Dealing with “government”

There is really only one piece of advise I can give on this:  Don’t.

I really can’t expand too much, beyond to tell the world that dealing with anything semi government related (at least in SA) is insane.  I heard the other day a story regarding some website that would cost R3’000’000.00 to fix up.  We had a good laugh about it on the GLUG mailing list, then got over ourselves and went on.

Having had a small taste of the whole tender, quote, requote, motivate, requote, update quote to add margin for the bloody consultant who has never up to this point presented your quote to actual client I realized over the last month or two WHY people often double, and even triple their price when dealing with government.

I can’t speak for everybody, but in my opinion it’s not that we want to rip the government off or anything, it’s dead simply that everything else is expected to come to a stand still when dealing with government.  A quote that would to another company take a day, now takes at least two weeks due to queries not being answered, requirements being unclear.

Further more, since government has learned that the guys making most of the money is not the guys doing the work, it’s the consultants going inbetween, they now seem to insist that the guys doing the work invoice them direct, and a separate consulting fee is paid to the consultants for actual work done.  So these consultants now go and strike profit sharing deals with the guys doing the work, and they insist on a 50/50, this means that if my profit would normally be R100k on deal, I now need to push my price up by an additional R100k.  Since profit is often hard to gauge, and in the case of development type work the “raw” profit margin is obviously 100 % this may imply a doubling of price depending on the deal.  At this point the consultant once more wins because they don’t have to carry the salaries of the people doing the work.

In a similar vein they also want a 50/50 profit sharing on hardware, now generally hardware quotes in my industry is valid for 7 days.  These consultants insist on a quote valid for 15 to 30 days.  This means I have to predict how prices from my suppliers are going to change, which is something I cannot really do.  It might go up 10 % in week for all I know, depending on when they ordered and paid for their stock, so this now immediately means I’ve got to enlarge my margin, by say 10 % in order to compensate.  Now the 50/50 thing kicks in which means that if I want 10 % as a buffer, I’ve got to add a further 10 % for the consultants.  And I’m still the guy carrying the risk.

If anybody can tell me with a straight face that that’s fair, then I’ll show you someone that’s been doing this for too long.  Someone who accepted they can’t win and joined the game.

The counter argument to all of this of course is that it’s money I would not have had anyway, but is this all really worth it?  And if it’s not me, then someone else is going to get it.  If the government is willing to throw that much money around simply because they have it, then to me it’s just showing that we’re paying too much tax.  And I’ve heard stories that legally one is allowed to refuse to pay taxes if you disagree with the way it’s being spent, but you have to motivate this or something.  Again, too much effort, but the point stands, that if this is the way our money is being spent, then I reckon the tax rate should be cut by 20 %+, a few officials should have their budgets doubled to appoint people in-house and to then deal direct with the suppliers of solutions.  This may sound counter productive, but consider that what we’re talking here on a single deal is anything upwards of R100’000.00 being wasted!

Somewhere something is seriously screwed.  It could just be that I walked into the ass-end of things, or that this is how it’s generally done.  Either way, I don’t think I want a part in that kind of what I deem to be corruption.

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