only for fans of the genre!

Seriously, it had a wonderful Random Mission Generator that was perfect for a burst of gameplay during a coffee break or what have you.

http://www.youtube.com/watch?v=xdhIuHishBg...feature=related
hyzmarca
QUOTE (Wounded Ronin @ May 1 2008, 12:12 PM) *
But, but, John Mullins!

http://www.youtube.com/watch?v=H2yAhALM-bE

Man, Soldier of Fortune II is a true classic. I must have played it through 20 or 30 times as a grad student. I cannot believe that lots of reviewers recommended it only for fans of the genre!

Seriously, it had a wonderful Random Mission Generator that was perfect for a burst of gameplay during a coffee break or what have you.

http://www.youtube.com/watch?v=xdhIuHishBg...feature=related


Yeah, one thing most anti-PMC people tend to overlook is the simple fact that mercenaries are cool, particularly when their rigid code of honor forces them to turn against their employers and slay them all in a bloody action-movie-esq turn of events that frees a country from the grip of a brutal dictator and when they secretly infiltrate highschools pretending to be substitute teachers and turn out to be able to better connect with todays violent youth than and liberal non-violent teacher possibly could and make a real difference in the lives of good kids who were just in bad situations while shutting down the drug smuggling ring secretly run by the school's principal who is in cahoots with the local gang leader.

They're cool. We wouldn't be playing a game about mercenaries (of sorts) if mercenaries aren't cool. That should be reason enough to employ them in the neverending quest for truth, justice, and the American way.
DMFubar
That is a really interesting website. Thank you for the link (btw, the link goes to the sites search engine, not the article in question).
martindv
QUOTE (Fix-it @ Apr 30 2008, 11:17 PM) *
An article I was reading recently (LINK) had me wondering;

Why does the US government out-source it's intelligence apparatus?

Because the US government doesn't have shit for foresight.

Because in the early 1990s, the CIA and other intelligence agencies were gutted by up to 40% or more, and then it turned out that they actually need people, and that satellites can't do everything. Oh, and by the way... Boeing's people are the only ones who know how those satellites work.

Because Congress doesn't raise as much of a stink if contractors in South America who are provided military assistance turn out to be carrying weapons and performing military operations.

Because after 9/11 the backlog in background investigations meant that it was easier to bring old people back than expand the organic apparatus. And so a third or more of CT intelligence is performed by contractors. And it's easier to hire someone on a short-term contract to translate than to put them through the full hiring process--people who won't work for the CIA itself anyway, or who ironically would never make it through the application process as employees.

Because the CIA is called The Company for a reason. And because it has a history going back to its roots as hiring and throwing money at their own little armies all over the world. Now it's just a matter of their biggest little army being filled with Americans in offices--including their own offices.

There are good reasons why corps especially would contract out to other corporations like Aegis Cognito. Among them being efficiency in only paying for intelligence they want, and not having to front the entire expense of operating an entire global intelligence agency. Intelligence has huge startup costs, long lead-in times, and questionable returns. And frankly, it's just cheaper to let other people pay for that crap. It's why corporations hire iJet instead of running their own intel operation now. And it's conceptually similar to why even the largest corporations in the world contract out their legal concerns (and by the way, this includes the Department of Justice)--because it's actually cheaper for the product you're purchasing in the long-term. A major corp will have a General Counsel's office, of course, but they also probably have four Wall Street firms, two DC firms, a LA firm, and a London firm (if the Wall Street firm's London office is not sufficient) on retainer basically forever.

P.S. going back to the background investigations part. In a twist of fate that could only come out of Washington, background investigations on contractors and subs are in part or whole now done by contractors.
FrankTrollman
Outsourcing is by definitionally more expensive than doing it in-house. Whether it is better or worse is a total crap shoot.

But I'll tell you one thing: it's faster. If you need something done tomorrow it makes little sense to try to train and promote your own guys rather than hiring someone from outside who happens to already have the tools and skill set you require. In the world of intelligence, things move really quickly. You don't want to find out about the Invasion of Greece by reading it in the papers. And putting an agent into a position where they can hear important things takes time in addition to resources.

But you know who has the exact skill set and resources to find out what you need to know about what the other guys are doing? []The Other Guys![/b] It's awesome. If you can hire them, then they already know the secrets you want and they can just tell it to you. Unfortunately, it turns out that these guys are unreliable, since it turns out the loyal straight shooters don't take bribes to commit espionage. Who knew?

Hiring intelligence outsourced is just like hiring traitors from other organizations. In fact, it often is hiring traitors from other organizations. And sometimes that gives you awesome information and the ability to sabotage stuff super well. And sometimes they pocket your money and make up crazy stories that they think you'll believe and be interested. It's a tough call. But it's one which people have seriously been making both ways for thousands of years.

-Frank
Method
Plus, not every corporation in SR is a extraterritorial megacorp with unlimited resources. There are a lot of A and B tier corps that probably can't afford their own intelligence apparatus, but need to buy intel before hiring runners for the reasons Crusher Bob mentioned above (i.e. risk premiums).
CanRay
Which is also why there's Street Johnsons. Professional Johnsons that work for a variety of minor corps.

Here's an example.
martindv
QUOTE (FrankTrollman @ May 1 2008, 02:06 PM) *
Hiring intelligence outsourced is just like hiring traitors from other organizations. In fact, it often is hiring traitors from other organizations. And sometimes that gives you awesome information and the ability to sabotage stuff super well. And sometimes they pocket your money and make up crazy stories that they think you'll believe and be interested. It's a tough call. But it's one which people have seriously been making both ways for thousands of years.


Well that is pretty much the definition of intelligence-gathering.
kzt
QUOTE (DocTaotsu @ Apr 30 2008, 11:59 PM) *
And I can see why people are so resistant to using contractors like "Well shit! That's easy, I could do it!" well if you could you should have, you huge retard. Bah!

Mechanics bill:
tightening nut: $15
Knowing which nut to tighten: $185
FlakJacket
If you're interested in this type of thing then The Spy Who Billed Me might be an interesting read. I can't speak for the quality of the site though as whilst someone passed me the link a while back I haven't really got around to having much more than a cursory skim through it yet.

A CIA Contractor Christmas though did make me laugh. smile.gif
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